For the quarter, total revenue increased 20.9%, to $212.5 million from $175.8 million in the same quarter of 2007. Freight revenue, which excludes fuel surcharges, increased 9.7%, to $162.9 million in the 2008 quarter from $148.5 million in the 2007 quarter. However, the company reported a net loss of $3.4 million in the third quarter of 2008 compared to a net loss of $3.6 million for the third quarter of 2007.
"The third quarter was a time of great promise and great frustration for Covenant Transportation Group," said David R. Parker, chairman, president and CEO. "From an operating perspective we improved several key metrics during the quarter, and we continued to bring down our truckload operating costs as a percentage of truckload revenue in most areas. The quarter was frustrating from a bottom line perspective, however, because of two specific items" -- a small number of severe accidents and a write-down related to a credit facility.
Average freight revenue per tractor per week improved 6.5% compared with the third quarter of 2007. This improvement resulted from a 4.9% increase in average miles per tractor and a 1.5% increase in average freight revenue per total mile. Tractors operated by driver teams increased approximately 25% compared with the third quarter of 2007.
"Despite these improvements during the third quarter, we reiterate our comment from September 29 that the freight environment remains weak and, if anything, seems to be deteriorating on a seasonally adjusted basis," Parker said.
Revenue from Covenant Transport Solutions, the company's non-asset-based brokerage business, increased 264%, to $16.7 million for the quarter, and Covenant Transport Solutions generated $2.9 million of net revenues, after purchased transportation expenses, compared with $950,000 of net revenues for the third quarter of 2007.
Fuel expense, net of fuel surcharge recovery, was approximately $25 million in the 2008 and 2007 quarters.
DOT reportable accidents dropped to the lowest level per million miles since 2000. However, Parker explained, a small number of severe accidents resulted in a negative quarter-over-quarter impact of approximately $3.6 million pretax, or $.16 per share.
As a result of closing its amended and restated revolving credit facility, the company recorded a non-cash write-down of $726,000, or $.03 per share, relating to partial extinguishment of the former credit facility.