As part of its ongoing turnaround efforts, Indianapolis-based trucking firm Celadon Group Inc. has sold off its flatbed trucking division to Birmingham, Alabama-based PS Logistics LLC.
Celadon announced on Monday that it had completed the transaction, in which PS Logistics assumed the lease obligations for Celadon’s fleet of leased trailers and paid cash for Celadon-owned trailers.
In other parts of the deal: Celadon is entitled to certain post-closing goodwill payments. PS Logistics agreed to hire certain Celadon flatbed company drivers and operations employees, assume certain flatbed customer contracts and enter into contracts that cover up to 100 of Celadon’s independent contractor flatbed drivers.
Specific financial terms were not disclosed. Celadon declined to comment further, and IBJ was unable to reach PS Logistics Monday morning.
PS Logistics, established in 2004, specializes in running irregular routes on flatbeds that haul everything from construction materials to pipes and steel plates.
Irregular routes, also known as over-the-road routes, involve moving freight to any place and at any time as needed. These routes differ from dedicated routes, where drivers follow regular itineraries.
Celadon CEO Paul Svindland said the company is refocusing on its core lines of business, which led to the decision to get out of flatbed trucking.
“Our new management team determined that we had neither the expertise nor the critical mass to compete in the flatbed sector,” Svindland said in a prepared statement.
The move is part of Celadon’s larger efforts to overcome significant financial challenges.
In May, Celadon said it expected to post a $10 million loss for the quarter that ended in March, in large part because of its irregular route operations. The company also disclosed that its most recent annual financial report, and those for the two subsequent quarters, should not be relied upon because of questions raised by auditor BKD LLP.
In the annual report, the firm reported net income of $24.8 million on $1.07 billion in revenue. Celadon has not yet released an amended version of the report.
Celadon has also had some executive-level management changes recently. In July, the company brought in Svindland to replace former CEO and board chairman Paul Will.
The company is still working to refinance its capital structure.
Celadon has gotten in and out of the flatbed trucking business a few times since the company was incorporated in 1986.
In 2001, Celadon sold off its Mooresville, North Carolina-based Cheetah Transportation Inc. flatbed trucking business.
Then, in June 2014, Celadon got back into the flatbed business when it acquired Butler, Indiana-based Evans Group Inc. This was during a period when Celadon was actively diversifying its business, largely through acquiring other companies.
Shares of Celadon were trading at $6.15 late Monday morning, up 10 cents. The stock has traded between $1.30 and $9.75 per share over the past 52 weeks.