SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
------------------------------------
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 0-24960
Covenant Transport, Inc.
(Exact name of registrant as specified in its charter)
Nevada 88-0320154
(State or other jurisdiction of (I.R.S. employer identification number)
incorporation or organization)
1320 East 23rd Street
Chattanooga, TN 37404
(423) 629-0393
(Address, including zip code, and telephone number,
including area code, of registrant's
principal executive office)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to the filing
requirements for at least the past 90 days.
YES X NO
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date (October 31, 1996)
Class A Common Stock, $.01 par value: 11,000,000 shares
Class B Common Stock, $.01 par value: 2,350,000 shares
Exhibit Index is on Page 13.
<PAGE>
PART I
FINANCIAL INFORMATION
PAGE
NUMBER
Item 1. Financial statements
Condensed consolidated balance sheets as of December 31, 1995
and September 30, 1996 (unaudited) 3
Condensed consolidated statements of operations for the three and
nine months ended September 30, 1995 and 1996 (unaudited) 4
Condensed consolidated statements of stockholders' equity for the
nine months ended September 30, 1995 and 1996 (unaudited) 5
Condensed consolidated statements of cash flows for the nine
months ended September 30, 1995 and 1996 (unaudited) 6
Notes to condensed consolidated financial statements
(unaudited) 7
Item 2. Management's discussion and analysis of financial condition
and results of operations 8 - 12
PART II
OTHER INFORMATION
PAGE
NUMBER
Item 1. Legal proceedings 13
Items 2.,
3., 4.,
and 5. Not applicable
Item 6. Exhibits and reports on Form 8-K 13
2
<PAGE>
COVENANT TRANSPORT, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
December 31, September 30,
ASSETS 1995 1996
- ------ ---------------------------------------
(unaudited)
Current assets:
Cash and cash equivalents ................... $ 461,288 $ 3,221,884
Accounts receivable, net of allowance of
$385,000 in 1995, and $500,000 in 1996 .... 29,737,998 32,927,098
Drivers advances and other receivables ...... 6,984,564 1,631,262
Tire and parts inventory .................... 801,460 677,655
Prepaid expenses ............................ 2,692,158 4,310,907
Deferred income taxes ....................... 176,000 212,000
------------
Total current assets ........................ 40,853,468 42,980,807
Property and equipment, at cost ............. 149,428,386 184,063,063
Less accumulated depreciation and amortization 22,020,359 36,893,375
------------
Net property and equipment .................. 127,408,027 147,169,689
Other ....................................... 1,119,484 1,146,764
------------
Total assets ................................ $169,380,979 $191,297,260
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt ........ $ 50,000 $ 50,000
Accounts payable ............................ 3,512,918 3,584,834
Accrued expenses ............................ 3,152,199 5,730,594
------------
Total current liabilities ................... 6,715,117 9,365,428
Long-term debt, less current maturities ..... 80,150,000 90,110,000
Deferred income taxes ....................... 9,764,000 12,346,000
------------
Total liabilities ........................... 96,629,117 111,821,428
----------- ------------
Stockholders' equity:
Class A common stock, $.01 par value;
11,000,000 shares issued and outstanding ..... 110,000 110,000
Class B common stock, $.01 par value;
2,350,000 shares issued and outstanding ...... 23,500 23,500
Additional paid-in-capital ................... 50,469,596 50,469,596
Retained earnings ............................ 22,148,766 28,872,736
----------- ------------
Total stockholders' equity .................. 72,751,862 79,475,832
----------- ------------
Total liabilities and stockholders' equity $169,380,979 $191,297,260
=========== ============
The accompanying notes are an integral part of these
condensed consolidated financial statements.
3
<PAGE>
COVENANT TRANSPORT, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three months ended Nine months ended
September 30, September 30,
1995 1996 1995 1996
--------------------------------------------------------------
Revenue ............. $47,130,955 $63,022,788 $130,175,268 $172,106,146
Operating expenses:
Salaries, wages, and related
expenses ........... 21,751,141 28,924,057 60,719,229 79,483,306
Fuel, oil, and road
expenses ........... 9,953,890 13,958,275 27,103,724 39,343,795
Revenue equipment
rentals and purchased
transportation ..... 311,750 79,298 861,370 400,477
Repairs ............. 991,599 1,254,147 2,417,100 3,268,155
Operating taxes and
licenses ........... 1,138,550 1,698,303 3,401,030 4,777,161
Insurance ........... 1,292,269 1,619,407 3,620,720 4,485,683
General supplies and
expenses ........... 2,590,789 3,300,458 7,293,243 9,393,691
Depreciation and
amortization, including
gain on disposition of
equipment .......... 3,952,925 5,420,782 11,305,856 15,971,268
----------- ----------- ----------- ------------
Total operating expenses 41,982,913 56,254,727 116,722,272 157,123,536
----------- ----------- ----------- ------------
Operating income ..... 5,148,042 6,768,061 13,452,996 14,982,610
Interest expense ..... 1,084,479 1,582,489 2,841,683 4,442,640
----------- ----------- ----------- ------------
Income before income
taxes ............... 4,063,563 5,185,572 10,611,313 10,319,970
Income tax expense ... 1,460,000 1,868,000 3,820,000 3,816,000
----------- ----------- ------------ ------------
Net income ........... $ 2,603,563 $ 3,317,572 $ 6,791,313 $ 6,723,970
=========== =========== ============ ============
Earnings per share
Net income ........... $ 0.20 $ 0.25 $ 0.51 $ 0.50
=========== =========== ============ ============
The accompanying notes are an integral part of these
condensed consolidated financial statements.
4
<PAGE>
COVENANT TRANSPORT, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the nine months ended September 30, 1995 and 1996
(unaudited)
Series I Class A Class B Additional Total
Preferred Common Common Paid-In Retained Stockholders'
Stock Stock Stock Capital Earnings Equity
Balances
at
December
31,
1994 $ - $ 110,000 $ 23,500 $50,469,596 $12,865,967 $63,469,063
Net
income
(unaudited) - - - - 6,791,313 6,791,313
-----------------------------------------------------------------------
Balances
at
September
30,
1995
(unaudited) - $ 110,000 $ 23,500 $50,469,596 $19,657,280 $70,260,376
=======================================================================
Balances
at
December
31,
1995 $ - $ 110,000 $ 23,500 $50,469,596 $22,148,766 $72,751,862
Net
income
(unaudited) - - - - 6,723,970 6,723,970
-----------------------------------------------------------------------
Balances
at
September
30,
1996
(unaudited) - $ 110,000 $ 23,500 $50,469,596 $28,872,736 $79,475,832
========================================================================
The accompanying notes are an integral part of these
condensed consolidated financial statements.
5
<PAGE>
COVENANT TRANSPORT, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 1995 and 1996
(unaudited)
1995 1996
-----------------------------
Cash flows from operating activities:
Net income ................................ $ 6,791,313 $ 6,723,970
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for losses on receivables ... 135,000 252,863
Depreciation and amortization ......... 11,979,282 16,584,062
Deferred income tax expense ........... 3,368,000 2,546,000
Gain on disposition of property and equipment (673,426) (612,794)
Changes in operating assets and liabilities:
Receivables, advances and other assets (9,690,569) 1,872,067
Prepaid expenses .................... (1,179,256) (1,618,749)
Tire and parts inventory ............ (126,426) 123,805
Accounts payable and accrued expenses (542,769) 2,650,311
---------- ------------
Net cash flows provided by operating
activities ........................ 10,061,149 28,521,535
---------- ------------
Cash flows from investing activities:
Acquisition of property and equipment ..... (48,223,550) (40,088,279)
Covenant not to compete ................... (100,000) --
Proceeds from disposition of property
and equipment ........................... 6,051,825 4,499,792
---------- ------------
Net cash flows used in investing
activities ........................ (42,271,725) (35,588,487)
---------- ------------
Cash flows from financing activities:
Proceeds from issuance of long-term debt .. 63,000,000 10,000,000
Repayments of long-term debt .............. (35,266,477) (40,000)
Deferred debt issuance costs .............. (205,815) (132,452)
----------- ------------
Net cash flows provided by financing
activities ....................... 27,527,708 9,827,548
----------- ------------
Net change in cash and cash equivalents ...... (4,682,868) 2,760,596
Cash and cash equivalents at beginning of period 4,877,361 461,288
---------- ------------
Cash and cash equivalents at end of period ... $ 194,493 $ 3,221,884
============ ============
The accompanying notes are an integral part of these
condensed consolidated financial statements.
6
<PAGE>
COVENANT TRANSPORT, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1. Basis of Presentation
The condensed consolidated financial statements include the
accounts of Covenant Transport, Inc., a Nevada holding company, and
its wholly-owned subsidiary (the Company). All significant
intercompany balances and transactions have been eliminated in
consolidation.
The financial statements have been prepared, without audit, in
accordance with generally accepted accounting principles, pursuant
to the rules and regulations of the Securities and Exchange
Commission. In the opinion of management, the accompanying
financial statements include all adjustments which are necessary
for a fair presentation of the results for the interim periods
presented, such adjustments being of a normal recurring nature.
Certain information and footnote disclosures have been condensed or
omitted pursuant to such rules and regulations. The December 31,
1995 Condensed Consolidated Balance Sheet was derived from the
audited balance sheet of the Company for the year then ended. It is
suggested that these condensed consolidated financial statements
and notes thereto be read in conjunction with the consolidated
financial statements and notes thereto included in the Company's
Form 10-K for the year ended December 31, 1995. Results of
operations in interim periods are not necessarily indicative of
results to be expected for a full year.
------------------------------------
FORWARD LOOKING STATEMENTS
This document and statements by the Company in press releases,
public filings, and stockholder reports, as well as oral public
statements by Company representatives, may contain certain forward
looking information that is subject to certain risks and
uncertainties that could cause actual results to differ materially
from those projected. Without limitation, these risks and
uncertainties include economic recessions or downturns in
customers' business cycles, excessive increases in capacity within
the truckload markets, decreased demand for transportation services
offered by the Company, rapid inflation and fuel price increases,
increases in interest rates, and the availability and compensation
of qualified drivers. Readers should review and consider the
various disclosures made by the Company in its press releases,
stockholder reports, and public filings.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following table sets forth the percentage relationship of certain items to
revenue for the periods indicated:
Three months ended Nine months ended
September 30, September 30,
1995 1996 1995 1996
----- ----- ----- -----
Revenue ...................... 100.0% 100.0% 100.0% 100.0%
Operating expenses:
Salaries, wages, and related expenses 46.2 45.9 46.6 46.2
Fuel, oil, and road expenses . 21.1 22.2 20.8 22.8
Revenue equipment rentals and
purchased transportation ..... 0.7 0.1 0.7 0.2
Repairs ...................... 2.1 2.0 1.9 1.9
Operating taxes and licenses . 2.4 2.7 2.6 2.8
Insurance .................... 2.7 2.6 2.8 2.6
General supplies and expenses 5.5 5.2 5.6 5.5
Depreciation and amortization 8.4 8.6 8.7 9.3
----- ----- ----- -----
Total operating expenses ..... 89.1 89.3 89.7 91.3
----- ----- ----- -----
Operating income ............. 10.9 10.7 10.3 8.7
Interest expense ............. 2.3 2.5 2.2 2.6
----- ----- ----- -----
Income before income taxes ... 8.6 8.2 8.1 6.1
Provision for income taxes ... 3.1 2.9 2.9 2.2
----- ----- ----- -----
Net income ................... 5.5% 5.3% 5.2% 3.9%
===== ===== ===== =====
COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 1996 TO THREE
MONTHS ENDED SEPTEMBER 30, 1995
Revenue increased 33.7%, to $63.0 million in the 1996 period from $47.1 million
in the 1995 period. The revenue increase was primarily generated by a 30.3%
increase in weighted average tractors, to 1,560 during the 1996 quarter from
1,197 during the 1995 quarter, as the Company expanded to meet demand from new
customers and higher volume from existing customers. During the third quarter of
1996, the Company instituted a combination of rate increases and fuel surcharges
in response to escalating fuel prices. The resulting revenue increase will
benefit the Company in future periods but is not expected to recapture the full
effect of fuel price increases over 1995 levels. The 1996 revenue included
approximately $105,000 attributable to a fuel surcharge. Average revenue per
loaded mile remained unchanged at $1.09 in the 1996 period and the 1995 period.
Average miles per tractor increased to 38,989 in the 1996 period from 38,186 in
the 1995 period, as shipping volumes increased. Deadhead increased to 5.1% of
total miles in the 1996 period from 5.0% in the 1995 period.
Salaries, wages, and related expenses decreased to 45.9% of revenue in the 1996
period from 46.2% in the 1995 period. Driver wages as a percentage of revenue
increased to 33.6% in the 1996 period from 32.6% in the 1995 period, as a result
of an increase in the per mile rate paid to drivers. Employee leasing charges,
payroll taxes, and worker's compensation decreased to 5.2% of revenue in the
1996 period from 6.4% in the 1995 period because of lower employee leasing costs
through August 1, 1996, and thereafter as a result of terminating the leasing
arrangement, resulting in an overall payroll savings.
Fuel, oil and road expenses increased to 22.2% of revenue in the 1996 period
from 21.1% in the 1995 period, as a result of increased per gallon fuel costs in
the 1996 period. Fuel surcharges
8
<PAGE>
received during the 1996 period offset approximately $105,000 of this increase
and are expected to recover a portion of future price increases in fuel periods.
Revenue equipment rentals and purchased transportation decreased to 0.1% of
revenue in the 1996 period from 0.7% in the 1995 period. During the 1996 period,
the Company had eliminated all long-term operating leases for revenue equipment.
Insurance, consisting primarily of premiums for liability, physical damage, and
cargo damage insurance, remained substantially the same at 2.6% of revenue in
the 1996 period versus 2.7% in the 1995 period.
General supplies and expenses, consisting primarily of driver recruiting
expenses, communications, and agent commissions, decreased to 5.2% of revenue in
the 1996 period from 5.5% in the 1995 period because of improved revenue per
tractor. These savings were partially offset by higher costs in the driver
orientation program as one day was added to driver orientation.
Depreciation and amortization, consisting primarily of depreciation of revenue
equipment, increased to 8.6% of revenue in the 1996 period from 8.4% in the 1995
period as a result of (i) all tractors being equipped with satellite
communication units for the entire 1996 period while in the 1995 period not all
tractors had such units, and (ii) the elimination of all revenue equipment
operating leases.
As a result of the foregoing, the Company's operating ratio was 89.3% in the
1996 period versus 89.1% in the 1995 period.
Interest expense increased to 2.5% of revenue in the 1996 period from 2.3% in
the 1995 period, as higher average debt balances ($89.2 million in the 1996
period compared with $64.1 million in the 1995 period) were combined with higher
average interest rates (7.1% in the 1996 period compared with 6.8% in the 1995
period).
The Company's effective tax rate was 36.0% in the 1996 period and the 1995
period.
As a result of the factors described above, net income increased to $3.3 million
in the 1996 period (5.3% of revenue) from $2.6 million in the 1995 period (5.5%
of revenue).
9
<PAGE>
COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 1996 TO NINE MONTHS
ENDED SEPTEMBER 30, 1995
Revenue increased 32.2%, to $172.1 million in the 1996 period from $130.2
million in the 1995 period. The revenue increase was primarily generated by a
31.0% increase in weighted average tractors, to 1,481 during the 1996 period
from 1,131 in the 1995 period, as the Company expanded to meet demand from new
customers and higher volume from existing customers. During the third quarter of
1996, the Company instituted a combination of rate increases and fuel surcharges
in response to escalating fuel prices. The resulting revenue increase will
benefit the Company in future periods but is not expected to recapture the full
effect of fuel price increases over 1995 levels. The 1996 revenue number
included approximately $880,000 attributable to a fuel surcharge instituted in
the second and third quarters of 1996. Average revenue per loaded mile was
unchanged at $1.09 in the 1996 period ($1.08 net of the surcharge) and the 1995
period. Average miles per tractor increased to 112,732 in the 1996 period from
111,818 in the 1995 period, as shipping volumes increased. Deadhead decreased to
5.3% of total miles in the 1996 period from 5.7% in the 1995 period.
Salaries, wages, and related expenses decreased to 46.2% of revenue in the 1996
period from 46.6% in the 1995 period. Driver wages as a percentage of revenue
increased to 33.5% in the 1996 period from 32.9% in the 1995 period because of
increased layover and other non-productive wages related to severe weather in
the first quarter 1996 and an increase in the per mile rate paid to drivers
implemented in August 1996. The increase in driver pay was more than offset by
improved equipment utilization and deadhead, as well as a reduction in employee
leasing company charges to 5.8% of revenue in the 1996 period from 6.9% in the
1995 period, because of lower employee leasing company charges through August 1,
1996, and thereafter as a result of terminating the leasing arrangement,
resulting in overall payroll savings.
Fuel, oil, and road expenses increased to 22.8% of revenue in the 1996 period
from 20.8% in the 1995 period, as a result of increased per gallon fuel costs in
the 1996 period. Fuel surcharges implemented during the second and third
quarters 1996 recovered a portion of the fuel price increase.
Revenue equipment rentals and purchased transportation decreased to 0.2% of
revenue in the 1996 period from 0.7% in the 1995 period. During the 1996 period,
the Company continued to reduce its revenue equipment under long-term operating
leases and had eliminated all long-term leases of revenue equipment at September
30, 1996.
Insurance, consisting primarily of premiums for liability, physical damage, and
cargo damage insurance, remained substantially the same at 2.6% of revenue in
the 1996 period versus 2.8% in the 1995 period.
General supplies and expenses, consisting primarily of driver recruiting
expenses, communications, and agent commissions, decreased to 5.5% of revenue in
the 1996 period from 5.6% in the 1995 period. Cost saving measures implemented
during the 1996 period were somewhat offset by the effects of the severe weather
during the first quarter 1996 and adding one day to driver orientation.
Depreciation and amortization, consisting primarily of depreciation of revenue
equipment, increased to 9.3% of revenue in the 1996 period from 8.7% in the 1995
period as a result of poor equipment utilization during the first quarter 1996,
all tractors being equipped with satellite communication
10
<PAGE>
units for the entire 1996 period while in the 1995 period not all tractors had
such units, and the elimination of all operating leases of revenue equipment
during the 1996 period.
As a result of the foregoing, the Company's operating ratio was 91.3% in the
1996 period versus 89.7% in the 1995 period.
Interest expense increased to 2.6% of revenue in the 1996 period from 2.2% in
the 1995 period, as higher average debt balances ($84.3 million in the 1996
period compared with $53.5 million in the 1995 period) were combined with lower
average interest rates (7.0% in the 1996 period compared with 7.1% in the 1995
period).
The Company's effective tax rate was 36.2% in the 1996 period and 36.0% in the
1995 period.
As a result of the factors described above, net income decreased to $6.7 million
in the 1996 period (3.9% of revenue) from $6.8 million in the 1995 period (5.2%
of revenue).
LIQUIDITY AND CAPITAL RESOURCES
The growth of the Company's business has required significant investments in new
revenue equipment. The Company's primary sources of liquidity are funds provided
by operations and borrowings under agreements with financial institutions.
The Company's primary sources of cash flow from operations are net income
increased by depreciation and deferred income taxes. The Company's principal
uses of cash flow from operations are to acquire new revenue equipment, make
payments on debt, and finance receivables and advances associated with growth in
the business. Net cash provided by operating activities was $28.5 million in the
nine months ended September 30, 1996, compared with $10.1 million for the same
period in 1995. Collection of a $5 million receivable from the December 1995
sale of used equipment and improved cash flow procedures relating to accounts
payable and accounts receivable contributed to the 1996 improvement in cash
flow.
Net cash used in investing activities was $35.6 million in the 1996 period
versus $42.3 million in the 1995 period. These amounts were used primarily to
acquire additional revenue equipment as the Company expanded its operations. The
Company expects capital expenditures (primarily for revenue equipment), net of
trade-ins, to be approximately $45.0 million in 1996.
Net cash provided by financing activities was $9.8 million in 1996 compared with
$27.5 million in 1995. The cash provided by financing activities related
primarily to borrowings under a credit agreement in both periods.
At September 30, 1996, the Company had outstanding debt of $90.2 million,
substantially all of which related to draws under the $70 million credit
agreement and $25 million in senior notes due October 2005. Interest rates on
this debt ranged from 6.1% to 7.5% at September 30, 1996.
The Company expects to relocate its headquarters during December 1996 in the
Chattanooga area. The headquarters lease agreements contemplate a total land
acquisition and construction budget of up to $15 million under a "build-to-suit"
operating lease. Therefore, the Company will not experience any cash flow impact
during the construction phase. The relocation is expected to result in a
$750,000 annual after-tax increase in the Company's overall costs of its
headquarters given
11
<PAGE>
current interest rates. The increase could be reduced upon successful sale or
subleasing of the Company's current facility in Chattanooga.
The credit agreement, senior notes, and lease agreements subject the Company to
certain restrictions and covenants relating to, among other things, dividends,
tangible net worth, cash flow, acquisitions and dispositions, and total
indebtedness. All of these agreements are cross-defaulted.
12
<PAGE>
PART II OTHER INFORMATION
Item 1. Legal Proceedings
No reportable events or material changes occurred during the
quarter for which this report is filed.
Items 2, 3,
4 and 5. Not applicable
Item 6. Exhibits and reports on Form 8-K.
(a) Exhibits
Exhibit
Number Description
3.1* Restated Articles of Incorporation
3.2* Amended Bylaws dated September 27, 1994
4.1* Restated Articles of Incorporation
4.2* Amended Bylaws dated September 27, 1994
10.3** Credit Agreement dated January 17, 1995, among Covenant Transport,
Inc., a Tennessee corporation, ABN-AMRO Bank N.V., as agent, and
certain other banks.
10.4* Lease dated January 1, 1990, between David R. and Jacqueline F.
Parker and Covenant Transport, Inc, a
Tennessee corporation, with respect to the Chattanooga, Tennessee
headquarters.
10.5* Lease dated June 1, 1994, between David R. and Jacqueline F. Parker
and Covenant Transport, Inc, a
Tennessee corporation, with respect to terminal facility in Greer,
South Carolina.
10.8* Incentive Stock Plan.
10.9* 401(k) Plan.
10.12**** Note Purchase Agreement dated October 15, 1995, among Covenant
Transport, Inc, a Tennessee corporation and CIG & Co.
10.13**** First Amendment to Credit Agreement and Waiver dated October 15,
1995.
10.14***** Participation Agreement dated March 29, 1996, among Covenant
Transport, Inc, a Tennessee corporation, Lease Plan USA, Inc., and
ABN-AMRO Bank, N.V., Atlanta Agency.
10.15***** Second Amendment to Credit Agreement and Waiver dated April 12,
1996.
10.16***** First Amendment to Note Purchase Agreement and Waiver dated April
1, 1996.
11 Statement re: Computation of Per Share Earnings (page 14 herein).
- ---------------------------
o Filed as an exhibit to the registrant's Registration Statement on
Form S-1, Registration No. 33-82978,
effective October 28, 1994, and incorporated herein by reference.
** Filed as an exhibit to the registrant's Form 10-Q for the quarter
ended March 31, 1995, and incorporated herein by reference.
*** Filed as an exhibit to the registrant's Form 10-Q for the quarter
ended June 30, 1995, and incorporated herein by reference.
**** Filed as an exhibit to the registrant's Form 10-K for the year
ended December 31, 1995, and incorporated herein by reference.
***** Filed as an exhibit to the registrant's Form 10-Q for the quarter
ended March 31, 1996, and incorporated herein by reference.
(b) No reports on Form 8 - K have been filed during the quarter
for which this report is filed.
13
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
COVENANT TRANSPORT, INC.
Date: October 31, 1996 /s/ Bradley A. Moline
------------------------------ ---------------------
Treasurer and
Chief Financial Officer
14
<PAGE>
EXHIBIT 11
COVENANT TRANSPORT, INC. AND SUBSIDIARY
SCHEDULE OF COMPUTATION OF NET EARNINGS PER SHARE
(In thousands, except per share amounts)
(Unaudited)
Three months ended Nine months ended
September 30, September 30,
1995 1996 1995 1996
---------------------------------------------
Net earnings $ 2,604 $ 3,178 $ 6,791 $ 6,584
===============================================
Weighted average shares:
Common shares outstanding 13,350 13,350 13,350 13,350
Common equivalent shares issuable
upon exercise of employee
stock options (1) - 56 - -
Total weighted average shares 13,350 13,406 13,350 13,350
===============================================
Primary net earnings per common
and equivalent share $ 0.20 $ 0.25 $ 0.51 $ 0.50
===============================================
Notes:
(1) Amount calculated using the treasury stock method and fair market values.
15
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<PERIOD-END> SEP-30-1996
<CASH> 3221884
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<RECEIVABLES> 34558360
<ALLOWANCES> 500000
<INVENTORY> 677655
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<PP&E> 184063063
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<BONDS> 90110000
0
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<COMMON> 133500
<OTHER-SE> 79342332
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<TOTAL-REVENUES> 172106146
<CGS> 0
<TOTAL-COSTS> 157123536
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