Covenant Transport revenues up 12 percent; two new executives hired

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Covenant Transport has announced financial and operating results for the quarter ended Sept. 30, including a 12 percent revenue rise. The Chattanooga, Tenn.-based carrier also hired two external candidates to lead its refrigerated and regional operations.

Revenue was up about 12 percent to $169.9 million in the 2005 quarter from $151.9 million in the 2004 quarter. Freight revenue, before fuel surcharges, was up about 3 percent to $144.7 million in the 2005 quarter from $140.6 million in the 2004 quarter.

The company had net income of $1.2 million, or $.09 per diluted share, in the 2005 quarter, compared with net income of $4.7 million, or $.32 per diluted share, for the third quarter of 2004.

“Freight demand gained strength throughout the quarter, with September finishing quite strong,” says David R. Parker, chairman, president and CEO of Covenant Transport. “After two quarters of less-than-impressive asset utilization, we were able to increase our average freight revenue per tractor per week — excluding fuel surcharge revenue — to $3,067 in the third quarter of 2005, a 1.1 percent increase over a strong third quarter of 2004.”

“Additionally, the 3.6 percent sequential increase in average freight revenue per tractor per week from the second quarter of 2005 was the largest increase in the company’s history. A key factor in the improvement was a 7.4 percent increase in average revenue per loaded mile, to $1.515 in the third quarter of 2005, compared with $1.410 in the third quarter of 2004.”

Parker says Covenant Transport continued to make progress during the third quarter in building the foundation for the evolution of its business model. Highlights included the following:

  • Implementing separate refrigerated, dedicated, expedited team and regional operations, with separate measurement of key operating statistics and general managers.
  • Designating internal candidates with substantial experience and proven success to lead the expedited team.
  • Hiring external candidates to lead the refrigerated and regional operations, each of whom has substantial experience for leading companies in their designated area of responsibility. The head of the refrigerated operation is Jeff Taylor, formerly vice president of operations and sales of Jim Palmer Trucking. The head of the regional operation will be Jeff Paulsen, who helped establish the Southeast region for Werner Enterprises and most recently managed Werner’s field sales effort.
  • “As we stated in July, this will be an extended and gradual process, and we intend to provide periodic updates,” Parker says.

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