-----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, DPZH7fOp06kJtr30fVJkjJDuMrJSPL9ksryopT4iSwKm/OzPM45yIUHeuwp+WIm/ tlhhlfH1xiyd5kxyEXaaZg== 0001008886-04-000180.txt : 20040721 0001008886-04-000180.hdr.sgml : 20040721 20040721092351 ACCESSION NUMBER: 0001008886-04-000180 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20040630 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20040721 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: 04923176 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 form8kjuly2004.txt FORM 8-K JULY 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): July 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 and six month period ended June 30, 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, July 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 and six month period ended June 30, 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, July 21, 2004, at 10:00 a.m. EDT. 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: July 20, 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 and six month period ended June 30, 2004 EX-99 2 form8kjuly2004exhibits.txt EXHIBIT TO JULY 2004 FORM 8-K COVENANT TRANSPORT ANNOUNCES SECOND QUARTER FINANCIAL AND OPERATING RESULTS CHATTANOOGA, TENNESSEE - July 20, 2004 - Covenant Transport, Inc. (Nasdaq/NMS:CVTI) announced today financial and operating results for the quarter and six month period ended June 30, 2004. For the quarter, net income increased 39%, to $4.4 million from $3.2 million in 2003, and basic and diluted earnings per share increased by 36%, to $.30 from $.22 in 2003. Total revenue increased 3%, to $149.8 million from $145.9 million in 2003. Freight revenue, before fuel surcharges, remained essentially constant at $140.0 million in the 2004 quarter and $139.5 million in the 2003 quarter. The Company measures freight revenue, before fuel surcharges, because management believes that fuel surcharges tend to be a volatile source of revenue and that removal of such surcharges affords a more consistent basis for comparing results of operations from period to period. For the first six months, net income increased 28%, to $5.1 million, or $.34 per diluted share, compared with $4.0 million, or $.27 per diluted share in 2003. Total revenue increased 1%, to $287.5 million from $283.8 million during the same period of 2003. Freight revenue, before fuel surcharges, remained essentially constant at $270.6 million in the 2004 period and $269.8 million in the 2003 period. Chairman, President, and Chief Executive Officer David R. Parker stated, "We are very excited about Covenant's overall progress during the quarter. Our earnings per share increased 36% versus last year despite an additional $.07 per share of diesel fuel expense, net of fuel surcharge revenue. We believe that the combination of tight truck capacity and our dedication to restoring Covenant's profitability back to the levels maintained by the Company in the late 90's will continue to positively impact our earnings going forward. As we have mentioned in the past, we believe that the key to substantially improving our profitability is to improve our revenue per tractor per week, primarily through increases in revenue per loaded mile. During the second quarter, revenue per loaded mile increased 10%, or $.12 per mile, versus the same quarter in 2003. Revenue per tractor per week increased almost 4%, to $2,996 from $2,892 during the same quarter of 2003. The increase in revenue per loaded mile was partially offset by lower tractor utilization and a higher percentage of non-revenue miles. Our average length of haul decreased by 11% to 941 from 1,055. On the expense side, our after-tax costs increased about 8% or $.086 per mile. The main factors were a $.03 per mile driver pay increase that commenced on March 15, 2004, lower fuel economy of new tractor engines, diesel fuel prices that averaged approximately $.28 per gallon more than the second quarter of 2003, and an approximately $.02 per mile increase in our cost of owning and operating revenue equipment. Our ownership and operating costs include ownership/lease costs and maintenance costs. Ownership/lease costs include both leased and owned equipment and are reflected in the combined cost of revenue equipment rentals, depreciation, and interest, and related to increased costs of equipment, trade-in costs, and the addition of 1,812 trailers versus last year to improve our customer service as a result of increased dedicated loads and decreased lengths of haul. Compared to second quarter of last year, our ownership/lease costs of revenue equipment increased approximately $.04 per mile. These amounts were partially offset by savings in the areas of tractor and trailer maintenance. Our newer fleet saved us $.018 per mile compared with the same quarter last year, resulting in a net increase of approximately $.021 per mile in costs relating to revenue equipment. By the end of 2004, we expect these costs to drop by an additional $.01 per mile as a result of fewer trade-ins and the related expenses. Our balance sheet remains strong despite acquiring a substantial amount of revenue equipment, which lowered the average age of our tractor and trailer fleets to 1.5 years and 2.5 years, respectively, for the 2004 quarter compared to 2.2 years and 4.8 years, respectively, for the 2003 quarter. At June 30, 2004, we had $195.5 million in stockholders' equity and $60.5 million in balance sheet debt, for a debt-to-total capitalization ratio of 24%." The Company will be hosting a conference call on Wednesday, July 21, 2004, at 10:00 a.m. EDT. The public will be able to listen and participate in the call telephonically by dialing 800-603-1780 access code 8512599. 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 of 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, ports, 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 June 30 Six Months Ended June 30 -------------------------------- --------------------------------- ($000s) 2004 2003 % Change 2004 2003 % Change ---- ---- -------- ---- ---- -------- Freight revenue $140,036 $139,480 0.4% $270,626 $269,833 0.3% Fuel surcharge revenue 9,811 6,462 16,888 13,984 ------------------------ ------------------------- Total revenue $149,847 $145,942 2.7% $287,514 $283,817 1.3% Operating expenses Salaries, wages and related expenses 56,378 55,662 108,336 109,472 Fuel expense 30,264 26,502 57,816 55,290 Operations and maintenance 7,482 10,290 15,193 20,284 Revenue equipment rentals and purchased transportation 18,589 16,562 37,153 31,380 Operating taxes and licenses 3,674 3,745 7,153 7,176 Insurance and claims 8,999 9,558 17,264 17,597 Communications and utilities 1,535 1,731 3,316 3,439 General supplies and expenses 3,524 3,826 7,021 6,999 Depreciation and amortization 10,677 10,617 22,480 21,217 ------------------------ ------------------------- Total operating expenses 141,122 138,493 275,732 272,854 ------------------------ ------------------------- Operating income 8,725 7,449 17.1% 11,782 10,963 7.5% Other (income) expenses: Interest expense 655 596 1,263 1,247 Interest income (69) (25) (87) (63) Other (510) 61 (482) 46 ------------------------ ------------------------- Other (income) expenses, net 76 632 694 1,230 ------------------------ ------------------------- Income before income taxes 8,649 6,817 26.9% 11,088 9,733 13.9% Income tax expense 4,261 3,653 5,981 5,730 ------------------------ ------------------------- Net income $4,388 $3,164 38.7% $5,107 $4,003 27.6% ======================== ========================= Basic earnings per share $0.30 $0.22 36.4% $0.35 $0.28 25.0% Diluted earnings per share $0.30 $0.22 36.4% $0.34 $0.27 25.9% Weighted avg. common shares outstanding 14,643 14,397 14,660 14,389 Weighted avg. common shares outstanding 14,787 14,664 14,823 14,637 adjusted for assumed conversions Operating statistics excludes fuel surcharges. Net margin as a percentage of freight revenue 3.13% 2.27% 1.89% 1.48% Average revenue per loaded mile $1.375 $1.252 9.8% $1.347 $1.252 7.6% Average revenue per total mile $1.248 $1.153 8.2% $1.225 $1.151 6.4% Average revenue per tractor per week $2,996 $2,892 3.6% $2,871 $2,792 2.8% Average miles per tractor per period 31,215 32,612 -4.3% 60,950 62,913 -3.1% Weighted avg. tractors for period 3,578 3,699 -3.3% 3,612 3,706 -2.5% Tractors at end of period 3,540 3,623 -2.3% 3,540 3,623 -2.3% Trailers at end of period 8,945 7,133 25.4% 8,945 7,133 25.3% June 2004 Dec 2003 --------- -------- Total assets $351,623 $354,281 Total equity 195,477 192,143 Total debt, including current maturities 60,480 61,653 Debt to Capitalization Ratio 23.6% 24.3%
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