Celadon Group, Inc. reported its financial and operating results for the three and six months ended December 31, 2005, the second fiscal quarter of the company's fiscal year ending June 30, 2006.
For the quarter, revenue increased 12.5%, to $120.3 million from $106.9 million in the 2004 quarter. Freight revenue, which excludes fuel surcharges, was up 5.9%, to $102.9 million from $97.2 million in the 2004 quarter. Net income increased 71.4%, to $4.8 million from $2.8 million for the 2004 quarter year. Earnings per diluted share improved by 70.4%, to $0.46 from $0.27 for the 2004 quarter. The December quarter marked the highest quarterly net income and earnings per share for a quarter in the history of the company.
For the six months ended December 31, 2005, revenue increased 12.7%, to $238.2 million from $211.3 million for the same period last year. Freight revenue was up 5.5%, to $206.2 million from $195.5 million for the same period last year. Net income increased 72.7%, to $9.5 million from $5.5 million for the same period last year. Earnings per diluted share increased 70.4%, to $0.92 from $0.54 the same period last year.
'Our results for the quarter were assisted by a favorable relationship between freight demand and truckload capacity. We believe capacity growth in our industry continues to be constrained by a shortage of qualified drivers. We address the driver shortage by recruiting safe and experienced drivers, providing newer equipment, and offering competitive compensation and lifestyle programs. We believe our continued commitment to the quality of life of our drivers helps keep our trucks seated with drivers, lowers our costs, improves customer service, and contributes to improved safety for the driving public. Two areas where our focus is evident are safety and driver turnover. We were recently notified by the Truckload Carriers Association that Celadon is one of three finalists for the award to the safest large fleet in America for 2005. We previously won the award in 2002 and 2004. Also, for the December quarter, our annualized driver turnover was approximately 70%, compared with an industry average of 135% published by the American Trucking Associations.
'We continued to invest in our revenue equipment during the quarter. The average tractor age is approximately 2.1 years, with a goal of 1.5 years based on a three year trade cycle, and the average trailer age is approximately 3.6 years, with a goal of 3.5 years based on a seven year trade cycle. We believe carefully managing the average age of our fleet allows us greater flexibility in addressing the cost and reliability issues involving tractor engines designed to comply with stricter emissions requirements in 2007 and generally lowers our operating expenses.
'Even with substantial investments in the fleet, at December 31, 2005, our balance sheet reflected $8.5 million in cash, $7.5 million in borrowings and capitalized leases, and $108.7 million of total stockholders' equity. For the six months, we invested approximately $19 million in cash to purchase new tractors,' said Mr. Russell.
In other news, the company announced that its board of directors has declared a 3-for-2 stock split on all shares of its outstanding common stock that will be effected in the form of a 50% stock dividend. The stock split will entitle all stockholders of record as of the close of business on February 1, 2006, to receive one additional share of common stock for every two shares of common stock held on that date. The additional shares will be distributed to stockholders on or about February 15, 2006. Cash will be paid in lieu of issuing fractional shares. The company currently has approximately 10,092,000 shares of common stock outstanding, and after giving effect to the stock split, will have approximately 15,138,000 shares outstanding. The board of directors believes the increase in outstanding shares will enhance the trading of the company's stock.
