Covenant Announces First Quarter Results

Apr 18, 2001, 01:00 ET from Covenant Transport, Inc.

    CHATTANOOGA, Tenn., April 18 /PRNewswire/ --
     Covenant Transport, Inc.  (Nasdaq:   CVTI) announced today financial results
 for the first quarter ended March 31, 2001.
     For the quarter, revenue was $131 million, a 4 percent increase over the
 first quarter of 2000.  Basic and diluted earnings per share were $.02,
 compared with $.14 during the same quarter in 2000.  The 2000 quarter included
 a $.03 per share gain on sale of equipment.  Chairman, President, and Chief
 Executive Officer David R. Parker stated, "In line with our previous
 announcement, Covenant's earnings for the quarter declined from the prior
 year.  The three main factors were sluggish freight demand, higher fuel
 expense, and increased insurance costs.
     During the first quarter, the widespread economic slowdown affected our
 equipment utilization.  Average miles per tractor decreased approximately one
 percent versus the same quarter last year, and the lower volume also put
 pressure on freight rates.  Companies simply weren't shipping as much, and
 this hurt our profitability.  Although utilization declined 1% for the
 quarter, over the last seven weeks we have seen positive utilization trends
 that give us hope that we have "hit the bottom".
     On the expense side, higher fuel costs, slightly lower fuel economy (miles
 per gallon), and a smaller benefit from fuel hedging increased our net fuel
 expense by approximately one cent per mile versus the same quarter in 2000.
 In addition, as previously discussed and consistent with the industry forces,
 our combined cost of insurance and claims in all areas increased
 significantly.
     Additionally on the positive side, our trucks continue to be fully manned
 and our cost control programs continue to produce results.  Although
 profitability was low during the quarter, we were able to pay down debt by $3
 million and expect larger reductions throughout the year.
     For the remainder of the year, we believe that the level of freight demand
 will be the key to our results.  Freight demand has improved in March and
 April, although it remains less than robust.  With additional freight from
 several accounts expected this quarter and few additional trucks scheduled for
 delivery, we expect utilization to improve sequentially.  In the current
 economic environment, however, freight demand and equipment utilization are
 difficult to predict.
     Covenant Transport, Inc. is a truckload carrier that offers just-in-time
 and other premium transportation services for customers throughout the United
 States.  Covenant operates the industry's largest fleet of team-driven
 tractors and is one of the ten largest truckload fleets in North America.
 Covenant is committed to growing revenue and earnings per share both
 internally and through acquisitions.  For more information on Covenant
 Transport visit the company's website at www.covenanttransport.com.
 
     For further information contact:
     Joey B. Hogan, Treasurer and Chief Financial Officer, (423) 821-1212
     Or Hogjoe@Covenanttransport.com
 
     For copies of company information contact:
     Melleny Andrews, (423) 821-1212 ex 3335
     Or Andmel@Covenanttransport.com
 
     This press release and statements by the Company in stockholder reports
 and public filings, as well as oral public statements by Company
 representatives may contain certain forward looking information that is
 subject to certain risks and uncertainties that could cause actual results to
 differ materially from those projected.  Without limitation, these risks and
 uncertainties include economic factors such as recessions, downturns in
 customers' business cycles, surplus inventories, inflation, fuel price
 increases, and higher interest rates; the resale value of the Company's used
 equipment; the availability and compensation of qualified drivers; competition
 from trucking, rail, and intermodal competitors; and the ability to identify
 acceptable acquisition targets, consummate acquisitions, and integrate
 acquired operations.  Readers should review and consider the various
 disclosures made by the Company in its stockholder reports and in its periodic
 reports on forms 10-K and 10-Q as well as the factors explained in greater
 detail in the Company's annual report on Form 10-K
 
                              Covenant Transport, Inc.
                       Key Financial and Operating Statistics
 
 
                                               Three Months Ended March 31
     ($000s)                                      2001         2000  % Change
 
     Revenue                                  $131,329     $126,481       3.8%
     Operating expenses
        Salaries, wages and related expenses    60,006       53,945
        Fuel, oil and road expenses             24,312       21,012
        Revenue equipment rentals and
         purchased transportation               16,915       18,719
        Repairs                                  3,618        3,008
        Operating taxes and licenses             3,392        3,285
        Insurance                                4,066        3,376
        Communications and utilities             1,769        1,753
        General supplies and
         expenses                                5,198        5,686
        Depreciation and
         amortization                            9,401       10,010
     Total operating expenses                  128,677      120,794
     Operating income                            2,652        5,687     -53.4%
     Interest expense                            2,283        2,303
     Income before income taxes                    369        3,384     -89.1%
     Income tax expense                            140        1,351
     Net income                               $    229     $  2,033     -88.7%
 
     Basic earnings per share                 $   0.02     $   0.14     -85.7%
     Diluted earnings per share               $   0.02     $   0.14     -85.7%
     Weighted avg common shares
      outstanding                               13,948       14,916
     Adjusted weighted avg common shares        14,208       14,982
        outstanding and assumed conversions
         outstanding
 
     Pre-tax margin                               0.3%         2.7%
     Average revenue per loaded mile (a)      $  1.211     $  1.219      -0.7%
     Average revenue per total mile (a)       $  1.111     $  1.119      -0.7%
     Average miles per tractor per period       30,860       31,095      -0.8%
     Average revenue per tractor per week     $  2,666     $  2,677      -0.4%
     Weighted avg. tractors for period           3,788        3,594       5.4%
     Tractors at end of period                   3,878        3,711       4.5%
     Trailers at end of period                   7,646        6,563      16.5%
 
     (a) For 2001, excludes $0.015 per loaded mile and $0.014 per total
         mile for certain accessorial charges that beginning in the third
         quarter of 2000 were reclassed against the appropriate expense
         category.
 
                                                       March 31
                                                  2001         2000
 
     Total assets                             $388,321     $386,701
     Total equity                              168,104      165,909
     Long term debt, including current
      maturities                               139,414      142,367
     Debt to Capitalization Ratio                 45.3%        46.2%
 
 

SOURCE Covenant Transport, Inc.
    CHATTANOOGA, Tenn., April 18 /PRNewswire/ --
     Covenant Transport, Inc.  (Nasdaq:   CVTI) announced today financial results
 for the first quarter ended March 31, 2001.
     For the quarter, revenue was $131 million, a 4 percent increase over the
 first quarter of 2000.  Basic and diluted earnings per share were $.02,
 compared with $.14 during the same quarter in 2000.  The 2000 quarter included
 a $.03 per share gain on sale of equipment.  Chairman, President, and Chief
 Executive Officer David R. Parker stated, "In line with our previous
 announcement, Covenant's earnings for the quarter declined from the prior
 year.  The three main factors were sluggish freight demand, higher fuel
 expense, and increased insurance costs.
     During the first quarter, the widespread economic slowdown affected our
 equipment utilization.  Average miles per tractor decreased approximately one
 percent versus the same quarter last year, and the lower volume also put
 pressure on freight rates.  Companies simply weren't shipping as much, and
 this hurt our profitability.  Although utilization declined 1% for the
 quarter, over the last seven weeks we have seen positive utilization trends
 that give us hope that we have "hit the bottom".
     On the expense side, higher fuel costs, slightly lower fuel economy (miles
 per gallon), and a smaller benefit from fuel hedging increased our net fuel
 expense by approximately one cent per mile versus the same quarter in 2000.
 In addition, as previously discussed and consistent with the industry forces,
 our combined cost of insurance and claims in all areas increased
 significantly.
     Additionally on the positive side, our trucks continue to be fully manned
 and our cost control programs continue to produce results.  Although
 profitability was low during the quarter, we were able to pay down debt by $3
 million and expect larger reductions throughout the year.
     For the remainder of the year, we believe that the level of freight demand
 will be the key to our results.  Freight demand has improved in March and
 April, although it remains less than robust.  With additional freight from
 several accounts expected this quarter and few additional trucks scheduled for
 delivery, we expect utilization to improve sequentially.  In the current
 economic environment, however, freight demand and equipment utilization are
 difficult to predict.
     Covenant Transport, Inc. is a truckload carrier that offers just-in-time
 and other premium transportation services for customers throughout the United
 States.  Covenant operates the industry's largest fleet of team-driven
 tractors and is one of the ten largest truckload fleets in North America.
 Covenant is committed to growing revenue and earnings per share both
 internally and through acquisitions.  For more information on Covenant
 Transport visit the company's website at www.covenanttransport.com.
 
     For further information contact:
     Joey B. Hogan, Treasurer and Chief Financial Officer, (423) 821-1212
     Or Hogjoe@Covenanttransport.com
 
     For copies of company information contact:
     Melleny Andrews, (423) 821-1212 ex 3335
     Or Andmel@Covenanttransport.com
 
     This press release and statements by the Company in stockholder reports
 and public filings, as well as oral public statements by Company
 representatives may contain certain forward looking information that is
 subject to certain risks and uncertainties that could cause actual results to
 differ materially from those projected.  Without limitation, these risks and
 uncertainties include economic factors such as recessions, downturns in
 customers' business cycles, surplus inventories, inflation, fuel price
 increases, and higher interest rates; the resale value of the Company's used
 equipment; the availability and compensation of qualified drivers; competition
 from trucking, rail, and intermodal competitors; and the ability to identify
 acceptable acquisition targets, consummate acquisitions, and integrate
 acquired operations.  Readers should review and consider the various
 disclosures made by the Company in its stockholder reports and in its periodic
 reports on forms 10-K and 10-Q as well as the factors explained in greater
 detail in the Company's annual report on Form 10-K
 
                              Covenant Transport, Inc.
                       Key Financial and Operating Statistics
 
 
                                               Three Months Ended March 31
     ($000s)                                      2001         2000  % Change
 
     Revenue                                  $131,329     $126,481       3.8%
     Operating expenses
        Salaries, wages and related expenses    60,006       53,945
        Fuel, oil and road expenses             24,312       21,012
        Revenue equipment rentals and
         purchased transportation               16,915       18,719
        Repairs                                  3,618        3,008
        Operating taxes and licenses             3,392        3,285
        Insurance                                4,066        3,376
        Communications and utilities             1,769        1,753
        General supplies and
         expenses                                5,198        5,686
        Depreciation and
         amortization                            9,401       10,010
     Total operating expenses                  128,677      120,794
     Operating income                            2,652        5,687     -53.4%
     Interest expense                            2,283        2,303
     Income before income taxes                    369        3,384     -89.1%
     Income tax expense                            140        1,351
     Net income                               $    229     $  2,033     -88.7%
 
     Basic earnings per share                 $   0.02     $   0.14     -85.7%
     Diluted earnings per share               $   0.02     $   0.14     -85.7%
     Weighted avg common shares
      outstanding                               13,948       14,916
     Adjusted weighted avg common shares        14,208       14,982
        outstanding and assumed conversions
         outstanding
 
     Pre-tax margin                               0.3%         2.7%
     Average revenue per loaded mile (a)      $  1.211     $  1.219      -0.7%
     Average revenue per total mile (a)       $  1.111     $  1.119      -0.7%
     Average miles per tractor per period       30,860       31,095      -0.8%
     Average revenue per tractor per week     $  2,666     $  2,677      -0.4%
     Weighted avg. tractors for period           3,788        3,594       5.4%
     Tractors at end of period                   3,878        3,711       4.5%
     Trailers at end of period                   7,646        6,563      16.5%
 
     (a) For 2001, excludes $0.015 per loaded mile and $0.014 per total
         mile for certain accessorial charges that beginning in the third
         quarter of 2000 were reclassed against the appropriate expense
         category.
 
                                                       March 31
                                                  2001         2000
 
     Total assets                             $388,321     $386,701
     Total equity                              168,104      165,909
     Long term debt, including current
      maturities                               139,414      142,367
     Debt to Capitalization Ratio                 45.3%        46.2%
 
 SOURCE  Covenant Transport, Inc.