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Celadon Group Inc. (CLDN) – A Model of Business Life Cycle Management

Electronic commerce and trucks of the brick-and-mortar age may not have much in common, but this company from Indianapolis, IN has used the Internet to upgrade its traditional business for the modern era.

The company has integrated horizontally from road transportation into supplying tires, fuel, and other consumables at competitive rates to fellow trucking companies. It has managed to build this new business without significant administrative overheads because it uses the World Wide Web.

The company has four prime strengths that buttress its core business:

1. It operates seamlessly throughout the North American Free Trade Area (NAFTA) of Canada and Mexico, as well as the United States.
2. It specializes in full truck loads of dry goods. This keeps handling and transit times down to minimal levels.
3. It has subsidiaries in each of the three NAFTA member companies, which gives it network strength.
4. It has major warehouses near factories of major corporations, thus locking in business from key accounts.

Sales have grown annually by 15.36% during the Most Recent Quarter against just 9.24 for the rest of the Trucking Industry. It has also led its competitors in terms of Gross Margin. The company has expanded steadily over the years, with a five-year Capital Spending Growth Rate of almost 60%. The company is very well placed to leverage the growing trade links within NAFTA. The third-week May 2008 stock price is nearly twice the 52-week low, with a Beta of 0.26.

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