Celadon Group Reports First Fiscal Quarter Financial Results

Celadon Group Inc. (NYSE: CGI) today reported its financial and operating results for the three months ended September 30, 2010, the first fiscal quarter of the Company’s fiscal year ending June 30, 2011.

Revenue for the quarter increased 9.8% to $140.3 million in the 2010 quarter from $127.8 million in the 2009 quarter. Revenue before fuel surcharge increased 8.0% to $119.5 million in the 2010 quarter from $110.7 million in the 2009 quarter. Net income increased to $4.4 million in the 2010 quarter from $0.6 million for the same quarter last year. Earnings per diluted share increased to $0.20 in the 2010 quarter from $0.03 for the same quarter last year.

Chairman and CEO Steve Russell commented on the results of the September 2010 quarter. "Earnings per share of twenty cents in the quarter compared with three cents in the September 2009 quarter. Our average rate per mile improved to $1.47, up about six cents per mile from the September 2009 level, or 4.5%, and about eight cents below the peak level of December 2006. Cost controls also continued to positively impact results. We have continued to improve our operating efficiency which has resulted in the reduction of 455 trailers and 159 tractors in our quarter end numbers, while maintaining approximately the same number of total miles for both quarters. As we continue to focus on expanding our margins and improving our returns on invested capital, we have also increased our non-asset based business revenues over 20% in the current quarter, compared with the prior year. These improvements and enhancements to our operating model resulted in a reduction in our operating ratio to 93.2, or 430 basis points compared with the 97.5 level achieved in the September 2009 quarter."

"Our balance sheet remains solid and we retain significant liquidity to support the growth of our business. At September 30, 2010, we had $159.6 million of stockholders' equity, $10.9 million in cash and $27.7 million of total balance sheet borrowing with no outstanding bank borrowings.”

Conference Call Information

An investor conference call is scheduled for Wednesday, October 27, at 11:00 a.m. EDT. Steve Russell and other members of management will discuss the results of the quarter. To listen and participate in a questions-and-answers exchange, simply dial 866-804-6926 (international calls 857-350-1672) pin number 42835261 a few minutes prior to the start time. A replay will be available through November 3 by dialing 888-286-8010 (international calls 617-801-6888) and entering call back code 37645634.

This call is being Web cast by Thomson/CCBN and can be accessed via Celadon's Web site at www.celadongroup.com.

Celadon Group Inc. (www.celadongroup.com), through its subsidiaries, primarily provides long-haul, full-truckload freight service across the United States, Canada and Mexico. The company also owns TruckersB2B Inc. (www.truckersb2b.com) which provides cost savings to member fleets; Celadon Dedicated Services, which provides supply chain management solutions, such as warehousing and dedicated fleet services; and Celadon Brokerage Services.

This press release contains certain statements that may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements may be identified by their use of terms or phrases such as "expects," "estimates," "projects," "believes," "anticipates," "plans," "intends," and similar terms and phrases. Forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, which could cause future events and actual results to differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. Actual results may differ from those set forth in the forward-looking statements. The following factors, among others, could cause actual results to differ materially from those in forward-looking statements: the risk that our perception of additional capacity due to seating trucks and perceived benefits thereof are inaccurate; the risk that our perception of changes in our customer base and perceived benefits thereto are inaccurate; the risk that managing our tractor fleet age does not result in greater flexibility and lower operating expenses; excess tractor and trailer capacity in the trucking industry; decreased demand for our services or loss of one or more of our major customers; surplus inventories; recessionary economic cycles and downturns in customers' business cycles; strikes, work slow downs, or work stoppages at our facilities, or at customer, port, border crossing, or other shipping related facilities; increases in compensation for and difficulty in attracting and retaining qualified drivers and independent contractors; increases in insurance premiums and deductible amounts; elevated experience in the frequency or severity of claims relating to accident, cargo, workers' compensation, health, and other matters; fluctuations in claims expenses that result from high self-insured retention amounts and differences between estimates used in establishing and adjusting claims reserves and actual results over time; increases or rapid fluctuations in fuel prices, as well as fluctuations in hedging activities and surcharge collection, the volume and terms of diesel purchase commitment, interest rates, fuel taxes, tolls, and license and registration fees; fluctuations in foreign currency exchange rates; increases in the prices paid for new revenue equipment and changes in the resale value of our used equipment; increases in interest rates or decreased availability of capital or other sources of financing for revenue equipment; seasonal factors such as harsh weather conditions that increase operating costs; competition from trucking, rail, and intermodal competitors; regulatory requirements that increase costs or decrease efficiency, including revised hours-of-service requirements for drivers and new emissions control regulations; our ability to identify acceptable acquisition candidates, consummate acquisitions, and integrate acquired operations; the timing of, and any rules relating to, the opening of the border to Mexican drivers; challenges associated with doing business internationally; our ability to retain key employees; and the effects of actual or threatened military action or terrorist attacks or responses, including security measures that may impede shipping efficiency, especially at border crossings.

Readers should review and consider these factors along with the various disclosures by the company in its press releases, stockholder reports, and filings with the Securities Exchange Commission. We disclaim any obligation to update or revise any forward-looking statements to reflect actual results or changes in the factors affecting the forward-looking information.

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