8-K/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________________________________________

FORM 8-K/A

AMENDMENT NO. 1

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

September 14, 2006

___________________________________________________________________

                                                              

COVENANT TRANSPORT, INC.

(Exact name of registrant as specified in its charter)

Nevada	000-24960	88-0320154
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

400 Birmingham Hwy., Chattanooga, TN	37419
(Address of principal executive offices)	(Zip Code)

(423) 821-1212

(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[    ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[    ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[    ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[    ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

EXPLANATORY NOTE

This Amendment to the Current Report on Form 8-K amends and supersedes in its entirety the Current Report which was filed on September 20, 2006 (the “Report”).  In the Report, the Company indicated that it would file the financial statements and the financial information required under Item 9.01(a) and (b) as soon as practicable.  The Company is hereby filing this Amendment No. 1 to Form 8-K to update Item 9.01, Financial Statements and Exhibits and, to include the financial statements of the business acquired and pro forma financial information, both of which were not available at the time of the Report.  As soon as practicable, the Company will file an Amendment No. 2 to this Form 8-K to include the Statements of Cash Flows for the six months ended June 30, 2006 and 2005.  The acquired company did not prepare interim statements of cash flows and, accordingly, the Company was unable to include such statements in this filing.

Item 1.01

Entry into a Material Definitive Agreement

Stock Purchase Agreement On Thursday, September 14, 2006, Covenant Transport, Inc., a Nevada corporation (the "Company"), executed and closed a Stock Purchase Agreement whereby the Company acquired 100% of the outstanding capital stock of Star Transportation, Inc., a Tennessee corporation ("Star") from Beth D. Franklin, David D. Dortch, Rose D. Shipp, David W. Dortch, and James F. Brower, Jr. (the "Stockholders"). Beth D. Franklin, Star's Chief Executive Officer, has agreed to consult with the Company on transition issues for one year and all Stockholders have agreed not to compete with the Company or Star. The aggregate purchase price for the Star stock was approximately $39 million in cash. The Company funded the purchase price for the stock from available borrowing under its revolving line of credit. In addition, Star had an estimated $42 million in existing debt that became part of Covenant's consolidated obligations as a result of the transaction. The Company will account for Star's operating results on a consolidated basis going forward. Company's Credit Facility On September 14, 2006, in connection with the Stock Purchase Agreement, the Company entered into Amendment No. 3 and Limited Waiver to Amended and Restated Credit Agreement dated August 11, 2006, with Bank of America, N.A., (the "Lender") amending the Company's revolving credit facility (the "Amendment") (as amended, the "Credit Agreement"). Under the Amendment, the Lender consented to the execution and consummation of the Stock Purchase Agreement and made certain amendments to the Credit Agreement to allow for the consummation of the Stock Purchase Agreement, including a change in the tangible net worth requirement. In connection with the Amendment and consummation of the Stock Purchase Agreement, the Company agreed to pledge the stock of Star as collateral for the Company's obligations arising under the Credit Agreement and Star became a guarantor under the Credit Agreement. Star's Credit Facilities In connection with the Stock Purchase Agreement, Star entered into a Thirteenth Amendment to Loan Agreement amending the Loan Agreement dated as of March 1, 2000 between Star and the Lender. As a condition to the Lender authorizing the consummation of the Stock Purchase Agreement, the Company and certain of its subsidiaries have guaranteed the obligations of Star under that certain Loan Agreement dated March 1, 2000, as amended by certain amendments First through Thirteenth, by and between Star and the Lender. In connection with the Stock Purchase Agreement, Star also entered into Amendment No. 1 to Amended and Restated Loan Agreement, by and between AmSouth Bank, an Alabama state chartered bank ("AmSouth") and Star. As a condition to AmSouth authorizing the consummation of the Stock Purchase Agreement, the Company and certain of its subsidiaries have guaranteed the obligations of Star under that certain Amended and Restated Loan Agreement dated March 1, 2006, as amended by Amendment No. 1 to Amended and Restated Loan Agreement, by and between AmSouth and Star.

Item 2.01	Completion of Acquisition or Disposition of Assets.
	The information set forth in Item 1.01 concerning the closing of the transactions contemplated by the Stock Purchase Agreement is incorporated by reference into this Item 2.01.

Item 9.01	Financial Statements and Exhibits.
	(a)Financial statements of business acquired.
	Audited Financial Statements  Balance Sheets as of December 31, 2005 and 2004  Statements of Operations for the years ended December 31, 2005 and 2004  Statements of Changes in Stockholders' Equity for the years ended December 31, 2005 and 2004  Statements of Cash Flows for the years ended December 31, 2005 and 2004  Notes to Financial Statements for the years ended December 31, 2005 and 2004  Unaudited Financial Statements  Balance Sheet as of June 30, 2006  Statements of Operations for the six months ended June 30, 2006 and 2005  Notes to Unaudited Financial Statements for the six months ended June 30, 2006
	(b)Pro forma financial information
	Unaudited Pro Forma Balance Sheet as of June 30, 2006  Unaudited Pro Forma Consolidated Statements of Operations for the year ended December 31, 2005  Unaudited Pro Forma Consolidated Statements of Operations for the six months ended June 30, 2006 Notes to the Unaudited Pro Forma Financial Statements
	(d)Exhibits

23.1	Consent of Lattimore Black Morgan & Cain, P.C.
99.1	Audited Financial Statements Balance Sheets as of December 31, 2005 and 2004 Statements of Operations for the years ended December 31, 2005 and 2004 Statements of Changes in Stockholders' Equity for the years ended December 31, 2005 and 2004 Statements of Cash Flows for the years ended December 31, 2005 and 2004 Notes to Financial Statements for the years ended December 31, 2005 and 2004
99.2	Unaudited Financial Statements Balance Sheet as of June 30, 2006 Statements of Operations for the six months ended June 30, 2006 and 2005 Notes to Unaudited Financial Statements for the six months ended June 30, 2006
99.3	Pro Forma Financial Statements Unaudited Pro Forma Balance Sheet as of June 30, 2006 Unaudited Pro Forma Consolidated Statements of Operations for the year ended December 31, 2005 Unaudited Pro Forma Consolidated Statements of Operations for the six months ended June 30, 2006 Notes to the Unaudited Pro Forma Financial Statements

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: November 30, 2006	By:	/s/ Joey B. Hogan
		Joey B. Hogan Executive Vice President and Chief Financial Officer

EXHIBIT INDEX

EXHIBIT NUMBER	EXHIBIT DESCRIPTION
23.1	Consent of Lattimore Black Morgan & Cain, P.C.
99.1	Audited Financial Statements Balance Sheets as of December 31, 2005 and 2004 Statements of Operations for the years ended December 31, 2005 and 2004 Statements of Changes in Stockholders' Equity for the years ended December 31, 2005 and 2004 Statements of Cash Flows for the years ended December 31, 2005 and 2004 Notes to Financial Statements for the years ended December 31, 2005 and 2004
99.2	Unaudited Financial Statements Balance Sheet as of June 30, 2006 Statements of Operations for the six months ended June 30, 2006 and 2005 Notes to Unaudited Financial Statements for the six months ended June 30, 2006
99.3	Pro Forma Financial Statements Unaudited Pro Forma Balance Sheet as of June 30, 2006 Unaudited Pro Forma Consolidated Statements of Operations for the year ended December 31, 2005 Unaudited Pro Forma Consolidated Statements of Operations for the six months ended June 30, 2006 Notes to the Unaudited Pro Forma Financial Statements

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT AUDITORS

We hereby consent to the incorporation by reference in the Registration Statement on Form S-8 (No. 33-88686, 333-2654, 333-67559, 333-37356, 333-50174, 333-88486, 333-105880, 333-134939) of Covenant Transport, Inc. of our report dated February 7, 2006 relating to the financial statements of Star Transportation, Inc., which appears in this Current Report on Form 8-K/A of Covenant Transport, Inc. dated November 30, 2006.

/s/ Lattimore Black Morgan & Cain, P.C.

Lattimore Black Morgan & Cain, P.C.

Brentwood, Tennessee

November 29, 2006

Back to Form 8-K/A

EX-99.1

Exhibit 99.1

STAR TRANSPORTATION, INC.

Financial Statements

December 31, 2005 and 2004

(With Independent Auditors' Report Thereon)

STAR TRANSPORTATION, INC.

Table of Contents

	Page
Independent Auditors' Report	1
Financial Statements:
Balance Sheets	2
Statements of Operations	3
Statements of Changes in Stockholders' Equity	4
Statements of Cash Flows	5
Notes to the Financial Statements	6-14

INDEPENDENT AUDITORS' REPORT

The Board of Directors

Star Transportation, Inc.:

We have audited the accompanying balance sheets of Star Transportation, Inc. as of December 31, 2005 and 2004, and the related statements of operations, changes in stockholders' equity and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Star Transportation, Inc. as of December 31, 2005 and 2004, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Brentwood, Tennessee

February 7, 2006

STAR TRANSPORTATION, INC.

Balance Sheets

December 31, 2005 and 2004

Assets
	2005		2004
Current assets:
Cash	$	4,573,112	$	1,480,641
Trade accounts receivable, less allowance for doubtful accounts of $120,500 and $116,707 in 2005 and 2004, respectively		9,825,398		8,758,225
Other receivables		144,170		117,096
Prepaid expenses		1,377,772		1,615,690
Refundable income taxes		-		220,072
Deferred income taxes		105,720		103,000
Assets held for sale		981,174		-
Total current assets		17,007,346		12,294,724
Property and equipment, net		42,193,049		25,293,586
Deposits		158,709		297,410
Other assets		389,076		270,253
	$	59,748,180	$	38,155,973
Liabilities and Stockholders' Equity
		2005		2004
Current liabilities:
Current installments of long-term debt	$	5,882,365	$	3,762,939
Trade accounts payable		1,672,221		1,469,947
Accrued expenses and liabilities		3,125,034		3,035,518
Accrued payroll and payroll taxes		1,036,448		1,029,950
Accrued profit sharing contribution		125,000		125,000
Income taxes payable		80,000		-
Total current liabilities		11,921,068		9,423,354
Long-term debt, excluding current installments		23,460,659		10,842,148
Deferred income taxes		1,061,297		564,000
Other long-term liabilities		-		126,723
Total liabilities		36,443,024		20,956,225
Stockholders' equity:
Common stock, no par value; 10,000 shares authorized 4,640 shares issued and outstanding		1,375		1,375
Retained earnings		23,086,538		17,325,096
Accumulated other comprehensive income (loss)		217,243		(126,723	)
Total stockholders' equity		23,305,156		17,199,748
	$	59,748,180	$	38,155,973

See accompanying notes to the financial statements.

2

STAR TRANSPORTATION, INC.

Statements of Operations

Years ended December 31, 2005 and 2004

	2005			2004
Revenues:
Freight revenue	$	85,789,239		$	77,970,924
Fuel surcharges		11,083,104			5,268,981
Total revenue		96,872,343			83,239,905
Operating expenses:
Salaries and related payroll taxes		36,316,661			32,788,549
Employee benefits		2,041,684			1,842,666
Fuel, tires and maintenance		29,596,933			21,540,017
General supplies		3,260,862			2,730,953
Taxes and licenses		1,892,429			1,889,250
Insurance		4,695,116			4,279,714
Utilities and communications		858,368			834,789
Depreciation and amortization		5,616,850			3,798,009
Revenue equipment rent		4,488,762			5,781,570
Owner operators		551,393			596,223
Other rent		457,796			327,224
Professional fees		178,720			183,295
Other		137,558			190,240
Total operating expenses		90,093,132			76,782,499
Operating income		6,779,211			6,457,406
Other income (expense):
Interest expense		(1,237,025	)		(629,728	)
Interest income		75,563			6,203
Loss on sale of property and equipment		(6,275	)		(34,966	)
Rental income		320,535			223,430
Miscellaneous income		466,818			311,386
Total other expense		(380,384	)		(123,675	)
Earnings before income taxes		6,398,827			6,333,731
Income tax expense		637,385			194,678
Net earnings	$	5,761,442		$	6,139,053

See accompanying notes to the financial statements.

3

STAR TRANSPORTATION, INC.

Statements of Changes in Stockholders' Equity

Years ended December 31, 2005 and 2004

	Common Stock		Retained Earnings			Comprehensive Income (Loss)		Accumulated Other Comprehensive Income (Loss)			Total Stockholders' Equity
Balance at December 31, 2003	$	1,375	$	11,386,043				$	(397,489	)	$	10,989,929
Dividends paid		-		(200,000	)							(200,000	)
Comprehensive income:
Net earnings		-		6,139,053		$	6,139,053		-			6,139,053
Increase in market value of swap contract		-		-			270,766		270,766			270,766
Comprehensive income		-		-		$	6,409,819		-			-
Balance at December 31, 2004		1,375		17,325,096					(126,723	)		17,199,748
Comprehensive income:
Net earnings		-		5,761,442		$	5,761,442		-			5,761,442
Increase in market value of swap contract		-		-			343,966		343,966			343,966
Comprehensive income		-		-		$	6,105,408		-			-
Balance at December 31, 2005	$	1,375	$	23,086,538				$	217,243		$	23,305,156

See accompanying notes to the financial statements.

4

STAR TRANSPORTATION, INC.

Statements of Cash Flows

Years ended December 31, 2005 and 2004

	2005			2004
Cash flows from operating activities:
Net earnings	$	5,761,442		$	6,139,053
Adjustments to reconcile net earnings to net cash flows provided by operating activities:
Depreciation and amortization		5,616,850			3,798,009
Provision for bad debts		22,443			171,798
Loss on sale of property and equipment		6,275			34,966
Provision for deferred incomes taxes		494,577			219,800
(Increase) decrease in operating assets:
Trade accounts receivable		(1,089,616	)		(157,105	)
Other receivables		49,643			103,293
Prepaid expenses		237,918			(262,151	)
Refundable income taxes		220,072			(220,072	)
Deposits		138,701			8,205
Other assets		93,844			(7,000	)
Increase (decrease) in operating liabilities:
Trade accounts payable		202,274			729,365
Accrued expenses and liabilities		89,516			631,790
Accrued payroll and payroll taxes		6,498			31,250
Accrued profit sharing contribution		-			-
Income taxes payable		80,000			(116,820	)
Total adjustments		6,168,995			4,965,328
Net cash provided by operating activities		11,930,437			11,104,381
Cash flows from investing activities:
Proceeds from sale of property and equipment		700			7,200
Purchases of property and equipment		(22,595,428	)		(8,727,491	)
Purchase of assets held for sale		(981,174	)		-
Net cash used by investing activities		(23,575,902	)		(8,720,291	)
Cash flows from financing activities:
Proceeds from long-term debt		20,850,277			8,417,398
Payments of long-term debt		(6,112,341	)		(9,701,053	)
Dividends paid		-			(200,000	)
Net cash used by financing activities		14,737,936			(1,483,655	)
Increase in cash		3,092,471			900,435
Cash at beginning of year		1,480,641			580,206
Cash at end of year	$	4,573,112		$	1,480,641

See accompanying notes to the financial statements.

5

STAR TRANSPORTATION, INC.

Notes to the Financial Statements

December 31, 2005 and 2004

(1)  Nature of operations

The Company is a truckload carrier based in Nashville, Tennessee serving customers throughout the continental United States.

(2) Summary of significant accounting policies

(a) Receivables and credit policies

Accounts receivable are uncollateralized customer obligations due under normal trade terms requiring payment within 30 days from invoice date. Certain customers have been granted extended payment terms based on business volume or other considerations. Late or interest charges on delinquent accounts are recorded when collected. The carrying amount of accounts receivable is reduced by a valuation allowance, which reflects management's best estimate of the amounts that will not be collected. The allowance is estimated based on management's knowledge of its customers, historical loss experience and existing economic conditions.

(b) Property and equipment

Property and equipment is stated at cost. Depreciation and amortization are provided over the assets' estimated useful lives using the straight-line method. Buildings are generally depreciated over forty years while revenue equipment is depreciated over seven to ten years. Leasehold improvements are amortized over the shorter of their estimated lives or the respective lease term. All other property and equipment is depreciated over three to ten years.

Expenditures for maintenance and repairs are expensed when incurred. Expenditures for renewals or betterments are capitalized. When property is retired or sold, the cost and the related accumulated depreciation are removed from the accounts, and the resulting gain or loss is included in operations.

(c) Self-insurance liabilities

Self-insurance liabilities are based upon loss reports on individual cases and an amount, based on experience, for losses incurred but not reported. Such liabilities are necessarily based on estimates and, while management believes that the amount is adequate, the ultimate liability may be in excess of or less than the amounts provided. The methods for making such estimates and for establishing the liabilities are continually reviewed, with any adjustments necessary reflected in the year of determination.

6

STAR TRANSPORTATION, INC.

Notes to the Financial Statements

December 31, 2005 and 2004

(d) Income taxes

The Company has elected to be taxed as a Subchapter "S" corporation for federal income tax purposes. As such, all federal taxable income and losses pass through to the individual stockholders for inclusion in their personal income tax returns and the Company recognizes only state income taxes in the financial statements.

The amount provided for state income taxes is based upon the amounts of current and deferred taxes payable or refundable at the date of the financial statements as a result of all events recognized in the financial statements as measured by the provisions of enacted tax laws.

(e) Revenue recognition

Revenue is recognized when the goods transported by the Company are picked up for delivery. Revenue and associated costs for goods delivered but not billed at year-end are estimated based on related miles and other factors.

(f) Realization of long-lived assets

Management evaluates the recoverability of the investment in long-lived assets on an ongoing basis and recognizes any impairment in the year of determination. It is reasonably possible that relevant conditions could change in the near term and necessitate a change in management's estimate of the recoverability of these assets.

(g) Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(h) Derivative instruments

The Company uses derivatives to manage risks related to interest rate movements. Interest rate swap contracts designated and qualifying as cash flow hedges are reported at fair value. The gain or loss on the effective portion of the hedge initially is included as a component of other comprehensive income and is subsequently reclassified into earnings when interest on the related debt is paid. The Company documents its risk management strategy and hedge effectiveness at the inception of and during the term of each hedge. The Company's interest rate risk management strategy is to stabilize cash flow requirements by maintaining interest rate swap contracts to convert variable-rate debt to a fixed rate.

7

STAR TRANSPORTATION, INC.

Notes to the Financial Statements

December 31, 2005 and 2004

(i) Reclassifications

Certain reclassifications have been made to the financial statements. These reclassifications have no effect on net earnings or retained earnings as previously reported.

(3) Credit risk and other concentrations

The Company generally maintains cash on deposit at banks in excess of federally insured amounts. The Company has not experienced any losses in such accounts and management believes the Company is not exposed to any significant credit risk related to cash.

The majority of the Company's revenues are from various companies for trucking services. Accordingly, substantially all trade accounts receivable are due from such customers. Credit losses have consistently been within management's expectations.

During 2005 and 2004, the Company purchased materials, primarily tractor fuel, from one vendor totaling approximately 33% and 24%, respectively, of total non-wage related disbursements.

(4) Assets held for sale

The Company has 24 units of revenue equipment at December 31, 2005 that have been classified as assets held for sale. The Company has an agreement with a vendor that will require the vendor to repurchase the revenue equipment at the stated price of $41,500 per unit less a $.05 per mile charge for mileage in excess of 550,000 and less a $500 monthly fee for each month the Company retains the revenue equipment during the rollout period (generally November 2005 through May 2006). The revenue equipment is carried at its current net realizable value determined as the stated sales prices less excess mileage and monthly rollout fees incurred through December 31, 2005.

(5) Property and equipment

A summary of property and equipment, net as of December 31, 2005 and 2004 is as follows:

	2005			2004
Land	$	1,093,544		$	1,093,544
Buildings and improvements		3,980,138			3,847,138
Revenue equipment		55,451,947			34,776,272
Computer equipment		1,748,442			1,670,071
Furniture and fixtures		369,111			341,272
Automobiles		488,912			444,275
		63,132,094			42,172,572
Accumulated depreciation		(20,939,045	)		(16,878,986	)
	$	42,193,049		$	25,293,586

In the normal course of business, management expects to purchase or lease significant amounts of new equipment each year.

8

STAR TRANSPORTATION, INC.

Notes to the Financial Statements

December 31, 2005 and 2004

(6) Long-term debt

A summary of long-term debt as of December 31, 2005 and 2004 is as follows:

	2005		2004
Note payable to Bank of America, N.A. due in monthly principal installments of $76,360, plus interest at LIBOR plus .75% (5.11% as of December 31, 2005) through December 2008, with remaining principal due in lump sum; secured by certain revenue equipment.	$	4,734,291	$	5,650,605
Notes payable to Bank of America, N.A. due in monthly principal installments aggregating $83,913, plus interest at LIBOR plus .75% (5.11% as of December 31, 2005) through dates ranging from October 2008 through October 2009, with remaining principal due in lump sum; secured by certain revenue equipment.		4,534,596		7,143,685
Note payable to Bank of America, N.A. due in monthly principal installments of $57,807, plus interest at LIBOR plus .75% (5.11% as of December 31, 2005) through July 2010, with remaining principal due in lump sum; secured by certain revenue equipment.		4,566,722		328,150
Note payable to AmSouth Bank due in monthly principal installments of $272,045, plus interest at LIBOR plus .75% (5.11% as of December 31, 2005) through September 2010, with remaining principal due in lump sum; secured by certain revenue equipment.		15,506,538		-
Other notes payable due in monthly installments aggregating approximately $900, with various maturity dates; secured by vehicles.		877		19,872
Notes repaid during the year.		-		1,462,775
Total long-term debt		29,343,024		14,605,087
Less current installments		5,882,365		3,762,939
Long-term debt, excluding current installments	$	23,460,659	$	10,842,148

9

STAR TRANSPORTATION, INC.

Notes to the Financial Statements

December 31, 2005 and 2004

A summary of future maturities of long-term debt as of December 31, 2005 is as follows:

Year	Amount
2006	$	5,882,365
2007		5,881,488
2008		7,792,429
2009		5,546,334
2010		4,240,408
	$	29,343,024

The provisions of the debt agreements place certain restrictions and limitations upon the Company. These include maintenance of specified financial ratios and restrictions or limitations on the payment of dividends, capital expenditures, advances to related parties and affiliates, investments, sales or rentals of property, and additional borrowings.

To minimize the effect of changes in LIBOR, the Company entered into an interest rate swap contract in a prior year which was classified as a cash flow hedge. Under the swap contract the Company paid interest at a fixed rate of 6.51% and received interest at a variable rate of LIBOR plus 1.25%. This agreement terminated in August 2005 and had a notional amount of $5,000,000.

In 2004, the Company entered into an interest rate swap contract which is classified as a cash flow hedge. Under the swap contract the Company pays interest at a fixed rate of 5.36% and receives interest at a variable rate of LIBOR plus 1.25% (5.61% as of December 31, 2005). This agreement became effective in September 2005 and terminates in September 2010 and has a notional amount of $15,441,490.

Notional amounts do not quantify risk or represent assets or liabilities of the Company, but are used in the determination of cash settlements under the contract.

(7) Profit-sharing plan

The Company sponsors a contributory profit-sharing plan covering substantially all employees. Company contributions are made at management's discretion. The Company made contributions of $125,000 to the plan for 2005 and 2004.

(8) Self-insurance reserves

Prior to January 1, 2003, the Company was self-insured for employee health insurance benefits up to $75,000 per insured with no aggregate exposure. For claims incurred from January 1, 2003 to December 31, 2005, the Company is self-insured up to $100,000 with an aggregate specific exposure of $75,000 for 2005 and 2004.

10

STAR TRANSPORTATION, INC.

Notes to the Financial Statements

December 31, 2005 and 2004

The Company is self-insured for property and liability losses up to $250,000 per occurrence for claims incurred prior to November 13, 1997 and for any amounts greater than $20,000,000 per occurrence. For claims incurred after November 12, 1997, the Company is no longer self-insured for property and liability losses but maintained a deductible amount of $50,000 through November 13, 1999 and $100,000 until November 12, 2001. For claims incurred after November 12, 2001 through November 12, 2003, the Company's deductible is $250,000. For claims incurred after November 12, 2003, the Company is self-insured up to $250,000 with an aggregate exposure ranging from $2,000,000 at September 16, 2002 to $10,000,000 at December 31, 2005.

The Company is self-insured for worker's compensation claims up to $250,000 per occurrence for claims incurred prior to November 13, 1997. For claims incurred after November 12, 1997, the Company is no longer self-insured for worker's compensation but maintained a deductible amount of $50,000 through November 13, 1999. The deductible was increased to $100,000 for claims incurred between November 13, 1999 and November 12, 2000 and $150,000 for claims incurred between November 13, 2000 and November 12, 2001. Effective November 13, 2001, the deductible was increased to $250,000.

For claims incurred between November 13, 2000 and November 12, 2001 where both worker's compensation and property and liability are involved, a basket deductible of $150,000 per occurrence applies.

The Company is self-insured for cargo loss and damage up to $100,000 per occurrence and $20,000,000 in aggregate for claims incurred prior to November 12, 2001. For cargo loss and damage claims incurred after November 12, 2001 through October 7, 2002, the Company is self-insured. For cargo loss and damage claims incurred after this date, the Company is self-insured up to $100,000 per occurrence and $500,000 in aggregate with re-insurance for claims exceeding $100,000 up to $500,000.

(9) Income taxes

The provision for income taxes during 2005 and 2004 is as follows:

	2005		2004
Current tax expense (benefit)	$	142,808	$	(25,122	)
Deferred tax expense		494,577		219,800
	$	637,385	$	194,678

11

STAR TRANSPORTATION, INC.

Notes to the Financial Statements

December 31, 2005 and 2004

Net deferred income taxes in the balance sheet as of December 31, 2005 and 2004 include the following amounts of deferred income tax assets and liability:

	Current			Long-term			Total
				2005
Deferred income tax assets	$	174,634		$	-		$	174,634
Deferred income tax liability		(68,914	)		(1,061,297	)		(1,130,211	)
Net	$	105,720		$	(1,061,297	)	$	(955,577	)
					2004
Deferred income tax assets	$	194,000		$	-		$	194,000
Deferred income tax liability		(91,000	)		(564,000	)		(655,000	)
Net	$	103,000		$	(564,000	)	$	(461,000	)

Deferred income taxes are provided for the temporary differences between the financial reporting basis and tax basis of the Company's assets and liabilities. The deferred income tax assets result primarily from the allowance for doubtful accounts, self-insurance accruals, accrued stockholder bonus and accrued vacation pay not deductible until paid for income tax purposes. The deferred income tax liability results primarily from the use of accelerated methods of depreciation of property and equipment for income tax purposes.

(10)         Lease commitments

The Company leases buildings and equipment under operating leases. The Company also utilizes revenue equipment under short-term leases. Rent expense under these leases amounted to approximately $4,950,000 and $6,110,000 in 2005 and 2004, respectively. Related party rent included in these totals amounted to approximately $8,700 in 2005 and $22,000 in 2004. A summary of approximate future minimum payments under these leases as of December 31, 2005 is as follows:

	Amount
2006	$	2,116,000
2007		488,000
	$	2,604,000

It is expected that in the normal course of business, leases that expire will be renewed, replaced by other leases, or replaced by purchased assets.

12

STAR TRANSPORTATION, INC.

Notes to the Financial Statements

December 31, 2005 and 2004

(11)         Contingent liabilities

There are legal proceedings pending against the Company related to product liability, workers compensation and auto claims. These are covered under the Company's self-insurance plan and through excess coverage insurance. In the opinion of management, any liabilities in excess of such insurance would not have a material adverse effect on the Company's financial position.

As these matters develop, it is reasonably possible management's estimate of their effect could change and an accrual for additional liabilities could be required.

The Company is contingently liable under standby letters of credit totaling approximately $3,000,000 at December 31, 2005, which have been provided to insurance companies related to workers' compensation and property and liability self-insurance. These letters of credit have been granted for security to the insurance companies that provide claims administration services.

(12)         Related party transactions

Related party transactions at December 31, 2005 and 2004 include the following:

	2005		2004
Trade accounts receivable:
AJA South Star Logistics, LLC	$	-	$	683,248
Other receivables:
Star Holdings, LLC	$	6,615	$	-
Star Logistics, LLC	$	1,056	$	-

(13)         Supplemental disclosures of cash flow statement information

	2005			2004
Interest paid	$	1,178,327		$	631,376
Income taxes paid (refunded), net	$	(157,264	)	$	311,770

During 2005, one of the Company's tractors was destroyed by fire. The tractor was insured and the expected insurance reimbursement is estimated to be equal to the net book value of the asset as of the date of the accident. Accordingly, the net book value totaling $76,717 has been removed from property and equipment and reflected as another receivable.

In accounting for its interest rate swap contract at fair value, the Company recognized a decrease in other long-term liabilities of $126,723, an increase in other assets of $217,243, and an increase in other comprehensive income of $343,966 in 2005. During 2004, the Company recognized a decrease in other long-term liabilities and an increase in other comprehensive income of $270,766.

13

STAR TRANSPORTATION, INC.

Notes to the Financial Statements

December 31, 2005 and 2004

(14)         Asset acquisition

During July 2005, the Company acquired certain operating assets consisting of trailers from Camp Transportation, Inc. for a purchase price of $746,000. In conjunction with the purchase, the Company entered into a noncompete agreement which prohibits the seller's management from directly or indirectly competing with the Company in the trucking industry within the state of Florida or any state contiguous to Florida. The acquisition was accounted for under the purchase method and operations of the acquired assets were included in the statement of operations since the date of acquisition.

As part of the acquisition from Camp Transportation, Inc., the Company also entered into certain compensation agreements with the seller. Under these agreements, the Company is obligated to pay the seller a maximum amount of $100,000 in fifty-two equal weekly installments. In addition, the Company is obligated to pay the seller a $1,000 bonus for each "seated" unit in operation on the 30-day, 90-day and one year anniversaries of the purchase date contingent upon the existence of a minimum number of "seated" units in operation when the payment is due.

(15)         Event (Unaudited) Subsequent to Date of the Independent Auditors Report

In September 2006, all of the outstanding stock of the Company was acquired by Covenant Transport, Inc. ("Covenant") for approximately $39 million pursuant to the terms of a Stock Purchase Agreement in a transaction to be accounted for as a purchase by Covenant.

14

Back to Form 8-K/A

EX-99.2

Exhibit 99.2

STAR TRANSPORTATION,  INC. BALANCE SHEET JUNE 30, 2006 (In thousands, except share data)
	6/30/06 (unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	11,246
Accounts receivable, net of allowance of $115 at June 30, 2006 and $132 at June 30, 2005		9,806
Driver advances and other receivables		107
Inventory and supplies		39
Prepaid expenses		1,334
Deferred income taxes		106
Total current assets	$	22,638
Net property and equipment		51,889
Other assets, net		705
Total assets	$	75,232
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt	$	5,881
Accounts payable		2,401
Accrued expenses		2,695
Insurance and claims accrual		2,499
Total current liabilities		13,476
Long-term debt, less current maturities		33,469
Deferred income taxes		1,061
Total liabilities		48,006
Stockholders' equity:
Common stock, no par value; 10,000 shares authorized, 4,640 shares issued and outstanding		1
Retained earnings		26,842
Accumulated other comprehensive income (loss)		383
Total stockholders' equity		27,226
Total liabilities and stockholders' equity	$	75,232

STAR TRANSPORTATION, INC. STATEMENTS OF OPERATIONS PERIODS ENDED JUNE 30, 2006 AND JUNE 30, 2005 (In thousands)
	6/30/06 (unaudited)			6/30/05 (unaudited)
Revenues
Freight revenue	$	46,139		$	42,345
Fuel surcharges		7,296			4,110
Total revenue		53,435			46,455
Operating expenses:
Salaries, wages, and related expenses		19,812			19,275
Fuel expense & maintenance		18,084			13,575
Revenue equipment rentals and purchased transportation		1,613			2,832
Operating taxes and licenses		1,003			1,091
Insurance and claims		2,361			2,181
Communications and utilities		484			416
General supplies and expenses		1,564			1,238
Depreciation and amortization, including gains (losses) on  disposition of equipment		3,606			2,426
Total operating expenses		48,527			43,034
Operating income		4,908			3,421
Other (income) expenses:
Interest expense		843			454
Interest income		(154	)		(16	)
Other		-			101
Other expenses, net		689			539
Income before income taxes		4,219			2,882
Income tax expense		274			187
Net income	$	3,945		$	2,695

STAR TRANSPORTATION, INC.

NOTES TO THE FINANCIAL STATEMENTS

JUNE 30, 2006 AND 2005

(Unaudited)

Note 1.Basis of Presentation

Star Transportation, Inc. (the "Company") is a truckload carrier based in Nashville, Tennessee serving customers throughout the continental Untied States.

The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, 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 omitted pursuant to such rules and regulations. The December 31, 2005 balance sheet was derived from our audited balance sheet as of that date. These financial statements and notes thereto should be read in conjunction with the financial statements and notes thereto included for the year ended December 31, 2005 included in this Form 8-K/A.

Certain prior period financial statement balances have been reclassified to conform to the current period’s classification.

Note 2. Property and Equipment

A summary of property and equipment, net as of June 30, 2006 is as follows:

(in thousands)
Land	$	1,094
Buildings and improvements		3,986
Revenue equipment		68,312
Computer equipment		1,807
Furniture and fixtures		380
Automobiles		375
		75,954
Accumulated depreciation		(24,065	)
	$	51,889

In the normal course of business, management expects to purchase or lease significant amounts of new equipment each year.

Note 3. Long-Term Debt

Our long-term debt consisted of the following at June 30, 2006:

(in thousands)
Installment notes payable with banks, weighted average interest rate of 6.02% at June 30, 2006, due in monthly installments with final maturities at various dates through September 2010, secured by related revenue equipment	$	39,350
		39,350
Less current maturities		(5,881	)
Long-term debt, less current maturities	$	33,469

Back to Form 8-K/A

EX-99.3

Exhibit 99.3

Unaudited Pro Forma Financial Statements

On September 14, 2006, Covenant Transport, Inc., a Nevada corporation (the "Company"), executed and closed a Stock Purchase Agreement whereby the Company acquired 100% of the outstanding capital stock of Star Transportation, Inc., a Tennessee corporation ("Star") from Beth D. Franklin, David D. Dortch, Rose D. Shipp, David W. Dortch, and James F. Brower, Jr.

The aggregate purchase price for the Star stock was approximately $39 million in cash. The Company funded the purchase price for the stock from available borrowing under its revolving line of credit. In addition, Star had an estimated $42 million in existing debt that became part of the Company's consolidated obligations as a result of the transaction.

The unaudited pro forma balance sheet combines the historical balance sheets of the Company and Star as if the transaction had taken place on June 30, 2006. The unaudited pro forma statements of operations  for the year ended December 31, 2005 and for the six month period ended June 30, 2006 combine the historical statements of operations of the Company and Star as if the transaction had taken place on January 1, 2005. The historical financial information has been adjusted to give effect to pro forma events that are (i) directly attributable to the transaction and (ii) factually supportable. In addition, with respect to the statements of operations, the pro forma events must be expected to have a continuing impact on the combined results.

This information should be read in conjunction with (i) the accompanying notes to the unaudited pro forma financial statements, (ii) the Company’s separate historical audited financial statements as of and for the year ended December 31, 2005, included in its Annual Report on Form 10-K previously filed with the U.S. Securities and Exchange Commission ("SEC"), and (iii) the Company’s separate historical financial information as of and for the six month period ended June 30, 2006, included in its Quarterly Report on Form 10-Q previously filed with the SEC.

The unaudited pro forma financial information is presented for informational purposes only. The pro forma information is not necessarily indicative of what the financial position or results of operations actually would have been had the transaction been completed as of the date indicated. In addition, the unaudited pro forma financial information does not purport to project the future financial position or operating results of the Company after the transaction.

The pro forma adjustments are based on preliminary estimates, available information, and certain assumptions, all as more fully described in the notes to the unaudited pro forma financial statements, and may be revised as additional information becomes available.

COVENANT TRANSPORT, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET As of June 30, 2006 (In thousands)
						Pro Forma Adjustments
	Covenant Transport			Star Transportation		Debit				Credit				Pro Forma Combined
ASSETS
Current assets:
Cash and cash equivalents	$	2,583		$	11,246					$	12,477	(f	)	$	1,352
Accounts receivable, net		69,678			9,806						35	(d	)		79,449
Driver advances and other receivables		6,693			107										6,800
Inventory and supplies		4,656			39										4,695
Prepaid expenses		12,585			1,334										13,919
Assets held for sale		9,820			-										9,820
Deferred income taxes		16,763			106										16,869
Income taxes receivable		6,008			-										6,008
Total current assets		128,786			22,638										138,912
Net property and equipment		203,079			51,889		9,952	(b	)						264,920
Other assets, net		23,825			705		23,234	(c	)						47,764
Total assets	$	355,690		$	75,232									$	451,596
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt	$	-		$	5,881									$	5,881
Securitization facility		47,781			-										47,781
Accounts payable		7,217			2,401										9,618
Accrued expenses		17,613			2,695						178	(d	)		20,486
Current portion of insurance and claims accrual		16,932			2,499						118	(d	)		19,549
Total current liabilities		89,543			13,476										103,315
Long-term debt, less current maturities		24,000			33,469						38,973	(e	)		96,442
Insurance and claims accrual, net of current portion		19,941			-										19,941
Deferred income taxes		33,494			1,061						8,631	(a	)		43,186
Total liabilities		166,978			48,006										262,884
Stockholders' equity:
Class A common stock		135			1		1	(g	)						135
Class B common stock		24			-										24
Additional paid-in-capital		91,823			-										91,823
Treasury stock		(21,582	)		-										(21,582	)
Accumulated other comprehensive income (loss)		-			383		383								-
Retained earnings		118,312			26,842		26,842								118,312
Total stockholders' equity		188,712			27,226										188,712
Total liabilities and stockholders' equity	$	355,690		$	75,232									$	451,596

COVENANT TRANSPORT, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS YEAR ENDED DECEMBER 31, 2005 (In thousands, except per share data)
							Pro Forma Adjustments
	Covenant Transport			Star Transportation			Debit				Credit	Pro Forma Combined
Revenues
Freight revenue	$	555,428		$	86,387							$	641,815
Fuel surcharges		87,626			11,083								98,709
Total revenue		643,054			97,470								740,524
Operating expenses:
Salaries, wages, and related expenses		242,157			38,359								280,516
Fuel, operations and maintenance		204,207			30,459								234,666
Revenue equipment rentals and purchased transportation		61,701			5,040								66,741
Operating taxes and licenses		13,431			1,892								15,323
Insurance and claims		41,034			4,789								45,823
Communications and utilities		6,579			858								7,437
General supplies and expenses		17,778			2,895								20,673
Depreciation and amortization, including gains (losses) on  disposition of equipment		39,101			5,618			562	(h	)			45,281
Total operating expenses		625,988			89,910								716,460
Operating income		17,066			7,560								24,064
Other (income) expenses:
Interest expense		4,203			1,237			1,218	(i	)			6,658
Interest income		(273	)		(76	)							(349	)
Other		(538	)		-								(538	)
Other expenses, net		3,392			1,161								5,771
Income before income taxes		13,674			6,399								18,293
Income tax expense		8,003			638			1,129	(j	)			9,770
Income before cumulative effect of change in accounting principle		5,671			5,761								8,523
Cumulative effect of change in accounting principle, net of tax		(485	)		-								(485	)
Net income (loss)	$	5,186		$	5,761							$	8,038
Net income (loss) per share:
Basic earnings (loss) per share:	$	0.37										$	0.57
Diluted earnings (loss) per share:	$	0.37										$	0.56
Basic weighted average shares outstanding		14,175											14,175
Diluted weighted average shares outstanding		14,270											14,270

COVENANT TRANSPORT, INC. AND SUBSIDIARIES UNAUDITED PRO FORMA STATEMENTS OF OPERATIONS PERIOD ENDED JUNE 30, 2006 (In thousands, except per share data)
							Pro Forma Adjustments
	Covenant Transport			Star Transportation			Debit				Credit	Pro Forma Combined
Revenues
Freight revenue	$	268,778		$	46,139							$	314,917
Fuel surcharges		52,109			7,296								59,405
Total revenue		320,887			53,435								374,322
Operating expenses:
Salaries, wages, and related expenses		123,063			19,812								142,875
Fuel, operations and maintenance		109,488			18,084								127,572
Revenue equipment rentals and purchased transportation		30,136			1,613								31,749
Operating taxes and licenses		6,767			1,003								7,770
Insurance and claims		16,414			2,361								18,775
Communications and utilities		3,117			484								3,601
General supplies and expenses		10,044			1,564								11,608
Depreciation and amortization, including gains (losses)   on disposition of equipment		18,555			3,606			281	(k	)			22,442
Total operating expenses		317,584			48,527								366,392
Operating income		3,303			4,908								7,930
Other (income) expenses:
Interest expense		2,199			843			1,049	(l	)			4,091
Interest income		(259	)		(154	)							(413	)
Other		(75	)		-								(75	)
Other expenses, net		1,865			689								3,603
Income before income taxes		1,438			4,219								4,327
Income tax expense		2,721			274			831	(j	)			3,826
Net income (loss)	$	(1,283	)	$	3,945							$	501
Net income (loss) per share:
Basic earnings (loss) per share:	$	(0.09	)									$	0.04
Diluted earnings (loss) per share:	$	(0.09	)									$	0.04
Basic weighted average shares outstanding		13,991											13,991
Diluted weighted average shares outstanding		13,991											13,991

Notes to the Unaudited Pro Forma Financial Statements

The notes to the unaudited pro forma financial statements that follow are intended to provide additional information regarding the effect of the pro forma adjustments on the consolidated financial statements.

(a)	To record federal deferred tax liability upon conversion from an S-corporation to a C-corporation.
(b)	To record real estate and revenue equipment to fair market value.
(c)	To record various items:
		Deferred acquisition costs	$                245
		Write-off previously acquired goodwill	(156)
		Goodwill	19,995
		Tradename	1,950
		Customer Contracts	1,200
			$          23,234
(d)	To revise certain estimates based on Covenant's review of the balance sheet.
(e)	To record cash paid to selling shareholders and deferred acquisition costs.
(f)	To record cash distributed to shareholders prior to closing of acquisition.
(g)	To record the acquisition of 100% of the outstanding stock of Star for a purchase price of $38,973,000.
(h)	To record twelve months of amortization for the tradename and customer contracts.
(i)	To record interest expense for the twelve months associated with the purchase of the stock. $38,793,000 purchase price for the stock at an average interest rate of 3.14%.
(j)	To adjust Star's tax expense to a blended rate of 38.25%.
(k)	To record six months of amortization for the tradename and customer contracts.
(l)	To record interest expense for the six months associated with the purchase of the stock. $38,793,000 purchase price for the stock at an average interest rate of 5.41%.

Reclassifications

Certain reclassifications have been made to the Star Transportation, Inc. December 31, 2005 unaudited proforma income statement in order to conform with the Covenant Transport, Inc. presentation. These reclassifications have no effect on net income as previously reported.

Back to Form 8-K/A