Covenant reports $3.1M 2Q net loss

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Covenant Transportation Group Inc. on Monday, July 27, announced financial and operating results for the second quarter ended June 30. Total revenue decreased 31.0 percent to $144.1 million from $208.7 million in the same quarter of 2008. Freight revenue, which excludes fuel surcharges, decreased 19.4 percent to $129.2 million from $160.5 million. The company reported a net loss of $3.1 million compared to a net loss of $2.3 million.

“Our results for the quarter reflected continued weak freight demand, excess tractor and trailer capacity in the truckload industry, and significant rate pressure from customers,” said David R. Parker, chairman, president and chief executive officer of Covenant Transportation Group, based in Chattanooga, Tenn. “These factors led to an approximate 9.9 percent reduction in average freight revenue per tractor per week. This reduction in asset utilization was partially offset by lower fuel expense and continued cost-control efforts across all of our companies.”

Parker said the company’s operating ratio deteriorated by only 30 basis points. “Our team is managing the company in this environment by implementing efficiencies in every aspect of our business, making tough cost-cutting decisions, and prudently managing our tractor and trailer capital expenditures while maintaining a relatively young fleet,” he said.

Parker said the entire company shared sacrifices to manage expenses through a combination of pay reductions, staffing reductions and benefits management. “Our goal of profitability for the year has not changed,” he said. “However, because of the magnitude of year-over-year reductions in freight rates and our results for the first six months of 2009, we acknowledge the reduced probability of achieving our goal, but continue our expectation of recording a profit for the final six months of 2009.”