[ X ]
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|
[ ]
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
13-3361050
|
(State or other jurisdiction of
|
(IRS Employer
|
incorporation or organization)
|
Identification No.)
|
9503 East 33rd Street
|
|
One Celadon Drive
|
|
Indianapolis, IN
|
46235-4207
|
(Address of principal executive offices)
|
(Zip Code)
|
(Registrant's telephone number, including area code): (317) 972-7000
|
Yes [X] No [ ]
|
Large accelerated filer [ ]
|
Accelerated filer [X]
|
Non-accelerated filer [ ]
|
Yes [ ] No [X]
|
Part I.
|
Financial Information
|
||
Item 1.
|
Financial Statements
|
||
3
|
|||
4
|
|||
5
|
|||
6
|
|||
7
|
|||
Item 2.
|
16
|
||
Item 3.
|
26
|
||
Item 4.
|
26
|
||
Part II.
|
Other Information
|
||
Item 1.
|
28
|
||
Item 1A.
|
28
|
||
Item 2.
|
30
|
||
Item 3.
|
30
|
||
Item 4
|
30
|
||
Item 5.
|
30
|
||
Item 6.
|
32
|
Three months ended
|
Six months ended
|
|||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
OPERATING REVENUE:
|
||||||||||||||||
Freight revenue
|
$
|
242,349
|
$
|
249,311
|
$
|
483,818
|
$
|
487,123
|
||||||||
Fuel surcharge revenue
|
23,376
|
26,088
|
46,947
|
54,397
|
||||||||||||
Total revenue
|
265,725
|
275,399
|
530,765
|
541,520
|
||||||||||||
OPERATING EXPENSES:
|
||||||||||||||||
Salaries, wages, and employee benefits
|
79,484
|
85,877
|
162,291
|
167,354
|
||||||||||||
Fuel
|
27,311
|
26,688
|
53,608
|
54,416
|
||||||||||||
Purchased transportation
|
85,614
|
93,948
|
175,906
|
182,978
|
||||||||||||
Revenue equipment rentals
|
9,184
|
2,201
|
18,652
|
4,423
|
||||||||||||
Operations and maintenance
|
22,108
|
18,243
|
41,258
|
35,849
|
||||||||||||
Insurance and claims
|
13,691
|
7,709
|
21,947
|
14,637
|
||||||||||||
Depreciation and amortization
|
16,976
|
19,187
|
36,308
|
40,788
|
||||||||||||
Communications and utilities
|
2,578
|
2,611
|
4,998
|
4,955
|
||||||||||||
Operating taxes and licenses
|
4,731
|
5,532
|
9,180
|
10,504
|
||||||||||||
General and other operating
|
6,289
|
4,803
|
11,429
|
9,085
|
||||||||||||
Gain on disposition of equipment
|
(507
|
)
|
(5,479
|
)
|
(1,768
|
)
|
(18,721
|
)
|
||||||||
Total operating expenses
|
267,459
|
261,320
|
533,809
|
506,268
|
||||||||||||
Operating income (loss)
|
(1,734
|
) |
14,079
|
(3,044
|
) |
35,252
|
||||||||||
Interest expense
|
2,988
|
3,758
|
6,291
|
6,910
|
||||||||||||
Other (income) expense, net
|
(40
|
)
|
---
|
13
|
---
|
|||||||||||
Loss (income) from equity method investment
|
(1,824
|
)
|
21
|
(1,955
|
)
|
121
|
||||||||||
Income (loss) before income taxes
|
(2,858
|
) |
10,300
|
(7,393
|
)
|
28,221
|
||||||||||
Income tax (benefit) expense
|
(1,333
|
)
|
3,685
|
(3,015
|
)
|
10,239
|
||||||||||
Net income (loss)
|
$
|
(1,525
|
) |
$
|
6,615
|
$
|
(4,378
|
)
|
$
|
17,982
|
||||||
Income (loss) per common share:
|
||||||||||||||||
Diluted
|
$
|
(0.06
|
) |
$
|
0.24
|
$
|
(0.16
|
)
|
$
|
0.64
|
||||||
Basic
|
$
|
(0.06
|
) |
$
|
0.24
|
$
|
(0.16
|
)
|
$
|
0.65
|
||||||
Diluted weighted average shares outstanding
|
27,639
|
27,940
|
27,627
|
27,953
|
||||||||||||
Basic weighted average shares outstanding
|
27,639
|
27,480
|
27,627
|
27,467
|
Three months ended
|
Six months ended
|
|||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
Net income (loss)
|
$
|
(1,525
|
) |
$
|
6,615
|
$
|
(4,378
|
)
|
$
|
17,982
|
||||||
Other comprehensive income (loss):
|
||||||||||||||||
Unrealized gain (loss) on fuel derivative instruments, net of tax
|
199
|
(875
|
)
|
314
|
(1,351
|
)
|
||||||||||
Foreign currency translation adjustments, net of tax
|
(4,044
|
)
|
(4,829
|
)
|
(8,947
|
)
|
(14,260
|
)
|
||||||||
Total other comprehensive loss
|
(3,845
|
)
|
(5,704
|
)
|
(8,633
|
)
|
(15,611
|
)
|
||||||||
Comprehensive income (loss)
|
$
|
(5,370
|
)
|
$
|
911
|
$
|
(13,011
|
)
|
$
|
2,371
|
(unaudited)
|
||||||||
December 31,
|
June 30,
|
|||||||
ASSETS
|
2016
|
2016
|
||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
6,138
|
$
|
9,077
|
||||
Trade receivables, net of allowance for doubtful accounts of $1,716 and $1,588 at December 31, 2016 and June 30, 2016, respectively
|
133,784
|
134,572
|
||||||
Prepaid expenses and other current assets
|
50,305
|
38,498
|
||||||
Tires in service
|
4,201
|
3,175
|
||||||
Leased revenue equipment held for sale
|
---
|
24,937
|
||||||
Revenue equipment held for sale
|
---
|
44,876
|
||||||
Income tax receivable
|
201
|
473
|
||||||
Total current assets
|
194,629
|
255,608
|
||||||
Property and equipment, net of accumulated depreciation and amortization of $161,537 and $142,423 at December 31, 2016 and June 30, 2016, respectively
|
610,777
|
636,733
|
||||||
Leased Assets, net of accumulated depreciation and amortization of $0 and $9,717 at December 31, 2016 and June 30, 2016, respectively
|
---
|
99,300
|
||||||
Tires in service
|
4,167
|
3,603
|
||||||
Goodwill
|
62,451
|
62,451
|
||||||
Investment in unconsolidated companies
|
---
|
2,253
|
||||||
Investment in joint venture
|
100,000
|
---
|
||||||
Other assets
|
9,698
|
43,342
|
||||||
Total assets
|
$
|
981,722
|
$
|
1,103,290
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
22,852
|
$
|
26,499
|
||||
Accrued salaries and benefits
|
14,612
|
17,090
|
||||||
Accrued insurance and claims
|
21,863
|
20,727
|
||||||
Accrued fuel expense
|
6,451
|
8,258
|
||||||
Accrued purchased transportation
|
17,335
|
22,046
|
||||||
Leasing servicing liabilities
|
11,526
|
15,918
|
||||||
Other accrued expenses
|
33,511
|
29,560
|
||||||
Current maturities of capital lease obligations
|
84,351
|
51,397
|
||||||
Total current liabilities
|
212,501
|
191,495
|
||||||
Long-term debt, net of current maturities
|
114,507
|
152,032
|
||||||
Capital lease obligations, net of current maturities
|
181,608
|
247,383
|
||||||
Other long term liabilities
|
---
|
22,227
|
||||||
Deferred income taxes
|
104,887
|
109,138
|
||||||
Stockholders' equity:
|
||||||||
Common stock, $0.033 par value, authorized 40,000 shares; issued and outstanding 28,729 and 28,715 shares at December 31, 2016 and June 30, 2016, respectively
|
948
|
948
|
||||||
Treasury stock at cost; 500 shares at December 31, 2016 and June 30, 2016
|
(3,453
|
)
|
(3,453
|
)
|
||||
Additional paid-in capital
|
199,896
|
198,576
|
||||||
Retained earnings
|
212,573
|
218,056
|
||||||
Accumulated other comprehensive loss
|
(41,745
|
)
|
(33,112
|
)
|
||||
Total stockholders' equity
|
368,219
|
381,015
|
||||||
Total liabilities and stockholders' equity
|
$
|
981,722
|
$
|
1,103,290
|
Six months ended
|
||||||||
December 31,
|
||||||||
2016
|
2015
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income (loss)
|
$
|
(4,378
|
)
|
$
|
17,982
|
|||
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
36,313
|
40,929
|
||||||
Gain on sale of equipment
|
(1,768
|
)
|
(18,721
|
)
|
||||
Earnings from unconsolidated entity
|
(1,803
|
)
|
---
|
|||||
Distributions received on earnings from unconsolidated entity
|
2,588
|
---
|
||||||
Deferred income taxes
|
(3,981
|
)
|
13,715
|
|||||
Provision for doubtful accounts
|
323
|
441
|
||||||
Stock based compensation
|
1,321
|
1,458
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Trade receivables
|
(37
|
)
|
(635
|
)
|
||||
Income tax receivable and payable
|
365
|
2,229
|
||||||
Tires in service
|
(1,614
|
)
|
(1,373
|
)
|
||||
Prepaid expenses and other current assets
|
(15,622
|
)
|
(10,238
|
)
|
||||
Other assets
|
33,693
|
(6,744
|
)
|
|||||
Leased revenue equipment held for sale
|
16,915
|
(11,948
|
)
|
|||||
Accounts payable and accrued expenses
|
(3,840
|
)
|
(4,201
|
)
|
||||
Net cash provided by operating activities
|
58,475
|
22,894
|
||||||
Cash flows from investing activities:
|
||||||||
Purchase of property and equipment
|
(43,111
|
)
|
(67,093
|
)
|
||||
Proceeds on sale of property and equipment
|
75,624
|
107,871
|
||||||
Investment in joint venture
|
(35,300
|
)
|
---
|
|||||
Proceeds from unconsolidated entity
|
2,000
|
---
|
||||||
Purchase of businesses, net of cash acquired
|
---
|
(17,733
|
)
|
|||||
Net cash provided by (used in) investing activities
|
(787
|
)
|
23,045
|
|||||
Cash flows from financing activities:
|
||||||||
Proceeds from issuance of stock
|
--
|
169
|
||||||
Proceeds from borrowings on long-term debt
|
266,400
|
499,970
|
||||||
Payments on long-term debt
|
(303,926
|
)
|
(506,867
|
)
|
||||
Proceeds from borrowings on other long-term liabilities
|
15,039
|
---
|
||||||
Payments on other long-term liabilities
|
(4,025
|
)
|
---
|
|||||
Dividends paid
|
(1,105
|
)
|
(1,098
|
)
|
||||
Principal payments under capital lease obligations
|
(32,822
|
)
|
(56,299
|
)
|
||||
Net cash used in financing activities
|
(60,439
|
)
|
(64,125
|
)
|
||||
Effect of exchange rates on cash and cash equivalents
|
(188
|
)
|
1,215
|
|||||
Increase/Decrease in cash and cash equivalents
|
(2,939
|
)
|
(16,971
|
)
|
||||
Cash and cash equivalents at beginning of period
|
9,077
|
24,699
|
||||||
Cash and cash equivalents at end of period
|
$
|
6,138
|
$
|
7,728
|
||||
Supplemental disclosure of cash flow information:
|
||||||||
Interest paid
|
$
|
8,074
|
$
|
6,910
|
||||
Income taxes paid
|
$
|
132
|
$
|
118
|
||||
Lease obligation incurred in the purchase of equipment
|
---
|
$
|
90,406
|
|||||
Conversion of capital leases to operating leases
|
---
|
$
|
61,248
|
|||||
Contribution of tractors and trailers net of deferred
|
$
|
63,600
|
---
|
Three months ended
|
Six months ended
|
|||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
Weighted average common shares outstanding – basic
|
27,639
|
27,480
|
27,627
|
27,467
|
||||||||||||
Dilutive effect of stock options and unvested restricted stock units
|
---
|
460
|
---
|
486
|
||||||||||||
Weighted average common shares outstanding – diluted
|
27,639
|
27,940
|
27,627
|
27,953
|
||||||||||||
Net income (loss)
|
$
|
(1,525
|
) |
$
|
6,615
|
$
|
(4,378
|
)
|
$
|
17,982
|
||||||
Earnings (loss) per common share:
|
||||||||||||||||
Basic
|
$
|
(0.06
|
) |
$
|
0.24
|
$
|
(0.16
|
)
|
$
|
0.65
|
||||||
Diluted
|
$
|
(0.06
|
) |
$
|
0.24
|
$
|
(0.16
|
)
|
$
|
0.64
|
Three months ended
|
Six months ended
|
|||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
Stock compensation expense for options, net of forfeitures
|
$
|
0
|
$
|
0
|
$
|
0
|
$
|
0
|
||||||||
Stock compensation expense for restricted stock, net of forfeitures
|
640
|
715
|
1,320
|
1,462
|
||||||||||||
Total stock compensation expense
|
$
|
640
|
$
|
715
|
$
|
1,320
|
$
|
1,462
|
Options
|
Option Totals
|
Weighted-Average Exercise
Price per Share
|
||||||
Outstanding at July 1, 2016
|
275,169
|
$
|
9.30
|
|||||
Granted
|
---
|
---
|
||||||
Vested and Issued
|
---
|
---
|
||||||
Forfeited or expired
|
---
|
---
|
||||||
Outstanding at December 31, 2016
|
275,169
|
$
|
9.30
|
|||||
Exercisable at December 31, 2016
|
275,169
|
$
|
9.30
|
Number of Restricted Stock Awards
|
Weighted-Average Grant Date Fair Value
|
|||||||
Unvested at July 1, 2016
|
601,794
|
$
|
11.92
|
|||||
Granted
|
23,780
|
$
|
9.39
|
|||||
Vested and Issued
|
(35,481
|
)
|
$
|
12.82
|
||||
Forfeited
|
(10,288
|
)
|
$
|
8.17
|
||||
Unvested at December 31, 2016
|
579,805
|
$
|
11.83
|
Operating Revenue
|
||||||||||||||||
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
Asset-based
|
$
|
218,617
|
$
|
236,324
|
$
|
441,859
|
$
|
467,087
|
||||||||
Asset-light based
|
30,954
|
32,943
|
62,608
|
63,539
|
||||||||||||
Equipment leasing and services
|
16,154
|
6,132
|
26,298
|
10,894
|
||||||||||||
Total
|
$
|
265,725
|
$
|
275,399
|
$
|
530,765
|
$
|
541,520
|
Operating Income (Loss)
|
||||||||||||||||
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
Asset-based
|
$
|
(6,790
|
)
|
$
|
11,471
|
$
|
(8,799
|
)
|
$
|
18,953
|
||||||
Asset-light based
|
1,876
|
3,280
|
3,890
|
7,111
|
||||||||||||
Equipment leasing and services
|
3,180
|
(672
|
)
|
1,865
|
9,188
|
|||||||||||
Total
|
$
|
(1,734
|
) |
$
|
14,079
|
$
|
(3,044
|
) |
$
|
35,252
|
Operating Revenue
|
||||||||||||||||
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
United States
|
$
|
234,394
|
$
|
241,843
|
$
|
468,218
|
$
|
474,552
|
||||||||
Canada
|
20,697
|
21,193
|
41,400
|
43,138
|
||||||||||||
Mexico
|
10,634
|
12,363
|
21,147
|
23,830
|
||||||||||||
Consolidated
|
$
|
265,725
|
$
|
275,399
|
$
|
530,765
|
$
|
541,520
|
Capital
Leases
|
Operating
Leases
|
|||||||
2017
|
90,171
|
29,696
|
||||||
2018
|
96,411
|
19,551
|
||||||
2019
|
13,164
|
14,025
|
||||||
2020
|
12,853
|
11,471
|
||||||
2021
|
9,273
|
7,386
|
||||||
Thereafter
|
61,110
|
9,306
|
||||||
Total minimum lease payments
|
$
|
282,982
|
$
|
91,435
|
||||
Less amounts representing interest
|
17,023
|
|||||||
Present value of minimum lease payments
|
265,959
|
|||||||
Less current maturities
|
84,351
|
|||||||
Non-current portion
|
$
|
181,608
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||||||||||||||||||||
Balance
at
December
31,
2016
|
Balance
at
June
30,
2016
|
Balance
at
December
31,
2016
|
Balance
at
June
30,
2016
|
Balance
at
December
31,
2016
|
Balance
at
June
30,
2016
|
Balance
at
December
31,
2016
|
Balance
at
June
30,
2016
|
|||||||||||||||||||||||||
Fuel derivatives
|
464
|
(95
|
)
|
---
|
---
|
464
|
(95
|
)
|
---
|
---
|
Intangible assets
|
||||||||||||
June 30, 2016
|
Current year changes
|
December 31, 2016
|
||||||||||
Gross carrying amount
|
$
|
8,096
|
---
|
$
|
8,096
|
|||||||
Accumulated amortization
|
1,210
|
$
|
304
|
1,514
|
||||||||
$
|
6,886
|
$
|
304
|
$
|
6,582
|
Goodwill
|
||||||||||||
June 30, 2016
|
Current year changes
|
December 31, 2016
|
||||||||||
Asset-based
|
$
|
61,083
|
---
|
$
|
61,083
|
|||||||
Asset-light based
|
$
|
1,368
|
---
|
$
|
1,368
|
|||||||
Total Goodwill
|
$
|
62,451
|
---
|
$
|
62,451
|
·
|
Redemption of Existing Members: 19th Capital redeemed all of its issued and outstanding membership interests, including those owned by the Company, for $15.7 million in cash. The Company's proceeds from the redemption were approximately $4.6 million in cash. The proceeds received relate primarily to the original $2.0 million that had been invested by the Company in 2015 and its proportionate share of undistributed earnings from inception. The Company recorded a net gain on the redemption of approximately $0.3 million, reflecting the excess of redemption proceeds over the initial investment plus equity income profits previously recognized. In addition to the redemption amount, the Company is entitled to receive approximately $2.5 million in restricted cash when the restrictions lapse. The Company has evaluated this receivable under ASC 450 – Contingencies and has not recorded a receivable within our financial statements at this time. If and when collected, this amount would be recorded as income.
|
|
·
|
Deferred Sale with 19th Capital: As part of the Transactions the Company received proceeds of $6.7 million in payment of deferred purchase price from a sale of equipment to 19th Capital in the June 30, 2016 quarter. This collection triggered sales accounting treatment for leased assets where recognition of the sale was deferred and leased assets remained on the Company’s balance sheet. As a result, the Company removed $34.6 million of “Leased assets” and $26.0 million of liabilities recorded within “Lease servicing liabilities” and “Other long term liabilities”. The Company did not recognize any gain or loss with this transaction.
|
|
·
|
Sale to Element: The Company sold tractors and trailers and assigned the related leases to Element for approximately $50.0 million. There was no material gain or loss on the disposition of this equipment.
|
·
|
Receipt of Lease Servicing Advance (“Perfect Pay”): The Company received $31.8 million in cash related to a receivable from Element related to the Company’s Perfect Pay obligations under the prior service agreements with Element.
|
|
·
|
Contribution by the Company: The Company (i) contributed $35.3 million in cash to 19th Capital, (ii) conveyed to 19th Capital equipment (primarily tractors) categorized as equipment held for sale, leasing assets held for sale, or leasing assets used, with a net book value of $56.0 million, (iii) received credit for $1.1 million of amounts owed to the Company by 19th Capital and (iv) contributed $7.6 million of the remaining consideration due from 19th Capital related to a September 30, 2016 deferred sale transaction with 19th Capital that was previously recorded as a financing transaction under GAAP. The contribution of the $7.6 million resulted in the removal of “Leased assets” of $21.9 million and $14.3 million of liabilities recorded within “Lease servicing liabilities” and “Other long term liabilities”. In consideration of the foregoing, 19th Capital (i) issued to the Company membership units of 19th Capital, which, after the consummation of the Transactions, constituted approximately 49.99% of the issued and outstanding units of 19th Capital.
|
|
·
|
Summary of Transactions: The following table summarizes the Company’s total contribution to 19th Capital at closing (in thousands):
|
Contribution
|
Description
|
||
$
|
56,000
|
Equipment contributed to 19th Capital at closing
|
|
7,600
|
Contribution of deferred sale receivable
|
||
35,300
|
Cash contributed to 19th Capital
|
||
1,100
|
Receivable due from 19th Capital
|
||
$
|
100,000
|
Total contribution to 19th Capital at closing
|
14. | Recent Accounting Pronouncements |
·
|
|
Total revenue decreased 3.5% to $265.7 million from $275.4 million;
|
·
|
|
Freight revenue, which excludes fuel surcharges, decreased 2.8% to $242.3 million from $249.3 million;
|
·
|
|
Net income (loss) decreased 122.7% to ($1.5) million from $6.6 million; and
|
·
|
|
Net income (loss) per diluted share decreased 125.0% to ($0.06) from $0.24.
|
Three months ended
|
Six months ended
|
|||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
Operating revenue
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
||||||||
Operating expenses:
|
||||||||||||||||
Salaries, wages, and employee benefits
|
29.9
|
%
|
31.2
|
%
|
30.6
|
%
|
30.9
|
%
|
||||||||
Fuel
|
10.3
|
%
|
9.7
|
%
|
10.1
|
%
|
10.1
|
%
|
||||||||
Purchased transportation
|
32.2
|
%
|
34.1
|
%
|
33.1
|
%
|
33.8
|
%
|
||||||||
Revenue equipment rentals
|
3.5
|
%
|
0.8
|
%
|
3.5
|
%
|
0.8
|
%
|
||||||||
Operations and maintenance
|
8.3
|
%
|
6.6
|
%
|
7.8
|
%
|
6.6
|
%
|
||||||||
Insurance and claims
|
5.2
|
%
|
2.8
|
%
|
4.2
|
%
|
2.7
|
%
|
||||||||
Depreciation and amortization
|
6.4
|
%
|
7.0
|
%
|
6.8
|
%
|
7.5
|
%
|
||||||||
Communications and utilities
|
1.0
|
%
|
0.9
|
%
|
0.9
|
%
|
0.9
|
%
|
||||||||
Operating taxes and licenses
|
1.8
|
%
|
2.0
|
%
|
1.7
|
%
|
1.9
|
%
|
||||||||
General and other operating
|
2.3
|
%
|
1.7
|
%
|
2.2
|
%
|
1.7
|
%
|
||||||||
Gain on disposition of equipment
|
(0.2
|
%)
|
(2.0
|
%)
|
(0.3
|
%)
|
(3.4
|
%)
|
||||||||
Total operating expenses
|
100.7
|
%
|
94.8
|
%
|
100.6
|
%
|
93.5
|
%
|
||||||||
Operating income (loss)
|
(0.7
|
%)
|
5.2
|
%
|
(0.6
|
%)
|
6.5
|
%
|
||||||||
Other expense (income)
|
0.4
|
%
|
1.4
|
%
|
0.8
|
%
|
1.3
|
%
|
||||||||
Income (loss) before income taxes
|
(1.1
|
%)
|
3.8
|
%
|
(1.4
|
%)
|
5.2
|
%
|
||||||||
Income tax (benefit) expense
|
(0.5
|
%)
|
1.3
|
%
|
(0.6
|
%)
|
1.9
|
%
|
||||||||
Net income (loss)
|
(0.6
|
%)
|
2.5
|
%
|
(0.8
|
%)
|
3.3
|
%
|
||||||||
Three months ended
|
Six months ended
|
|||||||||||||||
December 31,
|
December 31,
|
|||||||||||||||
2016
|
2015
|
2016
|
2015
|
|||||||||||||
Freight revenue(1)
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
||||||||
Operating expenses:
|
||||||||||||||||
Salaries, wages, and employee benefits
|
32.8
|
%
|
34.5
|
%
|
33.5
|
%
|
34.3
|
%
|
||||||||
Fuel(1)
|
1.6
|
%
|
0.2
|
%
|
1.4
|
%
|
0.0
|
%
|
||||||||
Purchased transportation
|
35.3
|
%
|
37.7
|
%
|
36.4
|
%
|
37.5
|
%
|
||||||||
Revenue equipment rentals
|
3.8
|
%
|
0.9
|
%
|
3.9
|
%
|
0.9
|
%
|
||||||||
Operations and maintenance
|
9.1
|
%
|
7.3
|
%
|
8.5
|
%
|
7.4
|
%
|
||||||||
Insurance and claims
|
5.7
|
%
|
3.1
|
%
|
4.5
|
%
|
3.0
|
%
|
||||||||
Depreciation and amortization
|
7.0
|
%
|
7.7
|
%
|
7.5
|
%
|
8.4
|
%
|
||||||||
Communications and utilities
|
1.1
|
%
|
1.0
|
%
|
1.0
|
%
|
1.0
|
%
|
||||||||
Operating taxes and licenses
|
2.0
|
%
|
2.2
|
%
|
1.9
|
%
|
2.2
|
%
|
||||||||
General and other operating
|
2.5
|
%
|
1.9
|
%
|
2.4
|
%
|
1.9
|
%
|
||||||||
Gain on disposition of equipment
|
(0.2
|
%)
|
(2.2
|
%)
|
(0.4
|
%)
|
(3.8
|
%)
|
||||||||
Total operating expenses
|
100.7
|
%
|
94.3
|
%
|
100.6
|
%
|
92.8
|
%
|
||||||||
Operating income (loss)
|
(0.7
|
%)
|
5.7
|
%
|
(0.6
|
%)
|
7.2
|
%
|
||||||||
Other expense (income)
|
0.5
|
%
|
1.5
|
%
|
0.9
|
%
|
1.4
|
%
|
||||||||
Income (loss) before income taxes
|
(1.2
|
%)
|
4.2
|
%
|
(1.5
|
%)
|
5.8
|
%
|
||||||||
Income tax (benefit) expense
|
(0.6
|
%)
|
1.5
|
%
|
(0.6
|
%)
|
2.1
|
%
|
||||||||
Net income (loss)
|
(0.6
|
%)
|
2.7
|
%
|
(0.9
|
%)
|
3.7
|
%
|
(1)
|
Freight revenue is total revenue less fuel surcharges. In this table, fuel surcharges are eliminated from revenue and subtracted from fuel expense. Fuel surcharges were $23.4 million and $26.1 million for the second quarter of fiscal 2017 and 2016, respectively, and $46.9 million and $54.4 million for the six months ended December 31, 2016 and 2015, respectively. Freight revenue is not a recognized measure under GAAP and should not be considered an alternative to or superior to other measures derived in accordance with GAAP. We believe our presentation of freight revenue and our discussion of various expenses as a percentage of freight revenue is a useful way to evaluate our core operating performance.
|
·
|
"Earnings," "profits" and similar terms referred to "net income (loss) excluding after-tax income (loss) from equity method investment and changes in value of equity method investment." This is referred to herein as "normalized net income (loss)."
|
|
·
|
"Free cash flow" and similar terms referred to normalized net income (loss), plus depreciation and amortization.
|
|
·
|
The references to "$16 million to $18 million" in the conference call referred to expected quarterly depreciation and amortization for the remaining quarters of fiscal 2017 and into fiscal 2018.
|
·
|
We expect to generate normalized net income for fiscal 2018.
|
|
·
|
We expect net capital expenditures (gross capital expenditures less proceeds from disposition of capital assets) to be in the range of $10 million to $15 million for the remaining half of fiscal 2017. This amount excludes any business acquisitions or dispositions, none of which are currently planned. We have not finalized a capital expenditure budget for fiscal 2018.
|
|
·
|
We expect to reduce our leverage ratio (as defined in our credit agreement) during fiscal 2018.
|
3.1
|
Amended and Restated Certificate of Incorporation of the Company, effective January 12, 2006. (Incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ending December 31, 2005, filed with the SEC on January 30, 2006.)
|
3.2
|
Certificate of Designation for Series A Junior Participating Preferred Stock. (Incorporated by reference to Exhibit 3.3 to the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2000, filed with the SEC on September 28, 2000.)
|
3.3
|
Amended and Restated By-Laws of the Company. (Incorporated by reference to Exhibit 3.3 to the Company's Quarterly Report on Form 10-Q filed with the SEC on January 31, 2008.)
|
4.1
|
Amended and Restated Certificate of Incorporation of the Company, effective January 12, 2006. (Incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ending December 31, 2005, filed with the SEC on January 30, 2006.)
|
4.2
|
Certificate of Designation for Series A Junior Participating Preferred Stock. (Incorporated by reference to Exhibit 3.3 to the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2000, filed with the SEC on September 28, 2000.)
|
4.3
|
Amended and Restated By-Laws of the Company. (Incorporated by reference to Exhibit 3.3 to the Company's Quarterly Report on Form 10-Q filed with the SEC on January 31, 2008.)
|
Membership Interest Redemption Agreement dated December 30, 2016 by and between the Company, as seller, and 19th Capital Group, LLC.*
|
|
Subscription Agreement dated December 30, 2016 by and among the Company, 19th Capital Group, LLC, and Element Transportation LLC.*
|
|
Amended and Restated Limited Liability Company Agreement of 19th Capital Group, LLC dated December 30, 2016 by and among the Company, Element Transportation LLC, Harry Dugan, and Gregory Burke.*
|
|
Service Agreement dated December 30, 2016 by and between 19th Capital Group, LLC and Quality Companies, LLC.*
|
|
Third Amendment to Amended and Restated Credit Agreement dated December 30, 2016 by and among the Company, Bank of America, N.A., as Administrative Agent, Swing Line Lender, and L/C Issuer, Wells Fargo Bank, N.A., and Citizens Bank, N.A., both as lenders.*
|
|
Certification pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, by Paul A. Will, the Company's Principal Executive Officer.*
|
|
Certification pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, by Bobby L. Peavler, the Company's Principal Financial Officer.*
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes–Oxley Act of 2002, by Paul A. Will, the Company's Chief Executive Officer.*
|
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by Bobby L. Peavler, the Company's Chief Financial Officer.*
|
|
101.INS
|
XBRL Instance Document.*
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.*
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.*
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.*
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document.*
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.*
|
*
|
Filed herewith
|
Celadon Group, Inc.
(Registrant)
|
||
Date: February 10, 2017
|
/s/ Paul A. Will
|
|
Paul A. Will
|
||
Chief Executive Officer and Chairman of the Board
(Principal Executive Officer)
|
||
Date: February 10, 2017
|
/s/ Bobby L. Peavler
|
|
Bobby L. Peavler
|
||
Executive Vice President, Chief Financial Officer, and Treasurer
(Principal Financial Officer and Principal Accounting Officer)
|
EXHIBIT INDEX
|
||
Exhibit
Number
|
Description
|
|
3.1
|
Amended and Restated Certificate of Incorporation of the Company, effective January 12, 2006. (Incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ending December 31, 2005, filed with the SEC on January 30, 2006.)
|
|
3.2
|
Certificate of Designation for Series A Junior Participating Preferred Stock. (Incorporated by reference to Exhibit 3.3 to the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2000, filed with the SEC on September 28, 2000.)
|
|
3.3
|
Amended and Restated By-Laws of the Company. (Incorporated by reference to Exhibit 3.3 to the Company's Quarterly Report on Form 10-Q filed with the SEC on January 31, 2008.)
|
|
4.1
|
Amended and Restated Certificate of Incorporation of the Company, effective January 12, 2006. (Incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the quarterly period ending December 31, 2005, filed with the SEC on January 30, 2006.)
|
|
4.2
|
Certificate of Designation for Series A Junior Participating Preferred Stock. (Incorporated by reference to Exhibit 3.3 to the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2000, filed with the SEC on September 28, 2000.)
|
|
4.3
|
Amended and Restated By-Laws of the Company. (Incorporated by reference to Exhibit 3.3 to the Company's Quarterly Report on Form 10-Q filed with the SEC on January 31, 2008.)
|
|
Membership Interest Redemption Agreement dated December 30, 2016 by and between the Company, as seller, and 19th Capital Group, LLC*
|
||
Subscription Agreement dated December 30, 2016 by and among the Company, 19th Capital Group, LLC, and Element Transportation LLC.*
|
||
Amended and Restated Limited Liability Company Agreement of 19th Capital Group, LLC dated December 30, 2016 by and among the Company, Element Transportation LLC, Harry Dugan, and Gregory Burke.*
|
||
Service Agreement dated December 30, 2016 by and between 19th Capital Group, LLC and Quality Companies, LLC.*
|
||
Third Amendment to Amended and Restated Credit Agreement dated December 30, 2016 by and among the Company, Bank of America, N.A., as Administrative Agent, Swing Line Lender, and L/C Issuer, Wells Fargo Bank, N.A., and Citizens Bank, N.A., both as lenders.*
|
||
Certification pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, by Paul A. Will, the Company's Principal Executive Officer.*
|
||
Certification pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, by Bobby L. Peavler, the Company's Principal Financial Officer.*
|
||
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes–Oxley Act of 2002, by Paul A. Will, the Company's Chief Executive Officer.*
|
||
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by Bobby L. Peavler, the Company's Chief Financial Officer.*
|
||
101.INS
|
XBRL Instance Document.*
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document.*
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document.*
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document.*
|
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document.*
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.*
|
*
|
Filed herewith
|
If to Seller:
|
Celadon Group, Inc.
9503 E. 33rd Street
Indianapolis, IN 46235
Attention: Paul A. Will
Email: pwill@celadontrucking.com
|
|
If to 19th Capital:
|
19th Capital Group, LLC
9702 East 30th Street
Indianapolis, IN 46229
Attention: Harry Dugan, President
Email: hdugan@19thcapital.com
|
SELLER:
|
||
CELADON GROUP, INC.
|
||
By:
|
/s/ Paul Will
|
|
Name: Paul Will
|
||
Title: CEO
|
19th CAPITAL:
|
||
19th CAPITAL GROUP, LLC
|
||
By:
|
/s/ Harry Dugan
|
|
Name: Harry Dugan
|
||
Title: President
|
Very truly yours,
|
||
ELEMENT TRANSPORTATION LLC
|
||
By:
|
/s/ James Halliday
|
|
Name: James Halliday
|
||
Title: Authorized Signatory
|
||
CELADON GROUP, INC.
|
||
By:
|
/s/ Paul Will
|
|
Name: Paul Will
|
||
Title: CEO
|
19TH CAPITAL GROUP, LLC
|
||
By:
|
/s/ Harry Dugan
|
|
Name: Harry Dugan
|
||
Title: President
|
Page
|
||
Article I Definitions
|
1
|
|
SECTION 1.1
|
Definitions
|
1
|
SECTION 1.2
|
Construction
|
9
|
Article II Formation and Term
|
9
|
|
SECTION 2.1
|
Formation
|
9
|
SECTION 2.2
|
Name
|
10
|
SECTION 2.3
|
Term
|
10
|
SECTION 2.4
|
Principal Place of Business
|
10
|
SECTION 2.5
|
Registered Agent and Office
|
10
|
SECTION 2.6
|
Qualification in Other Jurisdictions; Conduct of Business
|
10
|
Article III Purpose and Powers
|
10
|
|
SECTION 3.1
|
Purpose and Powers
|
10
|
Article IV Members; Additional Interests; Conversion
|
10
|
|
SECTION 4.1
|
General
|
10
|
SECTION 4.2
|
Powers of Members
|
11
|
SECTION 4.3
|
Nature of a Member's Interest
|
11
|
SECTION 4.4
|
No Other Persons Deemed Members
|
11
|
SECTION 4.5
|
No Cessation of Membership Upon Bankruptcy, etc.
|
11
|
SECTION 4.6
|
Admission of Additional Members and Creation of Additional Units
|
11
|
Article V Capital Contributions; Default; Liability of Members
|
12
|
|
SECTION 5.1
|
Capital Contributions
|
12
|
SECTION 5.2
|
Liability of Members
|
12
|
SECTION 5.3
|
Units Certificated
|
12
|
Article VI Distribution; Allocation of Profits and Losses
|
12
|
|
SECTION 6.1
|
Distributions
|
12
|
SECTION 6.2
|
Allocations
|
13
|
SECTION 6.3
|
Tax Allocations
|
13
|
Article VII Management
|
13
|
|
SECTION 7.1
|
Management Under Direction of the Board
|
13
|
SECTION 7.2
|
Meetings of the Board
|
15
|
SECTION 7.3
|
Quorum and Acts of the Board
|
15
|
SECTION 7.4
|
Telephonic or Video Communications
|
17
|
SECTION 7.5
|
Action by Written Consent
|
17
|
SECTION 7.6
|
Transactions with Members and their Affiliates
|
17
|
SECTION 7.7
|
Outside Businesses and Corporate Opportunities
|
18
|
SECTION 7.8
|
Committees of the Board
|
19
|
Article VIII Duties, Liability, Exculpation, Indemnification and Insurance
|
19
|
|
SECTION 8.1
|
Duties
|
19
|
SECTION 8.2
|
Liability
|
19
|
SECTION 8.3
|
Exculpation
|
19
|
SECTION 8.4
|
Indemnification
|
20
|
SECTION 8.5
|
Advancement of Expenses
|
20
|
SECTION 8.6
|
Notice of Proceedings
|
20
|
SECTION 8.7
|
Insurance
|
21
|
SECTION 8.8
|
Service Agreement
|
21
|
Article IX Transferability of Units
|
22
|
|
SECTION 9.1
|
General Transfer Restrictions
|
22
|
SECTION 9.2
|
Right of First Offer
|
22
|
SECTION 9.3
|
Tag-Along Rights
|
23
|
SECTION 9.4
|
Other Permitted Transfers
|
25
|
SECTION 9.5
|
Other Transfer Restrictions
|
26
|
SECTION 9.6
|
Substituted Members
|
27
|
SECTION 9.7
|
Transfer of Management Equity
|
28
|
Article X Records and Reports; Fiscal Affairs
|
28
|
|
SECTION 10.1
|
Records and Accounting
|
28
|
SECTION 10.2
|
Financial Statements and Reports
|
28
|
Article XI Tax Matters
|
29
|
|
SECTION 11.1
|
Preparation of Tax Returns
|
29
|
SECTION 11.2
|
Tax Mattes Member
|
30
|
SECTION 11.3
|
Organizational Expenses
|
30
|
SECTION 11.4
|
Withholding
|
30
|
SECTION 11.5
|
Classification
|
31
|
SECTION 11.6
|
Listed and Reportable Transactions
|
31
|
Article XII Dissolution, Liquidation and Termination
|
31
|
|
SECTION 12.1
|
Dissolution
|
31
|
SECTION 12.2
|
Liquidation of the Company's Assets Upon Dissolution
|
31
|
SECTION 12.3
|
Termination
|
32
|
SECTION 12.4
|
Claims of the Members
|
32
|
SECTION 12.5
|
Survival
|
33
|
Article XIII Consents, Voting and Meetings of Members
|
33
|
|
SECTION 13.1
|
Management Member
|
33
|
SECTION 13.2
|
Meetings
|
33
|
SECTION 13.3
|
Record Dates
|
33
|
SECTION 13.4
|
Consent Rights
|
33
|
SECTION 13.5
|
Voting and Other Rights
|
34
|
Article XIV Representations and Warranties of Each Member
|
34
|
|
SECTION 14.1
|
Representations and Warranties of each Member
|
34
|
Article XV General Provisions
|
35
|
|
SECTION 15.1
|
Notices
|
35
|
SECTION 15.2
|
Amendments
|
38
|
SECTION 15.3
|
Confidentiality
|
38
|
SECTION 15.4
|
Entire Agreement
|
38
|
SECTION 15.5
|
Successors and Assigns; Binding Effect
|
38
|
SECTION 15.6
|
Severability
|
39
|
SECTION 15.7
|
No Waiver
|
39
|
SECTION 15.8
|
Dispute Resolution and Arbitration
|
39
|
SECTION 15.9
|
Governing Law
|
39
|
SECTION 15.10
|
Judicial Proceedings
|
39
|
SECTION 15.11
|
Aggregation of Units
|
40
|
SECTION 15.12
|
Equitable Relief
|
40
|
SECTION 15.13
|
Table of Contents, Headings and Captions
|
40
|
SECTION 15.14
|
Counterparts
|
40
|
Term
|
Section
|
Act
|
Recitals
|
Board
|
7.1(a)
|
Capital Contributions
|
5.1(a)
|
Claims and Expenses
|
8.4
|
Company
|
Preamble
|
Competitor
|
9.1(b)
|
Effective Date
|
Preamble
|
KCMH
|
Preamble
|
Manager
|
7.1(a)
|
Offer Notice
|
9.2(a)
|
Offered Price
|
9.2(b)(i)
|
Offeree
|
9.2(a)
|
Offeror
|
9.2(a)
|
Pro Rata Share
|
9.3(e)(i)
|
Proposed Sale
|
9.3(a)
|
Proposed Transferee
|
9.3(b)(i)
|
Selling Member
|
9.3(a)
|
Services Agreement
|
Preamble
|
Subject Units
|
9.2(b)(i)
|
Tag Along Notice
|
9.3(a)
|
Tag Along Offer
|
9.3(c)
|
Tag Along Sale Percentage
|
9.3(b)(i)
|
Tag Along Sellers
|
9.3(b)(ii)
|
Tagging Members
|
9.3(b)(ii)
|
Tax Items
|
6.3
|
Tax Matters Member
|
11.2(a)
|
ELEMENT TRANSPORTATION LLC
|
||
By:
|
|
|
Name:
|
||
Title:
|
||
CELADON GROUP, INC.
|
||
By:
|
|
|
Name:
|
||
Title:
|
||
|
||
Name: Gregory Burke
|
||
|
||
Name: Harry Dugan
|
Page
|
||
Article I Definitions
|
1
|
|
SECTION 1.1
|
Definitions
|
1
|
SECTION 1.2
|
Construction
|
9
|
Article II Formation and Term
|
9
|
|
SECTION 2.1
|
Formation
|
9
|
SECTION 2.2
|
Name
|
10
|
SECTION 2.3
|
Term
|
10
|
SECTION 2.4
|
Principal Place of Business
|
10
|
SECTION 2.5
|
Registered Agent and Office
|
10
|
SECTION 2.6
|
Qualification in Other Jurisdictions; Conduct of Business
|
10
|
Article III Purpose and Powers
|
10
|
|
SECTION 3.1
|
Purpose and Powers
|
10
|
Article IV Members; Additional Interests; Conversion
|
10
|
|
SECTION 4.1
|
General
|
10
|
SECTION 4.2
|
Powers of Members
|
11
|
SECTION 4.3
|
Nature of a Member's Interest
|
11
|
SECTION 4.4
|
No Other Persons Deemed Members
|
11
|
SECTION 4.5
|
No Cessation of Membership Upon Bankruptcy, etc.
|
11
|
SECTION 4.6
|
Admission of Additional Members and Creation of Additional Units
|
11
|
Article V Capital Contributions; Default; Liability of Members
|
12
|
|
SECTION 5.1
|
Capital Contributions
|
12
|
SECTION 5.2
|
Liability of Members
|
12
|
SECTION 5.3
|
Units Certificated
|
12
|
Article VI Distribution; Allocation of Profits and Losses
|
12
|
|
SECTION 6.1
|
Distributions
|
12
|
SECTION 6.2
|
Allocations
|
13
|
SECTION 6.3
|
Tax Allocations
|
13
|
Article VII Management
|
13
|
|
SECTION 7.1
|
Management Under Direction of the Board
|
13
|
SECTION 7.2
|
Meetings of the Board
|
15
|
SECTION 7.3
|
Quorum and Acts of the Board
|
15
|
SECTION 7.4
|
Telephonic or Video Communications
|
17
|
SECTION 7.5
|
Action by Written Consent
|
17
|
SECTION 7.6
|
Transactions with Members and their Affiliates
|
17
|
SECTION 7.7
|
Outside Businesses and Corporate Opportunities
|
18
|
SECTION 7.8
|
Committees of the Board
|
19
|
Article VIII Duties, Liability, Exculpation, Indemnification and Insurance
|
19
|
|
SECTION 8.1
|
Duties
|
19
|
SECTION 8.2
|
Liability
|
19
|
SECTION 8.3
|
Exculpation
|
19
|
SECTION 8.4
|
Indemnification
|
20
|
SECTION 8.5
|
Advancement of Expenses
|
20
|
SECTION 8.6
|
Notice of Proceedings
|
20
|
SECTION 8.7
|
Insurance
|
21
|
SECTION 8.8
|
Service Agreement
|
21
|
Article IX Transferability of Units
|
22
|
|
SECTION 9.1
|
General Transfer Restrictions
|
22
|
SECTION 9.2
|
Right of First Offer
|
22
|
SECTION 9.3
|
Tag-Along Rights
|
23
|
SECTION 9.4
|
Other Permitted Transfers
|
25
|
SECTION 9.5
|
Other Transfer Restrictions
|
26
|
SECTION 9.6
|
Substituted Members
|
27
|
SECTION 9.7
|
Transfer of Management Equity
|
28
|
Article X Records and Reports; Fiscal Affairs
|
28
|
|
SECTION 10.1
|
Records and Accounting
|
28
|
SECTION 10.2
|
Financial Statements and Reports
|
28
|
Article XI Tax Matters
|
29
|
|
SECTION 11.1
|
Preparation of Tax Returns
|
29
|
SECTION 11.2
|
Tax Mattes Member
|
30
|
SECTION 11.3
|
Organizational Expenses
|
30
|
SECTION 11.4
|
Withholding
|
30
|
SECTION 11.5
|
Classification
|
31
|
SECTION 11.6
|
Listed and Reportable Transactions
|
31
|
Article XII Dissolution, Liquidation and Termination
|
31
|
|
SECTION 12.1
|
Dissolution
|
31
|
SECTION 12.2
|
Liquidation of the Company's Assets Upon Dissolution
|
31
|
SECTION 12.3
|
Termination
|
32
|
SECTION 12.4
|
Claims of the Members
|
32
|
SECTION 12.5
|
Survival
|
33
|
Article XIII Consents, Voting and Meetings of Members
|
33
|
|
SECTION 13.1
|
Management Member
|
33
|
SECTION 13.2
|
Meetings
|
33
|
SECTION 13.3
|
Record Dates
|
33
|
SECTION 13.4
|
Consent Rights
|
33
|
SECTION 13.5
|
Voting and Other Rights
|
34
|
Article XIV Representations and Warranties of Each Member
|
34
|
|
SECTION 14.1
|
Representations and Warranties of each Member
|
34
|
Article XV General Provisions
|
35
|
|
SECTION 15.1
|
Notices
|
35
|
SECTION 15.2
|
Amendments
|
38
|
SECTION 15.3
|
Confidentiality
|
38
|
SECTION 15.4
|
Entire Agreement
|
38
|
SECTION 15.5
|
Successors and Assigns; Binding Effect
|
38
|
SECTION 15.6
|
Severability
|
39
|
SECTION 15.7
|
No Waiver
|
39
|
SECTION 15.8
|
Dispute Resolution and Arbitration
|
39
|
SECTION 15.9
|
Governing Law
|
39
|
SECTION 15.10
|
Judicial Proceedings
|
39
|
SECTION 15.11
|
Aggregation of Units
|
40
|
SECTION 15.12
|
Equitable Relief
|
40
|
SECTION 15.13
|
Table of Contents, Headings and Captions
|
40
|
SECTION 15.14
|
Counterparts
|
40
|
Term
|
Section
|
Act
|
Recitals
|
Board
|
7.1(a)
|
Capital Contributions
|
5.1(a)
|
Claims and Expenses
|
8.4
|
Company
|
Preamble
|
Competitor
|
9.1(b)
|
Effective Date
|
Preamble
|
KCMH
|
Preamble
|
Manager
|
7.1(a)
|
Offer Notice
|
9.2(a)
|
Offered Price
|
9.2(b)(i)
|
Offeree
|
9.2(a)
|
Offeror
|
9.2(a)
|
Pro Rata Share
|
9.3(e)(i)
|
Proposed Sale
|
9.3(a)
|
Proposed Transferee
|
9.3(b)(i)
|
Selling Member
|
9.3(a)
|
Services Agreement
|
Preamble
|
Subject Units
|
9.2(b)(i)
|
Tag Along Notice
|
9.3(a)
|
Tag Along Offer
|
9.3(c)
|
Tag Along Sale Percentage
|
9.3(b)(i)
|
Tag Along Sellers
|
9.3(b)(ii)
|
Tagging Members
|
9.3(b)(ii)
|
Tax Items
|
6.3
|
Tax Matters Member
|
11.2(a)
|
ELEMENT TRANSPORTATION LLC
|
||
By:
|
/s/ James Halliday
|
|
Name: James Halliday
|
||
Title: Authorized Signatory
|
||
CELADON GROUP, INC.
|
||
By:
|
/s/ Paul Will
|
|
Name: Paul Will
|
||
Title: CEO
|
||
/s/ Gregory Burke
|
||
Name: Gregory Burke
|
||
/s/ Harry Dugan
|
||
Name: Harry Dugan
|
Name and Address of Member
|
Capital Contributions
|
Number Of Units
|
Element Transportation LLC
c/o Element Fleet Management Corp.
161 Bay Street, 36th Floor
Toronto, Ontario M5J 2S1
Canada
|
As described in the Subscription Agreement
|
9,999,995
|
Celadon Group, Inc.
9503 E. 33rd Street
Indianapolis, IN 46235
|
As described in the Subscription Agreement
|
9,999,995
|
Harry Dugan
353 West Lancaster Avenue
Suite 300
Wayne, PA 19087
|
As described in the applicable Management Subscription Agreement
|
5
|
Gregory Burke
655 Business Center Drive
Suite 250
Horsham, PA 19044
|
As described in the applicable Management Subscription Agreement
|
5
|
Certificate No. [ ]
|
[ ] Units ([ ]% of Membership Interests)
|
QUALITY:
|
||
QUALITY COMPANIES, LLC
|
||
By:
|
/s/ Leslie Tarble
|
|
Name: Leslie Tarble
|
||
Title: CFO
|
||
19th CAPITAL:
|
||
19TH CAPITAL GROUP, LLC
|
||
By:
|
/s/ Harry Dugan
|
|
Name: Harry Dugan
|
||
Title: President
|
1. | Fleet Program Agreement, dated September 28, 2015, by and among 19th Capital Group, LLC, Quality Companies, LLC, formerly dba Quality Equipment Sales, and Quality Equipment Leasing, LLC, dba Quality Equipment Sales. |
2. | Service Agreement, dated September 28, 2015, by and among 19th Capital Group, LLC, Quality Companies, LLC, formerly dba Quality Equipment Sales, and Quality Equipment Leasing, LLC, dba Quality Equipment Sales, as amended by that First Amendment to Service Agreement, dated March 30, 2016, by and among 19th Capital Group, LLC, Quality Companies, LLC, formerly dba Quality Equipment Sales, and Quality Equipment Leasing, LLC, dba Quality Equipment Sales. |
3. | Reserve Account Agreement, dated September 28, 2015, by and among 19th Capital Group, LLC, Quality Companies, LLC, formerly dba Quality Equipment Sales, and Quality Equipment Leasing, LLC, dba Quality Equipment Sales. |
4. | Supplement to Reserve Account Agreement, dated September 28, 2015, by and among 19th Capital Group, LLC, Quality Companies, LLC, formerly dba Quality Equipment Sales, and Quality Equipment Leasing, LLC, dba Quality Equipment Sales. |
5. | Program Agreement, dated September 28, 2015, by and among 19th Capital Group, LLC, Quality Companies, LLC, formerly dba Quality Equipment Sales, and Quality Equipment Leasing, LLC, dba Quality Equipment Sales. |
6. | Portfolio Purchase and Sale Agreement, dated September 28, 2015, by and among 19th Capital Group, LLC, Quality Companies, LLC, formerly dba Quality Equipment Sales, and Quality Equipment Leasing, LLC, dba Quality Equipment Sales. |
7. | Portfolio Purchase and Sale Agreement, dated October 27, 2015, by and among 19th Capital Group, LLC, Quality Companies, LLC, formerly dba Quality Equipment Sales, and Quality Equipment Leasing, LLC, dba Quality Equipment Sales. |
|
8. | Portfolio Purchase and Sale Agreement, dated June 8, 2016, by and among 19th Capital Group, LLC, Quality Companies, LLC, and Quality Equipment Leasing, LLC, dba Quality Equipment Sales. |
9. | Portfolio Purchase and Sale Agreement, dated October 20, 2015, by and among 19th Capital Group, LLC, Quality Companies, LLC, formerly dba Quality Equipment Sales, and Quality Equipment Leasing, LLC, dba Quality Equipment Sales. |
10. | Portfolio Purchase and Sale Agreement, dated December 30, 2015, by and among 19th Capital Group, LLC, Quality Companies, LLC, and Quality Equipment Leasing, LLC, dba Quality Equipment Sales. |
11. | Portfolio Purchase and Sale Agreement, dated October 29, 2015, by and among 19th Capital Group, LLC, Quality Companies, LLC, formerly dba Quality Equipment Sales, and Quality Equipment Leasing, LLC, dba Quality Equipment Sales. |
12. | Portfolio Purchase and Sale Agreement, dated December 23, 2015, by and among 19th Capital Group, LLC, Quality Companies, LLC, and Quality Equipment Leasing, LLC, dba Quality Equipment Sales. |
13. | Servicing Agreement, dated November 16, 2015, by and between 19th Capital Titling Limited and 19th Capital Group, LLC. |
14. | 2016-A SUBI Sale Agreement, dated June 8, 2016, by and between 19th Capital Group, LLC and 19th Capital SPE I, LLC. |
15. | 2016-A SUBI Servicing Agreement, dated June 8, 2016, by and among 19th Capital Titling Limited, 19th Capital SPE I, LLC, Quality Companies, LLC, and Quality Equipment Leasing, LLC, dba Quality Equipment Sales. |
16. | Portfolio Purchase and Sale Agreement, dated September 30, 2016, by and among 19th Capital Group, LLC, Quality Companies, LLC, and Quality Equipment Leasing, LLC, dba Quality Equipment Sales. |
17. | 2016-B SUBI Sale Agreement, dated September 30, 2016, by and between 19th Capital Group, LLC and 19th Capital SPE II, LLC. |
18. | 2016-B SUBI Servicing Agreement, dated September 30, 2016, by and among 19th Capital Titling Limited, 19th Capital SPE II, LLC, Quality Companies, LLC, and Quality Equipment Leasing, LLC, dba Quality Equipment Sales. |
(a) | Adjustments. |
"BORROWER" | |
CELADON GROUP, INC.
|
|
By:
|
/s/ Paul Will
|
Title:
|
CEO
|
"GUARANTORS" | |
CELADON TRUCKING SERVICES, INC.
|
|
By:
|
/s/ Paul Will
|
Title:
|
CEO
|
CELADON LOGISTICS SERVICES, INC.
|
|
By:
|
/s/ Paul Will
|
Title:
|
CEO
|
QUALITY EQUIPMENT LEASING, LLC
|
|
By:
|
/s/ Paul Will
|
Title:
|
CEO
|
CELADON E-COMMERCE, INC.
|
|
By:
|
/s/ Paul Will
|
Title:
|
CEO
|
TRANSPORTATION SERVICES
INSURANCE COMPANY, INC.
|
|
By:
|
/s/ Paul Will
|
Title:
|
CEO
|
A&S SERVICES GROUP, LLC
|
|
By:
|
/s/ Paul Will
|
Title:
|
CEO
|
OSBORN TRANSPORTATION, INC,
|
|
By:
|
/s/ Paul Will
|
Title:
|
CEO
|
CELADON CANADIAN HOLDINGS, LIMITED
|
|
By:
|
/s/ Paul Will
|
Title:
|
CEO
|
“ADMINISTRATIVE AGENT”
|
|
BANK OF AMERICA, N.A., as Administrative Agent
|
|
By:
|
/s/ Patrick Devitt
|
Title:
|
Vice President
|
“SWING LINE LENDER”, “L/C ISSUER”, “LENDER”
|
|
BANK OF AMERICA, N.A., as Swing Line Lender, as L/C Issuer and as a Lender
|
|
By:
|
/s/ Jennifer Brown
|
Title:
|
Vice President
|
“LENDERS”
|
|
WELLS FARGO BANK, NA., a Lender
|
|
By:
|
/s/ Candelario Martinez
|
Title: | Candelario Martinez |
|
Senior Vice President
|
CITIZENS BANK, NA., a Lender
|
|
By:
|
/s/ Scott Lankford
|
Title:
|
Vice President
|
Lender
|
Commitment
|
Applicable
Percentage
|
Bank of America, N.A.
|
$104,166,666.68
|
41.6666667%
|
Wells Fargo Bank, N.A.
|
$104,166,666.67
|
41.6666667%
|
Citizens Bank, N.A.
|
$41,666,666.65
|
16.6666666%
|
Total
|
$250,000,000.00
|
100.00%
|
WHOLLY OWNED SUBSIDIARIES:
|
||
NAME OF COMPANY
|
STATUS
|
ORGANIZATION
STATE
|
A&S Services Group, LLC
|
Guarantor
|
DE
|
American Quality, LLC
|
Guarantor
|
IN
|
Bee Line, Inc.
|
Guarantor
|
OH
|
Buckler Transport, Inc.
|
Guarantor
|
PA
|
Celadon Canadian Holdings, Limited
|
Guarantor
|
Ontario, Canada
|
Celadon Driving Academy, LLC
|
Guarantor
|
IN
|
Celadon E-Commerce, Inc.
|
Guarantor
|
DE
|
Celadon Logistics Services, Inc.
|
Guarantor
|
DE
|
Celadon Realty, LLC
|
Guarantor
|
DE
|
Celadon Trucking Services, Inc.
|
Guarantor
|
NJ
|
Distribution, Inc. (FTL)
|
Guarantor
|
OR
|
Eagle Logistics Services, Inc.
|
Guarantor
|
IN
|
Home Management Pros, LLC
|
Guarantor
|
IN
|
Hyndman Transport Limited
|
Guarantor
|
Ontario, Canada
|
Osborn Transportation, Inc.
|
Guarantor
|
AL
|
Prosair Technologies, LLC
|
Guarantor
|
IN
|
Quality Companies, LLC
|
Guarantor
|
IN
|
Quality Equipment Leasing, LLC
|
Guarantor
|
DE
|
Taylor Express, Inc.
|
Guarantor
|
NC
|
The American Franchising Group, LLC
|
Guarantor
|
IN
|
Transportation Services Insurance Company, Inc.
|
Guarantor
|
VT
|
Transportation Insurance Services, RRG, Inc.
|
Restricted Subsidiary
|
SC
|
A&S Kinard Logistics LLC
|
Restricted Subsidiary
|
DE
|
A&S Real Estate Holdings, LLC
|
Restricted Subsidiary
|
DE
|
Buckler Distribution Center
|
Restricted Subsidiary
|
PA
|
Buckler Logistics, Inc.
|
Restricted Subsidiary
|
PA
|
Celadon International Corporation
|
Restricted Subsidiary
|
DE
|
Celadon Mexicana, S.A. de C. V.
|
Restricted Subsidiary
|
Mexico
|
Hunt Valley Equipment Co LLC
|
Restricted Subsidiary
|
DE
|
Jaguar Transportation, Inc.
|
Restricted Subsidiary
|
IN
|
Leasing Servicios, S.A. de C.V.
|
Restricted Subsidiary
|
DE
|
Quality Business Services, LLC
|
Restricted Subsidiary
|
IN
|
Quality Custom Sleepers, LLC
|
Restricted Subsidiary
|
IN
|
Quality Insurance, LLC
|
Restricted Subsidiary
|
IN
|
Quality Specialty Vehicles, LLC
|
Restricted Subsidiary
|
IN
|
Stinger Logistics, Inc.
|
Restricted Subsidiary
|
OH
|
Strategic Leasing, Inc.
|
Restricted Subsidiary
|
OH
|
TCI Logistics
|
Restricted Subsidiary
|
DE
|
Truck Inventory, LLC
|
Restricted Subsidiary
|
NC
|
Vorbas, LLC
|
Restricted Subsidiary
|
IN
|
OTHER EQUITY INVESTMENTS:
|
||
Servicios de Transportacion Jaguar,
S. A. de C. V. (75% Interest)
|
Restricted Subsidiary
|
Mexico
|
GSM Transportation, LLC
(49% Interest in Minority
Business Enterprise)
|
Non Subsidiary MBE
|
IN
|
19th Capital Group LLC
(49.95% Interest)
|
Non Subsidiary
|
DE
|
1. | I have reviewed this Form 10-Q of Celadon Group, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: February 10, 2017
|
/s/Paul A. Will
|
Paul A. Will
|
|
Chief Executive Officer
(Principal Executive Officer)
|
1. | I have reviewed this Form 10-Q of Celadon Group, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions): |
(a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
(b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: February 10, 2017
|
/s/Bobby L. Peavler
|
Bobby L. Peavler
|
|
Executive Vice President, Chief Financial Officer, and Treasurer
(Principal Financial Officer and Principal Accounting Officer)
|
1. | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/Paul A. Will
|
|
Date: February 10, 2017
|
Paul A. Will
|
Chief Executive Officer
|
1. | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/Bobby L. Peavler
|
|
Date: February 10, 2017
|
Bobby L. Peavler
|
Chief Financial Officer
|
Document And Entity Information - shares |
6 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Feb. 09, 2017 |
|
Document Information [Line Items] | ||
Entity Registrant Name | CELADON GROUP INC | |
Entity Central Index Key | 0000865941 | |
Trading Symbol | cgi | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Accelerated Filer | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Entity Common Stock, Shares Outstanding (in shares) | 28,299,404 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2016 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
OPERATING REVENUE: | ||||
Freight revenue | $ 242,349 | $ 249,311 | $ 483,818 | $ 487,123 |
Fuel surcharge revenue | 23,376 | 26,088 | 46,947 | 54,397 |
Total revenue | 265,725 | 275,399 | 530,765 | 541,520 |
OPERATING EXPENSES: | ||||
Salaries, wages, and employee benefits | 79,484 | 85,877 | 162,291 | 167,354 |
Fuel | 27,311 | 26,688 | 53,608 | 54,416 |
Purchased transportation | 85,614 | 93,948 | 175,906 | 182,978 |
Revenue equipment rentals | 9,184 | 2,201 | 18,652 | 4,423 |
Operations and maintenance | 22,108 | 18,243 | 41,258 | 35,849 |
Insurance and claims | 13,691 | 7,709 | 21,947 | 14,637 |
Depreciation and amortization | 16,976 | 19,187 | 36,308 | 40,788 |
Communications and utilities | 2,578 | 2,611 | 4,998 | 4,955 |
Operating taxes and licenses | 4,731 | 5,532 | 9,180 | 10,504 |
General and other operating | 6,289 | 4,803 | 11,429 | 9,085 |
Gain on disposition of equipment | (507) | (5,479) | (1,768) | (18,721) |
Total operating expenses | 267,459 | 261,320 | 533,809 | 506,268 |
Operating income (loss) | (1,734) | 14,079 | (3,044) | 35,252 |
Interest expense | 2,988 | 3,758 | 6,291 | 6,910 |
Other (income) expense, net | (40) | 13 | ||
Loss (income) from equity method investment | (1,824) | 21 | (1,955) | 121 |
Income (loss) before income taxes | (2,858) | 10,300 | (7,393) | 28,221 |
Income tax (benefit) expense | (1,333) | 3,685 | (3,015) | 10,239 |
Net income (loss) | $ (1,525) | $ 6,615 | $ (4,378) | $ 17,982 |
Income (loss) per common share: | ||||
Diluted (in dollars per share) | $ (0.06) | $ 0.24 | $ (0.16) | $ 0.64 |
Basic (in dollars per share) | $ (0.06) | $ 0.24 | $ (0.16) | $ 0.65 |
Diluted weighted average shares outstanding (in shares) | 27,639 | 27,940 | 27,627 | 27,953 |
Basic weighted average shares outstanding (in shares) | 27,639 | 27,480 | 27,627 | 27,467 |
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Net income (loss) | $ (1,525) | $ 6,615 | $ (4,378) | $ 17,982 |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on fuel derivative instruments, net of tax | 199 | (875) | 314 | (1,351) |
Foreign currency translation adjustments, net of tax | (4,044) | (4,829) | (8,947) | (14,260) |
Total other comprehensive loss | (3,845) | (5,704) | (8,633) | (15,611) |
Comprehensive income (loss) | $ (5,370) | $ 911 | $ (13,011) | $ 2,371 |
Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) shares in Thousands, $ in Thousands |
Dec. 31, 2016 |
Jun. 30, 2016 |
---|---|---|
Trade receivables, allowance for doubtful accounts | $ 1,716 | $ 1,588 |
Property and equipment, accumulated depreciation and amortization | 161,537 | 142,423 |
Leased assets, accumulated depreciation and amortization | $ 0 | $ 9,717 |
Common stock, par value (in dollars per share) | $ 0.033 | $ 0.033 |
Common stock, shares authorized (in shares) | 40,000 | 40,000 |
Common stock, shares issued (in shares) | 28,729 | 28,715 |
Common stock, shares outstanding (in shares) | 28,729 | 28,715 |
Treasury stock, shares (in shares) | 500 | 500 |
Note 1 - Basis of Presentation |
6 Months Ended |
---|---|
Dec. 31, 2016 | |
Notes to Financial Statements | |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | 1. Basis of PresentationReferences in this Report on Form 10 -Q to “we,” “us,” “our,” “Celadon,” the “Company” or similar terms refer to Celadon Group, Inc. and its consolidated subsidiaries. All inter-company balances and transactions have been eliminated in consolidation.The accompanying unaudited condensed consolidated financial statements of Celadon Group, Inc. and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America and Regulation S-X, instructions to Form 10 -Q, and other relevant rules and regulations of the Securities and Exchange Commission (the “SEC”), as applicable to the preparation and presentation of interim financial information. Certain information and footnote disclosures have been omitted or condensed pursuant to such rules and regulations. We believe all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Results of operations in interim periods are not necessarily indicative of results for a full year. These condensed consolidated unaudited financial statements and notes thereto should be read in conjunction with our consolidated financial statements and notes thereto included in our Annual Report on Form 10 -K for the fiscal year ended June 30, 2016. The preparation of the financial statements in conformity with United States generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. |
Note 2 - Earnings (Loss) Per Share |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Text Block] | 2. Earnings (Loss) Per Share A reconciliation of the basic and diluted earnings per share is as follows (in thousands, except per share amounts):
There were 854,974 three and six month periods ended December 31, 2016. There were zero shares that were considered anti-dilutive for the three and six month periods ended December 31, 2015. |
Note 3 - Stock Based Compensation |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | 3. Stock Based CompensationThe following table summarizes the components of our stock based compensation program expense (in thousands):
As of December 31, 2016, we had no unrecognized compensation cost related to unvested options granted under our 2006 Omnibus Incentive Plan, as amended (the "2006 Plan"). A summary of the award activity of our stock option plans as of December 31, 2016, and changes during the six -month period then ended is presented below:
As of December 31, 2016, we had approximately $4.8 million of unrecognized compensation expense related to restricted stock awards, which is anticipated to be recognized over a weighted-average period of 2.6 years and a total period of 3.1 years. A summary of the restricted stock award activity under the 2006 Plan as of December 31, 2016, and changes during the six -month period then ended is presented below:
The fair value of each restricted stock award is based on the closing market price on the date of grant. During fiscal 2016, the Company gave certain 2014 and 2015 Restricted Stock Grant (“RSG”) grantees the opportunity to enter into an alternative fixed cash compensation arrangement whereby the grantee would forfeit all rights to unvested RSG awards in exchange for a guaranteed quarterly payment for the remainder of the underlying RSG term. This alternative arrangement is subject to continued service to the Company or one of its subsidiaries. These fixed payments will be accrued quarterly through January 2019. Unearned compensation was not affected by this arrangement and forfeitures include 72,327 shares related to this arrangement. The Company offered this alternative arrangement to mitigate the volatility to earnings from stock price variance on the RSGs. |
Note 4 - Segment Information and Significant Customers |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Notes to Financial Statements | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting Disclosure [Text Block] | 4. Segment Information and Significant Customers We have three reportable segments comprised of an asset-based segment, an asset-light based segment, and an equipment leasing and services segment. Our asset-based segment includes our asset-based dry van carrier and rail services, which are geographically diversified but have similar economic and other relevant characteristics, as they all provide truckload carrier services of general commodities to a similar class of customers. Our asset-light based segment consists of our warehousing, brokerage, and less-than-truckload ("LTL") operations. Our equipment leasing and services segment consists of tractor and trailer sales and leasing. This segment also includes revenues from insurance, maintenance, and other ancillary services that we provide for independent contractors. After the closing of our joint venture in December 2016, we expect ancillary services to be the primary focus of this segment. We have determined that these segments qualify as reportable segments under ASC 280 -10, Segment Reporting . Information regarding our reportable segments is summarized below (in thousands):
Information as to our operating revenue by geographic area is summarized below (in thousands). We allocate operating revenue based on the country of origin of the tractor hauling the freight:
No 10% of the Company's total revenue during the three and six months ended December 31, 2016 or December 31, 2015. |
Note 5 - Income Taxes |
6 Months Ended |
---|---|
Dec. 31, 2016 | |
Notes to Financial Statements | |
Income Tax Disclosure [Text Block] | 5 . Income Taxes During the three months ended December 31, 2016 and 2015, our effective tax rates were 46.6% and 35.8%, respectively. During the six months ended December 31, 2016 and 2015, our effective tax rates were 40.8% and 36.3%, respectively. In determining our quarterly provision for income taxes, we use an estimated annual effective tax rate, which is based on our expected annual income, statutory tax rates, nontaxable and nondeductible items of income and expense, and the ultimate outcome of tax audits. The change in the proportion of income from domestic and foreign sources affects our effective tax rate. Income tax expense also varies from the amount computed by applying the statutory federal tax rate to income before income taxes primarily due to state income taxes, net of federal income tax effect, adjusted for permanent differences, the most significant of which is the effect of the per diem pay structure for drivers. Under this pay structure, drivers who meet the requirements and elect to receive per diem pay are generally required to receive non-taxable per diem pay in lieu of a portion of their taxable wages. This per diem program increases our drivers’ net pay per mile, after taxes, while decreasing gross pay, before taxes. As a result, salaries, wages, and employee benefits are slightly lower, and our effective income tax rate is higher than the statutory rate. Generally, as pre-tax income increases, the impact of the driver per diem program on our effective tax rate decreases because aggregate per diem pay becomes smaller in relation to pre-tax income. Due to the partially nondeductible effect of per diem pay, our tax rate will fluctuate in future periods based on fluctuations in earnings and in the number of drivers who elect to be paid under this pay structure.We follow ASC Topic 740 -10 -25 in accounting for uncertainty in income taxes ("Topic 740"). Topic 740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. We account for any uncertainty in income taxes by determining whether it is more likely than not that a tax position taken or expected to be taken in a tax return will be sustained upon examination by the appropriate taxing authority based on the technical merits of the position. In that regard, we have analyzed filing positions in our federal and applicable state tax returns as well as in all open tax years. The only periods subject to examination for our federal returns are the 2012 through 2014 tax years. We believe that our income tax filing positions and deductions will be sustained on audit and do not anticipate any adjustments that will result in a material change to our consolidated financial position, results of operations, or cash flows. As of December 31, 2016, we recorded a $0.5 million liability for unrecognized tax benefits, a portion of which represents penalties and interest. |
Note 6 - Commitments and Contingencies |
6 Months Ended |
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Dec. 31, 2016 | |
Notes to Financial Statements | |
Commitments and Contingencies Disclosure [Text Block] | 6. Commitments and Contingencies The Company is party to certain lawsuits in the ordinary course of business. We are not currently party to any proceedings which we believe will have a material adverse effect on our consolidated financial position or operations. A Company subsidiary was named as the defendant in Wilmoth et al. v. Celadon Trucking Services, Inc., a class action proceeding. A summary judgment was granted in favor of the plaintiffs and upheld by the Indiana Court of Appeals in February 2017. We plan on appealing this judgment to the Indiana Supreme Court. We believe that we would be successful if the Indiana Supreme Court hears the appeal. However, we believe there is only a modest possibility that the court will hear the appeal. Accordingly, we have determined that it is probable that the summary judgment in favor of the plaintiffs will stand.We had also been named as the defendant in Day et al. v. Celadon Trucking Services, Inc., a second class action proceeding. A judgment was granted in favor of the plaintiffs. We appealed this judgment, but the judgment was subsequently upheld. The estimated damages of $2.4 million were fully reserved in the June 30, 2016 fiscal quarter, and are still accrued for in other accrued expenses as of December 31, 2016. Subsequent to the quarter ended December 31, 2016, we have made payment on this judgement.We have planned commitments to add $7.4 million of tractor operating leases over the next twelve months as of December 31, 2016. Generally, our purchase orders do not become firm commitment orders for which we are irrevocably obligated until shortly before purchase. We may also choose to adjust the timing of our purchases based on performance of existing equipment throughout the year. Our plans to purchase equipment are reevaluated on a quarter-by-quarter basis. As of December 31, 2016, the Company had outstanding planned purchase commitments of approximately $13 million for facilities and land. Factors such as costs and opportunities for future terminal expansions may change the amount of such expenditures.Standby letters of credit, not reflected in the accompanying condensed consolidated financial statements, aggregated approximately $5.5 million at December 31, 2016. In addition, at December 31, 2016, 500,000 treasury shares were held in a trust as collateral for self-insurance reserves. |
Note 7 - Lease Obligations and Long-term Debt |
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Leases of Lessee Disclosure [Text Block] | 7. Lease Obligations and Long-Term Debt Lease Obligations We lease certain revenue, service equipment, and real estate locations under long-term lease agreements, payable in monthly installments. Equipment obtained under capital leases is reflected on our condensed consolidated balance sheet as owned and the related leases bear interest rates ranging from 1.6% to 3.6% per annum maturing at various dates through 2022. Assets held under operating leases are not recorded on our condensed consolidated balance sheet. We lease revenue, service equipment and real estate locations under non-cancellable operating leases expiring at various dates through 2023. Future minimum lease payments relating to capital leases and operating leases as of December 31, 2016 (in thousands):
During the quarter ended December 31, 2016, we completed a sale-leaseback of several terminals which reduced our property and equipment $11.1 million, net of accumulated depreciation of $4.5 million, and created a deferred gain of $0.5 million. The purpose of the sale-leaseback was to give us flexibility at the end of each lease term. The base lease terms range from three to five years and our future minimum lease payments of $4.5 million are included in the table above.Long-Term Debt We had long-term debt, excluding capital leases, of $114.5 million at December 31, 2016, of which $113.9 million relates to our credit facility. On December 30, 2016, the Company entered into an amendment with the Agent, Wells Fargo Bank, N.A., and Citizens Bank, N.A., both as lenders, which amends that certain Amended and Restated Credit Agreement, dated December 12, 2014, by and among the Company, the Agent, and the other lenders party thereto (the “Credit Agreement”). The Amendment consented to the Transactions as described in Note 12 and reduced the Aggregate Commitments under the Credit Agreement by $50.0 million on a pro rata basis among the lenders from $300.0 million to $250.0 million. |
Note 8 - Fair Value Measurements |
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Fair Value Disclosures [Text Block] | 8. Fair Value Measurements ASC 820 -10 Fair Value Measurements and Disclosure defines fair value, establishes a framework for measuring fair value under GAAP, and expands disclosures about fair value measurements. This standard establishes a three -level hierarchy for fair value measurements based upon the significant inputs used to determine fair value. Observable inputs are those which are obtained from market participants external to us, while unobservable inputs are generally developed internally, utilizing management’s estimates assumptions, and specific knowledge of the nature of the assets or liabilities and related markets. The three levels are defined as follows:Level 1 – Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access at the measurement date. An active market is defined as a market in which transactions for the assets or liabilities occur with sufficient frequency and volume to provide pricing information on an ongoing basis.Level 2 – Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active (markets with few transactions), inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data correlation or other means (market corroborated inputs).Level 3 – Unobservable inputs, only used to the extent that observable inputs are not available, reflect our assumptions about the pricing of an asset or liability.In accordance with the fair value hierarchy described above, the following table shows the fair value of our financial assets and liabilities that are required to be measured at fair value as of December 31, 2016 and June 30, 2016 (in thousands).
Our other financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, long-term debt, and capital lease obligations. At December 31, 2016 the fair value of these instruments were approximated by their carrying values. |
Note 9 - Fuel Derivatives |
6 Months Ended |
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Dec. 31, 2016 | |
Notes to Financial Statements | |
Derivative Instruments and Hedging Activities Disclosure [Text Block] | 9. Fuel DerivativesIn our day-to-day business activities, we are exposed to certain market risks, including the effects of changes in fuel prices. We review ways to reduce the potentially adverse effects that the volatility of fuel markets may have on operating results. In an effort to reduce the variability of the ultimate cash flows associated with fluctuations in diesel fuel prices, we may enter into futures contracts. These instruments will be Gulf Coast Diesel futures contracts as the related index, New York Mercantile Exchange (“NYMEX”), generally exhibits high correlation with the changes in the dollars of the forecasted purchase of diesel fuel. We do not engage in speculative transactions, nor do we hold or issue financial instruments for trading purposes.We have entered into futures contracts relating to 1,134,000 total gallons of diesel fuel, or an average of 162,000 gallons per month for January 2017 through July 2017, which is approximately 4.8% of our monthly projected fuel requirements through July 2017. Under these contracts, we pay a fixed rate per gallon of Gulf Coast Diesel and receive the monthly average price of Gulf Coast Diesel per the NYMEX. We perform both a prospective and retrospective assessment of the effectiveness of our hedge contracts at inception and quarterly. If our analysis shows that the derivatives are not highly effective as hedges, we will discontinue hedge accounting for the period and prospectively recognize changes in the fair value of the derivative being recognized through earnings. As a result of our effectiveness assessment at inception and at December 31, 2016, we believe our hedge contracts have been and will continue to be highly effective in offsetting changes in cash flows attributable to the hedged risk. Accordingly, we have designated the respective hedges as cash flow hedges. We recognize all derivative instruments at fair value on our condensed consolidated balance sheets in other assets or other accrued expenses. Our derivative instruments are designated as cash flow hedges, thus the effective portion of the gain or loss on the derivative is reported as a component of accumulated other comprehensive income and will be reclassified into earnings in the same period during which the hedged transactions affect earnings. The effective portion of the derivative represents the change in fair value of the hedge that offsets the change in fair value of the hedged item. To the extent the change in the fair value of the hedge does not perfectly offset the change in the fair value of the hedged item, the ineffective portion of the hedge is immediately recognized in other income or expense on our condensed consolidated statements of income. The amount recorded in accumulated other comprehensive income as of December 31, 2016 is $0.5 million of gain. The accumulated other comprehensive income will fluctuate with changes in fuel prices. Amounts ultimately recognized in the condensed consolidated statements of income as fuel expense, due to the actual diesel fuel purchases, will depend on the fair value as of the date of settlement.Outstanding financial derivative instruments expose us to credit loss in the event of nonperformance by the counterparties with which we have these agreements. Our credit exposure related to these financial instruments is represented by the fair value of contracts reported as assets. To evaluate credit risk, we review each counterparty's audited financial statements and credit ratings and obtain references. Any credit valuation adjustments deemed necessary would be reflected in the fair value of the instrument. As of December 31, 2016, we had not made any such adjustments. |
Note 10 - Dividend |
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Dec. 31, 2016 | |
Notes to Financial Statements | |
Dividend [Text Block] | 10. Dividend On October 25, 2016, we declared a cash dividend of $0.02 per share of common stock. The dividend was payable to shareholders of record on January 6, 2017, and was paid on January 20, 2017. |
Note 11 - Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Text Block] | 11. Goodwill and Other Intangible Assets The acquired intangible assets, included in the condensed consolidated balance sheet within other assets, relate to customer relations acquired through acquisition in fiscal 2015. There have been no additions to intangible assets in fiscal 2017. All previously acquired intangibles relate to our asset-based business. The intangible assets are being amortized on a straight-line basis through 2041. The following table summarizes intangible assets, included as a component of other assets in the accompanying condensed consolidated financial statements (in thousands):
The following table summarizes goodwill (in thousands):
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Note 12 - Non-controlling Investment |
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Equity Method Investments and Joint Ventures Disclosure [Text Block] | 12. Non-Controlling Investment In December 2016, the Company, Quality Companies LLC, a wholly-owned subsidiary of the Company (“Quality”), Quality Equipment Leasing, LLC, a wholly-owned subsidiary of the Company (“Leasing”), 19th Capital Group, LLC, a non-controlling investment of the Company before and after the transactions described below (“19th Capital”), Element Transportation LLC (“Element”), and certain other parties entered into a series of simultaneous agreements and related transactions (collectively, the “Transactions”), pursuant to which substantially all tractors under management by Quality and owned by Element, 19th Capital, Quality, and Leasing have been combined into 19th Capital as a joint venture primarily between the Company and Element. After the Transactions, the Company and Element each own a non-controlling approximately 49.99% interest in 19th Capital, which at December 31, 2016, held the rights to over 10,000 tractors for use in leasing operations. The Company recorded $100.0 million as a minority investment and will record operating results of the joint venture using the equity method of accounting. The Transactions included the following:
Under our agreements with 19 th Capital, Quality will provide administrative and servicing support for 19th Capital’s lease and financing portfolio, certain driver recruiting, lease payment remittance, maintenance, and insurance services. The Company receives a monthly fee for each leased asset. While the transaction closed on December 30, 2016, the servicing agreements became effective December 1. The Company recorded lease servicing revenue of $1.0 million and maintenance revenue of $3.4 million during December 2016. Both amounts are recorded as receivables on our condensed consolidated balance sheet. We have collected $11.1 million of lease payments as of December 31, 2016 that we owe to 19th Capital which is recorded on our consolidated balance sheet as an accrual. Additionally, we have $5.9 million of receivables relating to previous maintenance and service agreements that were assumed by 19 th Capital. |
Note 13 - Equipment Leasing and Services Segment |
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Dec. 31, 2016 | |
Notes to Financial Statements | |
Equipment Leasing and Services Segment [Text Block] | 13. Equipment Leasing and Services Segment We have routinely entered into leases as lessors with independent contractors which we classify and record as operating leases. From time to time we have assigned these leases and sold the underlying assets to third party financing companies. In addition, we have sold unleased assets in the used markets. Total net proceeds and net gain as a result of these transactions during the three months ended December 31, 2016 were $82.0 million and $0.5 million, respectively, compared to $121.3 million and $7.2 million, respectively, during the three months ended December 31, 2015. Total net proceeds and net gain as a result of these transactions during the six months ended December 31, 2016 were $134.6 million and $1.8 million, respectively, compared to $273.9 million and $21.9 million, respectively, during the six months ended December 31, 2015. The sales figures noted for the three and six months ended December 31, 2016, include the assets sold to Element in connection with the Transactions, but do not include the assets that were contributed to 19 th Capital. The $3.2 million of net operating income reported under the equipment leasing and services segment for the three months ended December 31, 2016 includes $0.5 million in gains recorded on a net basis for such period, less operating expenses associated with this segment. The $1.7 million of net operating income reported under the equipment leasing and services segment for the six months ended December 31, 2016 includes $1.8 million in gains recorded on a net basis for such period, less operating expenses associated with this segment.As of December 31, 2016, we had completed a joint venture transaction involving 19 th Capital and Element, our major third party financing providers, as disclosed in note 12. As part of this arrangement and the related agreements, assets that were previously recorded on our balance sheet for the equipment leasing and services segment were sold or contributed to the entity in which we hold a non-controlling investment, 19 th Capital. This segment will continue to provide administrative and servicing support for all assets owned by 19 th Capital and will receive monthly servicing revenue. The new service agreement does not contain any payment remitting, “Perfect Pay” or similar obligation on the part of the Company or its subsidiaries. We have no plans for our equipment leasing and services segment to engage in any significant equipment leasing and sales at this time, other than equipment previously used in our trucking fleet. |
Note 14 - Recent Accounting Pronouncements |
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New Accounting Pronouncements and Changes in Accounting Principles [Text Block] |
In August 2015, the Financial Accounting Standards Board ("FASB") issued ASU No. 2015 -14 deferring the effective date of ASU No. 2014 -09, "Revenue from Contracts with Customers" (ASC Topic 606): ("ASU 2014 -09"), which requires the recognition of revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance will affect any organization that either enters into contracts with customers to transfer goods or services. This ASU is effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2017, and early adoption is permitted. Our intention is to adopt this ASU on its effective date, which is our fiscal 2019 period. An entity can apply the new revenue standard retrospectively to each prior reporting period presented or with the cumulative effect of initially applying the standard recognized at the date of initial application. The Company is still evaluating which adoption method to apply for this ASU. The Company is still in the early stages of reviewing and determining the impact to our consolidated financial statements. The Company has not completed its analysis of the anticipated impact on our consolidated financial statements. The impact may potentially be material, but has not yet been quantified.In November 2015, the FASB issued ASU No. 2015 -17 "Income Taxes"(ASC Topic 740), to simplify the presentation of deferred income taxes. The guidance in this update requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. This guidance will affect any entity that presents a classified statement of financial position. This ASU is effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2016, and early adoption is permitted. The Company has early adopted this update. Adoption of this update impacted our consolidated balance sheet by reclassifying current deferred tax assets of approximately $5 million and $1 million to offset our long-term deferred tax liabilities for the June 30, 2016 and December 31, 2016 balances, respectively.In February 2016, the FASB issued ASU No. 2016 -02 "Leases"(ASC Topic 842), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This guidance will affect any entity that enters into a lease. This ASU is effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2018, and early adoption is permitted. Our intention is to adopt this ASU on its effective date, which is our fiscal 2020 period. The Company will be required to use the modified retrospective transition method for all existing leases. Accordingly, the Company will apply the new accounting model for the earliest year presented in the consolidated financial statements. The Company is currently in the early stages of the process of determining the approach to adopting the standard, as well as the anticipated impact to the Company’s consolidated financial statements. The impact to the Company’s consolidated financial statements is expected to be material, but has not yet been quantified and will depend on our mix of debt, capital leases, and operating leases to finance equipment and other capital expenditures. The future implementation of the new ASU will likely not have an impact on our compliance with our current financial covenants under our credit facility. In March 2016, the FASB issued ASU No. 2016 -09 "Compensation - Stock Compensation"(ASC Topic 718), to simplify various aspects of accounting for stock-based compensation, including income tax consequences, classification of awards as equity or liability, as well as classification of activities within the statement of cash flows. This guidance will affect any entity that issues share-based payment awards to their employees. This ASU is effective for fiscal years, and interim periods within those years, beginning on or after December 15, 2016, and early adoption will be permitted. The Company is currently evaluating the anticipated adoption date of this ASU. The adoption method will vary based on the transaction type. The Company is still in the evaluation process of determining the impact of the implementation of this ASU to our consolidated financial statements. The Company also cannot predict the impact on our consolidated financial statements in future reporting periods following adoption of this ASU as this will be dependent on various factors, including the number of shares issued and changes in the price of our stock between grant date and settlement date. |
Note 15 - Change in Depreciable Lives of Property and Equipment |
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Dec. 31, 2016 | |
Notes to Financial Statements | |
Accounting Changes [Text Block] | 15. Change in depreciable lives of property and equipment In accordance with its policy, the Company reviews the estimated useful lives of its fixed assets on an ongoing basis. This review indicated that the actual lives of certain tractors and trailers were longer than the estimated useful lives used for depreciation purposes in the Company’s financial statements. As a result, effective October 1, 2015, the Company changed its estimates of the useful lives and salvage value of certain tractors and trailers to better reflect the estimated periods during which these assets will remain in service. The estimated useful lives of the tractors and trailers that previously were 3 years for tractors and 7 years for trailers were increased to 4 years for tractors and 10 years for trailers. The effect of this change in estimate reduced depreciation expense for the three months ended December 31, 2016 by $0.6 million, increased net income by $0.4 million, and increased basic and diluted earnings per share by $0.01. The effect of this change in estimate reduced depreciation expense for the three months ended December 31, 2015 by $2.9 million, increased net income by $1.7 million, and increased basic and diluted earnings per share by $0.06. This change for the six months ended December 31, 2016, reduced depreciation by $2.3 million, increased net income by $1.4 million, and increased basic and diluted earnings per share by $0.05. As the change went into effect on October 1, 2015, the impact for the six months ended December 31, 2015 would be the same as the impact for the three months ended December 31, 2015. |
Note 2 - Earnings (Loss) Per Share (Tables) |
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Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] |
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Note 3 - Stock Based Compensation (Tables) |
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Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block] |
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Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] |
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Schedule of Share-based Compensation, Restricted Stock Units Award Activity [Table Text Block] |
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Note 4 - Segment Information and Significant Customers (Tables) |
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Notes Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment [Table Text Block] |
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Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block] |
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Note 7 - Lease Obligations and Long-term Debt (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Lease Payments for Capital Leases [Table Text Block] |
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Note 8 - Fair Value Measurements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes Tables | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] |
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Note 11 - Goodwill and Other Intangible Assets (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes Tables | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Acquired Finite-Lived Intangible Assets by Major Class [Table Text Block] |
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Schedule of Goodwill [Table Text Block] |
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Note 12 - Non-controlling Investment (Tables) |
6 Months Ended | ||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||
Notes Tables | |||||||||||||||||||||||||
Summary of Investment Contributions [Table Text Block] |
|
Note 2 - Earnings (Loss) Per Share (Details Textual) - shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 854,974 | 0 | 854,974 | 0 |
Note 2 - Earnings (Loss) Per Share - Reconciliation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Basic weighted average shares outstanding (in shares) | 27,639 | 27,480 | 27,627 | 27,467 |
Dilutive effect of stock options and unvested restricted stock units (in shares) | 460 | 486 | ||
Weighted average common shares outstanding – diluted (in shares) | 27,639 | 27,940 | 27,627 | 27,953 |
Net income (loss) | $ (1,525) | $ 6,615 | $ (4,378) | $ 17,982 |
Earnings (loss) per common share: | ||||
Basic (in dollars per share) | $ (0.06) | $ 0.24 | $ (0.16) | $ 0.65 |
Diluted (in dollars per share) | $ (0.06) | $ 0.24 | $ (0.16) | $ 0.64 |
Note 3 - Stock Based Compensation - Components of Share Based Compensation Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Stock compensation expense | $ 640 | $ 715 | $ 1,320 | $ 1,462 |
Employee Stock Option [Member] | ||||
Stock compensation expense | 0 | 0 | 0 | 0 |
Restricted Stock [Member] | ||||
Stock compensation expense | $ 640 | $ 715 | $ 1,320 | $ 1,462 |
Note 3 - Stock Based Compensation - Summary of the Award Activity of the Stock Option Plans (Details) |
6 Months Ended |
---|---|
Dec. 31, 2016
$ / shares
shares
| |
Shares outstanding (in shares) | shares | 275,169 |
Weighted-average exercise price, outstanding (in dollars per share) | $ / shares | $ 9.30 |
Shares granted (in shares) | shares | |
Weighted-average exercise price, granted (in dollars per share) | $ / shares | |
Shares outstanding (in shares) | shares | 275,169 |
Weighted-average exercise price, outstanding (in dollars per share) | $ / shares | $ 9.30 |
Shares exercisable at December 31, 2016 (in shares) | shares | 275,169 |
Weighted-average exercise price, exercisable at December 31, 2016 (in dollars per share) | $ / shares | $ 9.30 |
Note 3 - Stock Based Compensation - Summary of the Restricted Stock Award Activity (Details) |
6 Months Ended |
---|---|
Dec. 31, 2016
$ / shares
shares
| |
Number of shares, forfeited (in shares) | (72,327) |
Restricted Stock [Member] | |
Number of shares, unvested (in shares) | 601,794 |
Weighted-average grant date fair value, unvested (in dollars per share) | $ / shares | $ 11.92 |
Number of shares, granted (in shares) | 23,780 |
Weighted-average grant date fair value, granted (in dollars per share) | $ / shares | $ 9.39 |
Number of shares, Vested and Issued (in shares) | (35,481) |
Weighted-average grant date fair value, Vested and Issued (in dollars per share) | $ / shares | $ 12.82 |
Number of shares, forfeited (in shares) | (10,288) |
Weighted-average grant date fair value, forfeited (in dollars per share) | $ / shares | $ 8.17 |
Number of shares, unvested (in shares) | 579,805 |
Weighted-average grant date fair value, unvested (in dollars per share) | $ / shares | $ 11.83 |
Note 4 - Segment Information and Significant Customers (Details Textual) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Number of Reportable Segments | 3 | |||
Customer Concentration Risk [Member] | Sales Revenue, Net [Member] | ||||
Concentration Risk, Percentage | 0.00% | 0.00% | 0.00% | 0.00% |
Note 4 - Segment Information and Significant Customers - Segment Reporting Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Operating revenues | $ 265,725 | $ 275,399 | $ 530,765 | $ 541,520 |
Operating Income (Loss) | (1,734) | 14,079 | (3,044) | 35,252 |
Operating Segments [Member] | ||||
Operating revenues | 265,725 | 275,399 | 530,765 | 541,520 |
Operating Income (Loss) | (1,734) | 14,079 | (3,044) | 35,252 |
Asset Based [Member] | Operating Segments [Member] | ||||
Operating revenues | 218,617 | 236,324 | 441,859 | 467,087 |
Operating Income (Loss) | (6,790) | 11,471 | (8,799) | 18,953 |
Asset Light Based [Member] | Operating Segments [Member] | ||||
Operating revenues | 30,954 | 32,943 | 62,608 | 63,539 |
Operating Income (Loss) | 1,876 | 3,280 | 3,890 | 7,111 |
Equipment Leasing and Services [Member] | Operating Segments [Member] | ||||
Operating revenues | 16,154 | 6,132 | 26,298 | 10,894 |
Operating Income (Loss) | $ 3,180 | $ (672) | $ 1,865 | $ 9,188 |
Note 4 - Segment Information and Significant Customers - Operating Revenue by Geographic Area (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Operating revenues | $ 265,725 | $ 275,399 | $ 530,765 | $ 541,520 |
UNITED STATES | ||||
Operating revenues | 234,394 | 241,843 | 468,218 | 474,552 |
CANADA | ||||
Operating revenues | 20,697 | 21,193 | 41,400 | 43,138 |
MEXICO | ||||
Operating revenues | $ 10,634 | $ 12,363 | $ 21,147 | $ 23,830 |
Note 5 - Income Taxes (Details Textual) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Effective Income Tax Rate Reconciliation, Percent | 46.60% | 35.80% | 40.80% | 36.30% |
Unrecognized Tax Benefits | $ 0.5 | $ 0.5 | ||
Domestic Tax Authority [Member] | Earliest Tax Year [Member] | ||||
Open Tax Year | 2012 | |||
Domestic Tax Authority [Member] | Latest Tax Year [Member] | ||||
Open Tax Year | 2014 |
Note 6 - Commitments and Contingencies (Details Textual) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Jun. 30, 2016 |
|
Letters of Credit Outstanding, Amount | $ 5,500 | |
Treasury Stock, Shares | 500,000 | 500,000 |
Held In Trust [Member] | ||
Treasury Stock, Shares | 500,000 | |
Tractor Operating Leases [Member} | ||
Long-term Purchase Commitment, Amount | $ 7,400 | |
Capital Addition Purchase Commitments [Member] | Land and Building [Member] | ||
Long-term Purchase Commitment, Amount | 13,000 | |
Wilmoth et al. v. Celadon Trucking Services [Member] | Minimum [Member] | ||
Loss Contingency, Estimate of Possible Loss | 0 | |
Day et al. v. Celadon Trucking Services, Inc. [Member] | ||
Loss Contingency, Estimate of Possible Loss | $ 2,400 |
Note 7 - Lease Obligations and Long-term Debt - Future Minimum Leases Payments (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Jun. 30, 2016 |
---|---|---|
2017 | $ 90,171 | |
2017 | 29,696 | |
2018 | 96,411 | |
2018 | 19,551 | |
2019 | 13,164 | |
2019 | 14,025 | |
2020 | 12,853 | |
2020 | 11,471 | |
2021 | 9,273 | |
2021 | 7,386 | |
Thereafter | 61,110 | |
Thereafter | 9,306 | |
Total minimum lease payments | 282,982 | |
Operating Leases, Future Minimum Payments Due | 91,435 | |
Less amounts representing interest | 17,023 | |
Present value of minimum lease payments | 265,959 | |
Less current maturities | 84,351 | $ 51,397 |
Non-current portion | $ 181,608 | $ 247,383 |
Note 8 - Fair Value Measurements - Fair Value of Financial Assets and Liabilities (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Jun. 30, 2016 |
---|---|---|
Fuel derivatives | $ 464 | $ (95) |
Fair Value, Inputs, Level 2 [Member] | ||
Fuel derivatives | $ 464 | $ (95) |
Note 9 - Fuel Derivatives (Details Textual) $ in Millions |
6 Months Ended |
---|---|
Dec. 31, 2016
USD ($)
gal
| |
Derivative Instruments, Gain (Loss) Reclassification from Accumulated OCI to Income, Estimated Net Amount to be Transferred | $ | $ 0.5 |
Diesel Fuel Future Contracts [Member] | |
Derivative, Nonmonetary Notional Amount, Volume | 1,134,000 |
Derivative, Nonmonetary Notional Amount, Volume per Month | 162,000 |
Derivative Nonmonetary, Percentage of Monthly Projected Fuel Requirements | 4.80% |
Note 10 - Dividend (Details Textual) |
Oct. 25, 2016
$ / shares
|
---|---|
Common Stock, Dividends, Per Share, Declared | $ 0.02 |
Note 11 - Goodwill and Other Intangible Assets - Acquired Intangible Assets (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Jun. 30, 2016 |
|
Gross carrying amount | $ 8,096 | $ 8,096 |
Accumulated amortization | 1,514 | 1,210 |
Amortization | 304 | |
$ 6,582 | $ 6,886 |
Note 11 - Goodwill and Other Intangible Assets - Additions to Goodwill (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Jun. 30, 2016 |
|
Goodwill | $ 62,451 | $ 62,451 |
Goodwill Current year additions | ||
Asset Based [Member] | ||
Goodwill | 61,083 | 61,083 |
Goodwill Current year additions | ||
Asset Light Based [Member] | ||
Goodwill | 1,368 | $ 1,368 |
Goodwill Current year additions |
Note 12 - Non-controlling Investment - Summary of Total Contribution (Details) - 19th Capital Group, LLC [Member] - USD ($) $ in Millions |
1 Months Ended | 12 Months Ended |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Equipment contributed | $ 56.0 | |
Contribution of deferred sale receivable | 7.6 | |
Cash contributed | 35.3 | $ 2.0 |
Receivable due | 1.1 | |
Total contribution | $ 100.0 |
Note 13 - Equipment Leasing and Services Segment (Details Textual) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Proceeds from Sale of Property, Plant, and Equipment | $ 75,624 | $ 107,871 | ||
Gain (Loss) on Disposition of Property Plant Equipment | $ 507 | $ 5,479 | 1,768 | 18,721 |
Operating Income (Loss) | (1,734) | 14,079 | (3,044) | 35,252 |
Element [Member] | ||||
Proceeds from Sale of Property, Plant, and Equipment | 82,000 | 121,300 | 134,600 | 273,900 |
Gain (Loss) on Disposition of Property Plant Equipment | 500 | $ 7,200 | 1,800 | $ 21,900 |
Operating Income (Loss) | $ 3,200 | $ 1,700 |
Note 14 - Recent Accounting Pronouncements (Details Textual) - Reclassification of Current Deferred Tax Assets to Offset Long-term Deferred Tax Liabilities [Member] $ in Millions |
6 Months Ended |
---|---|
Dec. 31, 2016
USD ($)
| |
Current Period Reclassification Adjustment | $ 1 |
Fiscal 2016 Period [Member] | |
Prior Period Reclassification Adjustment | $ 5 |
Note 15 - Change in Depreciable Lives of Property and Equipment (Details Textual) - USD ($) $ / shares in Units, $ in Millions |
3 Months Ended | 6 Months Ended | 15 Months Ended | ||
---|---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Sep. 30, 2015 |
Dec. 31, 2016 |
Dec. 31, 2016 |
|
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Net Income | $ 0.4 | $ 1.7 | $ 1.4 | ||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Basic and Diluted Earnings Per Share | $ 0.01 | $ 0.06 | $ 0.05 | ||
Depreciation Expense [Member] | |||||
New Accounting Pronouncement or Change in Accounting Principle, Effect of Change on Operating Results | $ 0.6 | $ 2.9 | $ 2.3 | ||
Tractors [Member] | |||||
Property, Plant and Equipment, Useful Life | 3 years | 4 years | |||
Trailers [Member] | |||||
Property, Plant and Equipment, Useful Life | 7 years | 10 years |
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