-----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, Il9Yw8Pqdh4qVVIjO59c7jToT0znxle58jI3T3I7bYrxf0wSfzkwkxIGraIiNS9a tId1aYC+XbImY0XYiEs6fg== 0001008886-04-000089.txt : 20040421 0001008886-04-000089.hdr.sgml : 20040421 20040421105607 ACCESSION NUMBER: 0001008886-04-000089 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040420 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040421 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: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-24960 FILM NUMBER: 04744426 BUSINESS ADDRESS: STREET 1: 400 BIRMINGHAM HIGHWAY CITY: CHATTANOOGA STATE: TN ZIP: 37419 BUSINESS PHONE: 4238211212 MAIL ADDRESS: STREET 1: 400 BIRMINGHAM HIGHWAY CITY: CHATTANOOGA STATE: TN ZIP: 37419 8-K 1 cvtiform8k.txt FORM 8-K 1ST QUARTER RELEASE APRIL 2004 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________________________________________________________________ FORM 8-K CURRENT REPORT Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): April 20, 2004 ________________________________________________________________________ COVENANT TRANSPORT, INC. (Exact name of registrant as specified in its charter) Nevada 0-24960 88-0320154 (State or other jurisdiction (Commission File Number) (I.R.S. Employer of incorporation) Identification No.) 400 Birmingham Hwy. Chattanooga, TN 37419 (Address of principal executive office, including zip code) (423) 821-1212 (Registrant's telephone number, including area code) Item 1. Changes in Control of Registrant. Not applicable. Item 2. Acquisition or Disposition of Assets. Not applicable. Item 3. Bankruptcy or Receivership. Not applicable. Item 4. Changes in Registrant's Certifying Accountant. Not applicable. Item 5. Other Events and Regulation FD Disclosure. Not applicable. Item 6. Resignations of Registrant's Directors. Not applicable. Item 7. Financial Statements and Exhibits. (c) Exhibits. EXHIBIT NUMBER EXHIBIT TITLE - ------------------------------------------------------------------------------- 99.1 Covenant Transport, Inc. press release announcing financial and operating results for the quarter ended March 31, 2004 Item 8. Change in Fiscal Year. Not applicable. Item 9. Regulation FD Disclosure. Not applicable. Item 10. Amendments to the Registrant's Code of Ethics, or Waiver of a Provision of the Code of Ethics. Not applicable. Item 11. Temporary Suspension of Trading Under Registrant's Employee Benefit Plans. Not applicable. Item 12. Results of Operations and Financial Condition. On Tuesday, April 20, 2004, Covenant Transport, Inc., a Nevada corporation (the "Company"), issued a press release (the "Press Release") announcing its financial and operating results for the quarter ended March 31, 2004, after the close of the market. The Company also will be holding a live conference call to discuss the Press Release and other matters on Wednesday, April 21, 2004, at 11:00 a.m. EST. The Press Release and the prepared remarks containing certain statistical and financial data that will be discussed on the conference call are available on the Company's website, www.covenanttransport.com, under "Investor Relations." A copy of the Press Release is attached to this report as Exhibit 99.1. Instructions on how to listen to the live conference call are available in the Press Release. The information contained in this report and the exhibit hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. The information in this report and the exhibit hereto may contain "forward-looking statements" that are made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995 and otherwise may be protected. Such statements are made based on the current beliefs and expectations of the Company's management and are subject to significant risks and uncertainties. Actual results may differ from those anticipated by forward-looking statements. Please refer to the Company's Annual Report on Form 10-K and other filings with the Securities and Exchange Commission for information concerning risks, uncertainties and other factors that may affect future results. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. COVENANT TRANSPORT, INC. Date: April 21, 2004 By: /s/ Joey B. Hogan ----------------------------------------- Joey B. Hogan, Executive Vice President and Chief Financial Officer EXHIBIT INDEX 99.1 Covenant Transport, Inc. press release announcing financial and operating results for the quarter ended March 31, 2004 EX-99 3 pressrelease.txt EXH 99-1 PRESS RELEASE WITH FINANCIALS COVENANT TRANSPORT ANNOUNCES FIRST QUARTER FINANCIAL AND OPERATING RESULTS CHATTANOOGA, TENNESSEE - April 20, 2004 - Covenant Transport, Inc. (Nasdaq/NMS:CVTI) announced today financial and operating results for the quarter ended March 31, 2004. For the quarter, revenue remained essentially constant at $137.7 million in the 2004 quarter and $137.9 million in the 2003 quarter. Freight revenue, before fuel surcharges, also remained essentially constant, at $130.6 million in the 2004 quarter and $130.4 million in the 2003 quarter. Net income decreased to $721,000, or $.05 per diluted share, from $839,000, or $.06 per diluted share, for the first quarter of 2003. Chairman, President, and Chief Executive Officer David R. Parker stated, "We were encouraged by several trends that developed during the quarter and, based on these trends, we expect the remainder of the year to improve considerably. The three main trends were a substantial increase in revenue per loaded mile, drawing to the end of a substantial fleet upgrade, and significantly decreasing our number of tractors without drivers. We were pleased with the progress on the revenue side of our business. Our revenue per loaded mile, excluding fuel surcharges, increased 5.3%, to $1.318 compared with $1.252 in the same quarter last year. The trend is continuing in April, as we have renewed several large contracts at meaningfully higher rates. We are nearing the end of a massive equipment upgrade, in which we accepted delivery of 1,700 tractors and 3,800 trailers and disposed of 1,700 and 2,900 trailers over the past nine months. Compared with the first quarter of last year, our operating expenses relating to ownership/lease costs of revenue equipment increased approximately $.05 per mile. Ownership/lease costs include both leased and owned equipment and are reflected in the combined cost of revenue equipment rentals, depreciation, and interest. Of that amount, about $.02 per mile, or $.08 per share, related to the trade-in costs and accelerated depreciation for the used equipment mentioned above. The remainder relates the addition of 1,530 trailers versus year ago in order to improve our customer service as our average length of haul has decreased and to the increased cost of revenue equipment. The increases described above were partially offset by savings in the areas of tractor and trailer maintenance, as the newer fleet saved us $.017 per mile compared with the same quarter last year. This resulted in a net increase of approximately $.033 per mile in operating costs relating to revenue equipment. We expect our ownership/lease cost to drop by approximately $.02 to $.025 per mile by the end of the year as the majority of the trade-in and accelerated depreciation costs associated with the fleet upgrade roll off. Finally, we experienced lower than anticipated truck utilization during the quarter primarily caused by intense competition for drivers that resulted in approximately 6.6% of our tractors being unmanned at the beginning of January. During the quarter, we announced a $.03 per mile driver pay increase that became effective March 15 and reduced our unmanned truck percentage by half at March 31. The length of time it took to correct the unseated truck percentage was the main factor in causing our earnings per share to be $.05 compared with the $.06 per share we expected in January. Regarding the new federal hours of service rules, I am very proud of the effort that our office and driving personnel have shown in implementing and following these new rules. We have experienced some reduction in equipment utilization, although it is difficult to judge the full extent because of severe winter weather and seasonally lower freight demand in the first quarter. We are responding to the new rules by imposing higher detention billing and reducing the number of loads with multiple stops. Accessorial revenue increased by $.023 per mile during the quarter with detention revenue being the largest component. We will remain committed that neither the Company nor our drivers will be negatively impacted financially by these new rules. Our balance sheet remains strong despite acquiring a substantial amount of revenue equipment that brought the average age of our fleet at historical lows. The average age of our tractor fleet was 1.5 years during the quarter compared to 2.2 years last year. The average age of our trailer fleet was 2.4 years during the quarter versus 4.6 years last year. At March 31, 2004, we had $192.9 million in stockholders' equity and $40.5 million in balance sheet debt, for a debt-to-total capitalization ratio of 17%. During the quarter, we paid down $21.2 million of balance sheet debt and added approximately the same amount in capitalized value of operating leases. For the year we expect to purchase approximately 1,200 tractors and 1,600 trailers and trade approximately 1,200 tractors and 1,600 trailers. Looking forward, we are very encouraged about the remainder of the year. In forming our outlook, we assume that the economy remains robust and our customers' freight levels are strong, fuel prices do not move rapidly higher and we continue to collect surcharges on a consistent basis, our detention and other accessorial programs are successful, and we attain and maintain an unseated tractor percentage of 2% to 3% for the remainder of the year. Based on those assumptions and a continuation of current trends in safety and maintenance costs, we continue to expect earnings per share for the year in the range of $1.05 to $1.10 that we announced in January. We expect freight rates to accelerate throughout the year as freight improves and afford us an opportunity to improve our margins nicely throughout the year." The Company also noted the following regarding its first quarter revenue. Historically, we have measured freight revenue, before fuel and accessorial surcharges, in addition to total revenue, because we believed that removing these sometimes volatile sources of revenue affords a more consistent basis for comparing results of operations from period to period. As a result of the new federally mandated hours of service rules, the additional accessorial charges associated with the new rules, and the expectation that the accessorial charges associated with the rules will become an ongoing part of the business, we determined it was appropriate to reflect accessorial revenue in freight revenue beginning with the first quarter of 2004. Freight revenue and related statistics such as rate per loaded and total mile and revenue per tractor per week have been reclassified in prior periods to reflect this change. The Company will be hosting a conference call on Wednesday, April 21, 2004 at 11:00 a.m. EST. The public will be able to listen and participate in the call telephonically by dialing 800-603-1780 (U.S./Canada) and 706-643-0889 (International), access code 6737086. For more information on how to access the conference call and for statistical and financial information regarding the Company that is expected to be discussed during the conference call, please visit our website at www.covenanttransport.com 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. The Company's Class A common stock is traded on the Nasdaq National Market under symbol, "CVTI." 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," "plans," "intends," 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 our 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 tractor or trailer capacity in the trucking industry; decreased demand for our services or loss of one or more or our major customers; surplus inventories; recessionary economic cycles and downturns in customers' business cycles; strikes, work slow downs, or work stoppages at the Company, customers, parts, or other shipping related facilities; increases or rapid fluctuations in fuel prices as well as fluctuations in hedging activities and surcharge collection, the volume and terms of diesel purchase commitments, interest rates, fuel taxes, tolls, and license and registration fees; increases in the prices paid for new revenue equipment; the resale value of our used equipment and the price of new equipment; increases in compensation for and difficulty in attracting and retaining qualified drivers and independent contractors; elevated experience in the frequency and severity of claims relating to accident, cargo, workers' compensation, health, and other claims; high insurance premiums and deductible amounts; 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, including revised hours-of-service requirements for drivers; the ability to successfully execute the Company's initiative of improving the profitability of medium length of haul movements; and the ability to identify acceptable acquisition candidates, consummate acquisitions, and integrate acquired operations. Readers should review and consider these factors along with the various disclosures by the Company in its press releases, stockholder reports, and filings with the Securities Exchange Commission. For further information contact: Joey B. Hogan, Executive 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) 2004 2003 % Change ---- ---- -------- Freight revenue $130,590 $130,353 0.2% Fuel surcharge revenue 7,077 7,522 --------------------------------- Total revenue $137,667 $137,875 -0.2% Operating expenses Salaries, wages and related expenses 51,958 53,810 Fuel expense 27,551 28,788 Operations and maintenance 7,711 9,994 Revenue equipment rentals and purchased transportation 18,564 14,818 Operating taxes and licenses 3,479 3,431 Insurance and claims 8,265 8,039 Communications and utilities 1,781 1,708 General supplies and expenses 3,497 3,173 Depreciation and amortization 11,803 10,600 --------------------------------- Total operating expenses 134,609 134,361 --------------------------------- Operating income 3,058 3,514 -13.0% Other (income) expenses: Interest expense 608 651 Interest income (11) (38) Other 20 (15) --------------------------------- Other (income) expenses, net 617 598 --------------------------------- Income before income taxes 2,441 2,916 -16.3% Income tax expense 1,720 2,077 --------------------------------- Net income $721 $839 -14.1% ================================= Basic earnings per share $0.05 $0.06 -16.7% Diluted earnings per share $0.05 $0.06 -16.7% Weighted avg. common shares outstanding 14,676 14,381 Weighted avg. common shares outstanding 14,858 14,670 adjusted for assumed conversions Operating statistics excludes fuel surcharges. Net margin as a percentage of freight revenue 0.55% 0.64% Average revenue per loaded mile $1.318 $1.252 5.3% Average revenue per total mile $1.201 $1.150 4.4% Average revenue per tractor per week $2,749 $2,712 1.4% Average miles per tractor per period 29,749 30,308 -1.8% Weighted avg. tractors for period 3,646 3,726 -2.1% Tractors at end of period 3,589 3,717 -3.4% Trailers at end of period 9,048 7,516 20.4% March 2004 Dec 2003 ------------ ---------- Total assets $335,331 $354,281 Total equity 192,913 192,143 Total debt, including current maturities 40,453 61,653 Debt to Capitalization Ratio 17.3% 24.3%
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