Covenant Transport, Chattanooga, Tenn., Inc. announced its financial and operating results for the third quarter ended Sept. 30, 2002.
For the quarter, freight revenue, before fuel and accessorial surcharges, decreased 2% to $135.3 million from $138.1 million in the third quarter of 2001. Net income increased 327% to $3.6 million from $845,000 in the 2001 quarter. Basic and diluted earnings per share were $.25 compared to $.06 for the third quarter of 2001.
For the nine months, freight revenue, before fuel and accessorial surcharges, decreased 2% to $403.1 million from $411.1 million during the same period in 2001. Net earnings, before an extraordinary item and an impairment charge that were recognized in the first quarter of 2002, were $7.8 million, or $.54 per diluted share, versus $1.6 million, or $.11 per share, in 2001. During the first quarter of 2002, the company recognized a $.14 per diluted share, or $2.0 million after-tax, charge to reflect an impairment in tractor values and a $.06 per diluted share, or $890,000 after-tax, extraordinary item to reflect the early extinguishment of debt in conjunction with prepayment of the company's 7.39% private placement notes. Giving effect to the extraordinary item and the impairment charge, net income for the nine months of 2002 was $4.9 million, or $.34 per diluted share.
Chairman, President, and Chief Executive Officer David R. Parker said, "Third quarter freight demand was like a rollercoaster, with a very strong July being followed by a weak August, a modest rebound in mid-September, and the shut down at the West Coast ports to end the quarter. Despite the fluctuations, Covenant increased revenue per loaded mile one percent and miles per tractor one half percent versus the same quarter a year ago. Revenue per tractor per week improved almost 2% to $2,819, the third straight quarter of year-over-year improvement, and average non-revenue miles decreased for the fifth straight quarter.?
Parker also said, "In addition to the top-line gains, I am very pleased with our cost control efforts and the strength of our balance sheet. For the quarter, we improved our after-tax cost per mile by approximately two cents per mile versus the same quarter a year ago. We also paid down approximately $18 million of funded debt during the quarter, resulting in a ratio of debt-to-total capitalization of less than 30% at Sept. 30, 2002."