Download - 2011 KeyBanc Capital Markets Industrial, Automotive, and Transportation Conference June 2, 2011
NYSE: CGIwww.CeladonGroup.
com
2011 KeyBanc Capital Markets Industrial, Automotive, and Transportation ConferenceJune 2, 2011
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Forward-Looking Statement DisclaimerToday’s presentation and discussion will contain forwarding-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “expects,” “anticipates,” “intends,” “estimates,” or similar expressions are intended to identify these forward-looking statements. These statements are based on Celadon Group’s current plans and expectations and involve risks and uncertainties that could cause future activities and results of operations to be materially different from those set forth in the forward-looking statements. For further information, please refer to Celadon Group’s prospectus and other filings with the Securities and Exchange Commission.
About CeladonOverview• Established: 1985• NYSE Ticker: CGI• Shares Outstanding: 22.6M• Market Capitalization: $328M• Recent Price: $14.51 (5/23/11)• 52-week Range: $10.72 - $16.80• Bank Debt: $0 ($50M available)
Awards & Accomplishments• Wal-Mart – Diamond Carrier of the
Year • Ryder – National Truckload Carrier
of the Year• Phillips -Van Heusen – Truckload
Carrier of the year• First Carrier certified C-TPAT and
ACE for border crossings• ‘Highway 2 Health’ Wellness
Program (American Heart Association award)
• Voted ‘Best Fleets to Drive For’ and ‘Best Places to Work in Indiana’
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Segment Information (TTM)
Asset-Based: $507M• Truckload Operations
– 3,000 tractors (including 250 Canada and 225 Mexico)
– 8,400 trailers• Young Fleet
– 2.0 years at 3/31/11• Long Haul Focus• Intermodal Services• International Footprint
– 35% Mexico / 11% Canada
Asset-Light: $41M• Celadon Dedicated Services• Celadon Logistics Services
– LTL US/Mexico– Brokerage
• TruckersB2B– Over 20,000 fleet members
• Annualized growth rate 25%
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Sep-02
Mar-03
Sep-03
Mar-04
Sep-04
Mar-05
Sep-05
Mar-06
Sep-06
Mar-07
Sep-07
Mar-08
Sep-08
Mar-09
Sep-09
Mar-10
Sep-10
Mar-11
$1.200
$1.250
$1.300
$1.350
$1.400
$1.450
$1.500
$1.550
$1.600
September 2002 to March 2011
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Rate Per Loaded Mile
Each 1¢ has an approximate annual impact of $2.7 million in pre-tax profit or $.07 EPS
Fiscal Year Results
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FY 03
FY 04
FY 05
FY 06
FY 07
FY 08
FY 09
FY 10
Q1-Q3
FY11
$0.0
$5.0
$10.0
$15.0
$20.0
$25.0
$4.2$6.6
$12.6
$20.5$22.3
$6.5$2.6
$4.7
$9.2
Net Income
FY 03
FY 04
FY 05
FY 06
FY 07
FY 08
FY 09
FY 10
Est. FY11
$0.0$10.0$20.0$30.0$40.0$50.0$60.0$70.0
$26.6$32.8
$38.3$46.7
$62.0$52.1
$46.1 $43.0$52.0
EBITDA
FY 03
FY 04
FY 05
FY 06
FY 07
FY 08
FY 09
FY 10
Q1-Q3
FY11
0¢
20¢
40¢
60¢
80¢
100¢
20¢29¢
55¢
88¢ 94¢
29¢
12¢21¢
42¢
EPS
FY 2006 FY2007 FY 2008 FY 2009 FY 2010 FY 2011 $-
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
$0.80
$0.61
$0.73
$0.20 $0.12 $0.10
$0.42
EPS for the 9-Months Ending March 31
First 9-Months of FY Comparison
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RPLM $1.485 $1.536 $1.502 $1.484 $1.397 $1.479 Operating Ratio 92.2% 90.6% 96.1% 96.9% 98.0% 95.9%
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Financial Strength (millions)Mar 31, 2003 Mar 31, 2010 Mar 31, 2011
Cash On Hand $0.7 $9.4 $19.1
Bank Debt $26.9 $ - $ -
Balance Sheet Debt $42.7 $36.9 $12.8
Operating Leases (NPV) $111.0 $179.3 $127.0
Total Debt $180.6 $216.2 $139.8
Net Worth $56.0 $150.0 $167.6
Average Seated Tractors 2,333 2,694 2,653
Tractor Average Age 2.7 years 1.3 years 2.0 years
State of the Truckload IndustryLikely Severe Driver Shortage
– CSA is adversely impacting the number of available drivers in the industry
– ATA estimates CSA will result in a 5-7% reduction– CSA scores by fleet will allow shippers to review their
carriers and assess their risks– Possible reduction of 1 hour in daily driving hours will
reduce carrier capacity– EOBR requirement will hurt smaller fleets– Significant impact on long haul capacity
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2006 2007 2008 2009 20105.25.45.65.8
66.26.46.66.8
Avg Active Tractor Age
Exiting Truckload Capacity
102006 2007 2008 2009 2010
050
100150200250300350400
Class 8 Truck Builds
2006 2007 2008 2009 20101.851.901.952.002.052.102.152.202.252.30
1.99
Active Tractor Units (Mil-lions)
Diminished financing options
Source: Ward’s and A.C.T. Research
Celadon Statistics• 2006 Avg Tractor Age: 2.1 years• 2011 Avg Tractor Age: 2.0 years• 2006 Avg Seated Tractors: 2,162• 2011 Avg Seated Tractors: 2,653
Increased costs of new tractors
2006 Est. Cost: $95k
2010 Est. Cost: $120k
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CSA Statistics
Unsafe Driving
Fatigued Driving
Driver Fitness
Controlled Substance
Vehicle Maintenance
Celadon 48 47 63 37 51
Alert Status 60 60 75 75 75
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Of the 25 largest truckload carriers, Celadon and 10 others have no alerts
Proposed Changes to HOS
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PROVISION CURRENT RULES PROPOSED RULES
OFF DUTY 10 CONSECUTIVE HOURS NO CHANGE
DRIVING WINDOW 14 HOURS + UNLIMITED ON DUTY 14 HOURS, THEN RELEASED FROM DUTY MAX DRIVING TIME W/IN WINDOW 11 HOURS 10 OR 11 BEING CONSIDERED
LIMIT ON CONSECUTIVE HRS OF DRIVING NONE MUST BE W/IN 7 HRS OF LAST 30 MINUTE
BREAK
ON DUTY WINDOW 14 HOURS + ONE 16 HR SHIFT PER WK FOR REGIONAL
14 HOURS + TWO 16 HR SHIFTS PER WK FOR REGIONAL
MAX ON DUTY W/IN DRIVING WINDOW
14 HOURS + ONE 16 HR SHIFT PER WEEK 13 HOURS (MANDATORY 1 HR BREAK)
EOBR NOT REQUIRED REQUIRED
• ATA believes the proposal will reduce productivity and capacity
• Celadon is fully equipped with EOBRs and is in the implementation phase
Celadon in Mexico
Opportunities• Improve service to customers
by simplifying border crossings• Reduce driver pay• Increase opportunity for
handling more domestic freight13
NAFTA Update
As of April 13, 2011, the DOT unveiled a three-year pilot program to end the ban on Mexican trucks crossing the border
Jaguar• Mexican subsidiary• Acquired in 1995• 225 tractors• 7 offices throughout Mexico• 2010 Wal-Mart Dry Van
Carrier of the Year
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– International footprint and long haul focus– Young tractor fleet– Strong driver culture– Diverse customer base– A leader in technology– Growing non-asset based businesses
• Well positioned to capitalize on industry supply / demand relationship
Summary