|
[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)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
$0.01 Par Value Class A common stock
|
CVTI
|
The NASDAQ Global Select Market
|
Yes [X]
|
No [ ]
|
Yes [X]
|
No [ ]
|
Large accelerated filer [ ]
|
|
Accelerated filer [X]
|
Non-accelerated filer [ ]
|
Smaller reporting company [ ]
|
|
|
Emerging growth company [ ]
|
Yes [ ]
|
No [X]
|
PART I
FINANCIAL INFORMATION
|
||
|
|
Page
Number
|
Item 1.
|
Financial Statements
|
|
|
|
|
|
3
|
|
|
|
|
|
4
|
|
|
|
|
|
5
|
|
|
|
|
|
6
|
|
|
|
|
|
7
|
|
|
|
|
|
8
|
|
|
|
|
Item 2.
|
17
|
|
|
|
|
Item 3.
|
29
|
|
|
|
|
Item 4.
|
30
|
|
|
||
PART II
OTHER INFORMATION
|
||
|
|
Page
Number
|
|
|
|
Item 1.
|
31
|
|
|
|
|
Item 1A.
|
31
|
|
|
|
|
Item 2.
|
31
|
|
|
|
|
Item 3.
|
31
|
|
|
|
|
Item 4.
|
31
|
|
|
|
|
Item 5.
|
31
|
|
|
|
|
Item 6.
|
32
|
PART I
|
FINANCIAL INFORMATION
|
ITEM 1.
|
FINANCIAL STATEMENTS
|
CONDENSED CONSOLIDATED BALANCE SHEETS
|
(In thousands, except share data)
|
|
June 30, 2019
|
December 31, 2018
|
||||||
|
(unaudited)
|
(unaudited)
|
||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
28,823
|
$
|
23,127
|
||||
Accounts receivable, net of allowance of $1,856 in 2019 and $1,985 in 2018
|
158,367
|
151,093
|
||||||
Drivers' advances and other receivables, net of allowance of $648 in 2019 and $626 in 2018
|
12,166
|
16,675
|
||||||
Inventory and supplies
|
4,142
|
4,067
|
||||||
Prepaid expenses
|
15,022
|
11,579
|
||||||
Assets held for sale
|
4,372
|
2,559
|
||||||
Income taxes receivable
|
1,788
|
1,109
|
||||||
Other short-term assets
|
934
|
1,435
|
||||||
Total current assets
|
225,614
|
211,644
|
||||||
|
||||||||
Property and equipment, at cost
|
723,263
|
638,770
|
||||||
Less: accumulated depreciation and amortization
|
(212,060
|
)
|
(188,175
|
)
|
||||
Net property and equipment
|
511,203
|
450,595
|
||||||
|
||||||||
Goodwill
|
42,518
|
41,598
|
||||||
Other intangibles, net
|
31,077
|
32,538
|
||||||
Other assets, net
|
41,117
|
37,149
|
||||||
|
||||||||
Total assets
|
$
|
851,529
|
$
|
773,524
|
||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Checks outstanding in excess of bank balances
|
$
|
1,610
|
$
|
1,857
|
||||
Accounts payable
|
24,754
|
22,101
|
||||||
Accrued expenses
|
29,513
|
49,503
|
||||||
Current maturities of long-term debt
|
37,794
|
28,710
|
||||||
Current portion of finance lease obligations
|
6,797
|
5,374
|
||||||
Current portion of operating lease obligations
|
14,117
|
-
|
||||||
Current portion of insurance and claims accrual
|
18,084
|
19,787
|
||||||
Total current liabilities
|
132,669
|
127,332
|
||||||
|
||||||||
Long-term debt
|
208,848
|
166,635
|
||||||
Long-term portion of finance lease obligations
|
30,820
|
35,119
|
||||||
Long-term portion of operating lease obligations
|
24,921
|
-
|
||||||
Insurance and claims accrual
|
18,811
|
22,193
|
||||||
Deferred income taxes
|
80,920
|
77,467
|
||||||
Other long-term liabilities
|
2,855
|
1,636
|
||||||
Total liabilities
|
499,844
|
430,382
|
||||||
Commitments and contingent liabilities
|
-
|
-
|
||||||
Stockholders' equity:
|
||||||||
Class A common stock, $.01 par value; 40,000,000 shares authorized; 16,096,235 shares issued and outstanding as of June 30, 2019; and 20,000,000 shares authorized; 16,015,708 shares issued and outstanding as of December 31, 2018
|
172
|
171
|
||||||
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
|
141,337
|
142,177
|
||||||
Accumulated other comprehensive (loss) income
|
(918
|
)
|
204
|
|||||
Retained earnings
|
211,070
|
200,566
|
||||||
Total stockholders' equity
|
351,685
|
343,142
|
||||||
Total liabilities and stockholders' equity
|
$
|
851,529
|
$
|
773,524
|
|
Three months ended June 30,
(unaudited) |
Six months ended June 30,
(unaudited)
|
||||||||||||||
|
2019
|
2018
|
2019
|
2018
|
||||||||||||
Revenues
|
||||||||||||||||
Freight revenue
|
$
|
194,917
|
$
|
170,635
|
$
|
390,679
|
$
|
321,097
|
||||||||
Fuel surcharge revenue
|
24,381
|
25,683
|
47,800
|
48,787
|
||||||||||||
Total revenue
|
$
|
219,298
|
$
|
196,318
|
$
|
438,479
|
$
|
369,884
|
||||||||
|
||||||||||||||||
Operating expenses:
|
||||||||||||||||
Salaries, wages, and related expenses
|
75,781
|
64,633
|
155,284
|
125,253
|
||||||||||||
Fuel expense
|
29,215
|
29,209
|
57,047
|
56,390
|
||||||||||||
Operations and maintenance
|
14,898
|
12,595
|
30,072
|
24,325
|
||||||||||||
Revenue equipment rentals and purchased transportation
|
47,169
|
37,388
|
95,839
|
68,079
|
||||||||||||
Operating taxes and licenses
|
3,365
|
2,613
|
6,549
|
5,273
|
||||||||||||
Insurance and claims
|
10,472
|
9,908
|
21,707
|
18,593
|
||||||||||||
Communications and utilities
|
1,760
|
1,666
|
3,478
|
3,406
|
||||||||||||
General supplies and expenses
|
7,284
|
6,423
|
14,015
|
10,562
|
||||||||||||
Depreciation and amortization, including gains and losses on disposition of property and equipment
|
20,510
|
17,818
|
40,218
|
37,513
|
||||||||||||
Total operating expenses
|
210,454
|
182,253
|
424,209
|
349,394
|
||||||||||||
Operating income
|
8,844
|
14,065
|
14,270
|
20,490
|
||||||||||||
Interest expense, net
|
2,683
|
1,941
|
5,129
|
3,900
|
||||||||||||
Income from equity method investment
|
(2,375
|
)
|
(1,775
|
)
|
(5,410
|
)
|
(3,265
|
)
|
||||||||
Income before income taxes
|
8,536
|
13,899
|
14,551
|
19,855
|
||||||||||||
Income tax expense
|
2,465
|
3,928
|
4,047
|
5,467
|
||||||||||||
Net income
|
$
|
6,071
|
$
|
9,971
|
$
|
10,504
|
$
|
14,388
|
||||||||
|
||||||||||||||||
Income per share:
|
||||||||||||||||
Basic and diluted income per share
|
$
|
0.33
|
$
|
0.54
|
$
|
0.57
|
$
|
0.78
|
||||||||
Basic weighted average shares outstanding
|
18,438
|
18,337
|
18,410
|
18,334
|
||||||||||||
Diluted weighted average shares outstanding
|
18,606
|
18,441
|
18,570
|
18,424
|
|
Three months ended June 30,
(unaudited) |
Six months ended June 30,
(unaudited)
|
||||||||||||||
|
2019
|
2018
|
2019
|
2018
|
||||||||||||
|
||||||||||||||||
Net income
|
$
|
6,071
|
$
|
9,971
|
$
|
10,504
|
$
|
14,388
|
||||||||
|
||||||||||||||||
Other comprehensive (loss) income:
|
||||||||||||||||
|
||||||||||||||||
Unrealized (loss) gain on effective portion of cash flow hedges, net of tax of $262 and $425 in 2019 and ($357) and ($650) in 2018, respectively
|
(692
|
)
|
943
|
(1,124
|
)
|
1,712
|
||||||||||
|
||||||||||||||||
Reclassification of cash flow hedge (gains) into statement of operations, net of tax of $3 and $7 in 2019 and $137 and $175 in 2018, respectively
|
(9
|
)
|
(363
|
)
|
(19
|
)
|
(461
|
)
|
||||||||
|
||||||||||||||||
Unrealized holding gain on investments classified as available-for-sale
|
11
|
-
|
21
|
-
|
||||||||||||
Total other comprehensive (loss) income
|
(690
|
)
|
580
|
(1,122
|
)
|
1,251
|
||||||||||
|
||||||||||||||||
Comprehensive income
|
$
|
5,381
|
$
|
10,551
|
$
|
9,382
|
$
|
15,639
|
|
For the Three and Six Months Ended June 30, 2019
|
|||||||||||||||||||||||
|
Accumulated
|
|||||||||||||||||||||||
|
Additional
|
Other
|
Total
|
|||||||||||||||||||||
|
Common Stock
|
Paid-In
|
Comprehensive
|
Retained
|
Stockholders'
|
|||||||||||||||||||
|
Class A
|
Class B
|
Capital
|
(Loss)
|
Earnings
|
Equity
|
||||||||||||||||||
|
||||||||||||||||||||||||
Balances at December 31, 2018
|
$
|
171
|
$
|
24
|
$
|
142,177
|
$
|
204
|
$
|
200,566
|
$
|
343,142
|
||||||||||||
Net income
|
-
|
-
|
-
|
-
|
4,433
|
4,433
|
||||||||||||||||||
Other comprehensive income
|
-
|
-
|
-
|
(432
|
)
|
-
|
(432
|
)
|
||||||||||||||||
Stock-based employee compensation expense
|
-
|
-
|
1,262
|
-
|
-
|
1,262
|
||||||||||||||||||
Issuance of restricted shares, net
|
1
|
-
|
(669
|
)
|
-
|
-
|
(668
|
)
|
||||||||||||||||
Balances at March 31, 2019
|
$
|
172
|
$
|
24
|
$
|
142,770
|
$
|
(228
|
)
|
$
|
204,999
|
$
|
347,737
|
|||||||||||
Net income
|
-
|
-
|
-
|
-
|
6,071
|
6,071
|
||||||||||||||||||
Other comprehensive loss
|
-
|
-
|
-
|
(690
|
)
|
-
|
(690
|
)
|
||||||||||||||||
Stock-based employee compensation expense reversal
|
-
|
-
|
(1,433
|
)
|
-
|
-
|
(1,433
|
)
|
||||||||||||||||
Issuance of restricted shares, net
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||||
Balances at June 30, 2019
|
$
|
172
|
$
|
24
|
$
|
141,337
|
$
|
(918
|
)
|
$
|
211,070
|
$
|
351,685
|
|
For the Three and Six Months Ended June 30, 2018
|
|||||||||||||||||||||||
|
Accumulated
|
|||||||||||||||||||||||
|
Additional
|
Other
|
Total
|
|||||||||||||||||||||
|
Common Stock
|
Paid-In
|
Comprehensive
|
Retained
|
Stockholders'
|
|||||||||||||||||||
|
Class A
|
Class B
|
Capital
|
(Loss)
|
Earnings
|
Equity
|
||||||||||||||||||
|
||||||||||||||||||||||||
Balances at December 31, 2017
|
$
|
171
|
$
|
24
|
$
|
137,242
|
$
|
293
|
$
|
157,471
|
$
|
295,201
|
||||||||||||
Net income
|
-
|
-
|
-
|
-
|
4,417
|
4,417
|
||||||||||||||||||
Effect of adoption of ASU 2014-09
|
-
|
-
|
-
|
-
|
591
|
591
|
||||||||||||||||||
Other comprehensive income
|
-
|
-
|
-
|
671
|
-
|
671
|
||||||||||||||||||
Stock-based employee compensation expense
|
-
|
-
|
826
|
-
|
-
|
826
|
||||||||||||||||||
Issuance of restricted shares, net
|
-
|
-
|
(18
|
)
|
-
|
-
|
(18
|
)
|
||||||||||||||||
Balances at March 31, 2018
|
$
|
171
|
$
|
24
|
$
|
138,050
|
$
|
964
|
$
|
162,479
|
$
|
301,688
|
||||||||||||
Net income
|
-
|
-
|
-
|
-
|
9,971
|
9,971
|
||||||||||||||||||
Other comprehensive loss
|
-
|
-
|
-
|
580
|
-
|
580
|
||||||||||||||||||
Stock-based employee compensation expense reversal
|
-
|
-
|
937
|
-
|
-
|
937
|
||||||||||||||||||
Issuance of restricted shares, net
|
-
|
-
|
375
|
-
|
-
|
375
|
||||||||||||||||||
Balances at June 30, 2018
|
$
|
171
|
$
|
24
|
$
|
139,362
|
$
|
1,544
|
$
|
172,450
|
$
|
313,551
|
|
Six months ended June 30,
(unaudited)
|
|||||||
|
2019
|
2018
|
||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
10,504
|
$
|
14,388
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
(Reversal of losses on) provision for accounts receivable
|
(32
|
)
|
113
|
|||||
Reversal of gain on sales to equity method investee
|
(7
|
)
|
(171
|
)
|
||||
Depreciation and amortization
|
40,426
|
36,829
|
||||||
Amortization of deferred financing fees
|
73
|
73
|
||||||
Deferred income tax expense
|
3,221
|
6,495
|
||||||
Income tax benefit arising from restricted share vesting and stock options exercised
|
668
|
4
|
||||||
Stock-based compensation (reversal) expense
|
(171
|
)
|
2,138
|
|||||
Income from equity method investment
|
(5,410
|
)
|
(3,265
|
)
|
||||
(Gain) Loss on disposition of property and equipment
|
(1,386
|
)
|
684
|
|||||
Return on investment in available-for-sale securities
|
(7
|
)
|
-
|
|||||
Changes in operating assets and liabilities:
|
||||||||
Receivables and advances
|
164
|
11,821
|
||||||
Prepaid expenses and other assets
|
(2,971
|
)
|
(5,238
|
)
|
||||
Inventory and supplies
|
(75
|
)
|
(81
|
)
|
||||
Insurance and claims accrual
|
(4,255
|
)
|
(2,793
|
)
|
||||
Operating leases
|
(17
|
)
|
-
|
|||||
Accounts payable and accrued expenses
|
(17,128
|
)
|
1,635
|
|||||
Net cash flows provided by operating activities
|
23,597
|
62,632
|
||||||
|
||||||||
Cash flows from investing activities:
|
||||||||
Purchase of available-for-sale securities
|
(1,780
|
)
|
-
|
|||||
Acquisition of property and equipment
|
(79,125
|
)
|
(31,771
|
)
|
||||
Proceeds from disposition of property and equipment
|
15,569
|
38,127
|
||||||
Net cash flows (used) provided by investing activities
|
(65,336
|
)
|
6,356
|
|||||
|
||||||||
Cash flows from financing activities:
|
||||||||
Change in checks outstanding in excess of bank balances
|
(247
|
)
|
-
|
|||||
Proceeds from issuance of notes payable
|
57,555
|
78,832
|
||||||
Repayments of notes payable
|
(19,733
|
)
|
(30,455
|
)
|
||||
Repayments of finance lease obligations
|
(2,876
|
)
|
(1,534
|
)
|
||||
Proceeds under revolving credit facility
|
843,398
|
755,886
|
||||||
Repayments under revolving credit facility
|
(829,995
|
)
|
(764,892
|
)
|
||||
Payment of minimum tax withholdings on stock compensation
|
(667
|
)
|
(18
|
)
|
||||
Debt refinancing costs
|
-
|
(17
|
)
|
|||||
Net cash flows provided by financing activities
|
47,435
|
37,802
|
||||||
|
||||||||
Net change in cash and cash equivalents
|
5,696
|
106,790
|
||||||
|
||||||||
Cash and cash equivalents at beginning of period
|
23,127
|
15,356
|
||||||
Cash and cash equivalents at end of period
|
$
|
28,823
|
$
|
122,146
|
Note 1.
|
Significant Accounting Policies
|
Note 2.
|
Income Per Share
|
(in thousands except per share data)
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2019
|
2018
|
2019
|
2018
|
||||||||||||
Numerator:
|
||||||||||||||||
Net income
|
$
|
6,071
|
$
|
9,971
|
$
|
10,504
|
$
|
14,388
|
||||||||
Denominator:
|
||||||||||||||||
Denominator for basic income per share – weighted-average shares
|
18,438
|
18,337
|
18,410
|
18,334
|
||||||||||||
Effect of dilutive securities:
|
||||||||||||||||
Equivalent shares issuable upon conversion of unvested restricted shares
|
168
|
104
|
160
|
90
|
||||||||||||
Denominator for diluted income per share adjusted weighted-average shares and assumed conversions
|
18,606
|
18,441
|
18,570
|
18,424
|
||||||||||||
|
||||||||||||||||
Net income per share:
|
||||||||||||||||
Basic and diluted income per share
|
$
|
0.33
|
$
|
0.54
|
$
|
0.57
|
$
|
0.78
|
Note 3.
|
Segment Information
|
(in thousands)
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2019
|
2018
|
2019
|
2018
|
||||||||||||
Total Revenues:
|
||||||||||||||||
|
||||||||||||||||
Truckload Segment:
|
||||||||||||||||
Expedited
|
$
|
66,529
|
$
|
85,589
|
$
|
129,251
|
$
|
166,351
|
||||||||
Dedicated
|
80,973
|
35,028
|
160,745
|
68,435
|
||||||||||||
Refrigerated
|
23,134
|
-
|
48,739
|
-
|
||||||||||||
OTR
|
4,772
|
50,094
|
9,334
|
90,473
|
||||||||||||
Truckload Revenues
|
175,408
|
170,711
|
348,069
|
325,259
|
||||||||||||
|
||||||||||||||||
Managed Freight Segment:
|
||||||||||||||||
Brokerage
|
20,277
|
24,489
|
44,583
|
42,582
|
||||||||||||
TMS
|
9,431
|
-
|
17,801
|
-
|
||||||||||||
Shuttle & Switching
|
3,562
|
-
|
7,298
|
-
|
||||||||||||
Warehouse
|
8,362
|
-
|
16,622
|
-
|
||||||||||||
Factoring
|
2,258
|
1,118
|
4,106
|
2,043
|
||||||||||||
Managed Freight Revenues
|
43,890
|
25,607
|
90,410
|
44,625
|
||||||||||||
|
||||||||||||||||
Total
|
$
|
219,298
|
$
|
196,318
|
$
|
438,479
|
$
|
369,884
|
Note 4.
|
Income Taxes
|
Note 5.
|
Debt and Lease Obligations
|
(in thousands)
|
June 30, 2019
|
December 31, 2018
|
||||||||||||||
|
Current
|
Long-Term
|
Current
|
Long-Term
|
||||||||||||
Borrowings under Credit Facility
|
$
|
-
|
$
|
17,314
|
$
|
-
|
$
|
3,911
|
||||||||
Revenue equipment installment notes; weighted average interest rate of 3.8% at June 30, 2019, and 3.7% at December 31, 2018, due in monthly installments with final maturities at various dates ranging from July 2019 to July 2023, secured by related revenue equipment
|
36,871
|
168,392
|
27,809
|
139,115
|
||||||||||||
|
||||||||||||||||
Real estate notes; interest rate of 4.2% at June 30, 2019 and 4.1% at December 31, 2018 due in monthly installments with a fixed maturity at August 2035, secured by related real estate
|
1,070
|
23,222
|
1,048
|
23,763
|
||||||||||||
Deferred loan costs
|
(147
|
)
|
(80
|
)
|
(147
|
)
|
(154
|
)
|
||||||||
Total debt
|
37,794
|
208,848
|
28,710
|
166,635
|
||||||||||||
Principal portion of finance lease obligations, secured by related revenue equipment
|
6,797
|
30,820
|
5,374
|
35,119
|
||||||||||||
Principal portion of operating lease obligations, secured by related revenue equipment
|
14,117
|
24,921
|
-
|
-
|
||||||||||||
Total debt and lease obligations
|
$
|
58,708
|
$
|
264,589
|
$
|
34,084
|
$
|
201,754
|
Note 6.
|
Stock-Based Compensation
|
Note 7.
|
Commitments and Contingencies
|
Note 8.
|
Leases
|
(dollars in thousands)
|
Three months Ended
|
Six Months Ended
|
||||||
|
June 30, 2019
|
June 30, 2019
|
||||||
Finance lease cost:
|
||||||||
Amortization of right-of-use assets
|
$ |
1,408
|
$ |
2,819
|
||||
Interest on lease liabilities
|
206
|
433
|
||||||
Operating lease cost
|
5,475
|
11,657
|
||||||
Total lease cost
|
$
|
7,089
|
$
|
14,909
|
||||
|
||||||||
Other information
|
||||||||
Cash paid for amounts included in the measurement of lease liabilities:
|
||||||||
Operating cash flows from finance leases
|
1,297
|
2,443
|
||||||
Operating cash flows from operating leases
|
5,475
|
11,657
|
||||||
Financing cash flows from finance leases
|
206
|
433
|
||||||
Right-of-use assets obtained in exchange for new operating lease liabilities
|
3,089
|
6,325
|
||||||
Weighted-average remaining lease term—finance leases
|
3.4 years
|
|||||||
Weighted-average remaining lease term—operating leases
|
3.5 years
|
|||||||
Weighted-average discount rate—finance leases
|
3.0
|
%
|
||||||
Weighted-average discount rate—operating leases
|
4.4
|
%
|
(in thousands)
|
Operating
|
Finance
|
||||||
2019 (1)
|
$
|
8,319
|
$
|
7,830
|
||||
2020
|
13,505
|
7,702
|
||||||
2021
|
9,711
|
7,997
|
||||||
2022
|
7,476
|
9,441
|
||||||
2023
|
1,018
|
6,364
|
||||||
Thereafter
|
2,431
|
1,209
|
||||||
Total minimum lease payments
|
|
42,460
|
|
40,543
|
||||
Less: amount representing interest
|
(3,310
|
)
|
(2,926
|
)
|
||||
Present value of minimum lease payments
|
|
39,150
|
|
37,617
|
||||
Less: current portion
|
(14,117
|
)
|
(6,797
|
)
|
||||
Lease obligations, long-term
|
$
|
25,033
|
$
|
30,820
|
Note 9.
|
Equity Method Investment
|
(in thousands)
|
As of
June 30,
|
As of
December 31,
|
||||||
|
2019
|
2018
|
||||||
Current Assets
|
$
|
26,400
|
$
|
25,877
|
||||
Non-current Assets
|
320,129
|
273,987
|
||||||
Current Liabilities
|
15,802
|
78,530
|
||||||
Non-current Liabilities
|
275,901
|
176,389
|
||||||
Total Equity
|
$
|
54,826
|
$
|
44,945
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2019
|
2018
|
2019
|
2018
|
||||||||||||
Revenue
|
$
|
24,505
|
$
|
23,574
|
$
|
51,988
|
$
|
48,715
|
||||||||
Operating Expenses
|
17,052
|
18,374
|
37,052
|
38,999
|
||||||||||||
Operating Income
|
7,453
|
5,200
|
14,936
|
9,716
|
||||||||||||
Net Income
|
$
|
4,792
|
$
|
3,464
|
$
|
9,881
|
$
|
6,482
|
Note 10.
|
Goodwill and Other Assets
|
(in thousands)
|
||||
|
||||
Balance at December 31, 2018
|
$
|
41,598
|
||
Post-acquisition goodwill adjustments
|
920
|
|||
Balance at June 30, 2019
|
$
|
42,518
|
(in thousands)
|
June 30, 2019
|
|||||||||||||||
|
Gross intangible assets
|
Accumulated amortization
|
Net intangible assets
|
Remaining life (months)
|
||||||||||||
Trade name
|
$
|
4,400
|
$
|
(293
|
)
|
$
|
4,107
|
168
|
||||||||
Non-Compete agreement
|
1,400
|
|
(280
|
)
|
1,120
|
48
|
||||||||||
Customer relationships
|
28,200
|
|
(2,350
|
)
|
25,850
|
132
|
||||||||||
Total
|
$
|
34,000
|
$
|
(2,923
|
)
|
$
|
31,077
|
|
December 31, 2018
|
|||||||||||||||
|
Gross intangible assets
|
Accumulated amortization
|
Net intangible assets
|
Remaining life (months)
|
||||||||||||
Trade name
|
$
|
4,400
|
$
|
(147
|
)
|
$
|
4,253
|
174
|
||||||||
Non-Compete agreement
|
1,400
|
|
(140
|
)
|
1,260
|
54
|
||||||||||
Customer relationships
|
28,200
|
|
(1,175
|
)
|
27,025
|
138
|
||||||||||
Total
|
$
|
34,000
|
$
|
(1,462
|
)
|
$
|
32,538
|
|
(in thousands)
|
|||
2019
|
$
|
1,462
|
||
2020
|
2,923
|
|||
2021
|
2,923
|
|||
2022
|
2,923
|
|||
2023
|
2,783
|
|||
Thereafter
|
18,063
|
|
●
|
Total revenue of
$219.3 million, an
increase of
11.7% compared with the second quarter of
2018, and freight revenue of
$194.9 million (which excludes revenue from fuel surcharges), an
increase of
14.2% compared with the second quarter of 2018;
|
|
|
|
|
●
|
Operating income of
$8.8 million, compared with operating income of
$14.1 million in the second quarter of 2018;
|
|
|
|
|
●
|
Net income of
$6.1 million, or
$0.33 per basic and diluted share, compared with net income of
$10.0 million , or
$0.54 per basic and diluted share, in the second quarter of 2018;
|
|
|
|
|
●
|
With available borrowing capacity of
$42.9 million under our Credit Facility at
June 30, 2019, we do not expect to be required to test our fixed charge covenant in the foreseeable future;
|
|
|
|
|
●
|
Our Managed Freight segment’s total revenue increased to
$43.9 million in the
2019 quarter from
$25.6 million in the 2018 quarter and operating income
increased to
$3.7 million in the 2019 quarter from
$2.3 million in the 2018 quarter;
|
|
|
|
|
●
|
Our equity investment in TEL provided
$2.4 million of pre-tax earnings compared to
$1.8 million in the second quarter of 2018;
|
|
|
|
|
●
|
Since
December 31, 2018, total indebtedness, net of cash and including operating lease liabilities,
increased by
$39.9 million to
$294.5 million; and
|
|
|
|
|
●
|
Stockholders' equity and tangible book value at
June 30, 2019, were
$351.7 million and
$278.1 million (or
$15.08 per basic share), respectively.
|
Three months ended June 30,
|
Six months ended June 30,
|
|||||||||||||||||||||||||||||||
GAAP Operating Ratio:
|
2019
|
OR %
|
2018
|
OR %
|
2019
|
OR %
|
2018
|
OR %
|
||||||||||||||||||||||||
Total revenue
|
$
|
219,298
|
$
|
196,318
|
$
|
438,479
|
$
|
369,884
|
||||||||||||||||||||||||
Total operating expenses
|
210,454
|
96.0 %
|
|
182,253
|
92.8%
|
|
424,209
|
96.7%
|
|
349,394
|
94.5%
|
|
||||||||||||||||||||
Operating income
|
$
|
8,844
|
$
|
14,065
|
$
|
14,270
|
$
|
20,490
|
||||||||||||||||||||||||
Adjusted Operating Ratio:
|
2019
|
Adj.
OR %
|
2018
|
Adj.
OR %
|
2019
|
Adj.
OR %
|
2018
|
Adj.
OR %
|
||||||||||||||||||||||||
Total revenue
|
$
|
219,298
|
$
|
196,318
|
$
|
438,479
|
$
|
369,884
|
||||||||||||||||||||||||
Fuel surcharge revenue
|
(24,381
|
) |
(25,683
|
) |
(47,800
|
) |
(48,787
|
) | ||||||||||||||||||||||||
Freight revenue (total revenue, excluding fuel surcharge)
|
194,917
|
170,635
|
390,679
|
321,097
|
||||||||||||||||||||||||||||
Total operating expenses
|
210,454
|
182,253
|
424,209
|
349,394
|
||||||||||||||||||||||||||||
Adjusted for: | ||||||||||||||||||||||||||||||||
Fuel surcharge revenue
|
(24,381
|
) |
(25,683
|
) |
(47,800
|
) |
(48,787
|
) | ||||||||||||||||||||||||
Amortization of intangibles | (731 | ) | - | (1,462 | ) | - | ||||||||||||||||||||||||||
Adjusted operating expenses
|
185,342
|
95.1%
|
|
156,570
|
91.8%
|
|
374,947
|
93.6%
|
|
300,607
|
93.6%
|
|
||||||||||||||||||||
Adjusted operating income
|
$
|
9,575
|
$
|
14,065
|
$
|
15,732
|
$
|
20,490
|
||||||||||||||||||||||||
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2019
|
2018
|
2019
|
2018
|
||||||||||||
Revenue:
|
||||||||||||||||
Freight revenue
|
$
|
194,917
|
$
|
170,635
|
$
|
390,679
|
$
|
321,097
|
||||||||
Fuel surcharge revenue
|
24,381
|
25,683
|
47,800
|
48,787
|
||||||||||||
Total revenue
|
$
|
219,298
|
$
|
196,318
|
$
|
438,479
|
$
|
369,884
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2019
|
2018
|
2019
|
2018
|
||||||||||||
Salaries, wages, and related expenses
|
$
|
75,781
|
$
|
64,633
|
$
|
155,284
|
$
|
125,253
|
||||||||
% of total revenue
|
34.6
|
%
|
32.9
|
%
|
35.4
|
%
|
33.9
|
%
|
||||||||
% of freight revenue
|
38.9
|
%
|
37.9
|
%
|
39.7
|
%
|
39.0
|
%
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2019
|
2018
|
2019
|
2018
|
||||||||||||
Fuel expense
|
$
|
29,215
|
$
|
29,209
|
$
|
57,047
|
$
|
56,390
|
||||||||
% of total revenue
|
13.3
|
%
|
14.9
|
%
|
13.0
|
%
|
15.2
|
%
|
||||||||
% of freight revenue
|
15.0
|
%
|
17.1
|
%
|
14.6
|
%
|
17.6
|
%
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2019
|
2018
|
2019
|
2018
|
||||||||||||
Total fuel surcharge
|
$
|
24,381
|
$
|
25,683
|
$
|
47,800
|
$
|
48,787
|
||||||||
Less: Fuel surcharge revenue reimbursed to independent contractors and other third parties
|
3,038
|
3,231
|
5,980
|
5,826
|
||||||||||||
Company fuel surcharge revenue
|
$
|
21,343
|
$
|
22,452
|
$
|
41,820
|
$
|
42,961
|
||||||||
Total fuel expense
|
$
|
29,215
|
$
|
29,209
|
$
|
57,047
|
$
|
56,390
|
||||||||
Less: Company fuel surcharge revenue
|
21,343
|
22,452
|
41,820
|
42,961
|
||||||||||||
Net fuel expense
|
$
|
7,872
|
$
|
6,757
|
$
|
15,227
|
$
|
13,429
|
||||||||
% of freight revenue
|
4.0
|
%
|
4.0
|
%
|
3.9
|
%
|
4.2
|
%
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2019
|
2018
|
2019
|
2018
|
||||||||||||
Operations and maintenance
|
$
|
14,898
|
$
|
12,595
|
$
|
30,072
|
$
|
24,325
|
||||||||
% of total revenue
|
6.8
|
%
|
6.4
|
%
|
6.9
|
%
|
6.6
|
%
|
||||||||
% of freight revenue
|
7.6
|
%
|
7.4
|
%
|
7.7
|
%
|
7.6
|
%
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2019
|
2018
|
2019
|
2018
|
||||||||||||
Revenue equipment rentals and purchased transportation
|
$
|
47,169
|
$
|
37,388
|
$
|
95,839
|
$
|
68,079
|
||||||||
% of total revenue
|
21.5
|
%
|
19.0
|
%
|
21.9
|
%
|
18.4
|
%
|
||||||||
% of freight revenue
|
24.2
|
%
|
21.9
|
%
|
24.5
|
%
|
21.2
|
%
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2019
|
2018
|
2019
|
2018
|
||||||||||||
Operating taxes and licenses
|
$
|
3,365
|
$
|
2,613
|
$
|
6,549
|
$
|
5,273
|
||||||||
% of total revenue
|
1.5
|
%
|
1.3
|
%
|
1.5
|
%
|
1.4
|
%
|
||||||||
% of freight revenue
|
1.7
|
%
|
1.5
|
%
|
1.7
|
%
|
1.6
|
%
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2019
|
2018
|
2019
|
2018
|
||||||||||||
Insurance and claims
|
$
|
10,472
|
$
|
9,908
|
$
|
21,707
|
$
|
18,593
|
||||||||
% of total revenue
|
4.8
|
%
|
5.0
|
%
|
5.0
|
%
|
5.0
|
%
|
||||||||
% of freight revenue
|
5.4
|
%
|
5.8
|
%
|
5.6
|
%
|
5.8
|
%
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2019
|
2018
|
2019
|
2018
|
||||||||||||
Communications and utilities
|
$
|
1,760
|
$
|
1,666
|
$
|
3,478
|
$
|
3,406
|
||||||||
% of total revenue
|
0.8
|
%
|
0.8
|
%
|
0.8
|
%
|
0.9
|
%
|
||||||||
% of freight revenue
|
0.9
|
%
|
1.0
|
%
|
0.9
|
%
|
1.1
|
%
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2019
|
2018
|
2019
|
2018
|
||||||||||||
General supplies and expenses
|
$
|
7,284
|
$
|
6,423
|
$
|
14,015
|
$
|
10,562
|
||||||||
% of total revenue
|
3.3
|
%
|
3.3
|
%
|
3.2
|
%
|
2.9
|
%
|
||||||||
% of freight revenue
|
3.7
|
%
|
3.8
|
%
|
3.6
|
%
|
3.3
|
%
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2019
|
2018
|
2019
|
2018
|
||||||||||||
Depreciation and amortization, including gains and losses on disposition of property and equipment
|
$
|
20,510
|
$
|
17,818
|
$
|
40,218
|
$
|
37,513
|
||||||||
% of total revenue
|
9.4
|
%
|
9.1
|
%
|
9.2
|
%
|
10.1
|
%
|
||||||||
% of freight revenue
|
10.5
|
%
|
10.4
|
%
|
10.3
|
%
|
11.7
|
%
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2019
|
2018
|
2019
|
2018
|
||||||||||||
Interest expense, net
|
$
|
2,683
|
$
|
1,941
|
$
|
5,129
|
$
|
3,900
|
||||||||
% of total revenue
|
1.2
|
%
|
1.0
|
%
|
1.2
|
%
|
1.1
|
%
|
||||||||
% of freight revenue
|
1.4
|
%
|
1.1
|
%
|
1.3
|
%
|
1.2
|
%
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2019
|
2018
|
2019
|
2018
|
||||||||||||
Income from equity method investment
|
$
|
2,375
|
$
|
1,775
|
$
|
5,410
|
$
|
3,265
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2019
|
2018
|
2019
|
2018
|
||||||||||||
Income tax expense
|
$
|
2,465
|
$
|
3,928
|
$
|
4,047
|
$
|
5,467
|
||||||||
% of total revenue
|
1.1
|
%
|
2.0
|
%
|
0.9
|
%
|
1.5
|
%
|
||||||||
% of freight revenue
|
1.3
|
%
|
2.3
|
%
|
1.0
|
%
|
1.7
|
%
|
|
Three Months Ended
|
Six Months Ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
(in thousands)
|
2019
|
2018
|
2019
|
2018
|
||||||||||||
Revenues:
|
||||||||||||||||
Truckload
|
$
|
175,408
|
$
|
170,711
|
$
|
348,069
|
$
|
325,259
|
||||||||
Managed Freight
|
43,890
|
25,607
|
90,410
|
44,625
|
||||||||||||
Total
|
$
|
219,298
|
$
|
196,318
|
$
|
438,479
|
$
|
369,884
|
||||||||
|
||||||||||||||||
Operating Income:
|
||||||||||||||||
Truckload
|
$
|
5,181
|
$
|
11,734
|
$
|
6,457
|
$
|
17,095
|
||||||||
Managed Freight
|
3,663
|
2,331
|
7,813
|
3,395
|
||||||||||||
Total
|
$
|
8,844
|
$
|
14,065
|
$
|
14,270
|
$
|
20,490
|
ITEM 3.
|
PART II
|
OTHER INFORMATION
|
ITEM 1.
|
ITEM 1A.
|
ITEM 2.
|
ITEM 3.
|
ITEM 4.
|
ITEM 5.
|
Exhibit
Number
|
Reference
|
Description
|
(1)
|
Second Amended and Restated Articles of Incorporation
|
|
(2)
|
Third Amended and Restated Bylaws
|
|
(1)
|
Second Amended and Restated Articles of Incorporation
|
|
(2)
|
Third Amended and Restated Bylaws
|
|
(3)
|
First Amendment to the Covenant Transportation Group, Inc. Third Amended and Restated 2006 Omnibus Incentive Plan
|
|
#
|
Form of Restricted Stock Award Notice under the Third Amended and Restated 2006 Omnibus Incentive Plan, as amended
|
|
#
|
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 3.1 to the Company's Report on Form 10-Q, filed May 10, 2019.
|
|
(2)
|
Incorporated by reference to Exhibit 3.2 to the Company's Report on Form 8-K, filed March 14, 2019.
|
|
(3)
|
Incorporated by reference to Appendix A to the Company's Definitive Proxy Statement filed with the SEC on April 8, 2019 in connection with the 2019 Annual Meeting of Stockholders
|
|
#
|
Filed herewith.
|
|
##
|
Furnished herewith.
|
|
COVENANT TRANSPORTATION GROUP, INC.
|
|
|
|
|
|
|
|
Date:
August 9, 2019
|
By:
|
/s/ Richard B. Cribbs
|
|
|
Richard B. Cribbs
|
|
|
Executive Vice President and Chief Financial Officer
in his capacity as such and as a duly authorized officer
on behalf of the issuer
|
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:
August 9, 2019
|
/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:
August 9, 2019
|
/s/ Richard B. Cribbs
|
|
Richard B. Cribbs
Principal Financial Officer
|
Date:
August 9, 2019
|
/s/ David R. Parker
|
|
David R. Parker
|
|
Chief Executive Officer
|
Date:
August 9, 2019
|
/s/
Richard B. Cribbs
|
|
Richard B. Cribbs
|
|
Chief Financial Officer
|
GRANTEE:
|
||
TYPE OF AWARD:
|
Restricted Stock Award
|
|
NUMBER OF SHARES:
|
||
DATE OF GRANT:
|
Grantee:
|
||
Covenant Transportation Group, Inc.
|
||
By:
|