CELADON GROUP ANNOUNCES ACQUISITION OF TRUCKLOAD VAN ASSETS FROM AIR ROAD EXPRESS
Posted on June 06. 2007
By:
Celadon Trucking Services
INDIANAPOLIS – Celadon Group Inc. (Nasdaq GS: CLDN) announced today that one of its wholly-owned subsidiaries has purchased the truckload business and certain tractors and trailers of Air Road Express Inc. (“Air Road”). Air Road will continue to provide asset based logistics services with its LTL consolidation and warehousing operations. According to the seller’s unaudited financial statements the Indianapolis-based transportation company generated approximately $26 million in gross revenue from its truckload operations including fuel surcharge in 2006.
Steve Russell Chairman and Chief Executive Officer stated “We are delighted with the Air Road acquisition and expect it to follow the pattern established in our acquisitions of Warrior Digby Truck Lines CX Roberson and Highway Express during the past few years. In those acquisitions as in this one our goals are to continue to broaden our customer base with quality customers add density in our primary traffic lanes and gain experienced drivers. In February 2007 Celadon acquired certain assets of Warrior Xpress and in October 2006 Celadon acquired certain assets of Digby Truck Lines.
Based on our evaluation of the business we believe Air Road had a group of quality customers that will enhance our current lane flows but suffered from the excessive cost structure that plagues many mid-sized carriers. We expect to integrate the acquired operations promptly. As part of the integration process we expect to optimize the combined customer driver and equipment base to improve asset productivity. We believe we can enhance the service to Air Road’s former customers through an upgraded equipment fleet excellent technology more available assets for dispatch and an outstanding safety record.
Air Road has been a long haul carrier and its lane flow compliments our network. We expect the acquired operations to be accretive beginning in the September 2007 quarter.
Celadon Group Inc. (www.celadongroup.com) through its subsidiaries primarily provides long-haul full-truckload freight service across the United States Canada and Mexico. The company also owns TruckersB2B Inc. (www.truckersb2b.com) which provides cost savings to member fleets.
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This press release and statements made by Celadon in its stockholder reports and public filings as well as oral public statements by Celadon representatives may contain certain forward-looking information usually identified by words such as anticipates believes estimates projects expects “plans” or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of Celadon’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in forward-looking statements. With respect to the acquisition the risks and uncertainties include but are not limited to the risk that integration of the acquired operation will not proceed as planned; the risk that Celadon will lose key components of the acquired operation including customers and drivers none of whom is bound to remain with the acquired operation; the risk that Celadon will not be able to improve the profitability of the acquired operation and operate it near the level of Celadon’s profitability; the risk of receiving less than expected for tractors and trailers expected to be disposed of and recording a loss on disposal of such equipment; the risk of unknown liabilities related to the acquired operation; the risk that acquired operations will not be accretive to earnings per share on the schedule or at all; and the risk that integrating and managing the acquired operation will distract management from other operations. With respect to general business operations the following factors among others could cause actual results to differ materially from those in forward-looking statements: excess tractor and trailer capacity in the trucking industry; decreased demand for our services or loss of one or more of our major customers; surplus inventories; recessionary economic cycles and downturns in customers’ business cycles; strikes work slow downs or work stoppages at our facilities or at customer port or other shipping related facilities; our ability to execute our strategic plan; increases in compensation for and difficulty in attracting and retaining qualified drivers and independent contractors; increases in insurance premiums and deductible amounts; elevated experience in the frequency or severity of claims relating to accident cargo workers’ compensation health and other matters; fluctuations in claims expenses that result from high self-insured retention amounts and differences between estimates used in establishing and adjusting claims reserves and actual results over time; increases or rapid fluctuations in fuel prices as well as fluctuations in hedging activities and surcharge collection the volume and terms of diesel purchase commitments interest rates fuel taxes tolls and license and registration fees; fluctuations in foreign currency exchange rates; increases in the prices paid for new revenue equipment; increases in interest rates or decreased availability of capital or other sources of financing for revenue equipment; decreases in the resale value of our used equipment; seasonal factors such as harsh weather conditions that increase operating costs; competition from trucking rail and intermodal competitors; regulatory requirements that increase costs or decrease efficiency including revised hours-of-service requirements for drivers; our ability to identify acceptable acquisition candidates consummate acquisitions and integrate acquired operations; the timing of and any rules relating to the opening of the border to Mexican drivers; challenges associated with doing business internationally; our ability to retain key employees; and the effects of actual or threatened military action or terrorist attacks or responses including security measures that may impede shipping efficiency especially at border crossings. Readers should review and consider the various disclosures made by Celadon in this press release stockholder reports and in its Forms 10-K 10-Q and other public filings. Celadon disclaims any such obligation to update or alter its forward-looking statements whether as a result of new information future events or otherwise.
Celadon Trucking Services
