Two weeks after receiving long-term financing, Celadon Group (OTCPink: CGIP) named Richard Stocking, the former chief executive officer of Swift Transportation, as the head of its trucking unit.
The Indianapolis-based truckload (TL) carrier announced that it has entered a consulting agreement with DPX Consulting LLC. The consulting firm will provide “broad-based management services,” essentially running Celadon Trucking Services, Inc.
Notably, Stocking will oversee the trucking unit’s operations, serving as the Chief Transformation Officer of Celadon Trucking Services. The unit generates roughly $400 million in annual revenue, which is approximately 75 percent of Celadon’s total revenue.
Specific terms of the agreement were not disclosed. From the press release, “compensation includes an incentive component linked to achievement of progressively improving operating margin benchmarks.”
“We are excited to have Richard Stocking and the entire DPX team working with us to accelerate needed improvements in our U.S. truckload business. DPX brings Richard’s decades of experience with Swift as well as the deep analytical and front-line operations capability of two other seasoned truckload executives. All are veterans at instilling sales and operating discipline, accountability and a winning culture. 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,” said Celadon’s Chief Executive Officer Paul Svindland.
On July 31, 2019, Celadon announced that it had received a three-year, $165 million financing plan that provided the carrier with the capital needed to begin replacing its older truck and trailer equipment. Also, the new financing replaced the temporary financing structure that was in place, which required frequent short-term extensions.
In a statement, DPX [and Richard Stocking] commented on the new agreement. “We have studied the company for several months and are convinced of the inherent potential of the franchise. We plan to work with Celadon’s leaders to adopt proven methods that enhance efficiency, set clear and measurable goals, and empower people through ownership of their results. Not only will performance improve, the entire organization will be energized by creating a winning culture. I’m looking forward to working with Paul and the team as we roll out the program through every part of the business.”
Stocking left Swift Transportation after its merger with Knight Transportation (creating Knight-Swift Transportation, NYSE: KNX) closed.
This announcement is another step in Celadon’s turnaround. So far in 2019, Celadon has agreed to pay $42 million in restitution to shareholders in regard to alleged accounting fraud, divested some of its non-core business units, announced executive title changes and secured a long-term financing plan.
Svindland concluded, “We especially appreciate Richard’s personal commitment to our turnaround, evidenced by accepting the role of Chief Transformation Officer. This vote of confidence by an industry leader shows how far the organization has come over the past several quarters and is inspiring to our people.”