EX-99 3 cvtipressrelease.txt EX 99.1 PRESS RELEASE APRIL 22, 2003 COVENANT TRANSPORT ANNOUNCES FIRST QUARTER FINANCIAL AND OPERATING RESULTS CHATTANOOGA, TENNESSEE - April 22, 2003 - Covenant Transport, Inc. (Nasdaq/NMS:CVTI) announced today financial and operating results for the quarter ended March 31, 2003. For the quarter, revenue increased approximately four percent, to $137.9 million in the first quarter of 2003 from $132.2 million in the same quarter of 2002. Freight revenue, before fuel and accessorial surcharges, decreased one percent, to $128.0 million from $129.0 million during the same period in 2002. Net income increased to $839,000 or $.06 per diluted share, from a net loss of $1.7 million, or $.12 per diluted share, for the first quarter of 2002. Chairman, President, and Chief Executive Officer David R. Parker stated, "The positive news for the quarter was that revenue per loaded mile, excluding fuel and accessorial surcharges, increased 2.5% despite a relatively weak freight environment. However, lower tractor utilization and a higher percentage of non-revenue miles more than offset the gain in rates, and our revenue per tractor decreased slightly. On the expense side, excluding charges during the first quarter of 2002 for tractor impairment and early extinguishment of debt, our after-tax cost per mile increased approximately $.016, most of which was expected due to higher costs of owning and operating tractors and insurance and claims. The remainder primarily was attributable to high fuel costs, which impacted our results for the quarter by $.03 per share versus a year ago. "Our balance sheet remains strong. During the quarter, we paid down approximately $16.0 million of balance sheet debt and ended the quarter with a balance sheet debt-to-capitalization ratio of 28%. In addition, the capitalized amount of our operating leases remained essentially constant versus year-end, as we did not purchase or trade a significant amount of equipment during the quarter. We expect this activity to accelerate, and for the year we expect to purchase approximately 1,200 tractors and 2,700 trailers and trade approximately 1,100 tractors and 1,700 trailers." The Company also noted the following regarding its first quarter earnings and its revenue. In the first quarter of 2002, the Company had recorded a $.14 per diluted share or $2.0 million after-tax impairment charge relating to tractor values and a $.06 per diluted share or $890,000 after-tax charge related to early extinguishment of debt. Prior to the charges in 2002, the Company would have earned $1.2 million, or $.09 per diluted share. Management believes that presentation of earnings calculated to exclude the impact of the charges is useful in comparing the Company's results from period to period. In addition, the Company measures revenue, before fuel and accessorial surcharges, in addition to total revenue, because management believes that removing this sometimes volatile source of revenue affords a more consistent basis for comparing results of operations from period to period. Covenant Transport, Inc. is a public truckload carrier that offers just-in-time service and other premium transportation services for customers throughout the United States. Covenant operates one of the ten largest fleets in North America and is committed to growing revenue and earnings per share both internally and through acquisitions. The Company will be hosting a conference call on Wednesday, April 23, at 11:00 a.m. ET. The dial-in number for this conference call is 1-800-603-1780 access code 9629698. For additional statistical and financial information that may be discussed on the conference call, please visit our website at www.covenanttransport.com under the icon "Investor Relations". This press release contains forward-looking statements that involve risk, assumptions, and uncertainties that are difficult to predict. Statements that constitute forward-looking statements are usually identified by words such as "anticipates," "believes," "estimates," "projects," "expects," or similar expressions. These statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are based upon the current beliefs and expectations of management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. The following factors, among others, could cause actual results to differ materially from those in forward-looking statements: excess capacity in the trucking industry; decreased demand for the Company's services or the loss of one or more major customers; surplus inventories; recessionary economic cycles and downturns in customers' business cycles; strike, work slow downs, or work stoppages at the Company, customers, parts, or other shipping-related facilities; increases or rapid fluctuations in fuel prices, interest rates, fuel taxes, tolls, and license and registration fees; the resale value of the Company's used equipment and the price of new equipment; increases in compensation for and difficulty in attracting and retaining qualified drivers and owner-operators; the frequency and severity of accidents and increases in insurance premiums and deductible amounts relating to accident, cargo, workers' compensation, health, and other claims; seasonal factors such as harsh weather conditions that increase operating costs; competition from trucking, rail, and intermodal competitors; regulatory requirements that increase costs or decrease efficiency; and the ability to identify acceptable acquisition candidates, consummate acquisitions, and integrate acquired operations. Readers should review and consider the various disclosures made by the Company in its press releases, stockholder reports, and public filings, as well as the factors explained in greater detail in the Company's annual report on Form 10-K. For further information contact: Joey B. Hogan, Senior VP and Chief Financial Officer (423) 825-3336 hogjoe@covenanttransport.com For copies of Company information contact: Kim Perry, Administrative Assistant (423) 825-3357 perkim@covenanttransport.com Covenant Transport, Inc. Key Financial and Operating Statistics Three Months Ended March 31 ----------------------------- ($000s) 2003 2002 --------- --------- Freight revenue $ 128,024 $ 129,020 Fuel surcharge and other accessorial revenue 9,851 3,199 ------------------------ Total revenue $ 137,875 $ 132,219 Operating expenses Salaries, wages and related expenses 53,810 55,756 Fuel expense 28,788 22,086 Operations and maintenance 9,994 8,863 Revenue equipment rentals and purchased transportation 14,818 14,803 Operating taxes and licenses 3,431 3,277 Insurance and claims 8,039 7,168 Communications and utilities 1,708 1,846 General supplies and expenses 3,173 3,511 Depreciation and amortization (1) 10,600 14,058 ------------------------ Total operating expenses 134,361 131,368 ------------------------ Operating income 3,514 851 Other (income) expenses: Interest expense 651 1,063 Interest income (38) (23) Other (15) (223) Early extinguishment of debt (2) -- 1,434 ------------------------ Other (income) expenses, net 598 2,251 ------------------------ Income (loss) before income taxes 2,916 (1,400) Income tax expense 2,077 267 ------------------------ Net income (loss) $ 839 ($ 1,667) ======================== (1) Includes a $3.3 million pre-tax impairment charge which incurred in the first quarter of 2002. (2) Reflects reclassification of early extinguishment of debt due to the adoption of SFAS 145. Basic earnings per share $ 0.06 ($ 0.12) Diluted earnings per share $ 0.06 ($ 0.12) Weighted avg. common shares outstanding 14,381 14,084 Adjusted weighted avg. common shares 14,670 14,084 outstanding and assumed conversions outstanding Operating statistics exclude fuel and accessorial surcharges. % Change --------- Net margin as a percentage of freight revenue 0.7% -1.3% Average revenue per loaded mile $ 1.231 $ 1.201 2.5% Average revenue per total mile $ 1.131 $ 1.112 1.7% Average revenue per tractor per week $ 2,667 $ 2,680 -0.5% Average miles per tractor per period 30,308 30,986 -2.2% Weighted avg. tractors for period 3,726 3,713 0.4% Tractors at end of period 3,717 3,705 0.3% Trailers at end of period 7,516 7,561 -0.6% March 2003 Dec 2002 ------------ ---------- Total assets $ 349,739 $ 361,541 Total equity 176,480 175,588 Long term debt, including current maturities 67,530 83,530 Debt to Capitalization Ratio 27.7% 32.2%