8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________________________________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

October 24, 2013

__________________________________________________________________

CELADON GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware	001-34533	13-3361050
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

9503 East 33rd Street One Celadon Drive, Indianapolis, IN	46235
(Address of principal executive offices)	(Zip Code)

(317) 972-7000

(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[   ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[   ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[   ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[   ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02                      Results of Operations and Financial Condition.

On Monday, October 28, 2013, Celadon Group, Inc., a Delaware corporation (the "Company"), issued a press release announcing its financial and operating results for the three months ended September 30, 2013, the first fiscal quarter of the Company's fiscal year ending June 30, 2014. A copy of the press release is attached to this report as Exhibit 99.1.

Item 5.02                      Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Compensatory Arrangements of Certain Officers

Fiscal Year 2014 Senior Management Performance-Based Cash Bonus Program

On October 24, 2013, the Compensation Committee of the Board of Directors (the "Compensation Committee") of the Company approved a cash bonus program for fiscal 2014 (the "2014 Bonus Program") for certain named executive officers.  Under the 2014 Bonus Program, the Compensation Committee adopted the following target bonus amounts for each of the officers listed below:

Name and Position	Target Bonus as a Percentage of Annualized Current Salary	Target Bonus in Dollars
Paul Will, CEO and President	65%	$325,000
William E. Meek, Executive Vice President, CFO, and Treasurer	50%	$110,000
Jonathan Russell, President of Asset Light Business Units	50%	$167,500

As part of the 2014 Bonus Program, the Compensation Committee established the following allocation for attainment of the fiscal 2014 cash bonus:

Bonus Criteria	Percentage of Bonus
Earnings Per Share Target	70%
Discretionary Amount	30%

For the earnings per share target, the recipients may earn between 0% and 200% of the portion of such target, depending on the level of performance.  Earnings per share is equal to diluted earnings per share as reflected in the audited financial statements, excluding any gain or loss attributable to extraordinary non-cash items.  The bonus amounts are linear in between the identified earnings per share targets and adjusted for the pro forma impact of any acquisitions or dispositions.  

Diluted EPS Calculation
Fiscal 2014 EPS	Percentage of Target Bonus
<$1.10	0%
$1.10	50%
$1.20	100%
$1.30	150%
$1.40	200%

The Compensation Committee viewed the 2014 performance targets as reflecting a range of performance that is achievable but uncertain, with the upper end of the range reflecting a significant accomplishment.  The 2014 performance targets do not reflect any view of management or the Compensation Committee concerning earnings expectations for the year.

Service Agreement with Stephen Russell

On October 24, 2013, the Compensation Committee approved a Service Agreement with Stephen Russell (the "Service Agreement") which, effective December 11, 2013, will supersede the Company's current employment agreement with Mr. Russell. Under the Service Agreement, Mr. Russell will continue in his position as Chairman of the Board in a non-employee role. Mr. Russell's compensation under the Service Agreement will be $300,000 per year, versus his current annual salary of $735,000. The term of the Service Agreement will be two years from the effective date thereof, with a one-year renewal option upon mutual agreement of Mr. Russell and the Company. Mr. Russell will be prevented under the Service Agreement from competing with the Company for two years following termination of the agreement or his resignation. The Service Agreement also allows Mr. Russell to retain any previously granted stock options that have vested and provides that he may exercise those options until 90 days after his resignation or termination.

The foregoing summary of the Service Agreement is not intended to be complete and is qualified in its entirety by reference to the full text of the Service Agreement to be filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the second quarter of the 2014 fiscal year.

Item 9.01                  Financial Statements and Exhibits.

(d)	Exhibits.
	EXHIBIT
	NUMBER	EXHIBIT DESCRIPTION
	99.1	Celadon Group, Inc. press release announcing financial and operating results for the three months ended September 30, 2013, the first fiscal quarter of the Company's fiscal year ending June 30, 2014, and cash dividend.

The information contained in Item 2.02 and 9.01 of this report and the exhibit hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

The information in this report and the exhibit hereto may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Such statements are made based on the current beliefs and expectations of the Company's management and are subject to significant risks and uncertainties.  Actual results or events may differ from those anticipated by forward-looking statements. Please refer to the second-to-last paragraph of the attached press release and various disclosures by the Company in its press releases, stockholder reports, and filings with the Securities and Exchange Commission for information concerning risks, uncertainties, and other factors that may affect future results.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		CELADON GROUP, INC.
Date: October 28,2013	By:	/s/ William E. Meek
		William E. Meek
		Executive Vice President, Chief Financial Officer, and Treasurer

EXHIBIT INDEX

EXHIBIT
NUMBER	EXHIBIT DESCRIPTION
99.1	Celadon Group, Inc. press release announcing financial and operating results for the three months ended September 30, 2013, the first fiscal quarter of the Company's fiscal year ending June 30, 2014, and cash dividend.

EX-99.1

    9503 East 33rd Street Indianapolis, IN  46235-4207 (800) CELADON (317) 972-7000

For more information:

Jeryl Desjarlais                                                                                                                                October 28, 2013

Communications Manager

(800) CELADON Ext. 7070

(317) 972-7070 Direct

jdesjarlais@celadongroup.com

CELADON GROUP REPORTS SEPTEMBER QUARTER RESULTS

AND DECLARES DIVIDEND

INDIANAPOLIS – Celadon Group Inc. (NYSE : CGI) today reported its financial and operating results for the three months ended September 30, 2013, the first fiscal quarter of the Company’s fiscal year ending June 30, 2014.

Revenue for the quarter increased 14.2% to $175.1 million in the 2014 quarter from $153.3 million in the 2013 quarter.  Freight revenue, which excludes fuel surcharges, increased 16.3% to $142.0 million in the 2014 quarter from $122.1 million in the 2013 quarter.  Net income decreased 20.5% to $6.6 million in the 2014 quarter from $8.3 million for the same quarter last year.  Earnings per diluted share decreased 22.2% to $0.28 in the 2014 quarter from $0.36 for the same quarter last year.

Paul Will, President and Chief Executive Officer, made the following comments: “We are pleased with our overall improvement in our operating statistics.  The increase in average seated tractor count of 288, or 10.5%, to 3,024 in the September 2013 quarter compared with 2,736 in the September 2013 quarter was a significant operating metric improvement that resulted in increased revenue for the quarter.  This increase was a result of expanding our recruiting efforts at terminal locations, having established a driving school and training program at our Indianapolis headquarters as well as the acquisition of select assets and liabilities of Houg Special Services, Inc. based in Commerce City, Colorado, Land Span, Inc. based in Lakeland, Florida, TCI Logistics, Inc. based in Kernersville, North Carolina and Hoss Cartage and Distribution, Inc. based in Ayr, Ontario, which were all completed in the back half of the September 2013 quarter.  The business generated from these acquisitions should help us continue to add truck capacity and density in our current operating lanes, while benefiting from future operating synergies over time.  This strategy should position Celadon to better serve our customers now and especially in the near future as we believe truck capacity will continue to tighten for the truckload industry.  Our average revenue per tractor per week increased $14, or 0.5%, to $2,913 in the September 2013 quarter, from $2,899 in the September 2012 quarter.  In addition, our average revenue per loaded mile increased to $1.597 per mile in the September 2013 quarter from $1.562 in the September 2012 quarter.

“The average age of the Company’s tractor fleet was 1.4 years as of September 2013 and the average age of the trailer fleet was 2.4 years as of September 2013.  Gains on sales of assets were $1.2 million in the September 2013 quarter compared with $1.9 million in the September 2012 quarter.  The Company has completed its current tractor and trailer refresh cycle.

“We believe we have put in place a lean cost structure, upgraded and expanded the fleet to one of the newest in the industry, broadened service offerings to customers, and positioned the Company to allow it to expand margins and profitability.

“Our balance sheet remains solid and we retain significant liquidity to support the growth of our business. At September 30, 2013, we had $234.3 million of stockholders' equity and our earnings before interest, taxes, depreciation and amortization was $26.7 million in the current September 2013 quarter.  Our increased cash flow generated from operations will allow us to effectively continue to execute on our growth strategy.”

On October 24, 2013, the Board of Directors approved a regular cash dividend to shareholders for the quarter ending December 31, 2013.  The quarterly cash dividend of two cents ($0.02) per share of common stock will be payable on January 17, 2014 to shareholders of record at the close of business on January 6, 2014.

Conference Call Information

An investor conference call is scheduled for Tuesday, October, 29, at 11:00 a.m. ET.  Management will discuss the results of the quarter.  To listen and participate in a questions-and-answers exchange, simply dial888-517-2470 (or 630-827-6818) pin number 7416832 a few minutes prior to the start time.  A replay will be available through November 29 at http://investors.celadontrucking.com.

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 Celadon Logistics Services, which provides freight brokerage; Celadon Dedicated Services, which provides supply chain management solutions, such as warehousing and dedicated fleet services.

This press release contains certain statements that may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements may be identified by their use of terms or phrases such as "expects," "estimates," "projects," "believes," "anticipates," "plans," "intends," and similar terms and phrases. Forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, which could cause future events and actual results to differ materially from those set forth in, contemplated by, or underlying the forward-looking statements.  Actual results may differ from those set forth in the forward-looking statements.  The following factors, among others, could cause actual results to differ materially from those in forward-looking statements: the risk that our perception of additional capacity due to seating trucks and perceived benefits thereof are inaccurate; the risk that our perception of changes in our customer base and perceived benefits thereto are inaccurate; the risk that managing our tractor fleet age does not result in greater flexibility and lower operating expenses; 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, border crossing, or other shipping related facilities; 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 commitment, 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 and changes in the resale value of our used equipment; increases in interest rates or decreased availability of capital or other sources of financing for revenue 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 and new emissions control regulations; 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 these factors along with the various disclosures by the company in its press releases, stockholder reports, and filings with the Securities Exchange Commission.  We disclaim any obligation to update or revise any forward-looking statements to reflect actual results or changes in the factors affecting the forward-looking information.

- tables follow -

CELADON GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

 (Dollars and shares in thousands except per share amounts)

(Unaudited)

	For the three months ended
	Sept 30,
	2013			2012
REVENUE:
Revenue, before fuel surcharge	$	141,956		$	122,108
Fuel surcharge revenue		33,146			31,189
Total revenue		175,102			153,297
OPERATING EXPENSES:
Salaries, wages, and employee benefits		46,654			40,401
Fuel		36,843			37,452
Purchased transportation		41,744			28,337
Revenue equipment rentals		1,652			1,998
Operations and maintenance		11,274			8,066
Insurance and claims		4,140			3,501
Depreciation and amortization		14,928			12,675
Communications and utilities		1,364			1,292
Operating taxes and licenses		2,832			2,588
General and other operating		2,139			1,848
Total operating expenses		163,570			138,158
Operating income		11,532			15,139
Interest expense		1,224			1,490
Interest income		0			0
Other (income) expense, net		(241	)		38
Income before income taxes		10,549			13,611
Income tax expense		3,983			5,349
Net income	$	6,566		$	8,262
Income per common share:
Diluted	$	0.28		$	0.36
Basic	$	0.29		$	0.37
Diluted weighted average shares outstanding		23,662			23,185
Basic weighted average shares outstanding		22,930			22,383

CELADON GROUP, INC

CONDENSED CONSOLIDATED BALANCE SHEETS

September 30, 2013 and June 30, 2013

(Dollars and shares in thousands except par value amounts)

	(unaudited)
	September 30,			June 30,
ASSETS	2013			2013
Current assets:
Cash and cash equivalents	$	3,610		$	1,315
Trade receivables, net of allowance for doubtful accounts of $869 and $919 at September 30, 2013 and June 30, 2013, respectively		81,518			77,623
Prepaid expenses and other current assets		33,058			13,434
Tires in service		1,015			1,245
Equipment held for resale		7,746			9,923
Income Tax Receivable		3,056			9,506
Deferred income taxes		4,236			4,342
Total current assets		134,239			117,388
Property and equipment		621,155			612,236
Less accumulated depreciation and amortization		119,542			115,366
Net property and equipment		501,613			496,870
Tires in service		1,527			1,785
Goodwill		20,415			17,730
Investment in unconsolidated companies		4,346			4,604
Other assets		3,201			2,785
Total assets	$	665,341		$	641,162
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	5,785		$	10,401
Accrued salaries and benefits		10,416			11,197
Accrued insurance and claims		10,262			10,092
Accrued fuel expense		8,414			7,461
Other accrued expenses		21,988			20,070
Current maturities of capital lease obligations		30,631			25,669
Income taxes payable		---			---
Total current liabilities		87,496			84,890
Capital lease obligations, net of current maturities		179,186			190,625
Long term debt, net of current maturities		104,591			78,137
Deferred income taxes		59,808			61,821
Stockholders' equity:
Common stock, $0.033 par value, authorized  40,000 shares; issued and outstanding 23,882 and 23,887 shares at September 30, 2013 and June 30, 2013, respectively		788			788
Treasury stock at cost; 595 and 696 shares at September 30, 2013and June 30, 2012, respectively		(4,104	)		(4,811	)
Additional paid-in capital		104,890			103,749
Retained earnings		137,333			131,224
Accumulated other comprehensive loss		(4,647	)		(5,261	)
Total stockholders' equity		234,260			225,689
Total liabilities and stockholders' equity	$	665,341			641,162

Key Operating Statistics

	For the three months ended
	September 30,
	2013		2012
Average revenue per loaded mile (*)	$	1.597	$	1.562
Average revenue per total mile (*)	$	1.406	$	1.402
Average revenue per tractor per week (*)	$	2,913	$	2,899
Average miles per seated tractor per week(**)		2,072		2,068
Average seated line-haul tractors (**)		3,024		2,736
*Freight revenue excluding fuel surcharge.
**Total seated fleet, including equipment operated by independent contractors and our Mexican subsidiary, Jaguar.

Adjusted Trucking Revenue(^)	$	147,658	$	134,302
Asset Light Revenue		13,218		10,862
Intermodal Revenue		7,524		5,168
Other Revenue		6,702		2,964
Total Revenue	$	175,102	$	153,297
^Trucking Revenue for US, Canada, Mexico.  Includes Fuel Surcharge.

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