[X]
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
[ ]
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Nevada
|
88-0320154
|
|
(State or other jurisdiction of incorporation
|
(I.R.S. Employer Identification No.)
|
|
or organization)
|
||
400 Birmingham Hwy.
|
||
Chattanooga, TN
|
37419
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Yes [X]
|
No [ ]
|
Yes [X]
|
No [ ]
|
Large accelerated filer [ ]
|
Accelerated filer [ ]
|
|
Non-accelerated filer [ ] (Do not check if a smaller reporting company)
|
Smaller reporting company [X]
|
Yes [ ]
|
No [X]
|
COVENANT TRANSPORTATION GROUP, INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
|
||||||||
ASSETS
|
September 30, 2014
(unaudited)
|
December 31, 2013
|
||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 17,234 | $ | 9,263 | ||||
Accounts receivable, net of allowance of $1,923 in 2014 and $1,736 in 2013
|
78,837 | 81,242 | ||||||
Drivers' advances and other receivables, net of allowance of $1,366 in 2014 and $1,337 in 2013
|
6,063 | 5,356 | ||||||
Inventory and supplies
|
4,504 | 4,718 | ||||||
Prepaid expenses
|
9,790 | 10,418 | ||||||
Assets held for sale
|
2,459 | 7,073 | ||||||
Deferred income taxes
|
4,564 | 5,234 | ||||||
Income taxes receivable
|
1,156 | 146 | ||||||
Total current assets
|
124,607 | 123,450 | ||||||
Property and equipment, at cost
|
452,535 | 462,376 | ||||||
Less: accumulated depreciation and amortization
|
(120,871 | ) | (132,768 | ) | ||||
Net property and equipment
|
331,664 | 329,608 | ||||||
Other assets, net
|
13,892 | 13,364 | ||||||
Total assets
|
$ | 470,163 | $ | 466,422 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Checks outstanding in excess of bank balances
|
$ | - | $ | 2,918 | ||||
Accounts payable
|
9,604 | 8,322 | ||||||
Accrued expenses
|
31,018 | 28,185 | ||||||
Current maturities of long-term debt
|
36,277 | 44,070 | ||||||
Current portion of capital lease obligations
|
5,402 | 8,732 | ||||||
Current portion of insurance and claims accrual
|
16,025 | 17,151 | ||||||
Total current liabilities
|
98,326 | 109,378 | ||||||
Long-term debt
|
169,296 | 169,491 | ||||||
Long-term portion of capital lease obligations
|
12,234 | 13,186 | ||||||
Insurance and claims accrual
|
20,939 | 13,601 | ||||||
Deferred income taxes
|
61,303 | 59,077 | ||||||
Other long-term liabilities
|
5,568 | 1,329 | ||||||
Total liabilities
|
367,666 | 366,062 | ||||||
Commitments and contingent liabilities
|
- | - | ||||||
Stockholders' equity:
|
||||||||
Class A common stock, $.01 par value; 20,000,000 shares authorized; 13,469,090 shares issued; and 12,618,078 shares outstanding as of September 30, 2014 and 12,559,703 shares outstanding as of December 31, 2013
|
145 | 145 | ||||||
Class B common stock, $.01 par value; 5,000,000 shares authorized; 2,350,000 shares issued and outstanding
|
24 | 24 | ||||||
Additional paid-in-capital
|
89,112 | 88,620 | ||||||
Treasury stock at cost; 851,012 shares and 909,387 shares as of September 30, 2014 and December 31, 2013, respectively
|
(11,725 | ) | (12,319 | ) | ||||
Accumulated other comprehensive (loss) income
|
(2,379 | ) | 833 | |||||
Retained earnings
|
27,320 | 23,057 | ||||||
Total stockholders' equity
|
102,497 | 100,360 | ||||||
Total liabilities and stockholders' equity
|
$ | 470,163 | $ | 466,422 |
Three months ended
September 30,
(unaudited)
|
Nine months ended
September 30,
(unaudited)
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Revenue:
|
||||||||||||||||
Freight revenue
|
$ | 142,034 | $ | 134,362 | $ | 405,985 | $ | 398,527 | ||||||||
Fuel surcharge revenue
|
35,547 | 36,481 | 106,207 | 109,534 | ||||||||||||
Total revenue
|
$ | 177,581 | $ | 170,843 | $ | 512,192 | $ | 508,061 | ||||||||
Operating expenses:
|
||||||||||||||||
Salaries, wages, and related expenses
|
57,636 | 53,728 | 166,651 | 163,602 | ||||||||||||
Fuel expense
|
42,784 | 46,540 | 127,875 | 141,734 | ||||||||||||
Operations and maintenance
|
11,934 | 13,077 | 35,498 | 37,460 | ||||||||||||
Revenue equipment rentals and purchased transportation
|
25,871 | 26,207 | 78,818 | 75,668 | ||||||||||||
Operating taxes and licenses
|
2,733 | 2,780 | 8,041 | 8,215 | ||||||||||||
Insurance and claims
|
15,545 | 6,887 | 29,229 | 22,647 | ||||||||||||
Communications and utilities
|
1,457 | 1,363 | 4,320 | 3,899 | ||||||||||||
General supplies and expenses
|
3,950 | 3,882 | 12,289 | 12,182 | ||||||||||||
Depreciation and amortization, including gains and losses on disposition of property and equipment
|
10,085 | 10,497 | 34,476 | 31,137 | ||||||||||||
Total operating expenses
|
171,995 | 164,961 | 497,197 | 496,544 | ||||||||||||
Operating income
|
5,586 | 5,882 | 14,995 | 11,517 | ||||||||||||
Other expenses (income):
|
||||||||||||||||
Interest expense
|
2,635 | 2,386 | 8,108 | 7,636 | ||||||||||||
Interest income
|
(1 | ) | (1 | ) | (10 | ) | (3 | ) | ||||||||
Other expenses, net
|
2,634 | 2,385 | 8,098 | 7,633 | ||||||||||||
Equity in income of affiliate
|
880 | 1,150 | 2,530 | 2,180 | ||||||||||||
Income before income taxes
|
3,832 | 4,647 | 9,427 | 6,064 | ||||||||||||
Income tax expense
|
1,975 | 2,674 | 5,164 | 4,159 | ||||||||||||
Net income
|
$ | 1,857 | $ | 1,973 | $ | 4,263 | $ | 1,905 | ||||||||
Income per share:
|
||||||||||||||||
Basic net income per share
|
$ | 0.12 | $ | 0.13 | $ | 0.29 | $ | 0.13 | ||||||||
Diluted net income per share
|
$ | 0.12 | $ | 0.13 | $ | 0.28 | $ | 0.13 | ||||||||
Basic weighted average shares outstanding
|
14,959 | 14,864 | 14,935 | 14,827 | ||||||||||||
Diluted weighted average shares outstanding
|
15,145 | 15,043 | 15,166 | 15,023 |
Three months ended
September 30,
(unaudited)
|
Nine months ended
September 30,
(unaudited)
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Net income
|
$ | 1,857 | $ | 1,973 | $ | 4,263 | $ | 1,905 | ||||||||
Other comprehensive income (loss):
|
||||||||||||||||
Unrealized (loss) gain on effective portion of fuel hedges, net of tax of $2,339 and $2,078 in 2014 and $561 and $138 in 2013, respectively
|
(3,752 | ) | 900 | (3,334 | ) | (222 | ) | |||||||||
Reclassification of fuel hedge loss (gain) into statement of operations, net of tax of $304 and $76 in 2014 and $119 and $119 in 2013, respectively
|
487 | (191 | ) | 122 | (190 | ) | ||||||||||
Total other comprehensive (loss) income
|
(3,265 | ) | 709 | (3,212 | ) | (412 | ) | |||||||||
Comprehensive (loss) income
|
$ | (1,408 | ) | $ | 2,682 | $ | 1,051 | $ | 1,493 |
Common Stock
|
Additional
Paid-In
|
Treasury | Accumulated Other Comprehensive |
|
Total Stockholders' | |||||||||||||||||||||||
Class A | Class B |
Capital
|
Stock | Income (Loss) | Earnings | Equity | ||||||||||||||||||||||
Balances at December 31, 2013
|
$ | 145 | $ | 24 | $ | 88,620 | $ | (12,319 | ) | $ | 833 | $ | 23,057 | $ | 100,360 | |||||||||||||
Net income
|
- | - | - | - | - | 4,263 | 4,263 | |||||||||||||||||||||
Other comprehensive loss
|
- | - | - | - | (3,212 | ) | - | (3,212 | ) | |||||||||||||||||||
Exercise of stock options
|
- | - | 5 | 147 | - | - | 152 | |||||||||||||||||||||
Stock-based employee compensation expense
|
- | - | 863 | - | - | - | 863 | |||||||||||||||||||||
Issuance of restricted shares
|
- | - | (521 | ) | 447 | - | - | (74 | ) | |||||||||||||||||||
Income tax benefit arising from restricted share vesting and option exercises
|
- | - | 145 | - | - | - | 145 | |||||||||||||||||||||
Balances at September 30, 2014
|
$ | 145 | $ | 24 | $ | 89,112 | $ | (11,725 | ) | $ | (2,379 | ) | $ | 27,320 | $ | 102,497 |
Nine months ended September 30,
(unaudited)
|
||||||||
2014
|
2013
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$ | 4,263 | $ | 1,905 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Provision for losses on accounts receivable
|
536 | 308 | ||||||
Reversal of deferred gain on sales to equity method investee
|
(54 | ) | (71 | ) | ||||
Depreciation and amortization
|
36,410 | 32,328 | ||||||
Gain on disposition of property and equipment
|
(1,934 | ) | (1,191 | ) | ||||
Amortization of deferred financing fees
|
185 | 183 | ||||||
Deferred income tax benefit
|
5,043 | 4,762 | ||||||
Income tax (benefit) deficit arising from restricted share vesting
|
(145 | ) | 111 | |||||
Unrealized loss on ineffective portion of fuel hedges
|
525 | 75 | ||||||
Stock-based compensation expense
|
963 | 151 | ||||||
Equity in income of affiliate
|
(2,530 | ) | (2,180 | ) | ||||
Changes in operating assets and liabilities:
|
||||||||
Receivables and advances
|
208 | 991 | ||||||
Prepaid expenses and other assets
|
704 | (1,946 | ) | |||||
Inventory and supplies
|
214 | (58 | ) | |||||
Insurance and claims accrual
|
6,212 | (2,412 | ) | |||||
Accounts payable and accrued expenses
|
(2,007 | ) | (2,763 | ) | ||||
Net cash flows provided by operating activities
|
48,593 | 30,193 | ||||||
Cash flows from investing activities:
|
||||||||
Acquisition of property and equipment
|
(93,416 | ) | (82,344 | ) | ||||
Return on investment (investment in) affiliated company
|
307 | (500 | ) | |||||
Proceeds from disposition of property and equipment
|
69,159 | 39,420 | ||||||
Net cash flows used in investing activities
|
(23,950 | ) | (43,424 | ) | ||||
Cash flows from financing activities:
|
||||||||
Change in checks outstanding in excess of bank balances
|
(2,918 | ) | (3,045 | ) | ||||
Proceeds from issuance of notes payable
|
64,565 | 77,960 | ||||||
Proceeds from the exercise of stock options
|
152 | - | ||||||
Income tax benefit (deficit) arising from restricted share vesting
|
145 | (111 | ) | |||||
Repayments of notes payable
|
(65,570 | ) | (64,697 | ) | ||||
Repayments of capital lease obligations
|
(5,840 | ) | (1,555 | ) | ||||
(Repayments)/proceeds under revolving credit facility, net
|
(6,983 | ) | 8,910 | |||||
Payment of minimum tax withholdings on stock compensation
|
(174 | ) | (203 | ) | ||||
Debt refinancing costs
|
(49 | ) | (348 | ) | ||||
Net cash (used in) provided by financing activities
|
(16,672 | ) | 16,911 | |||||
Net change in cash and cash equivalents
|
7,971 | 3,680 | ||||||
Cash and cash equivalents at beginning of period
|
9,263 | 6,846 | ||||||
Cash and cash equivalents at end of period
|
$ | 17,234 | $ | 10,526 |
Note 1.
|
Significant Accounting Policies
|
Note 2.
|
Income Per Share
|
(in thousands except per share data)
|
Three Months ended
September 30,
|
Nine months ended
September 30,
|
||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Numerator:
|
||||||||||||||||
Net income
|
$ | 1,857 | $ | 1,973 | $ | 4,263 | $ | 1,905 | ||||||||
Denominator:
|
||||||||||||||||
Denominator for basic earnings per share – weighted-average shares
|
14,959 | 14,864 | 14,935 | 14,827 | ||||||||||||
Effect of dilutive securities:
|
||||||||||||||||
Equivalent shares issuable upon conversion of unvested restricted stock
|
185 | 179 | 231 | 196 | ||||||||||||
Equivalent shares issuable upon conversion of unvested employee stock options
|
1 | - | - | - | ||||||||||||
Denominator for diluted earnings per share – adjusted weighted-average shares and assumed conversions
|
15,145 | 15,043 | 15,166 | 15,023 | ||||||||||||
Basic income per share:
|
$ | 0.12 | $ | 0.13 | $ | 0.29 | $ | 0.13 | ||||||||
Diluted income per share:
|
$ | 0.12 | $ | 0.13 | $ | 0.28 | $ | 0.13 |
Note 3.
|
Segment Information
|
(in thousands)
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Total Revenues:
|
||||||||||||||||
Truckload
|
$ | 166,839 | $ | 160,107 | $ | 477,432 | $ | 479,511 | ||||||||
Other
|
10,742 | 10,736 | 34,760 | 28,550 | ||||||||||||
Total
|
$ | 177,581 | $ | 170,843 | $ | 512,192 | $ | 508,061 | ||||||||
Operating Income (Loss):
|
||||||||||||||||
Truckload
|
$ | 10,854 | $ | 6,831 | $ | 23,369 | $ | 17,969 | ||||||||
Other
|
483 | 366 | 1,590 | 575 | ||||||||||||
Unallocated Corporate Overhead
|
(5,751 | ) | (1,315 | ) | (9,964 | ) | (7,027 | ) | ||||||||
Total
|
$ | 5,586 | $ | 5,882 | $ | 14,995 | $ | 11,517 |
●
|
Level 1. Observable inputs such as quoted prices in active markets;
|
●
|
Level 2. Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and
|
●
|
Level 3. Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
|
(in thousands)
|
||||||||
Hedge derivative assets
|
September 30,
2014
|
December 31,
2013
|
||||||
Fair Value of Derivatives
|
$ | (4,327 | ) | $ | 1,412 | |||
Quoted Prices in Active Markets (Level 1)
|
- | - | ||||||
Significant Other Observable Inputs (Level 2)
|
$ | (4,327 | ) | $ | 1,412 | |||
Significant Unobservable Inputs (Level 3)
|
- | - |
(in thousands)
|
September 30, 2014
|
December
31, 2013
|
||||||||||||||
Current
|
Long-Term
|
Current
|
Long-Term
|
|||||||||||||
Borrowings under Credit Facility
|
$ | - | $ | 27 | $ | - | $ | 7,010 | ||||||||
Revenue equipment installment notes with finance companies; weighted average interest rate of 3.95% and 4.7% at September 30, 2014 and December 31, 2013, respectively, due in monthly installments with final maturities at various dates ranging from October 2014 to December 2021, secured by related revenue equipment
|
36,033 | 165,473 | 43,745 | 158,596 | ||||||||||||
Real estate note; interest rate of 2.5% and 2.4% at September 30, 2014 and December 31, 2013, due in monthly installments with fixed maturity at December 2018, secured by related real estate
|
136 | 3,679 | 217 | 3,693 | ||||||||||||
Other note payable, interest rate of 3.0% at September 30, 2014 and December 31, 2013, with fixed maturity at November 2016
|
108 | 117 | 108 | 192 | ||||||||||||
Total debt
|
36,277 | 169,296 | 44,070 | 169,491 | ||||||||||||
Principal portion of capital lease obligations, secured by related revenue equipment
|
5,402 | 12,234 | 8,732 | 13,186 | ||||||||||||
Total debt and capital lease obligations
|
$ | 41,679 | $ | 181,530 | $ | 52,802 | $ | 182,677 |
(in thousands)
|
As of September 30,
2014
|
As of December 31,
2013
|
||||||
Current Assets
|
$ | 11,595 | $ | 9,160 | ||||
Non-current Assets
|
57,209 | 40,296 | ||||||
Current Liabilities
|
2,940 | 13,456 | ||||||
Non-current Liabilities
|
51,310 | 26,101 | ||||||
Total Equity
|
$ | 14,554 | $ | 9,899 |
For the three months
ended
September 30, 2014
|
For the three months
ended
September 30, 2013
|
For the nine months
ended
September 30, 2014
|
For the nine months
ended
September 30, 2013
|
|||||||||||||
Revenue
|
$ | 23,545 | $ | 16,672 | $ | 64,433 | $ | 39,838 | ||||||||
Operating Expenses
|
21,120 | 14,256 | 57,613 | 34,631 | ||||||||||||
Operating Income
|
$ | 2,425 | $ | 2,416 | $ | 6,820 | $ | 5,207 | ||||||||
Net Income
|
$ | 1,855 | $ | 2,009 | $ | 5,282 | $ | 4,217 |
Details about AOCI Components
|
Amount Reclassified from AOCI for the three months ended September 30, 2014
|
Amount Reclassified from AOCI for the nine months ended September 30, 2014
|
Affected Line Item in the
Statement of Operations
|
||||||
Gains on cash flow hedges
|
|||||||||
Commodity derivative contracts
|
$ | 791 | $ | 198 |
Fuel expense
|
||||
(304 | ) | (76 | ) |
Income tax (benefit)
|
|||||
$ | 487 | $ | 122 |
Net of tax
|
●
|
Total revenue of $177.6 million, an increase of 3.9% compared with the third quarter of 2013 and freight revenue of $142.0 million (excluding revenue from fuel surcharges), an increase of 5.7% compared with the third quarter of 2013;
|
●
|
Operating income of $5.6 million and an operating ratio of 96.1%, compared with operating income of $5.9 million and an operating ratio of 95.6% in the third quarter of 2013. Operating income for the 2014 quarter included a $7.5 million reserve for an adverse judgment in September 2014 stemming from a cargo loss in 2008;
|
●
|
Net income of $1.9 million, or $0.12 per basic and diluted share, compared with net income of $2.0 million, or $0.13 per basic and diluted share, in the third quarter of 2013. Net income for the 2014 quarter includes an unfavorable after-tax impact of approximately $4.6 million, or $0.30 per share for the abovementioned cargo claim;
|
●
|
With available borrowing capacity of $52.6 million under our Credit Facility, we do not expect to be required to test our fixed charge covenant in the foreseeable future;
|
●
|
Solutions’ revenue remained flat at approximately $10.7 million for the 2014 and 2013 quarters;
|
●
|
Our equity investment in TEL provided $0.9 million of pre-tax earnings compared to $1.2 million in the third quarter of 2013;
|
●
|
Since December 31, 2013, total indebtedness, net of cash and including the present value of off-balance sheet lease obligations has decreased by $33.5 million to $271.7 million; and
|
●
|
Stockholders’ equity at September 30, 2014, was $102.5 million and our tangible book value was $102.2 million, or $6.83 per basic share.
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Revenue:
|
||||||||||||||||
Freight revenue
|
$ | 142,034 | $ | 134,362 | $ | 405,985 | $ | 398,527 | ||||||||
Fuel surcharge revenue
|
35,547 | 36,481 | 106,207 | 109,534 | ||||||||||||
Total revenue
|
$ | 177,581 | $ | 170,843 | $ | 512,192 | $ | 508,061 |
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Salaries, wages, and related expenses
|
$ | 57,636 | $ | 53,728 | $ | 166,651 | $ | 163,602 | ||||||||
% of total revenue
|
32.5 | % | 31.4 | % | 32.5 | % | 32.2 | % | ||||||||
% of freight revenue
|
40.6 | % | 40.0 | % | 41.0 | % | 41.1 | % |
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Total fuel expense
|
$ | 42,784 | $ | 46,540 | $ | 127,875 | $ | 141,734 | ||||||||
% of total revenue
|
24.1 | % | 27.2 | % | 25.0 | % | 27.9 | % |
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Total fuel surcharge
|
$ | 35,547 | $ | 36,481 | $ | 106,207 | $ | 109,534 | ||||||||
Less: Fuel surcharge revenue reimbursed to independent contractors and other third parties
|
2,690 | 3,286 | 8,287 | 9,690 | ||||||||||||
Company fuel surcharge revenue
|
$ | 32,857 | $ | 33,195 | $ | 97,920 | $ | 99,844 | ||||||||
Total fuel expense
|
$ | 42,784 | $ | 46,540 | $ | 127,875 | $ | 141,734 | ||||||||
Less: Company fuel surcharge revenue
|
32,857 | 33,195 | 97,920 | 99,844 | ||||||||||||
Net fuel expense
|
$ | 9,927 | $ | 13,345 | $ | 29,955 | $ | 41,890 | ||||||||
% of freight revenue
|
7.0 | % | 9.9 | % | 7.4 | % | 10.5 | % |
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Operations and maintenance
|
$ | 11,934 | $ | 13,077 | $ | 35,498 | $ | 37,460 | ||||||||
% of total revenue
|
6.7 | % | 7.7 | % | 6.9 | % | 7.4 | % | ||||||||
% of freight revenue
|
8.4 | % | 9.7 | % | 8.7 | % | 9.4 | % |
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Revenue equipment rentals and purchased transportation
|
$ | 25,871 | $ | 26,207 | $ | 78,818 | $ | 75,668 | ||||||||
% of total revenue
|
14.6 | % | 15.3 | % | 15.4 | % | 14.9 | % | ||||||||
% of freight revenue
|
18.2 | % | 19.5 | % | 19.4 | % | 19.0 | % |
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Operating taxes and licenses
|
$ | 2,733 | $ | 2,780 | $ | 8,041 | $ | 8,215 | ||||||||
% of total revenue
|
1.5 | % | 1.6 | % | 1.6 | % | 1.6 | % | ||||||||
% of freight revenue
|
1.9 | % | 2.1 | % | 2.0 | % | 2.1 | % |
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Insurance and claims
|
$ | 15,545 | $ | 6,887 | $ | 29,229 | $ | 22,647 | ||||||||
% of total revenue
|
8.8 | % | 4.0 | % | 5.7 | % | 4.5 | % | ||||||||
% of freight revenue
|
10.9 | % | 5.1 | % | 7.2 | % | 5.7 | % |
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Communications and utilities
|
$ | 1,457 | $ | 1,363 | $ | 4,320 | $ | 3,899 | ||||||||
% of total revenue
|
0.8 | % | 0.8 | % | 0.8 | % | 0.8 | % | ||||||||
% of freight revenue
|
1.0 | % | 1.0 | % | 1.1 | % | 1.0 | % |
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
General supplies and expenses
|
$ | 3,950 | $ | 3,882 | $ | 12,289 | $ | 12,182 | ||||||||
% of total revenue
|
2.2 | % | 2.3 | % | 2.4 | % | 2.4 | % | ||||||||
% of freight revenue
|
2.8 | % | 2.9 | % | 3.0 | % | 3.1 | % |
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Depreciation and amortization
|
$ | 10,085 | $ | 10,497 | $ | 34,476 | $ | 31,137 | ||||||||
% of total revenue
|
5.7 | % | 6.1 | % | 6.7 | % | 6.1 | % | ||||||||
% of freight revenue
|
7.1 | % | 7.8 | % | 8.5 | % | 7.8 | % |
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||
2014
|
2013
|
2014
|
2013
|
|||||
Other expense, net
|
$2,634
|
$2,385
|
$8,098
|
$7,633
|
||||
% of total revenue
|
1.5%
|
1.4%
|
1.6%
|
1.5%
|
||||
% of freight revenue
|
1.9%
|
1.8%
|
2.0%
|
1.9%
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Equity in income of affiliate
|
$ | 880 | $ | 1,150 | $ | 2,530 | $ | 2,180 |
Three months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Income tax expense
|
$ | 1,975 | $ | 2,674 | $ | 5,164 | $ | 4,159 | ||||||||
% of total revenue
|
1.1 | % | 1.6 | % | 1.0 | % | 0.8 | % | ||||||||
% of freight revenue
|
1.4 | % | 2.0 | % | 1.3 | % | 1.0 | % |
(in thousands)
|
Three months ended
September 30,
|
Nine months ended
September 30,
|
||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Total Revenues:
|
||||||||||||||||
Truckload
|
$ | 166,839 | $ | 160,107 | $ | 477,432 | $ | 479,511 | ||||||||
Other
|
10,742 | 10,736 | 34,760 | 28,550 | ||||||||||||
Total
|
$ | 177,581 | $ | 170,843 | $ | 512,192 | $ | 508,061 | ||||||||
Operating Income (Loss):
|
||||||||||||||||
Truckload
|
$ | 10,854 | $ | 6,831 | $ | 23,369 | $ | 17,969 | ||||||||
Other
|
483 | 366 | 1,590 | 575 | ||||||||||||
Unallocated Corporate Overhead
|
(5,751 | ) | (1,315 | ) | (9,964 | ) | (7,027 | ) | ||||||||
Total
|
$ | 5,586 | $ | 5,882 | $ | 14,995 | $ | 11,517 |
ITEM 6
.
|
EXHIBITS
|
|
Exhibit
Number
|
Reference
|
Description
|
3.1
|
(1)
|
Amended and Restated Articles of Incorporation
|
3.2
|
(2)
|
Second Amended and Restated Bylaws
|
4.1
|
(1)
|
Amended and Restated Articles of Incorporation
|
4.2
|
(2)
|
Second Amended and Restated Bylaws
|
#
|
Ninth Amendment to Third Amended and Restated Credit Agreement and Related Security Documents dated effective as of August 6, 2014 among Covenant Transportation Group, Inc., Covenant Transport, Inc., CTG Leasing Company, Covenant Asset Management, Inc., Southern Refrigerated Transport, Inc., Covenant Transport Solutions, Inc., Star Transportation, Inc., Bank of America, N.A., and JPMorgan Chase Bank, N.A.
|
|
#
|
Tenth Amendment to Third Amended and Restated Credit Agreement and Related Security Documents dated effective as of September 8, 2014 among Covenant Transportation Group, Inc., Covenant Transport, Inc., CTG Leasing Company, Covenant Asset Management, Inc., Southern Refrigerated Transport, Inc., Covenant Transport Solutions, Inc., Star Transportation, Inc., Bank of America, N.A., and JPMorgan Chase Bank, N.A.
|
|
#
|
Certification pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, by David R. Parker, the Company's Principal Executive Officer
|
|
#
|
Certification pursuant to Item 601(b)(31) of Regulation S-K, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, by Richard B. Cribbs, the Company's Principal Financial Officer
|
|
#
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by David R. Parker, the Company's Chief Executive Officer
|
|
#
|
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by Richard B. Cribbs, the Company's Chief Financial Officer
|
|
101.INS
|
*
|
XBRL Instance Document
|
101.SCH
|
*
|
XBRL Taxonomy Extension Schema Document
|
101.CAL
|
*
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF
|
*
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB
|
*
|
XBRL Taxonomy Extension Labels Linkbase Document
|
101.PRE
|
*
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
References:
|
||
(1)
|
Incorporated by reference to Exhibit 99.2 to the Company's Report on Form 8-K, filed May 29, 2007.
|
|
(2)
|
Incorporated by reference to Exhibit 3.2 to the Company's Form 10-Q, filed May 13, 2011.
|
|
#
|
Filed herewith.
|
|
*
|
In accordance with Regulation S-T, the XBRL-related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall be deemed to be "furnished" and not "filed."
|
COVENANT TRANSPORTATION GROUP, INC.
|
||
Date: November 13, 2014
|
By:
|
/s/ Richard B. Cribbs
|
Richard B. Cribbs
|
||
Senior Vice President and Chief Financial Officer
in his capacity as such and as a duly authorized officer
on behalf of the issuer
|
EXECUTION
COPY
|
BORROWERS
:
COVENANT TRANSPORT, INC.
|
||
By:
|
/s/ Richard B. Cribbs | |
Name:
|
Richard B. Cribbs
|
|
Title:
|
Senior Vice President and Chief Financial Officer
|
|
CTG LEASING COMPANY
SOUTHERN REFRIGERATED TRANSPORT, INC.
STAR TRANSPORTATION, INC.
|
||
By:
|
/s/ Richard B. Cribbs | |
Name:
|
Richard B. Cribbs
|
|
Title:
|
Treasurer
|
|
COVENANT ASSET MANAGEMENT, INC.
|
||
By:
|
/s/ Richard B. Cribbs | |
Name:
|
Richard B. Cribbs
|
|
Title:
|
Assistant Treasurer
|
|
COVENANT TRANSPORT SOLUTIONS, INC.
|
||
By:
|
/s/ Richard B. Cribbs | |
Name:
|
Richard B. Cribbs
|
|
Title:
|
Vice President and Assistant Treasurer
|
PARENT
:
COVENANT TRANSPORTATION GROUP, INC.
|
||
By:
|
/s/ Richard B. Cribbs
|
|
Name:
|
Richard B. Cribbs
|
|
Title:
|
Senior Vice President and Chief Financial Officer
|
AGENT AND LENDERS
:
BANK OF AMERICA, N.A.
,
as Agent and Lender
|
||
By:
|
/s/ Douglas Cowan | |
Name:
|
Douglas Cowan | |
Title:
|
Senior Vice President |
JPMORGAN CHASE BANK, N.A.
|
||
By:
|
/s/ Kennedy A. Capin | |
Name:
|
Kennedy A. Capin | |
Title:
|
Vice President |
Location
|
Address and Zip Code
|
Owning Entity
|
Texarkana, Arkansas
|
8055 Hwy 67 N, 71854
|
Southern Refrigerated Transport, Inc.
|
Hutchins, Texas
|
1096 1-45 South, 75141
|
Covenant Transport, Inc.
|
Pomona, California
|
1300 E. Franklin, 91766
|
Covenant Transport, Inc.
|
Allentown, Pennsylvania
|
4815 Crackersport Rd., 18104
|
Covenant Transport, Inc.
|
740 Johnson Rd. Charlotte, North Carolina 28206
|
Leased
|
|
3049 Chief Lane, Indianapolis, Indiana 46225
|
Leased
|
|
1096 1-45 South, Hutchins, Texas 75141
|
Owned
|
|
400 Inglewood Dr, El Paso, Texas 79927
|
Leased
|
|
4450 Poth Road, Columbus, Ohio 43213
|
Leased
|
|
815 E Roth Rd, French Camp, California 95231
|
Leased
|
|
14714 Valley Blvd, Fontana, California 92335
|
Leased
|
|
1300 E. Franklin, Pomona, California 91766
|
Owned
|
|
4815 Crackersport Rd., Allentown, Pennsylvania 18104
|
Owned
|
2.
|
In the five years preceding the Amendment Date, no Borrower has had any office or place of business located in any county other than as set forth above, except:
|
3.
|
As of the Amendment Date, Parent and each Subsidiary has the following business locations, and no others:
|
4.
|
In the five years preceding the Amendment Date, neither Parent nor Subsidiary has had an office or place of business located in any county other than as set forth above, except:
|
5.
|
As of the Amendment Date, the following bailees, warehouseman, similar parties and consignees hold
inventory or equipment of each Obligor or a Subsidiary:
|
Name
and Address of Party
|
Nature of
Relationship
|
Amount of
Inventory/Equipment
|
Owner of
Inventory/Equipment
|
None
|
|||
EXECUTION
DRAFT
|
BORROWERS
:
COVENANT TRANSPORT, INC.
|
||
By:
|
/s/ Richard B. Cribbs | |
Name:
|
Richard B. Cribbs
|
|
Title:
|
Senior Vice President and Chief Financial Officer
|
|
CTG LEASING COMPANY
SOUTHERN REFRIGERATED TRANSPORT, INC.
STAR TRANSPORTATION, INC.
|
||
By:
|
/s/ Richard B. Cribbs | |
Name:
|
Richard B. Cribbs
|
|
Title:
|
Treasurer
|
|
COVENANT ASSET MANAGEMENT, INC.
|
||
By:
|
/s/ Richard B. Cribbs | |
Name:
|
Richard B. Cribbs
|
|
Title:
|
Assistant Treasurer
|
|
COVENANT TRANSPORT SOLUTIONS, INC.
|
||
By:
|
/s/ Richard B. Cribbs | |
Name:
|
Richard B. Cribbs
|
|
Title:
|
Vice President and Assistant Treasurer
|
PARENT
:
COVENANT TRANSPORTATION GROUP, INC.
|
||
By:
|
/s/ Richard B. Cribbs | |
Name:
|
Richard B. Cribbs
|
|
Title:
|
Senior Vice President and Chief Financial Officer
|
AGENT AND LENDERS
:
BANK OF AMERICA, N.A.
,
as Agent and Lender
|
||
By:
|
/s/ Douglas Cowan | |
Name:
|
Douglas Cowan | |
Title:
|
Senior Vice President |
JPMORGAN CHASE BANK, N.A.
|
||
By:
|
/s/ Rashmi Bhatt | |
Name:
|
Rashmi Bhatt | |
Title:
|
Authorized Signatory |
1096 1-45 South, Hutchins, Texas 75141
|
Owned
|
|
1300 E. Franklin, Pomona, California 91766
|
Owned
|
|
4815 Crackersport Rd., Allentown, Pennsylvania 18104
|
Owned
|
|
9858 Sidney Hayes Rd., Orlando, Florida 32806
|
Owned
|
6850 Stateline Rd, Olive Branch, Mississippi 38654
|
Owned
|
2.
|
In the five years preceding the Amendment Date, no Borrower has had any office or place of business (excluding drop lots) located in any county other than as set forth above, except as consented to by Agent and as follows:
|
3.
|
As of the Amendment Date, Parent and each Subsidiary has the following business locations that are required to be disclosed by Section 9.1.5 of this Agreement, and no others:
|
1096 I-45 South, Hutchins, Texas 75141
|
Owned
|
|
1300 E. Franklin, Pomona, California 91766
|
Owned
|
|
4815 Crackersport Rd., Allentown, Pennsylvania 18104
|
Owned
|
|
9858 Sidney Hayes Rd., Orlando, Florida 32806
|
Owned
|
6850 Stateline Rd, Olive Branch, Mississippi 38654
|
Owned
|
4.
|
In the five years preceding the Amendment Date, neither Parent nor Subsidiary has had an office or
place of business (excluding drop lots) located in any county other than as set forth above, except as consented to by Agent.
|
5.
|
As of the Amendment Date, the following bailees, warehouseman, similar parties and consignees hold inventory or equipment of each Obligor or a Subsidiary:
|
Name
and Address of Party
|
Nature of
Relationship
|
Amount of
Inventory/Equipment
|
Owner of
Inventory/Equipment
|
None
|
|||
1.
|
I have reviewed this quarterly report on Form 10-Q of Covenant Transportation Group, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
Date: November 13, 2014
|
/s/ David R. Parker
|
David R. Parker
|
|
Principal Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Covenant Transportation Group, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
Date: November 13, 2014
|
/s/ Richard B. Cribbs
|
Richard B. Cribbs
Principal Financial Officer
|
Date: November 13, 2014
|
/s/ David R. Parker
|
David R. Parker
|
|
Chief Executive Officer
|
Date: November 13, 2014
|
/s/
Richard B. Cribbs
|
Richard B. Cribbs
|
|
Chief Financial Officer
|