Press Release -
Covenant Transport Announces Record Third Quarter Revenue And Earnings
CHATTANOOGA, Tenn., Oct. 14 /PRNewswire/ -- Covenant Transport, Inc. (Nasdaq: CVTI - news) announced today record financial results for the third quarter ended September 30, 1998. For the third quarter, revenue increased 27% to $95.6 million from $75.3 million in 1997, while net income increased 33% to $5.4 million from $4.1 million in 1997. Basic and diluted earnings per share were $.37 compared with $.31 for the third quarter of 1997. Earnings per share increased 19% despite a 12% increase in average shares outstanding as a result of the completed follow-on equity offering in May. The Company's pre- tax margin expanded to 9.3% from 8.6% in the same period one year ago.
For the nine months, revenue increased 27% to $264.4 million from $208.0 million in 1997. Net income increased 34% to $12.7 million from $9.5 million in 1997. Basic and diluted earnings per share increased 26% to $.89 compared with $.71 for the nine month period last year, on a 6.5% increase in weighted average shares outstanding. The Company's pre-tax margin increased to 7.8% in the 1998 period from 7.2% in the 1997 period.
Chairman, President, and Chief Executive Officer David R. Parker stated, ''As with the first and second quarters, Covenant's operating performance improved principally as a result of increased freight rates, lower fuel costs and reduced interest expense. Revenue per total mile increased about 4.5 cents per mile over the 1997 quarter, excluding $334,000 in fuel surcharges in the same period a year ago. Rates increased sequentially over the second quarter by 1.5 cents per mile. This rate increase has more than paid for our previously announced 3 cents per mile driver pay increase. The driver pay increase has been instrumental in keeping our trucks almost fully seated and reducing our annualized driver turnover by approximately 15% since the announcement of the pay increase.''
Treasurer and Chief Financial Officer Joey B. Hogan stated, ''Our operating results exceeded our expectations. We are particularly pleased to have produced revenue of over $3,000 per truck per week. Due to the strong operating performance for the quarter we paid down $12 million in debt and attained a 33% debt to capitalization ratio at September 30. We had $87 million of available capacity in our line of credit at September 30. With approximately $74 million in availability after the previously announced acquisition of SRT, we are well positioned to continue our stated growth plans.''
Covenant Transport, Inc. is a truckload carrier that offers just-in-time and other premium transportation services for customers throughout the United States. Covenant's annualized revenue is approximately $400 million with revenue growing over 25% per year over the last two years. Covenant has completed six acquisitions since 1995 and is committed to growing revenue and earnings per share both internally and through acquisitions.
For further information contact:
Joey B. Hogan, Treasurer and Chief Financial Officer
•(423) 821-1212 •For copies of company information contact: •Melleny Andrews •(423) 821-1212 ex 3335
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 equipments; 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. |
