Celadon Posts Net Loss After Adverse Court Ruling
Celadon Group Inc. lost money in the final three months of 2016, after the company filed an amended earnings report with an additional $4.6 million to cover a class-action lawsuit.
The Indianapolis carrier originally posted $1.3 million in net income, or 5 cents per share, but the updated report to the Securities and Exchange Commission indicated a $1.5 million net loss, or negative 6 cents. In the final three months of 2015, Celadon earned $6.6 million in profits, or 24 cents.
Revenue was $265.7 million, the same as the original earnings report. But Celadon increased its insurance and claims expense line to $13.7 million from $9.1 million in the updated document.
On Feb. 9, Celadon told the SEC that it would delay filing its quarterly report due to a Feb. 7 decision from the Indiana Court of Appeals affirming a $3.3 million summary judgement against the trucking company. Celadon plans to appeal the ruling to a higher court.
Owner-operator Charles Wilmoth and Kent Vassey filed the class-action lawsuit in 2013, alleging Celadon withheld more money from their paychecks than it actually paid for fuel purchases.
“In short, drivers were given ‘charge cards’ by [Celadon] for fuel purchases that allowed them to purchase fuel at a retail price, which amounted to [about a] $0.06 discount per gallon, of which CGI would later deduct that amount from their pay. However, the lawsuit states that CGI received a larger discount [of about] $0.08 from the truck stop [Pilot Flying J] and profited off the difference,” Stephens Inc. analyst Brad Delco wrote in an investors note.
Celadon, which is based in Indianapolis, ranks No. 32 on the Transport Topics Top 100 list of the largest U.S. and Canadian for-hire carriers.
