Covenant Transportation Group, Inc. (NASDAQ/GS: CVTI) (“CTG”)
announced today financial and operating results for the third
quarter ended September 30, 2018.
Highlights for the quarter included the
following(1):
- Total revenue of $243.3 million, an
increase of 36.2% compared with the third quarter of 2017.
- Freight revenue of $214.6 million
(excludes revenue from fuel surcharges), an increase of 34.6%
compared with the third quarter of 2017.
- Operating income of $16.2 million
and an operating ratio of 93.3%. Adjusted operating
income(2) of $16.9 million and an adjusted
operating ratio(2) of 92.1%. This compares with
operating income of $9.0 million and an operating ratio of 94.9% in
the third quarter of 2017.
- Net income of $11.6 million, or
earnings per diluted share of $0.63. Adjusted net
income(2) of $12.1 million, or adjusted earnings
per diluted share(2) of $0.66. This compares with
net income of $4.6 million, or $0.25 per diluted share in the third
quarter of 2017.
(1) For information regarding
comparability of the reported results due to the acquisition of
Landair Holdings and its subsidiaries (“Landair”), refer to
footnote (2) of the Non-GAAP Reconciliation (Unaudited) schedules
included with this release.(2) See GAAP to
Non-GAAP Reconciliation in the schedules included with this
release.
Chairman and Chief Executive Officer, David R.
Parker, made the following comments: “We are pleased to announce
record third quarter revenue, operating income, and net income for
our organization. Our historical truckload business has
continued to improve year-over-year, and we could not be happier
with our first three months of ownership of Landair. A
unified team from both organizations has done an excellent job of
prioritizing and executing on the most impactful transition items,
while customer sentiment towards our combined capabilities has been
very positive. From the collaboration between the sales and
operations teams to the scope and speed of attaining cost
synergies, the transition efforts have exceeded our
expectations."
Management Discussion—Truckload
OperationsMr. Parker continued: “For the quarter, total
revenue in our truckload operations increased to $197.1 million, an
increase of $44.0 million compared with the third quarter of
2017. This increase consisted of $34.4 million higher freight
revenue and $9.6 million higher fuel surcharge revenue. The $34.4
million increase in freight revenue related to a 547 (or 21.6%)
average truck increase and a 6.1% increase in average freight
revenue per truck in the 2018 period as compared to the 2017
period, partially offset by a $2.7 million year-over-year reduction
in intermodal revenues as we effectively discontinued this
consistently unprofitable service offering within our solo-driver
refrigerated truckload unit during December 2017. Of the 547
increased average trucks, 428 average trucks were contributed by
the Landair acquisition as Landair contributed $18.4 million of
freight revenue to consolidated truckload operations in the third
quarter of 2018.
“Average freight revenue per tractor per week
increased to $4,159 during the 2018 quarter from $3,922 during the
2017 quarter. Average freight revenue per total mile increased by
27.7 cents per mile, or 16.4%, compared to the 2017 quarter and
average miles per tractor decreased by 8.9%. The main factors
impacting the decreased utilization were the impact of the Landair
operations on the combined truckload division. Landair's shorter
average length of haul and dedicated contract, solo-driven truck
operations generally produce higher revenue per total mile and
fewer miles per tractor than our other truckload business
units. We also experienced a 960 basis point decrease in the
percentage of our fleet comprised of team-driven trucks.
Team-driven trucks decreased to an average of 880 teams (or 28.6%
of the total fleet) in the third quarter of 2018 versus an average
of 967 teams (or 38.2% of the total fleet) in the third quarter of
2017. Our average seated truck percentage improved as 3.9% of our
fleet lacked drivers during the 2018 quarter compared with 4.9%
during the 2017 quarter.
“Salaries, wages and related expenses increased
14.3 cents per total mile due primarily to the impact of the
Landair acquisition and employee pay adjustments since the third
quarter of 2017, partially offset by fewer miles from team-driven
trucks, which carry the cost of two drivers.
“Insurance and claims expense increased to 14.5
cents per mile in the third quarter of 2018 versus 9.8 cents per
mile in the third quarter of 2017. Our rate of accidents per
million miles, as measured by the U.S. Department of
Transportation, remained essentially constant compared with the
2017 quarter, but the expected outcome of certain casualty
insurance claims resulted in an overall increase to expense.
“Net fuel expense decreased by 3.7 cents per
total mile in the 2018 quarter, primarily as a result of
improvement in fuel hedging activity, with $0.6 million of fuel
hedge gains in the 2018 quarter compared with $1.0 million of fuel
hedge losses in the 2017 quarter. In addition, our fuel surcharge
recovery was more effective during the 2018 quarter and we expect
to continue to experience improved fuel economy as we upgrade our
tractor fleet. These favorable items were partially offset by
increased fuel pricing. Ultra-low sulfur diesel prices as measured
by the Department of Energy averaged $0.61/gallon higher in the
third quarter of 2018 compared with the 2017 quarter.
“Depreciation and amortization (which includes
gain or loss on disposition of assets) increased by $1.1 million
primarily resulting from $1.4 million of depreciation expense and
$0.5 million of non-cash intangible amortization expense
attributable to Landair’s truckload operations partially offset by
recognition of a $0.3 million gain on disposal of equipment in the
current year quarter as compared to a $0.7 million loss on disposal
of equipment in the prior year quarter. The improvement in
consolidated gain/loss on disposition resulted from a strengthening
market for used tractors and trailers.
“In addition to the items mentioned above,
primarily in connection with our acquisition of Landair, we
experienced increases to operations and maintenance, revenue
equipment rentals and purchased transportation, operating taxes and
licenses, as well as general supplies and expenses.”
Management Discussion—Non-Asset Based
Managed Freight and Other OperationsMr. Parker offered the
following comments concerning the Company’s non-asset based managed
freight segment (“Managed Freight”): “For the quarter, Managed
Freight’s total revenue increased 80.9%, to $46.3 million from
$25.6 million in the same quarter of 2017. Operating income was
$4.2 million for an operating ratio of 90.9%, compared with
operating income of $2.5 million and an operating ratio of 90.3% in
the third quarter of 2017. Of the $20.7 million of increased total
revenue, Landair contributed $20.4 million of revenue to combined
Managed Freight operations in the third quarter of 2018. In
addition, our 49% equity investment in Transport Enterprise Leasing
contributed $2.1 million of pre-tax income in the quarter compared
with $0.8 million in the third quarter of 2017.”
Capitalization, Liquidity and Capital
ExpendituresRichard B. Cribbs, the Company's Executive
Vice President and Chief Financial Officer, added the following
comments: “In connection with the July 3rd acquisition of Landair,
we expended $83.0 million in cash in exchange for 100% of Landair’s
outstanding stock and assumed $15.5 million of Landair’s
outstanding debt, which we have paid in full. In addition to the
cash paid at closing, subject to further adjustments, we expect to
pay an additional $8.2 million in gross up payments to the Landair
sellers related to an Internal Revenue Code Section 338(h)(10)
election we have made. These additional gross up payments will be
made subsequent to September 30, 2018. At September 30, 2018, our
total balance sheet debt and capital lease obligations, net of
cash, were $216.0 million, and our stockholders’ equity was $326.2
million, for a ratio of net debt to total balance sheet
capitalization of 39.8%, which compares favorably to the 40.2%
ratio as of December 31, 2017, even with the cash expended for the
Landair acquisition. In addition, our leverage ratio (defined as:
net balance sheet debt divided by trailing four quarters earnings
before interest, taxes, depreciation, and amortization, as adjusted
and pro forma for the Landair acquisition) has improved to 1.5x
from 1.9x for the fiscal 2017 period. At September 30, 2018, the
discounted value of future obligations under off-balance sheet
operating lease obligations was $26.4 million. Between December 31,
2017 and September 30, 2018, the Company's balance sheet debt and
capital lease obligations, net of cash, increased by $17.6 million,
while the present value of financing provided by operating leases
increased $4.7 million. At September 30, 2018, we had $59.9 million
of borrowing availability under our revolving line of credit.
“Our net capital expenditures excluding the
Landair acquisition for the three months ended September 30, 2018
totaled $1.6 million compared to $33.1 million for the prior year
period. Excluding the assets acquired with the Landair transaction,
in the first nine months of 2018, we took delivery of approximately
525 new company tractors and disposed of approximately 611 used
tractors. Our current tractor fleet plan for full-year 2018
includes the delivery of approximately 930 new company tractors,
and the disposal of approximately 812 used tractors.”
OutlookMr. Cribbs commented on
the Company’s outlook: “We expect the overall balance of business
conditions to remain favorable through the fourth quarter of 2018
and into 2019. Freight demand has been, and remains, strong
across our business units and indications from our holiday peak
season customers indicate robust expectations for the fourth
quarter. From a capacity perspective, attracting and
retaining highly qualified, over the road professional truck
drivers remains our largest challenge. Low unemployment,
alternative careers, and an aging driver population are creating an
increasingly competitive environment. In this environment, we
continue to work actively with our customers to improve driver
compensation, efficiency, and working conditions while providing a
high level of service and generating acceptable financial
returns. We intend to continue to allocate our assets where
the returns are justified and use our managed freight units to
supplement our internal capacity.
“For the fourth quarter, we will remain a major
participant in the holiday peak shipping season and anticipate our
consolidated adjusted operating ratio and consolidated adjusted
earnings per diluted share to improve compared with the fourth
quarter of 2017. However, due to changes in team versus
solo-driver mix, dedicated versus irregular route capacity, and
managed freight capacity, as well as the impact of the Landair
transaction, we are not offering more specific earnings
guidance.”
Conference Call InformationThe
Company will host a live conference call tomorrow, October 24,
2018, at 10:00 a.m. Eastern time to discuss the quarter.
Individuals may access the call by dialing 800-351-4894
(U.S./Canada) and 800-756-3333 (International), access code
CTG3. An audio replay will be available for one week
following the call at 877-919-4059, access code 86738402. For
additional financial and statistical information regarding the
Company that is expected to be discussed during the conference
call, please visit our website at
www.covenanttransport.com/investors under the icon “Earnings
Info.”
Covenant Transportation Group, Inc. is the
holding company for several transportation providers that offer
premium transportation services for customers throughout the United
States. The consolidated group includes operations from Covenant
Transport and Covenant Transport Solutions of Chattanooga,
Tennessee; Southern Refrigerated Transport of Texarkana, Arkansas;
Landair Transport and Landair Logistics of Greeneville, Tennessee;
and Star Transportation of Nashville, Tennessee. In addition,
Transport Enterprise Leasing, of Chattanooga, Tennessee is an
integral affiliated company providing revenue equipment sales and
leasing services to the trucking industry. The Company's Class A
common stock is traded on the NASDAQ Global Select market under the
symbol, “CVTI”.
This press release contains certain statements
that may be considered forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended,
and such statements are subject to the safe harbor created by those
sections and the Private Securities Litigation Reform Act of 1995,
as amended. Such statements may be identified by their use of
terms or phrases such as "expects," "estimates," "projects,"
"believes," "anticipates," "plans," "intends," “outlook,” and
similar terms and phrases. Forward-looking statements are
based upon the current beliefs and expectations of our management
and are inherently subject to risks and uncertainties, some of
which cannot be predicted or quantified, which could cause future
events and actual results to differ materially from those set forth
in, contemplated by, or underlying the forward-looking statements.
In this press release, the statements relating to the
expected fuel economy of new tractors, our current tractor fleet
plan, and the statements under “Outlook” are forward-looking
statements. The following factors, among others, could cause actual
results to differ materially from those in the forward-looking
statements: the rates and volumes realized during 2018, elevated
experience in the frequency and severity of claims relating to
accident, cargo, workers' compensation, health, and other claims,
increased insurance premiums, fluctuations in claims expenses
that result from our self-insured retention amounts, including in
our excess layers and in respect of claims for which we commute
policy coverage, and the requirement that we pay additional
premiums if there are claims in certain of those layers,
differences between estimates used in establishing and adjusting
claims reserves and actual results over time, adverse changes in
claims experience and loss development factors, or additional
changes in management's estimates of liability based upon such
experience and development factors that cause our expectations of
insurance and claims expense to be inaccurate or otherwise impacts
our results; changes in the market condition for used revenue
equipment and real estate that impact our capital expenditures and
our ability to dispose of revenue equipment and real estate on the
schedule and for the prices we expect; increases in the prices paid
for new revenue equipment that impact our capital expenditures and
our results generally; changes in management’s estimates of the
need for new tractors and trailers; the effect of any reduction in
tractor purchases on the number of tractors that will be accepted
by manufacturers under tradeback arrangements; our inability to
generate sufficient cash from operations and obtain financing on
favorable terms to meet our significant ongoing capital
requirements; our ability to maintain compliance with the
provisions of our credit agreements, particularly financial
covenants in our revolving credit facility; excess tractor or
trailer capacity in the trucking industry; decreased demand for our
services or loss of one or more of our major customers; our ability
to renew dedicated service offering contracts on the terms and
schedule we expect; surplus inventories, recessionary economic
cycles, and downturns in customers' business cycles; strikes, work
slowdowns, or work stoppages at the Company, customers, ports, or
other shipping related facilities; increases or rapid fluctuations
in fuel prices, as well as fluctuations in hedging activities and
surcharge collection, including, but not limited to, changes in
customer fuel surcharge policies and increases in fuel surcharge
bases by customers; the volume and terms of diesel purchase
commitments and hedging contracts; interest rates, fuel taxes,
tolls, and license and registration fees; increases in compensation
for and difficulty in attracting and retaining qualified drivers
and independent contractors; seasonal factors such as harsh weather
conditions that increase operating costs; competition from
trucking, rail, and intermodal competitors; regulatory requirements
that increase costs, decrease efficiency, or impact the
availability or effective driving time of our drivers and other
drivers in the industry, including the terms and exemptions from
hours-of-service and electronic log requirements for drivers and
the Federal Motor Carrier Safety Administration’s Compliance,
Safety, Accountability program applicable to driver standards and
the methodology for determining a carrier’s DOT safety rating; the
ability to reduce, or control increases in, operating costs;
changes in the Company’s business strategy that require the
acquisition of new businesses, and the ability to identify
acceptable acquisition candidates, consummate acquisitions, and
integrate acquired operations; fluctuations in the results of
Transport Enterprise Leasing, which are included as equity in
income (loss) of affiliate in our financial statements; the number
of shares repurchased, if any; the effects of repurchasing the
shares on debt, equity, and liquidity; the effects of repurchasing
no or a nominal number of shares; and the ultimate uses of
repurchased shares, if any. Readers should review and
consider these factors along with the various disclosures by the
Company in its press releases, stockholder reports, and filings
with the Securities and Exchange Commission. We disclaim any
obligation to update or revise any forward-looking statements to
reflect actual results or changes in the factors affecting the
forward-looking information.
For further information contact:Richard B.
Cribbs, Executive Vice President and Chief Financial
Officer
RCribbs@covenanttransport.com
For copies of Company information contact:Kim
Perry, Administrative Assistant
KPerry@covenanttransport.com
|
|
Covenant Transportation Group,
Inc. |
Key Financial and Operating
Statistics |
|
|
|
|
|
|
|
|
|
|
|
INCOME STATEMENT DATA |
|
INCOME STATEMENT DATA |
|
|
Three Months Ended Sep 30, |
|
Nine Months Ended Sep 30, |
($000s, except per share data) |
|
2018 |
|
|
2017 |
|
% Change |
|
|
2018 |
|
|
2017 |
|
% Change |
Freight
revenue |
$ |
214,623 |
|
$ |
159,500 |
|
34.6% |
|
|
$ |
535,721 |
|
$ |
445,212 |
|
20.3% |
|
Fuel
surcharge revenue |
|
28,680 |
|
|
19,131 |
|
|
|
|
77,466 |
|
|
56,489 |
|
|
|
Total revenue |
$ |
243,303 |
|
$ |
178,631 |
|
36.2% |
|
|
$ |
613,187 |
|
$ |
501,701 |
|
22.2% |
|
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
Salaries, wages, and
related expenses |
|
86,249 |
|
|
60,732 |
|
|
|
|
211,621 |
|
|
178,639 |
|
|
|
Fuel expense |
|
33,428 |
|
|
25,998 |
|
|
|
|
89,817 |
|
|
76,310 |
|
|
|
Operations and
maintenance |
|
16,457 |
|
|
13,046 |
|
|
|
|
40,783 |
|
|
37,504 |
|
|
|
Revenue equipment
rentals and |
|
|
|
|
|
|
|
|
purchased
transportation |
|
47,445 |
|
|
36,361 |
|
|
|
|
115,525 |
|
|
90,719 |
|
|
|
Operating taxes and
licenses |
|
3,377 |
|
|
2,364 |
|
|
|
|
8,649 |
|
|
7,197 |
|
|
|
Insurance and
claims |
|
12,675 |
|
|
7,681 |
|
|
|
|
31,269 |
|
|
24,313 |
|
|
|
Communications and
utilities |
|
1,810 |
|
|
1,747 |
|
|
|
|
5,216 |
|
|
5,081 |
|
|
|
General supplies and
expenses |
|
6,391 |
|
|
3,729 |
|
|
|
|
16,833 |
|
|
10,919 |
|
|
|
Depreciation and
amortization, including gains and |
|
|
|
|
|
|
|
|
losses on
disposition of property and equipment |
|
19,290 |
|
|
17,932 |
|
|
|
|
56,803 |
|
|
57,707 |
|
|
Total
operating expenses |
|
227,122 |
|
|
169,590 |
|
|
|
|
576,516 |
|
|
488,389 |
|
|
Operating
income |
|
16,181 |
|
|
9,041 |
|
|
|
|
36,671 |
|
|
13,312 |
|
|
Interest
expense, net |
|
2,460 |
|
|
2,174 |
|
|
|
|
6,360 |
|
|
6,216 |
|
|
Income from
equity method investment |
|
(2,142 |
) |
|
(750 |
) |
|
|
|
(5,407 |
) |
|
(2,575 |
) |
|
Income
before income taxes |
|
15,863 |
|
|
7,617 |
|
|
|
|
35,718 |
|
|
9,671 |
|
|
Income tax
expense |
|
4,249 |
|
|
2,985 |
|
|
|
|
9,716 |
|
|
3,530 |
|
|
Net
income |
$ |
11,614 |
|
$ |
4,632 |
|
|
|
$ |
26,002 |
|
$ |
6,141 |
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
$ |
0.63 |
|
$ |
0.25 |
|
|
|
$ |
1.42 |
|
$ |
0.34 |
|
|
Diluted earnings per share |
$ |
0.63 |
|
$ |
0.25 |
|
|
|
$ |
1.41 |
|
$ |
0.33 |
|
|
Basic
weighted average shares outstanding (000s) |
|
18,343 |
|
|
18,288 |
|
|
|
|
18,337 |
|
|
18,275 |
|
|
Diluted
weighted average shares outstanding (000s) |
|
18,497 |
|
|
18,424 |
|
|
|
|
18,448 |
|
|
18,373 |
|
|
|
|
|
|
Three Months Ended Sep 30, |
|
Nine Months Ended Sep 30, |
|
|
|
2018 |
|
|
2017 |
|
% Change |
|
|
2018 |
|
|
2017 |
|
% Change |
($000s) |
SEGMENT REVENUES |
|
SEGMENT REVENUES |
Asset-based
truckload revenues |
$ |
168,373 |
|
$ |
133,935 |
|
25.7% |
|
|
$ |
444,846 |
|
$ |
389,832 |
|
14.1% |
|
Managed
freight revenues |
|
46,250 |
|
|
25,565 |
|
80.9% |
|
|
|
90,875 |
|
|
55,380 |
|
64.1% |
|
|
Freight revenue |
$ |
214,623 |
|
$ |
159,500 |
|
34.6% |
|
|
$ |
535,721 |
|
$ |
445,212 |
|
20.3% |
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING STATISTICS |
|
OPERATING STATISTICS |
Average
freight revenue per loaded mile |
$ |
2.160 |
|
$ |
1.872 |
|
15.4% |
|
|
$ |
2.051 |
|
$ |
1.827 |
|
12.3% |
|
Average
freight revenue per total mile |
$ |
1.967 |
|
$ |
1.689 |
|
16.4% |
|
|
$ |
1.870 |
|
$ |
1.642 |
|
13.9% |
|
Average
freight revenue per tractor per week |
$ |
4,159 |
|
$ |
3,922 |
|
6.1% |
|
|
$ |
4,149 |
|
$ |
3,810 |
|
8.9% |
|
Average
miles per tractor per period |
|
27,797 |
|
|
30,511 |
|
-8.9% |
|
|
|
86,523 |
|
|
90,489 |
|
-4.4% |
|
Weighted
avg. tractors for period |
|
3,080 |
|
|
2,533 |
|
21.6% |
|
|
|
2,749 |
|
|
2,557 |
|
7.5% |
|
Tractors at
end of period |
|
3,077 |
|
|
2,550 |
|
20.7% |
|
|
|
3,077 |
|
|
2,550 |
|
20.7% |
|
Trailers at
end of period |
|
7,260 |
|
|
7,114 |
|
2.1% |
|
|
|
7,260 |
|
|
7,114 |
|
2.1% |
|
|
|
SELECTED BALANCE SHEET DATA |
|
($000s, except per share data) |
9/30/2018 |
12/31/2017 |
|
|
|
|
|
Total
assets |
$ |
747,482 |
|
$ |
649,668 |
|
|
|
|
|
|
Total
stockholders' equity |
$ |
326,150 |
|
$ |
295,201 |
|
|
|
|
|
|
Total
balance sheet debt, net of cash |
$ |
216,020 |
|
$ |
198,443 |
|
|
|
|
|
|
Net Debt to
Capitalization Ratio |
|
39.8 |
% |
|
40.2 |
% |
|
|
|
|
|
Tangible
book value per basic share |
$ |
13.72 |
|
$ |
16.11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Covenant Transportation Group,
Inc. |
Non-GAAP Reconciliation
(Unaudited) |
Adjusted Operating Income and Adjusted
Operating Ratio (1) (2) |
|
|
|
|
|
|
|
|
|
(Dollars in thousands) |
Three Months Ended Sep 30, |
|
Nine Months Ended Sep 30, |
GAAP Presentation |
|
2018 |
|
|
2017 |
|
bps Change |
|
|
2018 |
|
|
2017 |
|
bps Change |
Total
revenue |
$ |
243,303 |
|
$ |
178,631 |
|
|
|
$ |
613,187 |
|
$ |
501,701 |
|
|
Total
operating expenses |
|
227,122 |
|
|
169,590 |
|
|
|
|
576,516 |
|
|
488,389 |
|
|
|
Operating income |
$ |
16,181 |
|
$ |
9,041 |
|
|
|
$ |
36,671 |
|
$ |
13,312 |
|
|
|
Operating ratio |
|
93.3 |
% |
|
94.9 |
% |
-160 |
|
|
|
94.0 |
% |
|
97.3 |
% |
-330 |
|
|
|
|
|
|
|
|
|
Non-GAAP Presentation |
|
2018 |
|
|
2017 |
|
bps Change |
|
|
2018 |
|
|
2017 |
|
bps Change |
Total
revenue |
$ |
243,303 |
|
$ |
178,631 |
|
|
|
$ |
613,187 |
|
$ |
501,701 |
|
|
Fuel
surcharge revenue |
|
(28,680 |
) |
|
(19,131 |
) |
|
|
|
(77,466 |
) |
|
(56,489 |
) |
|
|
Freight revenue (total
revenue, excluding fuel surcharge) |
|
214,623 |
|
|
159,500 |
|
|
|
|
535,721 |
|
|
445,212 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
operating expenses |
|
227,122 |
|
|
169,590 |
|
|
|
576,516 |
|
|
488,389 |
|
|
Adjusted
for: |
|
|
|
|
|
|
Fuel
surcharge revenue |
|
(28,680 |
) |
|
(19,131 |
) |
|
|
(77,466 |
) |
|
(56,489 |
) |
|
Amortization of intangibles (3) |
|
(731 |
) |
|
- |
|
|
|
(731 |
) |
|
- |
|
|
|
Adjusted operating
expenses |
|
197,711 |
|
|
150,459 |
|
|
|
498,319 |
|
|
431,900 |
|
|
|
Adjusted operating
income |
|
16,912 |
|
|
9,041 |
|
|
|
37,402 |
|
|
13,312 |
|
|
|
Adjusted operating
ratio |
|
92.1 |
% |
|
94.3 |
% |
-220 |
|
|
|
93.0 |
% |
|
97.0 |
% |
-400 |
|
|
|
|
|
|
|
|
|
(1) Pursuant to the requirements of
Regulation G, this table reconciles consolidated GAAP operating
ratio to consolidated non-GAAP Adjusted operating ratio. |
(2) The reported results do not include the
results of operations of Landair Holdings and its subsidiaries
("Landair") on and prior to its acquisition by Covenant
Transportation Group on July 3, 2018 in accordance with the
accounting treatment applicable to the transaction. |
(3) "Amortization of intangibles" reflects
the non-cash amortization expense relating to intangible assets
identified in the July 3, 2018 acquisition of Landair. Certain data
necessary to complete the purchase price allocation for the Landair
acquisition is open for adjustments during the measurement period.
We believe the estimates used are reasonable, but are subject to
change as additional information becomes available. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Reconciliation
(Unaudited) |
Adjusted Net Income and Adjusted EPS (1)
(2) |
|
|
|
|
|
|
|
|
|
(Dollars in thousands) |
Three Months Ended Sep 30, |
|
Nine Months Ended Sep 30, |
|
|
|
2018 |
|
|
2017 |
|
|
|
|
2018 |
|
|
2017 |
|
|
GAAP Presentation - Net income |
$ |
11,614 |
|
$ |
4,632 |
|
|
|
$ |
26,002 |
|
$ |
6,141 |
|
|
Adjusted
for: |
|
|
|
|
|
|
Income tax
expense |
|
4,249 |
|
|
2,985 |
|
|
|
9,716 |
|
|
3,530 |
|
|
|
Income before income
taxes |
|
15,863 |
|
|
7,617 |
|
|
|
35,718 |
|
|
9,671 |
|
|
Amortization of intangibles (3) |
|
731 |
|
|
- |
|
|
|
731 |
|
|
- |
|
|
|
Adjusted income before
income taxes |
|
16,594 |
|
|
7,617 |
|
|
|
36,449 |
|
|
9,671 |
|
|
Provision
for income tax expense at effective rate |
|
(4,445 |
) |
|
(2,985 |
) |
|
|
(9,915 |
) |
|
(3,530 |
) |
|
|
Non-GAAP
Presentation - Adjusted net income |
$ |
12,149 |
|
$ |
4,632 |
|
|
$ |
26,534 |
|
$ |
6,141 |
|
|
|
|
|
|
|
|
|
|
GAAP Presentation - Diluted earnings per share
("EPS") |
$ |
0.63 |
|
$ |
0.25 |
|
|
|
$ |
1.41 |
|
$ |
0.33 |
|
|
Adjusted
for: |
|
|
|
|
|
|
Income tax
expense |
|
0.23 |
|
|
0.16 |
|
|
|
0.53 |
|
|
0.19 |
|
|
|
Income before income
taxes |
|
0.86 |
|
|
0.41 |
|
|
|
1.94 |
|
|
0.53 |
|
|
Amortization of intangibles (3) |
|
0.04 |
|
|
- |
|
|
|
0.04 |
|
|
- |
|
|
|
Adjusted income before
income taxes |
|
0.90 |
|
|
0.41 |
|
|
|
1.98 |
|
|
0.53 |
|
|
Provision
for income tax expense at effective rate |
|
(0.24 |
) |
|
(0.16 |
) |
|
|
(0.54 |
) |
|
(0.19 |
) |
|
|
Non-GAAP
Presentation - Adjusted EPS |
$ |
0.66 |
|
$ |
0.25 |
|
|
$ |
1.44 |
|
$ |
0.33 |
|
|
|
(1) Pursuant to the requirements of
Regulation G, this table reconciles consolidated GAAP net income to
consolidated non-GAAP Adjusted net income and consolidated GAAP
diluted earnings per share to non-GAAP consolidated Adjusted
EPS. |
(2) The reported results do not include the
results of operations of Landair Holdings and its subsidiaries
("Landair") on and prior to its acquisition by Covenant
Transportation Group on July 3, 2018 in accordance with the
accounting treatment applicable to the transaction. |
(3) "Amortization of intangibles" reflects
the non-cash amortization expense relating to intangible assets
identified in the July 3, 2018 acquisition of Landair. Certain data
necessary to complete the purchase price allocation for the Landair
acquisition is open for adjustments during the measurement period.
We believe the estimates used are reasonable, but are subject to
change as additional information becomes available. |
|
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