Indianapolis-based trucking company Celadon Group Inc., which is working to recover from a host of accounting and financial issues, is bringing aboard Swift Transportation Co.’s former CEO to help it execute a turnaround.
Celadon announced late Monday that it has entered into a consulting agreement with DPX Consulting LLC. DPX’s founder Richard Stocking, who formerly led Swift Transportation, will serve as chief transformation officer at Celadon Trucking Services Inc.
Celadon Trucking is Celadon’s primary U.S. truckload business, accounting for about $400 million in annual revenue, or about 75 percent of Celadon’s revenue.
Stocking left Swift in 2017 when that company merged with Knight Transportation Inc. The combined company is now known as Knight-Swift Transportation Holdings Inc. and is based in Phoenix. It earned $5.3 billion in revenue last year.
Under the agreement with Celadon, Stocking will lead Celadon’s Trucking Services team. DPX will oversee the group’s sales, operations and maintenance and will provide customer and vendor introductions and support as needed.
Financial terms were not disclosed, but Celadon said DPX’s compensation will include incentives linked to the “achievement of progressively improving operating margin benchmarks.”
Celadon hit another turnaround milestone two weeks ago, when it secured $165 million in new financing—$105 million in term loans and $60 million from refinancing its former revolving credit facility.
“With the recent closing of our refinancing, we are laser-focused on returning to profitable operations, and we expect DPX to help us achieve a rapid and resilient pace of change,” Celadon Group CEO Paul Svindland said in a prepared statement.
In May 2017, Celadon revealed that its auditor had raised questions about a complicated joint-venture arrangement that involved the sale of leased equipment, calling into question the accuracy of recent financial reports. The company has not filed financial reports with the U.S. Securities and Exchange Commission since then.
The company has since revamped its executive team and made several divestitures to concentrate on its core business.
In April, Celadon agreed to pay $42.2 million in restitution to settle securities fraud charges from the U.S. Department of Justice.
Celadon said it expects to complete its financial statement audit during the second or third quarter of fiscal 2020. After that happens, the company said, it will resume filing financial reports and seek to be relisted on a national stock exchange.