-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RyPSrOZ62LWC6W0T0AJQlplDcrQhR8kWAW5QIK9xL/lbDT9EW1yclkdluhthp+iF NhogSHH1ExUHceD1++8msQ== 0001008886-96-000045.txt : 19961106 0001008886-96-000045.hdr.sgml : 19961106 ACCESSION NUMBER: 0001008886-96-000045 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961105 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: COVENANT TRANSPORT INC CENTRAL INDEX KEY: 0000928658 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 880320154 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-24960 FILM NUMBER: 96654312 BUSINESS ADDRESS: STREET 1: 1320 EAST 23RD ST CITY: CHATTANOOGA STATE: TN ZIP: 37404 BUSINESS PHONE: 6156290393 MAIL ADDRESS: STREET 1: 1320 E 23RD ST STREET 2: P O BOX 22997 CITY: CHATTANOOGA STATE: TN ZIP: 37404 10-Q 1 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549-1004 ------------------------------------ FORM 10-Q (Mark One) (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1996 ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 0-24960 Covenant Transport, Inc. (Exact name of registrant as specified in its charter) Nevada 88-0320154 (State or other jurisdiction of (I.R.S. employer identification number) incorporation or organization) 1320 East 23rd Street Chattanooga, TN 37404 (423) 629-0393 (Address, including zip code, and telephone number, including area code, of registrant's principal executive office) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for at least the past 90 days. YES X NO Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date (October 31, 1996) Class A Common Stock, $.01 par value: 11,000,000 shares Class B Common Stock, $.01 par value: 2,350,000 shares Exhibit Index is on Page 13. PART I FINANCIAL INFORMATION PAGE NUMBER Item 1. Financial statements Condensed consolidated balance sheets as of December 31, 1995 and September 30, 1996 (unaudited) 3 Condensed consolidated statements of operations for the three and nine months ended September 30, 1995 and 1996 (unaudited) 4 Condensed consolidated statements of stockholders' equity for the nine months ended September 30, 1995 and 1996 (unaudited) 5 Condensed consolidated statements of cash flows for the nine months ended September 30, 1995 and 1996 (unaudited) 6 Notes to condensed consolidated financial statements (unaudited) 7 Item 2. Management's discussion and analysis of financial condition and results of operations 8 - 12 PART II OTHER INFORMATION PAGE NUMBER Item 1. Legal proceedings 13 Items 2., 3., 4., and 5. Not applicable Item 6. Exhibits and reports on Form 8-K 13 2 COVENANT TRANSPORT, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS December 31, September 30, ASSETS 1995 1996 - ------ --------------------------------------- (unaudited) Current assets: Cash and cash equivalents ................... $ 461,288 $ 3,221,884 Accounts receivable, net of allowance of $385,000 in 1995, and $500,000 in 1996 .... 29,737,998 32,927,098 Drivers advances and other receivables ...... 6,984,564 1,631,262 Tire and parts inventory .................... 801,460 677,655 Prepaid expenses ............................ 2,692,158 4,310,907 Deferred income taxes ....................... 176,000 212,000 ------------ Total current assets ........................ 40,853,468 42,980,807 Property and equipment, at cost ............. 149,428,386 184,063,063 Less accumulated depreciation and amortization 22,020,359 36,893,375 ------------ Net property and equipment .................. 127,408,027 147,169,689 Other ....................................... 1,119,484 1,146,764 ------------ Total assets ................................ $169,380,979 $191,297,260 ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current maturities of long-term debt ........ $ 50,000 $ 50,000 Accounts payable ............................ 3,512,918 3,584,834 Accrued expenses ............................ 3,152,199 5,730,594 ------------ Total current liabilities ................... 6,715,117 9,365,428 Long-term debt, less current maturities ..... 80,150,000 90,110,000 Deferred income taxes ....................... 9,764,000 12,346,000 ------------ Total liabilities ........................... 96,629,117 111,821,428 ----------- ------------ Stockholders' equity: Class A common stock, $.01 par value; 11,000,000 shares issued and outstanding ..... 110,000 110,000 Class B common stock, $.01 par value; 2,350,000 shares issued and outstanding ...... 23,500 23,500 Additional paid-in-capital ................... 50,469,596 50,469,596 Retained earnings ............................ 22,148,766 28,872,736 ----------- ------------ Total stockholders' equity .................. 72,751,862 79,475,832 ----------- ------------ Total liabilities and stockholders' equity $169,380,979 $191,297,260 =========== ============ The accompanying notes are an integral part of these condensed consolidated financial statements. 3 COVENANT TRANSPORT, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) Three months ended Nine months ended September 30, September 30, 1995 1996 1995 1996 -------------------------------------------------------------- Revenue ............. $47,130,955 $63,022,788 $130,175,268 $172,106,146 Operating expenses: Salaries, wages, and related expenses ........... 21,751,141 28,924,057 60,719,229 79,483,306 Fuel, oil, and road expenses ........... 9,953,890 13,958,275 27,103,724 39,343,795 Revenue equipment rentals and purchased transportation ..... 311,750 79,298 861,370 400,477 Repairs ............. 991,599 1,254,147 2,417,100 3,268,155 Operating taxes and licenses ........... 1,138,550 1,698,303 3,401,030 4,777,161 Insurance ........... 1,292,269 1,619,407 3,620,720 4,485,683 General supplies and expenses ........... 2,590,789 3,300,458 7,293,243 9,393,691 Depreciation and amortization, including gain on disposition of equipment .......... 3,952,925 5,420,782 11,305,856 15,971,268 ----------- ----------- ----------- ------------ Total operating expenses 41,982,913 56,254,727 116,722,272 157,123,536 ----------- ----------- ----------- ------------ Operating income ..... 5,148,042 6,768,061 13,452,996 14,982,610 Interest expense ..... 1,084,479 1,582,489 2,841,683 4,442,640 ----------- ----------- ----------- ------------ Income before income taxes ............... 4,063,563 5,185,572 10,611,313 10,319,970 Income tax expense ... 1,460,000 1,868,000 3,820,000 3,816,000 ----------- ----------- ------------ ------------ Net income ........... $ 2,603,563 $ 3,317,572 $ 6,791,313 $ 6,723,970 =========== =========== ============ ============ Earnings per share Net income ........... $ 0.20 $ 0.25 $ 0.51 $ 0.50 =========== =========== ============ ============ The accompanying notes are an integral part of these condensed consolidated financial statements. 4 COVENANT TRANSPORT, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY For the nine months ended September 30, 1995 and 1996 (unaudited) Series I Class A Class B Additional Total Preferred Common Common Paid-In Retained Stockholders' Stock Stock Stock Capital Earnings Equity Balances at December 31, 1994 $ - $ 110,000 $ 23,500 $50,469,596 $12,865,967 $63,469,063 Net income (unaudited) - - - - 6,791,313 6,791,313 ----------------------------------------------------------------------- Balances at September 30, 1995 (unaudited) - $ 110,000 $ 23,500 $50,469,596 $19,657,280 $70,260,376 ======================================================================= Balances at December 31, 1995 $ - $ 110,000 $ 23,500 $50,469,596 $22,148,766 $72,751,862 Net income (unaudited) - - - - 6,723,970 6,723,970 ----------------------------------------------------------------------- Balances at September 30, 1996 (unaudited) - $ 110,000 $ 23,500 $50,469,596 $28,872,736 $79,475,832 ======================================================================== The accompanying notes are an integral part of these condensed consolidated financial statements. 5 COVENANT TRANSPORT, INC. AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS For the nine months ended September 30, 1995 and 1996 (unaudited) 1995 1996 ----------------------------- Cash flows from operating activities: Net income ................................ $ 6,791,313 $ 6,723,970 Adjustments to reconcile net income to net cash provided by operating activities: Provision for losses on receivables ... 135,000 252,863 Depreciation and amortization ......... 11,979,282 16,584,062 Deferred income tax expense ........... 3,368,000 2,546,000 Gain on disposition of property and equipment (673,426) (612,794) Changes in operating assets and liabilities: Receivables, advances and other assets (9,690,569) 1,872,067 Prepaid expenses .................... (1,179,256) (1,618,749) Tire and parts inventory ............ (126,426) 123,805 Accounts payable and accrued expenses (542,769) 2,650,311 ---------- ------------ Net cash flows provided by operating activities ........................ 10,061,149 28,521,535 ---------- ------------ Cash flows from investing activities: Acquisition of property and equipment ..... (48,223,550) (40,088,279) Covenant not to compete ................... (100,000) -- Proceeds from disposition of property and equipment ........................... 6,051,825 4,499,792 ---------- ------------ Net cash flows used in investing activities ........................ (42,271,725) (35,588,487) ---------- ------------ Cash flows from financing activities: Proceeds from issuance of long-term debt .. 63,000,000 10,000,000 Repayments of long-term debt .............. (35,266,477) (40,000) Deferred debt issuance costs .............. (205,815) (132,452) ----------- ------------ Net cash flows provided by financing activities ....................... 27,527,708 9,827,548 ----------- ------------ Net change in cash and cash equivalents ...... (4,682,868) 2,760,596 Cash and cash equivalents at beginning of period 4,877,361 461,288 ---------- ------------ Cash and cash equivalents at end of period ... $ 194,493 $ 3,221,884 ============ ============ The accompanying notes are an integral part of these condensed consolidated financial statements. 6 COVENANT TRANSPORT, INC. AND SUBSIDIARY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited) Note 1. Basis of Presentation The condensed consolidated financial statements include the accounts of Covenant Transport, Inc., a Nevada holding company, and its wholly-owned subsidiary (the Company). All significant intercompany balances and transactions have been eliminated in consolidation. The financial statements have been prepared, without audit, in accordance with generally accepted accounting principles, pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, the accompanying financial statements include all adjustments which are necessary for a fair presentation of the results for the interim periods presented, such adjustments being of a normal recurring nature. Certain information and footnote disclosures have been condensed or omitted pursuant to such rules and regulations. The December 31, 1995 Condensed Consolidated Balance Sheet was derived from the audited balance sheet of the Company for the year then ended. It is suggested that these condensed consolidated financial statements and notes thereto be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Form 10-K for the year ended December 31, 1995. Results of operations in interim periods are not necessarily indicative of results to be expected for a full year. ------------------------------------ FORWARD LOOKING STATEMENTS This document and statements by the Company in press releases, public filings, and stockholder reports, as well as oral public statements by Company representatives, may contain certain forward looking information that is subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Without limitation, these risks and uncertainties include economic recessions or downturns in customers' business cycles, excessive increases in capacity within the truckload markets, decreased demand for transportation services offered by the Company, rapid inflation and fuel price increases, increases in interest rates, and the availability and compensation of qualified drivers. Readers should review and consider the various disclosures made by the Company in its press releases, stockholder reports, and public filings. 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following table sets forth the percentage relationship of certain items to revenue for the periods indicated: Three months ended Nine months ended September 30, September 30, 1995 1996 1995 1996 ----- ----- ----- ----- Revenue ...................... 100.0% 100.0% 100.0% 100.0% Operating expenses: Salaries, wages, and related expenses 46.2 45.9 46.6 46.2 Fuel, oil, and road expenses . 21.1 22.2 20.8 22.8 Revenue equipment rentals and purchased transportation ..... 0.7 0.1 0.7 0.2 Repairs ...................... 2.1 2.0 1.9 1.9 Operating taxes and licenses . 2.4 2.7 2.6 2.8 Insurance .................... 2.7 2.6 2.8 2.6 General supplies and expenses 5.5 5.2 5.6 5.5 Depreciation and amortization 8.4 8.6 8.7 9.3 ----- ----- ----- ----- Total operating expenses ..... 89.1 89.3 89.7 91.3 ----- ----- ----- ----- Operating income ............. 10.9 10.7 10.3 8.7 Interest expense ............. 2.3 2.5 2.2 2.6 ----- ----- ----- ----- Income before income taxes ... 8.6 8.2 8.1 6.1 Provision for income taxes ... 3.1 2.9 2.9 2.2 ----- ----- ----- ----- Net income ................... 5.5% 5.3% 5.2% 3.9% ===== ===== ===== ===== COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 1996 TO THREE MONTHS ENDED SEPTEMBER 30, 1995 Revenue increased 33.7%, to $63.0 million in the 1996 period from $47.1 million in the 1995 period. The revenue increase was primarily generated by a 30.3% increase in weighted average tractors, to 1,560 during the 1996 quarter from 1,197 during the 1995 quarter, as the Company expanded to meet demand from new customers and higher volume from existing customers. During the third quarter of 1996, the Company instituted a combination of rate increases and fuel surcharges in response to escalating fuel prices. The resulting revenue increase will benefit the Company in future periods but is not expected to recapture the full effect of fuel price increases over 1995 levels. The 1996 revenue included approximately $105,000 attributable to a fuel surcharge. Average revenue per loaded mile remained unchanged at $1.09 in the 1996 period and the 1995 period. Average miles per tractor increased to 38,989 in the 1996 period from 38,186 in the 1995 period, as shipping volumes increased. Deadhead increased to 5.1% of total miles in the 1996 period from 5.0% in the 1995 period. Salaries, wages, and related expenses decreased to 45.9% of revenue in the 1996 period from 46.2% in the 1995 period. Driver wages as a percentage of revenue increased to 33.6% in the 1996 period from 32.6% in the 1995 period, as a result of an increase in the per mile rate paid to drivers. Employee leasing charges, payroll taxes, and worker's compensation decreased to 5.2% of revenue in the 1996 period from 6.4% in the 1995 period because of lower employee leasing costs through August 1, 1996, and thereafter as a result of terminating the leasing arrangement, resulting in an overall payroll savings. Fuel, oil and road expenses increased to 22.2% of revenue in the 1996 period from 21.1% in the 1995 period, as a result of increased per gallon fuel costs in the 1996 period. Fuel surcharges 8 received during the 1996 period offset approximately $105,000 of this increase and are expected to recover a portion of future price increases in fuel periods. Revenue equipment rentals and purchased transportation decreased to 0.1% of revenue in the 1996 period from 0.7% in the 1995 period. During the 1996 period, the Company had eliminated all long-term operating leases for revenue equipment. Insurance, consisting primarily of premiums for liability, physical damage, and cargo damage insurance, remained substantially the same at 2.6% of revenue in the 1996 period versus 2.7% in the 1995 period. General supplies and expenses, consisting primarily of driver recruiting expenses, communications, and agent commissions, decreased to 5.2% of revenue in the 1996 period from 5.5% in the 1995 period because of improved revenue per tractor. These savings were partially offset by higher costs in the driver orientation program as one day was added to driver orientation. Depreciation and amortization, consisting primarily of depreciation of revenue equipment, increased to 8.6% of revenue in the 1996 period from 8.4% in the 1995 period as a result of (i) all tractors being equipped with satellite communication units for the entire 1996 period while in the 1995 period not all tractors had such units, and (ii) the elimination of all revenue equipment operating leases. As a result of the foregoing, the Company's operating ratio was 89.3% in the 1996 period versus 89.1% in the 1995 period. Interest expense increased to 2.5% of revenue in the 1996 period from 2.3% in the 1995 period, as higher average debt balances ($89.2 million in the 1996 period compared with $64.1 million in the 1995 period) were combined with higher average interest rates (7.1% in the 1996 period compared with 6.8% in the 1995 period). The Company's effective tax rate was 36.0% in the 1996 period and the 1995 period. As a result of the factors described above, net income increased to $3.3 million in the 1996 period (5.3% of revenue) from $2.6 million in the 1995 period (5.5% of revenue). 9 COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 1996 TO NINE MONTHS ENDED SEPTEMBER 30, 1995 Revenue increased 32.2%, to $172.1 million in the 1996 period from $130.2 million in the 1995 period. The revenue increase was primarily generated by a 31.0% increase in weighted average tractors, to 1,481 during the 1996 period from 1,131 in the 1995 period, as the Company expanded to meet demand from new customers and higher volume from existing customers. During the third quarter of 1996, the Company instituted a combination of rate increases and fuel surcharges in response to escalating fuel prices. The resulting revenue increase will benefit the Company in future periods but is not expected to recapture the full effect of fuel price increases over 1995 levels. The 1996 revenue number included approximately $880,000 attributable to a fuel surcharge instituted in the second and third quarters of 1996. Average revenue per loaded mile was unchanged at $1.09 in the 1996 period ($1.08 net of the surcharge) and the 1995 period. Average miles per tractor increased to 112,732 in the 1996 period from 111,818 in the 1995 period, as shipping volumes increased. Deadhead decreased to 5.3% of total miles in the 1996 period from 5.7% in the 1995 period. Salaries, wages, and related expenses decreased to 46.2% of revenue in the 1996 period from 46.6% in the 1995 period. Driver wages as a percentage of revenue increased to 33.5% in the 1996 period from 32.9% in the 1995 period because of increased layover and other non-productive wages related to severe weather in the first quarter 1996 and an increase in the per mile rate paid to drivers implemented in August 1996. The increase in driver pay was more than offset by improved equipment utilization and deadhead, as well as a reduction in employee leasing company charges to 5.8% of revenue in the 1996 period from 6.9% in the 1995 period, because of lower employee leasing company charges through August 1, 1996, and thereafter as a result of terminating the leasing arrangement, resulting in overall payroll savings. Fuel, oil, and road expenses increased to 22.8% of revenue in the 1996 period from 20.8% in the 1995 period, as a result of increased per gallon fuel costs in the 1996 period. Fuel surcharges implemented during the second and third quarters 1996 recovered a portion of the fuel price increase. Revenue equipment rentals and purchased transportation decreased to 0.2% of revenue in the 1996 period from 0.7% in the 1995 period. During the 1996 period, the Company continued to reduce its revenue equipment under long-term operating leases and had eliminated all long-term leases of revenue equipment at September 30, 1996. Insurance, consisting primarily of premiums for liability, physical damage, and cargo damage insurance, remained substantially the same at 2.6% of revenue in the 1996 period versus 2.8% in the 1995 period. General supplies and expenses, consisting primarily of driver recruiting expenses, communications, and agent commissions, decreased to 5.5% of revenue in the 1996 period from 5.6% in the 1995 period. Cost saving measures implemented during the 1996 period were somewhat offset by the effects of the severe weather during the first quarter 1996 and adding one day to driver orientation. Depreciation and amortization, consisting primarily of depreciation of revenue equipment, increased to 9.3% of revenue in the 1996 period from 8.7% in the 1995 period as a result of poor equipment utilization during the first quarter 1996, all tractors being equipped with satellite communication 10 units for the entire 1996 period while in the 1995 period not all tractors had such units, and the elimination of all operating leases of revenue equipment during the 1996 period. As a result of the foregoing, the Company's operating ratio was 91.3% in the 1996 period versus 89.7% in the 1995 period. Interest expense increased to 2.6% of revenue in the 1996 period from 2.2% in the 1995 period, as higher average debt balances ($84.3 million in the 1996 period compared with $53.5 million in the 1995 period) were combined with lower average interest rates (7.0% in the 1996 period compared with 7.1% in the 1995 period). The Company's effective tax rate was 36.2% in the 1996 period and 36.0% in the 1995 period. As a result of the factors described above, net income decreased to $6.7 million in the 1996 period (3.9% of revenue) from $6.8 million in the 1995 period (5.2% of revenue). LIQUIDITY AND CAPITAL RESOURCES The growth of the Company's business has required significant investments in new revenue equipment. The Company's primary sources of liquidity are funds provided by operations and borrowings under agreements with financial institutions. The Company's primary sources of cash flow from operations are net income increased by depreciation and deferred income taxes. The Company's principal uses of cash flow from operations are to acquire new revenue equipment, make payments on debt, and finance receivables and advances associated with growth in the business. Net cash provided by operating activities was $28.5 million in the nine months ended September 30, 1996, compared with $10.1 million for the same period in 1995. Collection of a $5 million receivable from the December 1995 sale of used equipment and improved cash flow procedures relating to accounts payable and accounts receivable contributed to the 1996 improvement in cash flow. Net cash used in investing activities was $35.6 million in the 1996 period versus $42.3 million in the 1995 period. These amounts were used primarily to acquire additional revenue equipment as the Company expanded its operations. The Company expects capital expenditures (primarily for revenue equipment), net of trade-ins, to be approximately $45.0 million in 1996. Net cash provided by financing activities was $9.8 million in 1996 compared with $27.5 million in 1995. The cash provided by financing activities related primarily to borrowings under a credit agreement in both periods. At September 30, 1996, the Company had outstanding debt of $90.2 million, substantially all of which related to draws under the $70 million credit agreement and $25 million in senior notes due October 2005. Interest rates on this debt ranged from 6.1% to 7.5% at September 30, 1996. The Company expects to relocate its headquarters during December 1996 in the Chattanooga area. The headquarters lease agreements contemplate a total land acquisition and construction budget of up to $15 million under a "build-to-suit" operating lease. Therefore, the Company will not experience any cash flow impact during the construction phase. The relocation is expected to result in a $750,000 annual after-tax increase in the Company's overall costs of its headquarters given 11 current interest rates. The increase could be reduced upon successful sale or subleasing of the Company's current facility in Chattanooga. The credit agreement, senior notes, and lease agreements subject the Company to certain restrictions and covenants relating to, among other things, dividends, tangible net worth, cash flow, acquisitions and dispositions, and total indebtedness. All of these agreements are cross-defaulted. 12 PART II OTHER INFORMATION Item 1. Legal Proceedings No reportable events or material changes occurred during the quarter for which this report is filed. Items 2, 3, 4 and 5. Not applicable Item 6. Exhibits and reports on Form 8-K. (a) Exhibits Exhibit Number Description 3.1* Restated Articles of Incorporation 3.2* Amended Bylaws dated September 27, 1994 4.1* Restated Articles of Incorporation 4.2* Amended Bylaws dated September 27, 1994 10.3** Credit Agreement dated January 17, 1995, among Covenant Transport, Inc., a Tennessee corporation, ABN-AMRO Bank N.V., as agent, and certain other banks. 10.4* Lease dated January 1, 1990, between David R. and Jacqueline F. Parker and Covenant Transport, Inc, a Tennessee corporation, with respect to the Chattanooga, Tennessee headquarters. 10.5* Lease dated June 1, 1994, between David R. and Jacqueline F. Parker and Covenant Transport, Inc, a Tennessee corporation, with respect to terminal facility in Greer, South Carolina. 10.8* Incentive Stock Plan. 10.9* 401(k) Plan. 10.12**** Note Purchase Agreement dated October 15, 1995, among Covenant Transport, Inc, a Tennessee corporation and CIG & Co. 10.13**** First Amendment to Credit Agreement and Waiver dated October 15, 1995. 10.14***** Participation Agreement dated March 29, 1996, among Covenant Transport, Inc, a Tennessee corporation, Lease Plan USA, Inc., and ABN-AMRO Bank, N.V., Atlanta Agency. 10.15***** Second Amendment to Credit Agreement and Waiver dated April 12, 1996. 10.16***** First Amendment to Note Purchase Agreement and Waiver dated April 1, 1996. 11 Statement re: Computation of Per Share Earnings (page 14 herein). - --------------------------- o Filed as an exhibit to the registrant's Registration Statement on Form S-1, Registration No. 33-82978, effective October 28, 1994, and incorporated herein by reference. ** Filed as an exhibit to the registrant's Form 10-Q for the quarter ended March 31, 1995, and incorporated herein by reference. *** Filed as an exhibit to the registrant's Form 10-Q for the quarter ended June 30, 1995, and incorporated herein by reference. **** Filed as an exhibit to the registrant's Form 10-K for the year ended December 31, 1995, and incorporated herein by reference. ***** Filed as an exhibit to the registrant's Form 10-Q for the quarter ended March 31, 1996, and incorporated herein by reference. (b) No reports on Form 8 - K have been filed during the quarter for which this report is filed. 13 SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. COVENANT TRANSPORT, INC. Date: October 31, 1996 /s/ Bradley A. Moline ------------------------------ --------------------- Treasurer and Chief Financial Officer 14 EXHIBIT 11 COVENANT TRANSPORT, INC. AND SUBSIDIARY SCHEDULE OF COMPUTATION OF NET EARNINGS PER SHARE (In thousands, except per share amounts) (Unaudited) Three months ended Nine months ended September 30, September 30, 1995 1996 1995 1996 --------------------------------------------- Net earnings $ 2,604 $ 3,178 $ 6,791 $ 6,584 =============================================== Weighted average shares: Common shares outstanding 13,350 13,350 13,350 13,350 Common equivalent shares issuable upon exercise of employee stock options (1) - 56 - - Total weighted average shares 13,350 13,406 13,350 13,350 =============================================== Primary net earnings per common and equivalent share $ 0.20 $ 0.25 $ 0.51 $ 0.50 =============================================== Notes: (1) Amount calculated using the treasury stock method and fair market values. 15 -----END PRIVACY-ENHANCED MESSAGE-----