Covenant Transportation Group, Inc. (NASDAQ/GS: CVTI) (“CTG”) today
announced the following executive team changes:
- John A. Tweed has been named
Co-President and Chief Operating Officer, with responsibility for
enterprise-wide operations, sales, and safety functions, as well as
the expansion of our contract logistics business and improvements
in our operating efficiency.
- Joey B. Hogan has been named
Co-President and Chief Administrative Officer, with responsibility
for all enterprise-wide administrative functions, including
strategic planning, finance, human resources, and information
technology, as well as equipment and maintenance. Messrs. Bunn and
Cribbs will continue to report to Mr. Hogan.
- M. Paul Bunn has been named
Executive Vice President and Chief Financial Officer, with
responsibility for all enterprise-wide efficiency, financial, and
accounting functions.
- Richard B. Cribbs has been named
Senior Vice President of Strategy & Investor Relations,
Treasurer, with responsibility for our capital structure, strategy,
risk management, and investor relation functions.
Company Comments
Chairman and Chief Executive Officer, David R.
Parker, commented: “We are blessed with a deep and talented
management team that is highly committed to our strategic vision.
The appointments announced today will accelerate our progress by
aligning our team’s talents with our most imperative goals. I am
proud of the way the entire executive team pulled together to
redesign our organizational structure with the good of the entire
enterprise in mind.”
Mr. Parker continued: “Our strategic vision is
to strengthen our position in the U.S. logistics industry, de-risk
our leverage profile, and concentrate our business model on more
sustainable, higher margin services and sectors where we can add
considerable value to our partner-customers. To accomplish this
vision, we are accelerating the migration of our services toward
contract logistics (long-term dedicated contract truckload,
warehousing, transportation management, and brokerage) and
expedited truckload services, reducing the percentage of revenue
and capital allocated to the other portions of our business, and
lowering overhead costs. We are using a framework of sustained
earnings, de-leveraging, and return on capital targets to guide our
decisions. With recent dedicated truckload and warehouse services
contract wins, the closure of the Texarkana facility and an
upcoming disposition of a currently unoccupied facility, and the
downsizing of our fleet capital expenditure plans, we are off to a
fast start. The combination of Joey Hogan’s historical knowledge of
Covenant and John Tweed’s performance-oriented management approach
was instrumental in driving these actions and validated the basis
for the changes.
“Our realigned executive structure will
capitalize on the strengths of each member and magnify the
effectiveness of the entire team. John Tweed’s expertise in
contract logistics is fundamental to Covenant’s future as we
continue to become more deeply embedded in our customers’ supply
chains and seek organizational efficiency. We have benefitted from
John’s presence over the past two years as the Landair operations
have been a stable and highly profitable performer. Importantly,
Joey Hogan’s financial acumen and strategic thinking will be
concentrated on improving all administrative functions, including
organizational development, our technology future, financial and
strategic planning, and furthering our culture. Paul Bunn’s ability
to integrate financial and business planning is a strong complement
to John’s skill set and managing through a changing business mix.
And Richard Cribbs will continue to deliver a strong capital
markets, risk management, and strategic presence as we de-leverage
our balance sheet and improve our return on capital. I’m confident
we have the team to drive Covenant forward and look forward to
reporting the progress on our plan as we take this opportunity to
strengthen and re-energize the enterprise during the current
economic environment and return to normal operations with a
brighter future.”
Executive Bios
John A. Tweed, 54, was
appointed Co-President and Chief Operating Officer in April 2020.
Mr. Tweed joined the Company in July 2018 following our acquisition
of Landair Holdings Inc. (“Landair”) and previously was the EVP and
COO of Landair. Prior to the Company’s acquisition of Landair (the
“Landair Acquisition”), Mr. Tweed served as the CEO of Landair
since 2000. Prior to becoming CEO of Landair, Mr. Tweed held
various positions at Landair, including vice president of sales and
special-projects manager. Mr. Tweed is an active committee and
board member for several industry associations and community
organizations.
Joey B. Hogan, 58, was
appointed Co-President and Chief Administrative Officer in April
2020. Previously, Mr. Hogan served as our President and Chief
Operating Officer from February 2016 to April 2020. From May 2007
to February 2016 Mr. Hogan served as our Senior Executive Vice
President and COO, as well as President of CTI. Mr. Hogan was
our CFO from 1997 to May 2007, our Executive Vice President from
May 2003 to May 2007, and a Senior Vice President from
December 2001 to May 2003. From joining us in August 1997 through
December 2001, Mr. Hogan served as our Treasurer. Mr. Hogan
served as a director and on the Audit Committee of Chattem, Inc., a
consumer products company, from April 2009 through March 2010, and
currently serves as an officer of the Truckload Carriers
Association.
M. Paul Bunn, 42, was appointed
our Executive Vice President, Chief Financial Officer, and
Secretary in April 2020. Mr. Bunn previously served as our
Executive Vice President since April 2019, Chief Accounting Officer
and Treasurer since January 2012, and Senior Vice President since
2017. Previously, Mr. Bunn served as our Corporate Controller from
July 2009 to January 2012. Prior to that, Mr. Bunn served as an
Audit Senior Manager for Ernst & Young, LLP, a global
professional services provider.
Richard B. Cribbs, 48, was
appointed Senior Vice President of Strategy & Investor
Relations, Treasurer in April 2020. Previously, Mr. Cribbs served
as our Executive Vice President and CFO since February 2016. From
May 2008 to February 2016 Mr. Cribbs served as our Senior Vice
President and CFO. Mr. Cribbs served as our Vice President and
Chief Accounting Officer from May 2007 to May 2008 and Corporate
Controller from May 2006 to May 2007. Prior to joining the Company,
Mr. Cribbs was the Corporate Controller, Assistant Secretary, and
Assistant Treasurer for Tandus, Inc., a commercial flooring
company, from May 2005 to May 2006. Mr. Cribbs also previously
served as CFO of Modern Industries, Inc., a tier two automotive
supply company, from December 1999 to May 2005.
Covenant Transportation Group, Inc., through its
subsidiaries, offers an integrated suite of contract logistics,
truckload transportation, other supply chain services, and revenue
equipment sales and leasing to a diverse customer base throughout
the United States. 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,” “focus,” “seek,”
“potential,” “continue,” “goal,” “target,” “objective,” “will,”
derivations thereof, 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 our strategic vision, reducing financial
leverage, improving earnings and return on capital, planned
dispositions and capital expenditures, expectations for our
realigned executive structure and contributions of each executive
team member, service offering expectations, and the economic
environment are forward-looking statements. The following factors,
among others could cause actual results to differ materially from
those in the forward-looking statements: elevated experience in the
frequency and severity of claims relating to accident, cargo,
workers' compensation, health, and other claims, increased
insurance premiums, higher self-insured retentions, reduced
insurance coverage, 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; government
regulations imposed on our captive insurance companies; 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 respond to changes in our industry or
business in light of our substantial indebtedness and lease
obligations; our ability to sustain or increase profitability in
the future; the risks related to our Factoring segment; 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; our ability to retain our key employees; the risks
associated with engaging independent contractors to provide a
portion of our capacity; seasonal factors such as harsh weather
conditions that increase operating costs; competition from
trucking, rail, and intermodal competitors; our dependence on
third-party providers, particularly in our Managed Freight segment;
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
Department of Transportation safety rating; the proper functioning
and availability of our management information and communication
systems and other information technology assets; volatility of our
stock price; our ability to maintain effective internal controls
without material weaknesses; impairment of goodwill and other
intangible assets; future outcomes of litigation; uncertainties in
the interpretation of the 2017 Tax Cuts and Jobs Act and other tax
laws; the ability to reduce, or control increases in, operating
costs; changes in the Company’s business strategy that require the
acquisition of new businesses, the disposition of businesses, and
the ability to identify acceptable acquisition candidates and
appropriate assets or businesses to be disposed, consummate
acquisitions and dispositions, and integrate acquired operations;
our ability to achieve our strategic plan; fluctuations in the
results of Transport Enterprise Leasing, which are included as
equity in income (loss) of affiliate in our financial statements;
our Chairman of the Board and Chief Executive Officer and his wife
control a large portion of our stock and have substantial control
over us, which could limit other stockholders' ability to influence
the outcome of key transactions, including changes of control;
changes in methods of determining LIBOR or replacement of LIBOR;
future share repurchases, if any; and the impact of the recent
coronavirus outbreak or other similar outbreaks. 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, Senior Vice President of Strategy & Investor Relations,
TreasurerRCribbs@covenanttransport.com
For copies of Company information
contact:Theresa Ives, Executive Administrative
AssistantTIves@covenanttransport.com
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