INDIANAPOLIS -- June 10, 1996 -- Celadon Group Inc.
(NASDAQ: CLDN) today announced an agreement between two key
shareholders: the company's Chairman and Chief Executive Officer,
Stephen Russell and its President and Chief Operating Officer,
In connection with this agreement, Russell and others, including
members of Celadon management, will purchase the 913,000 shares of
Celadon common stock currently owned by Bennett at a price of $11
per share, subject to market trading prices prior to closing.
Hanseatic Corp., a principal stockholder of the company, has
indicated that it intends to acquire a significant portion of the
shares directly or through its affiliates. Bennett will resign as a
director and officer of the company. He will also terminate his
employment contract with the company and enter into a three year non-
compete and consulting contract.
Subject to board approval, Bennett will acquire the company's
interest in logistics operations in South America, which operate
under the name of Celsur. Bennett said, "I intend to focus on the
logistics and distribution activities in Latin America and other
international markets in the years ahead."
Stephen Russell stated that, "We intend to focus Celadon on the
core trucking business both within the United States and with other
In other developments, Russell noted that Celadon's financial
results for the fourth fiscal quarter ending June 30, 1996 are
likely to be below prior expectations. High fuel prices in April
coupled with lower than expected revenue in April and most of May
will contribute to lower reported results. Although revenue levels
have shown recent strengthening, Russell added that, "The
improvement is not likely to be sufficient to offset performance
earlier in the quarter."
The company also reported that its efforts to acquire certain
assets of Burlington Motor Carriers continue to move forward. The
company's revised letter of intent has been approved by the Board of
Burlington and the Bankruptcy Court has set a June 25 auction date.
The Court has also authorized, subject to signing a definitive
agreement, a breakup fee of $500,000 plus fees of up to $250,000 in
the event Celadon is overbid. Russell stated that, "We are hopeful
that we will be successful in our efforts to acquire Burlington's
assets as it will broaden our market focus while enabling us to be a
more efficient provider of truckload freight movements."
Separately, the company also stated that it was selling its
Celadon Express division, a package delivery service based in New
York. "This is one more step in the plan to shed non-core assets,"
Celadon Group Inc. is a full truckload company, with facilities
in the U.S. and Mexico. Celadon is a leader in truckload movements
among NAFTA countries.
CONTACT: Celadon Group Inc., Indianapolis
Don Snyder, 317/972-7033
ENGLEWOOD, Colo.-- June 10, 1996 -- KLH
Engineering Group Inc. (KLHE) announced today that the request for
modification of contract on the Department of Energy with MK-
Ferguson of Oak Ridge, Tenn., was filed on May 31, 1996.
The request for this contract modification is for work performed
from 1991 through 1994 by Tomahawk Construction ("Tomahawk"), a
subsidiary of KLHE. The preparation of the request has taken over a
year to prepare and document. The total request of the modification
is for $4,386,969, of which $3,309,603 will directly benefit
Tomahawk. The specifics of the request address over 1,100
construction interface documents which were requested on the project
and a total contract expansion of 421 days. The request includes
amounts for schedule impact, inefficiencies, overtime premium, wage
increases, additional bonds and interest.
Tomahawk has requested that MK-Ferguson respond to the contract
modification request by June 24, 1996. If the matter cannot be
resolved amicably, then Tomahawk will file a legal action with the
Bankruptcy Court in Kansas City, Mo. Upon emerging from bankruptcy
in August 1995, Tomahawk reserved the right to litigate the MK-
Ferguson action in the Bankruptcy Court due to the significance of
the amount and the overall effect the settlement will have on its
approved plan of reorganization.
This modification has been included on the financial statements
of KLHE at $2,538,937, shown as Earnings in Excess of Billings. Any
collection above the $2,538,937 will reflect positively on KLHE's
financial picture. The company believes that this matter can be
resolved during the 1996 financial year.
KLH Engineering Group Inc. is a full-service consulting,
engineering, construction and processing firm based in Englewood,
Colo., specializing in design/build and construction management
services for the development segment and economic development for
the Native American community.
CONTACT: KLH Engineering Group Inc.
Delmar Janovec, 913/621-4233; 913/621-2763 (fax)