Truckload and logistics provider Celadon Group Inc. said yesterday it had sold its flatbed trucking division to a subsidiary of Birmingham, Ala.-based PS Logistics LLC. Terms were not disclosed.
The division's assets consisted mostly of leased and owned trailers, which were sold in exchange for an assumption or satisfaction of the lease obligations and for cash, Indianapolis-based Celadon said. In addition, the PS unit will retain the services of up to 100 independent-operator drivers, hire an unspecified number of company drivers and operations employees, and assume certain contractual obligations of Celadon's former flatbed clients.
Celadon CEO Paul Svindland said the company determined that it lacked the expertise or critical mass to compete in the flatbed trucking business, and that the company would focus on its regional trucking, warehousing, and third-party logistics (3PL) services. Celadon is best known for its truckload business that operates in the NAFTA trades. However, that business has struggled this year to stay profitable.
Celadon, the seventh-largest truckload carrier in the U.S., ran into trouble in early May when it projected a $10 million operating loss in its fiscal third quarter, which ended on March 31. The company also delayed issuing its fiscal third-quarter results after disclosing that financial statements for the six quarters ending last Dec. 31 should not be relied upon. It has yet to issue results for that period.
Company executives blamed the quarterly loss on poor management of its core truckload business, in particular the handling of owner-operators. Celadon's finances were also thrown into question by an unprofitable joint venture involving its truck-leasing division.
Eric Meek, Celadon's former president and COO, resigned in the wake of the results. Jon Russell, son of Steve Russell, Celadon's late founder, was named president and COO, and was put in charge of all trucking operations. Douglas Schmidt, who had been president and chief operating officer of one of Celadon's subsidiaries, was tapped to oversee the company's truckload division.
Svindland was named CEO in mid-July, replacing Paul Will, who retired a few days later as chairman and CEO.
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