Covenant Transportation Group Inc. announced that for the second quarter, total revenue increased 4.8 percent to $177.4 million from $169.4 million in the same quarter of 2006. Freight revenue, which excludes fuel surcharges,
increased 8.4 percent to $151.0 million in the 2007 quarter from $139.3 million in the 2006 quarter.
The company measures freight revenue because management believes that fuel surcharges tend to be a volatile source of revenue and the removal of such surcharges affords a more consistent basis for comparing results of operations from period to period. The company experienced a net loss of $11.3 million in the 2007 quarter compared with a net loss of $398,000 for the second quarter of 2006. A majority of the loss in the 2007 quarter is attributable to items that the company believes to be of an infrequent nature.
For the six months ended June 30, total revenue increased 7.2 percent, to $343.8 million in 2007 from $320.9 million during 2006. Freight revenue increased 9.6 percent to $294.6 million in 2007 from $268.8 million in 2006. The company generated a net loss of $13.3 million in 2007, compared with a net loss of $1.3 million for 2006.
Chairman, President, and Chief Executive Officer David R. Parker said, "I want to express my sincere regret and disappointment with our financial results for the second quarter of 2007. Although a majority of the loss is attributable to three items of an infrequent nature, and we knew our ongoing business realignment would involve fluctuations in results, the results are nonetheless disappointing. There were a few operational improvements during the quarter, particularly in the asset productivity of the regional service offering, but these improvements were overshadowed by the overall numbers.
"We are committed to a full evaluation of the company's strategy and are leaving no stone unturned in our effort to improve the company's results. Fortunately, we have a strong balance sheet, many fine customers, a loyal employee base, and stable relationships with our lenders that provide a solid foundation for the company as we continue the turnaround process."