<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 30, 1998.
REGISTRATION NO. 333-49755
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------------------
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
COVENANT TRANSPORT, INC.
(Exact name of registrant as specified in charter)
<TABLE>
<S> <C>
NEVADA 88-0320154
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
--------------------------
400 BIRMINGHAM HIGHWAY
CHATTANOOGA, TENNESSEE 37419
(423) 821-1212
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------------
DAVID R. PARKER
CHAIRMAN, PRESIDENT, AND CHIEF EXECUTIVE OFFICER
400 BIRMINGHAM HIGHWAY
CHATTANOOGA, TENNESSEE 37419
(423) 821-1212
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
------------------------------
COPIES TO:
<TABLE>
<S> <C>
MARK A. SCUDDER, ESQ. STEPHEN A. RIDDICK, ESQ.
SCUDDER LAW FIRM, P.C. PIPER & MARBURY L.L.P.
411 South 13th Street, Suite 200 36 South Charles Street
Lincoln, Nebraska 68508 Baltimore, Maryland 21201
(402) 435-3223 (410) 539-2530
</TABLE>
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: as soon as
practicable after the effective date of the registration statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
--------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED PRICE REGISTRATION FEE
<S> <C> <C>
Class A Common Stock, $.01 par value $100,648,000 $29,692(1)
</TABLE>
(1) Previously paid.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
2,500,000 SHARES
[LOGO] C O V E N A N T T R A N S P O R T
CLASS A COMMON STOCK
Of the 2,500,000 shares of Class A Common Stock of Covenant Transport, Inc.
offered hereby, 1,540,000 shares are being sold by the Company and 960,000
shares are being sold by certain stockholders of the Company (the "Selling
Stockholders"). See "Selling Stockholders." The Company will not receive any of
the proceeds from the sale of the shares of Class A Common Stock by the Selling
Stockholders. The Company's Class A Common Stock is traded on the Nasdaq
National Market under the symbol "CVTI." On April 29, 1998, the last reported
sale price of the Class A Common Stock was $19.50 per share.
The Company's authorized capital stock includes Class A Common Stock and
Class B Common Stock. The Class A Common Stock is substantially identical to the
Class B Common Stock, except with respect to voting rights. The Class A Common
Stock is entitled to one vote per share and the Class B Common Stock is entitled
to two votes per share so long as it is beneficially owned by David R. Parker,
Jacqueline F. Parker, or their children, Jonathan Parker and Rachel Parker. The
Class A and Class B Common Stock are together referred to as the "Common Stock."
--------------
SEE "RISK FACTORS" BEGINNING ON PAGE 8 OF THIS PROSPECTUS FOR CERTAIN
INFORMATION THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE CLASS A
COMMON STOCK OFFERED HEREBY.
-------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PRICE UNDERWRITING PROCEEDS PROCEEDS
TO DISCOUNTS AND TO TO
PUBLIC COMMISSIONS COMPANY(1) SELLING STOCKHOLDERS
<S> <C> <C> <C> <C>
Per Share..................... $19.00 $.95 $18.05 $18.05
Total(2)...................... $47,500,000 $2,375,000 $27,797,000 $17,328,000
</TABLE>
(1) Before deducting expenses of the offering estimated at $200,000 payable by
the Company.
(2) The Company has granted the Underwriters a 30-day option to purchase up to
375,000 additional shares of Class A Common Stock solely to cover
over-allotments, if any. To the extent that the option is exercised, the
Underwriters will offer the additional shares at the Price to Public shown
above. If the option is exercised in full, the total Price to Public,
Underwriting Discounts and Commissions, and Proceeds to Company will be
$54,625,000, $2,731,250, and $34,565,750, respectively. See "Underwriting."
--------------
The shares of Class A Common Stock are offered by the several Underwriters,
subject to prior sale, when, as, and if delivered to and accepted by them, and
subject to the right of the Underwriters to reject any order in whole or in
part. It is expected that delivery of the shares will be made at the offices of
BT Alex. Brown Incorporated, Baltimore, Maryland, on or about May 5, 1998.
BT ALEX. BROWN
SALOMON SMITH BARNEY
STEPHENS INC.
ABN AMRO INCORPORATED
THE DATE OF THIS PROSPECTUS IS APRIL 30, 1998
<PAGE>
AVAILABLE INFORMATION
The Company has filed a Registration Statement on Form S-3 under the
Securities Act of 1933, as amended (the "Securities Act"), with the Securities
and Exchange Commission (the "Commission") with respect to the shares offered by
this Prospectus. This Prospectus constitutes a part of the Registration
Statement and does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto. Statements
contained herein concerning the provisions of any documents are not necessarily
complete and, in each instance, reference is made to the copy of such documents
filed as an exhibit to the Registration Statement, and each such statement shall
be deemed qualified in its entirety by such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements, and other information with the
Commission. This Prospectus does not contain all the information set forth in
the Registration Statement and exhibits thereto which the Company has filed with
the Commission under the Securities Act and information incorporated by
reference herein. Copies of such information and the reports, proxy statements,
and other information filed by the Company under the Exchange Act may be
examined without charge at the Public Reference Section of the Commission
located at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, DC
20549, at the regional offices of the Commission located at 7 World Trade
Center, Suite 1300, New York, New York 10048, and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511, and at the Web site
maintained by the Commission at http://www.sec.gov. Copies of such material can
also be obtained from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington D.C. 20549 at rates prescribed by the Commission
or from the Commission's web site. The Class A Common Stock of the Company is
quoted on the Nasdaq National Market. Reports, proxy statements, and other
information concerning the Company can be inspected at the offices of The Nasdaq
Stock Market, 1735 K Street, Washington D.C. 20006.
INFORMATION INCORPORATED BY REFERENCE
The following documents filed by the Company with the Commission are hereby
incorporated herein by reference: the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1997, the Company's Quarterly Report on Form
10-Q for the quarter ended March 31, 1998, and the description of the Company's
Class A Common Stock contained in the Company's Form 8-A filed under the
Exchange Act. All other documents filed by the Company pursuant to Sections
13(a), 13(c), 14, or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering made hereby shall be
deemed to be incorporated by reference in, and made a part of, this Prospectus
from the date of filing of such documents. See "Available Information." Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein, or in any other
subsequently filed document which also is incorporated or deemed to be
incorporated by reference herein, modifies or supersedes such statement. The
Company will furnish without charge upon written or oral request to each person
to whom this Prospectus is delivered a copy of any or all of the documents
incorporated by reference herein other than exhibits to such documents not
specifically incorporated by reference thereto. Such request should be directed
to Covenant Transport, Inc., 400 Birmingham Highway, Chattanooga, Tennessee
37419, telephone no. (423) 821-1212, Attn: Joey B. Hogan, Chief Financial
Officer.
IN CONNECTION WITH THIS OFFERING, CERTAIN PERSONS PARTICIPATING IN THIS
OFFERING MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE CLASS A COMMON
STOCK ON THE NASDAQ NATIONAL MARKET IN ACCORDANCE WITH RULE 103 UNDER REGULATION
M. SEE "UNDERWRITING."
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE CLASS A COMMON
STOCK. SPECIFICALLY, THE UNDERWRITERS MAY OVER-ALLOT IN CONNECTION WITH THE
CLASS A COMMON STOCK OFFERING AND MAY BID FOR AND PURCHASE SHARES OF THE CLASS A
COMMON STOCK IN THE OPEN MARKET. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE
"UNDERWRITING."
2
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION APPEARING ELSEWHERE IN THIS PROSPECTUS AND INCORPORATED BY REFERENCE
HEREIN. UNLESS OTHERWISE INDICATED, (I) ALL INFORMATION IN THIS PROSPECTUS
ASSUMES THAT THE UNDERWRITERS' OVER-ALLOTMENT OPTION IS NOT EXERCISED AND (II)
REFERENCES TO "COVENANT" OR THE "COMPANY" INCLUDE COVENANT TRANSPORT, INC. AND
ITS CONSOLIDATED SUBSIDIARIES. POTENTIAL INVESTORS SHOULD CONSIDER CAREFULLY THE
FACTORS SET FORTH HEREIN UNDER THE CAPTION "RISK FACTORS" AND ARE URGED TO READ
THIS PROSPECTUS IN ITS ENTIRETY.
THE COMPANY
Covenant is one of the largest truckload carriers in the United States and
operates the industry's largest fleet of team-driven tractors. Covenant offers
just-in-time and other premium transportation services, focusing on longer
lengths of haul and selected traffic lanes to enhance equipment utilization,
improve operating efficiency, and deliver the equipment availability demanded by
major shippers. The Company's major customers include manufacturers and
retailers, as well as a substantial and rapidly growing number of air freight,
logistics, and trucking companies that demand on-time service to meet the
expedited, long-haul needs of their customers.
Over the past five years, Covenant's revenue has grown at a compounded
annual growth rate of over 38%, from $81.9 million in 1993 to $297.9 million in
1997. During the same period, net income grew at a compounded annual growth rate
of 37%, from $3.9 million in 1993 to $13.7 million in 1997. The Company has
expanded through a combination of internal growth and external growth through
four acquisitions completed between 1995 and 1997. The most recent of these
acquisitions, $45 million annual revenue Bud Meyer Truck Lines, Inc.,
established an additional growth platform for the Company in transporting
service-sensitive, temperature-controlled freight. Management believes that
Covenant is positioned to capitalize on industry trends toward rapid
distribution of freight and consolidation, as well as to take advantage of
growth of business from other transportation companies.
BUSINESS STRATEGY
Covenant's objective is to obtain long-term, profitable growth. The key
elements of the Company's strategy for achieving profitable growth include the
following:
OFFER PREMIUM SERVICE. Covenant offers just-in-time, transcontinental
express, and other premium services to shippers with exacting transportation
requirements. The Company's service standards include transporting loads
coast-to-coast in 50 to 72 hours, meeting schedules with delivery windows as
narrow as 15 minutes, and delivering 99% of all loads on-time. Covenant targets
such premium service freight to obtain higher rates, build longer-term,
service-based customer relationships, and avoid competition from rail,
intermodal, and trucking companies that compete primarily on the basis of price.
OPERATE IN TARGET MARKETS. Covenant operates in target markets where its
service can provide a competitive advantage. The Company's primary market has
been expedited long-haul freight transportation predominantly using two-person
driver teams. The use of two-person driver teams allows expedited handling of
long-haul loads because the drivers can alternate driving and sleeping and
thereby keep freight moving 24-hours a day while operating within safety
guidelines. The Company's industry-leading 1,200 driver teams can provide
significantly faster, more predictable service than rail, intermodal, or
single-driver service over long lengths of haul. The Company's average length of
haul in 1997 was approximately 1,650 miles, the longest of any publicly traded
truckload carrier. In 1997, the Company expanded into the service-sensitive,
temperature-controlled market niche by acquiring Bud Meyer Truck Lines.
Management believes that Covenant's service standards, modern fleet, and
technology can offer a competitive advantage in serving the large frozen food
and consumer products companies targeted by Bud Meyer Truck Lines. Covenant
intends to expand both of its existing niches and will evaluate selective
expansion into other niches.
3
<PAGE>
FOCUS ON EQUIPMENT UTILIZATION. Covenant focuses intently on maintaining
and improving lane density and equipment utilization to enhance its average
revenue generated per tractor. Covenant's primary traffic lanes are between the
West Coast and the Northeast and Southeast United States. The Company maintains
disciplined operating lanes to optimize the amount of equipment on selected
routes. This level of operational discipline creates more predictable movements,
reduces empty miles, shortens turn times between loads, and permits the Company
to more consistently predict home visits by drivers. These factors and the use
of driver teams, which generate more miles per tractor than single drivers,
contributed to averages of over 149,000 miles per tractor per year and $3,000 in
revenue per tractor per week during 1997.
SERVE OTHER TRANSPORTATION COMPANIES. Five of Covenant's top 10 and
approximately one-third of its top 100 customers are air freight, logistics,
trucking, and other transportation companies. These transportation companies
seek Covenant's service to fulfill their customers' expedited long-haul needs.
With near air freight, logistics, and just-in-time transportation expected to
continue to grow rapidly, management believes Covenant can grow by serving as a
partner, rather than competitor, with customers such as Eagle USA Air Freight,
J.B. Hunt Transport Services, and Menlo Logistics.
USE TECHNOLOGY TO ENHANCE OPERATING EFFICIENCY. Covenant has made
significant investments in technologies that reduce costs and afford a
competitive advantage with service-sensitive customers. Management believes that
technologies employed by the Company promote economies of scale by accomodating
expanding revenue without a proportionate growth in non-driver employees. The
Company improved its number of tractors per non-driver employee to 4.0 in 1997
from 3.5 in 1996. Technologies employed by the Company include:
- Qualcomm-TM- satellite-based tracking and communication systems, which
permit continuous updating of load positions and delivery times and
instantaneous communication with drivers, installed in 100% of tractors.
- Document-imaging technology that reduces paperwork and streamlines
employee access to important information.
- Fuel routing software that calculates optimal fueling locations.
- Out-of-route warning system to reduce unproductive miles.
- Sabre-TM- operating system that provides real-time, integrated operating
and financial information.
- Internet electronic data interchange to permit customers to access their
load information and electronically transmit shipping instructions.
MAINTAIN A UNIFORM, LATE-MODEL FLEET. Covenant operates a virtually
uniform, late-model fleet: (i) to minimize breakdowns, repairs, and maintenance
time that could interfere with delivery schedules and decrease utilization; (ii)
to reduce parts inventory and ensure that most repairs are covered by
manufacturers' warranties; and (iii) to promote driver comfort and a positive
image with customers and drivers. At December 31, 1997, the average age of the
Company's tractor fleet was 21 months and the average age of its trailer fleet
was 33 months.
RECRUIT, RETAIN, AND REWARD DRIVERS AND OWNER-OPERATORS. Management
believes driver retention is primarily a pay issue and raised the Company's
driver wages approximately two cents per mile in 1997. The Company has announced
an additional increase of two and one-half cents per mile effective April 20,
1998. Both wage increases have been more than covered by increases in freight
rates. The Company intends to continue to raise driver compensation to the
extent permitted by freight rates. Covenant also employs many driver
satisfaction efforts, including operating late-model conventional tractors,
assigning drivers to a single dispatcher to promote solid relationships, and
addressing individual driver concerns with driver relations personnel. The
Company commenced contracting with owner-operators of tractors in 1997, and
owner-operators currently comprise approximately 6.0% of its fleet. Covenant
intends to increase the number of owner-operators in its fleet gradually over
time.
4
<PAGE>
INDUSTRY GROWTH OPPORTUNITIES
Management believes that growth trends among shippers and in the truckload
industry present expansion opportunities for carriers such as Covenant. Several
of the fastest growing segments of the truckload freight market include deferred
air freight movements, just-in-time manufacturing and inventory control, and
line haul substitution for consolidated less-than-truckload traffic, which can
help shippers lower costs, increase inventory turns, and respond quickly to
changes in demand. Covenant already has a significant presence in these markets,
and management anticipates that Covenant's large number of driver teams,
reputation for premium service, and relationships with other transportation
companies as a long-haul, expedited carrier of choice will support continued
growth with customers in these markets.
Consolidation in the truckload industry is being driven by several factors,
including the use of core carriers by major shippers, outsourcing of private
fleet traffic to for-hire carriers, and economies of scale enjoyed by larger
carriers. Many major shippers continue to reduce the number of carriers they
regularly use in favor of service-based, ongoing relationships with a group of
core carriers. Core carriers gain market share by committing to high quality
service, technological advances, and equipment availability in return for
greater equipment utilization and more predictable revenue. Other shippers that
own tractor-trailer fleets are outsourcing their transportation fleets to
truckload carriers in "private fleet conversions" to lower operating expenses
and conserve capital for core corporate purposes. Only carriers such as Covenant
that can meet the stringent service requirements of private fleets can take
advantage of these opportunities. Finally, deregulation and economies of scale
also promote consolidation. Many truckload carriers have grown rapidly since
deregulation in 1980 and have achieved the size to negotiate lifetime equipment
warranties and obtain equipment, fuel, insurance, financing, and other items at
significantly lower costs than smaller or more leveraged competitors. All of
these trends favor large, well-managed, financially stable carriers. Management
believes that Covenant is well-positioned to take advantage of further industry
consolidation, while many smaller, less successful carriers are likely to be
forced from the market or acquired.
COVENANT'S GROWTH STRATEGY
Management believes that the Company's growth strategy has positioned the
Company to capitalize on industry trends and continue Covenant's profitable
growth. Covenant has achieved a 40% compounded annual growth rate in revenue
since its first year of operation in 1986 and over 38% over the past five years.
Covenant's growth has been achieved through expansion of business with new and
existing customers and four acquisitions between 1995 and 1997.
Covenant's strategy for continuing its profitable growth includes:
- CONTINUING INTERNAL GROWTH. Covenant intends to seek additional business
from new and existing customers in its expedited long-haul and
temperature-controlled markets to increase equipment utilization, limit
empty miles, and reap other benefits of greater lane density. The Company
will continue to seek core carrier, dedicated fleet, and private fleet
conversion opportunities to support its internal growth.
- SERVING OTHER TRANSPORTATION COMPANIES. Covenant will continue to provide
specialized service for other transportation companies in areas where it
has a competitive advantage, particularly in the area of expedited
long-haul service using driver teams.
- SEEKING SELECTIVE ACQUISITIONS. Covenant is pursuing acquisitions in three
primary areas:
- Acquiring and integrating small companies to obtain customer
relationships in existing markets. The Company's first three
acquisitions followed this strategy and produced several of the
Company's large customers, including one of its top five.
5
<PAGE>
- Acquiring companies in existing markets to obtain drivers, increase
lane density, and achieve economies of scale.
- Expanding into niche markets where the target companies meet Covenant's
service and operating standards, and management perceives the
opportunity for additional growth, such as with Bud Meyer Truck Lines.
Covenant has completed and successfully integrated four acquisitions
since 1995. The first three added customers and lane density to Covenant's
long-haul operations, and Covenant significantly expanded those carriers'
customer relationships following the acquisitions. In October 1997, Covenant
branched into a new market by acquiring the stock of Bud Meyer Truck Lines,
Inc., a $45 million annual revenue temperature-controlled carrier based in
Lake City, Minnesota. Since the acquisition, Covenant has improved Bud
Meyer's profitability and expanded the Bud Meyer fleet beyond its pre-
acquisition size.
Covenant Transport, Inc., a Nevada corporation, is a holding company for the
Tennessee operating corporation also named Covenant Transport, Inc., Bud Meyer
Truck Lines, Inc., and its other consolidated subsidiaries. The Company's
headquarters are located at 400 Birmingham Highway, Chattanooga, Tennessee
37419, and its telephone number is (423) 821-1212.
THE OFFERING
<TABLE>
<S> <C>
Class A Common Stock offered by the
Company.................................... 1,540,000 shares
Class A Common Stock offered by the Selling
Stockholders(1)............................ 960,000 shares
Common Stock to be outstanding after this
offering:
Class A Common Stock....................... 12,553,500 shares(2)
Class B Common Stock....................... 2,350,000 shares(1)
Total................................ 14,903,500 shares(1)(2)
Use of Proceeds.............................. To reduce indebtedness and fund general
corporate and working capital requirements.
Nasdaq National Market symbol................ CVTI
</TABLE>
- ------------------------
(1) David R. and Jacqueline F. Parker (the "Parkers") are selling 460,000 shares
of Class A Common Stock and Clyde M. Fuller is selling 500,000 shares of
Class A Common Stock. The Class A Common Stock is entitled to one vote per
share. The Class B Common Stock is entitled to two votes per share and
automatically converts into Class A Common Stock if beneficially owned by
persons other than the Parkers or their children. The Class A and Class B
Common Stock vote together as a single class except as required by law and
are substantially identical, except with respect to voting rights.
(2) Excludes approximately 656,500 shares of Class A Common Stock reserved for
issuance to key employees under the Company's Incentive Stock Plan. Options
to purchase approximately 494,500 of such shares are currently outstanding.
6
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL AND OPERATING DATA
(IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA AMOUNTS)
The following table sets forth summary historical financial data of the
Company for the five years ended December 31, 1997, and for the three months
ended March 31, 1997 and 1998. The summary financial data for the years ended
December 31, 1995, 1996, and 1997 were derived from the audited consolidated
financial statements of the Company incorporated by reference in this
Prospectus. The summary financial data for years ended December 31, 1993 and
1994 are derived from audited consolidated historical financial statements of
the Company not included herein. The information presented for the three months
ended March 31, 1997 and 1998 has been derived from the unaudited consolidated
financial statements of the Company, which have been prepared on the same basis
as the audited consolidated financial statements and, in the opinion of
management, include all adjustments (consisting of normal recurring adjustments)
necessary to present fairly the information set forth herein. Results for the
three months ended March 31, 1998 are not necessarily indicative of the results
to be expected for the year ended December 31, 1998.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
----------------------------------------------------- --------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1993 1994 1995 1996 1997 1997 1998
--------- --------- --------- --------- --------- --------- ---------
STATEMENTS OF OPERATIONS DATA:
Revenue......................................... $ 81,911 $ 131,926 $ 180,346 $ 236,267 $ 297,861 $ 62,588 $ 79,824
Operating income................................ 9,373 15,950 18,719 20,067 28,124 4,282 5,781
Net income...................................... 3,886(1) 7,263(1) 9,283 8,978 13,702 1,838 2,675
Basic and diluted earnings per share............ 0.39 0.69 0.70 0.67 1.03 0.14 0.20
Weighted average common shares outstanding...... 10,000 10,496 13,350 13,350 13,360 13,350 13,361
Adjusted weighted average common shares and
assumed conversions outstanding............... 10,000 10,497 13,350 13,353 13,360 13,350 13,387
SELECTED OPERATING DATA:
Pretax margin................................... 6.8% 8.5% 8.1% 6.0% 7.3% 4.7% 5.4%
Average revenue per loaded mile(2).............. $ 1.05 $ 1.09 $ 1.09 $ 1.10 $ 1.13 $ 1.11 $ 1.15
Average revenue per total mile(2)............... $ 0.99 $ 1.03 $ 1.03 $ 1.04 $ 1.07 $ 1.05 $ 1.08
Average length of haul in miles................. 1,821 1,840 1,811 1,780 1,653 1,710 1,531
Average miles per tractor per period............ 157,756 159,921 148,669 150,778 149,117 34,389 34,828
Average revenue per tractor per week............ $ 3,008 $ 3,165 $ 2,942 $ 2,994 $ 3,059 $ 2,811 $ 2,922
Weighted average tractors for period............ 518 796 1,179 1,509 1,866 1,732 2,125
Total tractors at end of period................. 621 1,001 1,343 1,629 2,136 1,800 2,238
Total trailers at end of period................. 966 1,651 2,554 3,048 3,948 3,142 4,045
</TABLE>
<TABLE>
<CAPTION>
MARCH 31, 1998
---------------------------
<S> <C> <C>
BALANCE SHEET DATA: ACTUAL AS ADJUSTED(3)
----------- --------------
Net property and equipment.......................................................... $ 174,967 $ 174,967
Total assets........................................................................ 238,891 238,891
Long-term debt, including current maturities........................................ 100,011 72,414
Stockholders' equity................................................................ 98,322 125,919
</TABLE>
- ------------------------
(1) Includes the results of a related-party leasing company that operated as an
S corporation and was not subject to federal and state corporate income
taxes. If the leasing company had been subject to corporate income taxes for
the periods presented, the Company's consolidated pro forma net income would
have been $3.6 million in 1993 and $7.0 million in 1994. The 1993 and 1994
results of operations present the pro forma effect of these adjustments.
However because the Company acquired substantially all of the leasing
company's assets effective in 1994, the operating results of the leasing
company were not combined in subsequent periods.
(2) Includes fuel surcharges in all periods.
(3) Adjusted to reflect the issuance and sale of 1,540,000 shares of Class A
Common Stock offered by the Company and the application of the estimated net
proceeds as described in "Use of Proceeds."
7
<PAGE>
RISK FACTORS
AN INVESTMENT IN THE COMPANY'S CLASS A COMMON STOCK INVOLVES A SIGNIFICANT
DEGREE OF RISK. IN DETERMINING WHETHER TO MAKE AN INVESTMENT, POTENTIAL
INVESTORS SHOULD CONSIDER CAREFULLY ALL OF THE INFORMATION SET FORTH IN AND
INCORPORATED INTO THIS PROSPECTUS AND, IN PARTICULAR, THE FOLLOWING FACTORS.
ECONOMIC FACTORS
Fuel prices, insurance costs, liability claims, interest rates, the
availability of qualified drivers, fluctuations in the resale value of revenue
equipment, and customers' business cycles and shipping demands are economic
factors over which the Company has little or no control. Significant increases
or rapid fluctuations in fuel prices, interest rates, or increases in insurance
costs, or liability claims, to the extent not offset by increases in freight
rates, would reduce the Company's profitability. A downturn in customers'
business cycles or shipping demands also could have a materially adverse effect
on the growth and profitability of the Company. If the resale value of the
Company's revenue equipment were to decline, the Company could be forced to
dispose of its equipment at lower prices or retain some of its equipment longer,
with a resulting increase in operating expenses for maintenance and repairs. At
this time a significant portion of the Company's business is concentrated in the
California market, and a general economic decline or a natural disaster in this
market could have a materially adverse effect on the growth and profitability of
the Company.
RECRUITMENT, RETENTION, AND COMPENSATION OF QUALIFIED DRIVERS
There is, and historically has been, an industry-wide shortage of truck
drivers. Accordingly, competition for drivers is intense. The Company
experiences difficulty attracting and retaining a sufficient number of qualified
drivers, which results in the temporary idling of revenue equipment. The
Company's use of two-person driver teams to operate a majority of its tractors
increases the number of drivers it needs compared to competitors who primarily
use single drivers. Prolonged difficulty in attracting and retaining qualified
drivers could force the Company to substantially increase the compensation it
pays to drivers or curtail the Company's growth, either of which could have a
materially adverse effect on the Company's operations and profitability.
CAPITAL REQUIREMENTS
The trucking industry is capital intensive. The Company depends on operating
leases, lines of credit, secured equipment financing, and cash flows from
operations to finance the expansion and maintenance of its modern and
cost-efficient revenue equipment and facilities. If the Company were unable in
the future to enter into acceptable operating or capital lease arrangements,
raise additional equity, or borrow sufficient funds, it would be forced to limit
its growth and operate its revenue equipment for longer periods, which could
adversely affect the Company's operating results.
COMPETITION
The trucking industry is highly competitive and fragmented and includes
numerous regional, inter-regional, and national truckload carriers, none of
which dominates the market. The Company also competes with private fleets
operated by existing and potential customers, logistics providers, and
alternative forms of transportation, such as railroads and air-freight carriers.
This competition historically has created downward pressure on the truckload
industry's pricing structure. Competition for the freight transported by the
Company is based on service, efficiency, and freight rates. Many competitors
offer transportation service at lower rates than the Company. Prolonged weakness
in the freight markets or downward pressure on freight rates could adversely
affect the Company's results of operations or financial condition. The Company
has competitors that have greater financial resources, operate more equipment,
and transport more freight than the Company.
8
<PAGE>
GROWTH STRATEGY; ACQUISITIONS
The Company's growth strategy includes the acquisition and deployment of
additional revenue equipment and the expansion and development of its
operations. There can be no assurance that the Company will successfully adapt
its management, administrative, and operational systems to respond to any future
growth, or that the Company's operating margins, leverage, and net earnings will
not be adversely affected by future changes in or expansion of the business or
by changes in economic conditions. A significant portion of the Company's growth
since June 1995 has resulted from acquisitions, and acquisitions are an
important component of the Company's growth strategy. The Company will face
competition from various transportation companies or other third parties for
future acquisition opportunities. There can be no assurance that the Company can
successfully negotiate and conclude acquisitions in the future or that the
Company will be able to integrate successfully the operations of any acquired
business.
FUEL
Fuel is one of the Company's largest operating expenses. Fuel prices tend to
fluctuate, and the Company generally hedges against such fluctuations on a
limited basis. Fluctuations in fuel prices can affect the Company's
profitability more than many other truckload carriers because its long average
lengths of haul and high average miles per tractor result in greater fuel
expense as a percentage of revenue than for many carriers with shorter lengths
of haul. Any increase in fuel taxes or in fuel prices, to the extent not offset
by freight rate increases or fuel surcharges to customers, or any interruption
in the supply of fuel, could have a materially adverse effect on the Company's
operating results.
DEPENDENCE UPON KEY PERSONNEL
The Company's success is highly dependent upon the continued services of the
Company's senior management team, particularly David R. Parker, the Company's
Chairman, President, and Chief Executive Officer, and Michael W. Miller, the
Company's Executive Vice President and Chief Operating Officer, neither of whom
has an employment agreement with the Company. The loss of one or more of these
executives could have a materially adverse effect upon the Company. The
Company's success also depends upon its ability to attract and retain other
skilled management employees. There is significant competition for qualified
personnel in the trucking industry. There can be no assurance that the Company
will attract and retain qualified management personnel in the future.
INFLUENCE OF PARKERS
Upon completion of this offering, the Parkers will beneficially own
approximately 32.6% of the outstanding shares of Class A Common Stock and all of
the outstanding shares of Class B Common Stock, which together will represent
approximately 43.2% of all of the outstanding shares of Common Stock and 51.0%
of the total voting power of the Company's outstanding shares (42.2% ownership
and 49.9% of the total voting power if the Underwriters' over-allotment option
is exercised in full). In addition, upon completion of this offering, Mr. Fuller
will own approximately 12.5% of the outstanding shares of Class A Common Stock,
representing 10.6% of all outstanding shares of Common Stock and 9.1% total
voting power of the Company's outstanding shares (10.3% ownership and 8.9%
voting power if the Underwriters' over-allotment option is exercised in full).
The shares and percentages in this paragraph exclude 133,750 shares of Class A
Common Stock underlying employee stock options held by Mr. Parker (options
covering 53,500 of which are vested or vest within 60 days of the date hereof)
and 25,000 shares of Class A Common Stock underlying a vested stock option held
by Mr. Fuller. After this offering, the Parkers will continue to possess
substantial influence over matters submitted to a vote of stockholders. Although
there is no agreement to do so, if the Parkers and Mr. Fuller acted together,
they could control a majority of the votes entitled to be cast of the Company's
Common Stock, elect the entire Board of Directors of the Company, determine the
outcome of all matters involving a stockholder vote, and take certain actions by
written
9
<PAGE>
consent with proper notice given to the other stockholders. Such control could
make it more difficult for a third party to acquire, or discourage a third party
from attempting to acquire, control of the Company.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
This Prospectus, including all documents incorporated herein by reference,
contains forward-looking statements. Additional written or oral forward-looking
statements may be made by the Company from time to time in filings with the
Securities and Exchange Commission or otherwise. The words "believe," "expect,"
"anticipate," and "project" and similar expressions identify forward-looking
statements, which speak only as of the date the statement is made. Such
forward-looking statements are within the meaning of that term in Section 27A of
the Securities Act and Section 21E of the Exchange Act. Such statements are
based on current knowledge and current judgments, but are subject to certain
risks and uncertainties that could cause the actual results to differ materially
from those projected. Readers are cautioned not to place undue reliance on these
forward-looking statements which speak only as of the date hereof. Readers are
also urged to carefully review and consider the various disclosures made by the
Company that attempt to advise interested parties of the factors that affect the
Company's business, including the disclosures made under the heading "Risk
Factors" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in the Company's Annual Report on Form 10-K for the year
ended December 31, 1997, which is incorporated by reference herein.
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the
1,540,000 shares of Class A Common Stock offered by the Company are estimated to
be approximately $27.6 million (approximately $34.4 million if the Underwriters'
over-allotment option is exercised in full), after deducting underwriting
discounts and commissions and estimated offering expenses. The Company intends
to use the estimated net proceeds of this offering primarily to reduce
indebtedness under the Company's revolving line of credit and also for general
corporate and working capital purposes. The indebtedness to be repaid was
incurred primarily to acquire revenue equipment, bears interest at a rate of
6.1875%, and has an average remaining maturity of approximately one month.
Pending the use of proceeds as described above, the net proceeds will be
invested in short-term interest bearing securities. The Company will not receive
any proceeds from the sale of shares of Class A Common Stock by the Selling
Stockholders.
Subsequent to the application of the net proceeds of this offering as
described above, the Company will have approximately $57.6 million of borrowing
capacity under its $100 million line of credit.
10
<PAGE>
PRICE RANGE OF CLASS A COMMON STOCK
The Company's Class A Common Stock has been traded on the Nasdaq National
Market under the symbol CVTI since October 28, 1994. The following table sets
forth for the calendar periods indicated the range of high and low sales price
for the Company's Class A Common Stock as reported by Nasdaq.
<TABLE>
<CAPTION>
PERIOD HIGH LOW
- --------- --------- ---------
<S> <C> <C> <C>
1996
1st Quarter................................................................................ $ 17.75 $ 11.25
2nd Quarter................................................................................ 18.00 15.00
3rd Quarter................................................................................ 21.00 15.00
4th Quarter................................................................................ 19.25 13.00
1997
1st Quarter................................................................................ 16.25 11.25
2nd Quarter................................................................................ 19.13 13.75
3rd Quarter................................................................................ 20.25 16.25
4th Quarter................................................................................ 20.13 14.75
1998
1st Quarter................................................................................ 23.00 14.38
2nd Quarter (through April 29, 1998)....................................................... 23.31 19.50
</TABLE>
As of March 31, 1998, the Company had 40 stockholders of record of its Class
A Common Stock. However, the Company estimates that it has approximately 2,000
stockholders because a substantial number of the Company's shares are held of
record by brokers or dealers for their customers in street names.
DIVIDEND POLICY
The Company has never declared and paid a cash dividend on its Common Stock.
It is the current intention of the Company's Board of Directors to continue to
retain earnings to finance the growth of the Company's business rather than to
pay dividends. The payment of cash dividends is currently limited by agreements
relating to the Company's $100 million line of credit, $25 million in senior
notes due October 2005, and the operating lease covering the Company's
headquarters and terminal facility. Future payments of cash dividends will
depend upon the financial condition, results of operations and capital
commitments of the Company, restrictions under then-existing agreements, and
other factors deemed relevant by the Board of Directors.
11
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
(DOLLAR AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA AMOUNTS)
The following table sets forth selected historical financial data of the
Company for the five years ended December 31, 1997, and for the three months
ended March 31, 1997 and 1998. The selected financial data for the years ended
December 31, 1995, 1996, and 1997 were derived from the audited consolidated
financial statements of the Company incorporated by reference in this
Prospectus. The selected financial data for years ended December 31, 1993 and
1994 are derived from audited consolidated historical financial statements of
the Company not included herein. The information presented for the three months
ended March 31, 1997 and 1998 has been derived from the unaudited consolidated
financial statements of the Company, which have been prepared on the same basis
as the audited consolidated financial statements and, in the opinion of
management, include all adjustments (consisting of normal recurring adjustments)
necessary to present fairly the information set forth herein. Results for the
three months ended March 31, 1998 are not necessarily indicative of the results
to be expected for the year ended December 31, 1998.
<TABLE>
<CAPTION>
THREE MONTHS
YEARS ENDED DECEMBER 31, ENDED MARCH 31,
----------------------------------------------------- --------------------
1993 1994 1995 1996 1997 1997 1998
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENTS OF OPERATIONS DATA:
Revenue................................ $ 81,911 $ 131,926 $ 180,346 $ 236,267 $ 297,861 $ 62,588 $ 79,824
Operating expenses:
Salaries, wages, and related
expenses........................... 34,629 57,675 83,747 108,818 131,522 27,685 35,242
Fuel, oil, and road expenses......... 17,573 27,282 37,802 55,340 64,910 15,560 15,922
Revenue equipment rentals and
purchased transportation........... 1,703 2,785 1,230 605 8,492 427 5,002
Repairs.............................. 1,363 2,285 3,569 4,293 5,885 1,267 1,925
Operating taxes and licenses......... 2,125 3,479 4,679 6,065 7,514 1,534 2,317
Insurance............................ 3,374 4,510 4,907 6,115 8,655 1,786 2,424
General supplies and expenses........ 5,921 8,650 9,648 12,825 16,277 3,691 4,438
Depreciation and amortization........ 5,850 9,310 16,045 22,139 26,482 6,356 6,773
--------- --------- --------- --------- --------- --------- ---------
Total operating expenses........... 72,538 115,976 161,627 216,200 269,737 58,306 74,042
--------- --------- --------- --------- --------- --------- ---------
Operating income....................... 9,373 15,950 18,719 20,067 28,124 4,282 5,781
Interest expense....................... 3,765 4,736 4,162 5,987 6,274 1,367 1,461
--------- --------- --------- --------- --------- --------- ---------
Income before income taxes............. 5,608 11,214 14,557 14,080 21,850 2,914 4,320
Income tax expense..................... 1,722 3,951 5,274 5,102 8,148 1,076 1,645
Net income(2).......................... $ 3,886(1) $ 7,263(1) $ 9,283 $ 8,978 $ 13,702 $ 1,838 $ 2,675
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Basic and diluted earnings per share... $ 0.39 $ 0.69 $ 0.70 $ 0.67 $ 1.03 $ 0.14 $ 0.20
--------- --------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- --------- ---------
Weighted average common shares
outstanding.......................... 10,000 10,496 13,350 13,350 13,360 13,350 13,361
Adjusted weighted average common shares
and assumed conversions
outstanding.......................... 10,000 10,497 13,350 13,353 13,360 13,350 13,387
BALANCE SHEET DATA:
Net property and equipment............. $ 46,975 $ 87,882 $ 127,408 $ 144,384 $ 161,621 $ 153,064 $ 174,967
Total assets........................... 61,628 112,552 169,381 187,148 215,256 202,406 $ 238,891
Long-term debt, including current
maturities........................... 47,392 37,495 80,200 83,160 82,377 94,160 100,011
Stockholders' equity................... 5,703 63,469 72,752 81,730 95,597 83,568 98,322
SELECTED OPERATING DATA:
Pretax margin.......................... 6.8% 8.5% 8.1% 6.0% 7.3% 4.7% 5.4%
Average revenue per loaded mile(2)..... $ 1.05 $ 1.09 $ 1.09 $ 1.10 $ 1.13 $ 1.11 $ 1.15
Average revenue per total mile(2)...... $ 0.99 $ 1.03 $ 1.03 $ 1.04 $ 1.07 $ 1.05 $ 1.08
Average length of haul in miles........ 1,821 1,840 1,811 1,780 1,653 1,710 1,531
Average miles per tractor per period... 157,756 159,921 148,669 150,778 149,117 34,389 34,828
Average revenue per tractor per week... $ 3,008 $ 3,165 $ 2,942 $ 2,994 $ 3,059 $ 2,811 $ 2,922
Weighted average tractors for period... 518 796 1,179 1,509 1,866 1,732 2,125
Total tractors at end of period........ 621 1,001 1,343 1,629 2,136 1,800 2,238
Total trailers at end of period........ 966 1,651 2,554 3,048 3,948 3,142 4,045
</TABLE>
- ------------------------------
(1) Includes the results of a related-party leasing company that operated as an
S corporation and was not subject to federal and state corporate income
taxes. If the leasing company had been subject to corporate income taxes for
the periods presented, the Company's consolidated pro forma net income would
have been $3.6 million in 1993 and $7.0 million in 1994. The 1993 and 1994
results of operations present the pro forma effect of these adjustments.
However because the Company acquired substantially all of the leasing
company's assets effective in 1994, the operating results of the leasing
company were not combined in subsequent periods.
(2) Includes fuel surcharges in all periods.
12
<PAGE>
The following table sets forth for the periods indicated certain statement
of earnings data as a percentage of revenue. Individual expense items as a
percentage of revenue may fluctuate depending upon the percentage of the
Company's revenue equipment that is owned, acquired under operating leases, or
obtained through agreements with owner-operators. Costs associated with revenue
equipment acquired under operating leases or through agreements with
owner-operators are expensed as "revenue equipment rentals and purchased
transportation." For these categories of equipment, the Company does not incur
costs such as interest and depreciation as it might with owned equipment. In
addition, for owner-operator tractors, driver compensation, fuel,
communications, and certain other expenses are borne by the owner-operator and
are not incurred by the Company.
<TABLE>
<CAPTION>
THREE
MONTHS
ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
----------------------------------------------------- ---------
1993 1994 1995 1996 1997 1997
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Revenue..................................................... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Operating expenses:
Salaries, wages, and related expenses..................... 42.3 43.7 46.4 46.1 44.2 44.2
Fuel, oil, and road expenses.............................. 21.5 20.7 21.0 23.4 21.8 24.9
Revenue equipment rentals and purchased transportation.... 2.1 2.1 0.7 0.2 2.9 0.7
Repairs................................................... 1.7 1.7 2.0 1.8 2.0 2.0
Operating taxes and licenses.............................. 2.6 2.6 2.6 2.6 2.5 2.5
Insurance................................................. 4.1 3.4 2.7 2.6 2.9 2.8
General supplies and expenses............................. 7.2 6.6 5.3 5.4 5.5 5.9
Depreciation and amortization............................. 7.1 7.1 8.9 9.4 8.9 10.2
--------- --------- --------- --------- --------- ---------
Total operating expenses................................ 88.6 87.9 89.6 91.5 90.6 93.2
--------- --------- --------- --------- --------- ---------
Operating income............................................ 11.4 12.1 10.4 8.5 9.4 6.8
Interest expense............................................ (4.6) (3.6) (2.3) (2.5) (2.1) (2.2)
--------- --------- --------- --------- --------- ---------
Income before income taxes.................................. 6.8 8.5 8.1 6.0 7.3 4.7
Income tax expense.......................................... (2.1) (3.0) (2.9) (2.2) (2.7) (1.7)
--------- --------- --------- --------- --------- ---------
Net income.................................................. 4.7% 5.5% 5.2% 3.8% 4.6% 2.9%
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
<CAPTION>
1998
---------
<S> <C>
Revenue..................................................... 100.0%
Operating expenses:
Salaries, wages, and related expenses..................... 44.1
Fuel, oil, and road expenses.............................. 20.0
Revenue equipment rentals and purchased transportation.... 6.3
Repairs................................................... 2.4
Operating taxes and licenses.............................. 2.9
Insurance................................................. 3.0
General supplies and expenses............................. 5.6
Depreciation and amortization............................. 8.5
---------
Total operating expenses................................ 92.8
---------
Operating income............................................ 7.2
Interest expense............................................ (1.8)
---------
Income before income taxes.................................. 5.4
Income tax expense.......................................... (2.1)
---------
Net income.................................................. 3.4%
---------
---------
</TABLE>
SELLING STOCKHOLDERS
The following table sets forth information with respect to the ownership of
Class A and Class B Common Stock by the Selling Stockholders.
<TABLE>
<CAPTION>
SHARES OWNED SHARES OWNED
PRIOR TO THE OFFERING AFTER THE OFFERING
----------------------------------- -----------------------------------
CLASS A CLASS B SHARES CLASS A CLASS B
COMMON COMMON BEING COMMON COMMON
OWNER STOCK STOCK PERCENT(1) OFFERED STOCK STOCK PERCENT(1)
- ----------------------------------- --------- --------- ------------- --------- --------- --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
David R. Parker and
Jacqueline F. Parker(2)............ 4,555,225 2,350,000 51.7% 460,000 4,095,225 2,350,000 43.2%
Clyde M. Fuller(3)................. 2,075,000 -- 15.5% 500,000 1,575,000 -- 10.6%
</TABLE>
- ------------------------------
(1) Ownership percentages reflect the total number of outstanding shares of both
Class A and Class B Common Stock, assuming the Underwriters' over-allotment
option is not exercised. If the over-allotment option is exercised in full,
the Parkers and Mr. Fuller will own 42.2% and 10.3% of the total outstanding
shares of the Common Stock, respectively.
(2) Mr. Parker is Chairman, President, and Chief Executive Officer of the
Company and Mrs. Parker is an employee of the Company. All shares are owned
as joint tenants with rights of survivorship, except 200,000 shares of Class
A Common Stock held by the Parker Family Limited Partnership, of which the
Parkers are the general partners. Because the Class B Common Stock has two
votes per share, the shares owned by the Parkers before the offering
represent 58.9% of the total voting power of the Common Stock. After the
offering, the shares owned by the Parkers will represent 51.0% of the total
voting power of the Common Stock (49.9% if the Underwriters' over-allotment
option is exercised in full). The shares and percentages exclude 133,750
shares of Class A Common Stock underlying employee stock options held by Mr.
Parker, options to purchase 53,500 shares of which are vested or will vest
within 60 days hereof.
(3) Mr. Fuller is an employee of the Company and the step-father of David R.
Parker. Shares reflected exclude 25,000 shares of Class A Common Stock
underlying a vested stock option.
13
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, the
underwriters named below (the "Underwriters"), have severally agreed to purchase
from the Company and the Selling Stockholders the following respective number of
shares of Class A Common Stock at the public offering price less the
underwriting discounts and commissions set forth on the cover page of this
Prospectus:
<TABLE>
<CAPTION>
NAME NUMBER OF SHARES
- --------------------------------------------------------------------------- -----------------
<S> <C>
BT Alex. Brown Incorporated................................................ 675,000
Smith Barney Inc........................................................... 675,000
Stephens Inc............................................................... 675,000
ABN AMRO Incorporated...................................................... 225,000
Schroder & Co. Inc. ....................................................... 50,000
George K. Baum & Company................................................... 50,000
William Blair & Company, L.L.C. ........................................... 50,000
C.L. King & Associates, Inc. .............................................. 50,000
Morgan Keegan & Company, Inc. ............................................. 50,000
-----------------
Total................................................................ 2,500,000
-----------------
-----------------
</TABLE>
The Underwriting Agreement provides that the obligations of the Underwriters
are subject to certain conditions precedent and that the Underwriters will
purchase all of the shares of Class A Common Stock offered hereby if any such
shares are purchased.
The Company and the Selling Stockholders have been advised that the
Underwriters propose to offer the shares of Class A Common Stock to the public
at the public offering price set forth on the cover page of this Prospectus and
to certain dealers at such price less a concession not in excess of $.55 per
share. The Underwriters may allow, and such dealers may reallow, a concession
not in excess of $.10 per share to certain other dealers. After commencement of
this offering, the public offering price and other selling terms may be changed
by the Underwriters.
The Company has granted to the Underwriters an option, exercisable not later
than 30 days after the date of this Prospectus, to purchase up to 375,000
additional shares of Class A Common Stock at the public offering price less the
underwriting discounts and commissions set forth on the cover page of this
Prospectus. To the extent that the Underwriters exercise such option, each of
the Underwriters will have a firm commitment to purchase approximately the same
percentage thereof that the number of shares of Class A Common Stock to be
purchased by it shown in the above table bears to the total number of shares
offered hereby, and the Company will be obligated, pursuant to the option, to
sell such shares to the Underwriters. The Underwriters may exercise such option
only to cover over-allotments made in connection with the sale of the Class A
Common Stock offered hereby. If purchased, the Underwriters will offer such
additional shares on the same terms as those on which the 2,500,000 shares are
being offered.
The Underwriting Agreement contains covenants of indemnity and contribution
between the Underwriters, the Company, and the Selling Stockholders regarding
certain liabilities, including liabilities under the Securities Act.
The Company, its officers and directors, and the Selling Stockholders,
holding in the aggregate 9,149,081 shares of Class A Common Stock, have agreed
that until 90 days after the date of this Prospectus, they will not, without the
prior written consent of BT Alex. Brown Incorporated, directly or indirectly,
offer, sell, or otherwise dispose of any shares of Class A Common Stock or any
options, rights, or warrants with respect to any Class A Common Stock, except
for (i) securities issued by the Company under the Company's Incentive Stock
Plan or any similar stock option plan; (ii) shares issued by the Company in
connection with any future acquisitions; and (iii) shares donated by such
holders to charitable
14
<PAGE>
organizations; provided, that any such charitable organization must agree in
writing not to sell such donated securities for a like period.
In connection with this offering, certain Underwriters may engage in passive
market making transactions in the Class A Common Stock on the Nasdaq National
Market immediately prior to the commencement of sales in this offering in
accordance with Rule 103 of Regulation M. Passive market making consists of
displaying bids on the Nasdaq National Market limited by the bid prices of
independent market makers and making purchases limited by such prices and
effected in response to order flow. Net purchases by a passive market maker on
each day are limited to a specified percentage of the passive market maker's
average daily trading volume in the Class A Common Stock during a specified
period and must be discontinued when such limit is reached. Passive market
making may stabilize the market price of the Class A Common Stock at a level
above that which might otherwise prevail and, if commenced, may be discontinued
at any time.
Subject to applicable limitations, the Underwriters, in connection with this
offering, may place bids for or make purchases of the Class A Common Stock in
the open market or otherwise, for long or short account, or cover short
positions incurred, to stabilize, maintain, or otherwise affect the price of the
Class A Common Stock, which may be higher than the price that might otherwise
prevail in the open market. There can be no assurance that the price of the
Class A Common Stock will be stabilized, or that stabilizing, if commenced, will
not be discontinued at any time. Subject to applicable limitations, the
Underwriters may also place bids or make purchases on behalf of the underwriting
syndicate to reduce a short position created in connection with this offering.
The Underwriters are not required to engage in these activities and may end
these activities at any time.
ABN AMRO Bank N.V., an affiliate of ABN AMRO Incorporated, one of the
Underwriters, served as the Agent for a syndicate of financial institutions in
establishing the Company's line of credit in January 1995 and has continued in
such role since that date. Since more than 10% of the net proceeds from the sale
of the Class A Common Stock offered hereby is being paid to an affilate of an
NASD member, this offering is being made pursuant to the provisions of Rule
2710(c)(8) of the Conduct Rules of the National Association of Securities
Dealers, Inc.
LEGAL MATTERS
The validity of the shares of Class A Common Stock offered hereby will be
passed upon for the Company by Scudder Law Firm, P.C., Lincoln, Nebraska. A
member of Scudder Law Firm, P.C., Mark A. Scudder, has served as a director of
the Company since October 1994. Certain legal matters relating to the offering
will be passed upon for the Underwriters by Piper & Marbury L.L.P., Baltimore,
Maryland.
EXPERTS
The consolidated financial statements of Covenant Transport, Inc.
incorporated by reference herein in this Prospectus and elsewhere in this
Registration Statement, have been audited by the independent public accountants
Coopers & Lybrand L.L.P. for 1995, 1996, and 1997 and are included herein in
reliance upon the authority of said firms as experts in accounting and auditing.
15
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON, OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFER CONTAINED HEREIN AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED
HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE
MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE
HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR SINCE
THE DATES AS OF WHICH INFORMATION IS SET FORTH HEREIN.
--------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Available Information.......................... 2
Information Incorporated by Reference.......... 2
Prospectus Summary............................. 3
Risk Factors................................... 8
Use of Proceeds................................ 10
Price Range of Class A Common Stock............ 11
Dividend Policy................................ 11
Selected Consolidated Financial Data........... 12
Selling Stockholders........................... 13
Underwriting................................... 14
Legal Matters.................................. 15
Experts........................................ 15
</TABLE>
--------------
2,500,000 SHARES
COVENANT TRANSPORT
[LOGO]
CLASS A COMMON STOCK
--------------
PROSPECTUS
--------------
BT ALEX. BROWN
SALOMON SMITH BARNEY
STEPHENS INC.
ABN AMRO INCORPORATED
April 30, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
(This page has been left blank intentionally.)
<PAGE>
(This page has been left blank intentionally.)
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Set forth below is an itemized statement of expenses to be incurred in
connection with the sale and distribution of the securities being registered by
this Registration Statement, other than the underwriting discounts and
commissions. All amounts are estimated except the SEC registration fee, the NASD
filing fee, and the Nasdaq national market fee. The Company will bear all
expenses of the offering other than the Underwriting discounts and commissions
applicable to shares sold by the Selling Stockholders, which shall be borne by
them.
<TABLE>
<S> <C>
SEC registration fee.............................................. $ 29,692
NASD filing fee................................................... 10,565
Nasdaq national market fee........................................ 17,500
Accounting fees and expenses...................................... 25,000
Legal fees and expenses........................................... 50,000
Printing and engraving............................................ 35,000
Miscellaneous..................................................... 32,243
---------
Total............................................................. $ 200,000
---------
---------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article VII of the Registrant's Articles of Incorporation ("Articles") and
Article X of the Registrant's Bylaws provide that the Registrant's directors and
officers shall be indemnified against liabilities they may incur while serving
in such capacities to the fullest extent allowed by the Nevada General
Corporation Law. Under these indemnification provisions, the Registrant is
required to indemnify its directors and officers against any reasonable expenses
(including attorneys' fees) incurred by them in the defense of any action, suit,
or proceeding, whether civil, criminal, administrative, or investigative, to
which they were made a party, or in defense of any claim, issue, or matter
therein, by reason of the fact that they are or were a director or officer of
the Registrant or while a director or officer of the Registrant are or were
serving at the Registrant's request as a director, officer, partner, trustee,
employee, or agent of another corporation, partnership, joint venture, trust,
employee benefit plan, or other enterprise unless it is ultimately determined by
a court of competent jurisdiction that they failed to act in a manner they
believed in good faith to be in, or not opposed to, the best interests of the
Registrant, and with respect to any criminal proceeding, had reasonable cause to
believe their conduct was lawful. The Registrant will advance expenses incurred
by directors or officers in defending any such action, suit, or proceeding upon
receipt of written confirmation from such officers or directors that they have
met certain standards of conduct and an undertaking by or on behalf of such
officers or directors to repay such advances if it is ultimately determined that
they are not entitled to indemnification by the Registrant. The Articles provide
that the Registrant may, through indemnification agreements, insurance, or
otherwise, provide additional indemnification. The Company has entered into
indemnification agreements with its directors and officers, pursuant to which
the Company agrees to indemnify such persons to the maximum extent against
expense or loss arising from any action, suit, or proceeding brought by reason
of the fact that any person is a director or officer of the Company.
Article VI of the Registrant's Articles eliminates, to the fullest extent
permitted by law, the liability of directors and officers for monetary or other
damages for breach of fiduciary duties to the Registrant and its stockholders as
a director or officer.
II-1
<PAGE>
ITEM 16. EXHIBITS
<TABLE>
<C> <S>
1 + Form of Underwriting Agreement
3.1++ Restated Articles of Incorporation
3.2++ Amended By-Laws dated September 27, 1994
4.1++ Restated Articles of Incorporation
4.2++ Amended By-Laws dated September 27, 1994
5 + Opinion, including consent of Scudder Law Firm, P.C., counsel to Covenant
Transport, Inc. as to legality of the securities being registered
23.1+ Consent of Scudder Law Firm, P.C. (included in their opinion filed as Exhibit 5
to this Registration Statement)
23.2+ Consent of Coopers & Lybrand L.L.P., independent accountants
24 + Power of Attorney (included on signature page of this Registration Statement)
</TABLE>
- ------------------------
+ Filed as an exhibit to the Registrant's Registration Statement on Form S-3,
Registration No. 333-49755, filed April 9, 1998, and incorporated herein by
reference.
++ 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.
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the provisions set forth in Item 15, or otherwise, the
Registrant has been advised in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit, or
proceeding) is asserted by such director, officer, or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Securities
Act, and the Registrant will be governed by the final adjudication of such
issue.
The Registrant hereby undertakes to provide the Underwriters at the closing
specified in the Underwriting Agreement, certificates in such denominations and
registered in such names as required by the Underwriters to permit prompt
delivery to each purchaser.
The Registrant hereby undertakes that:
(a) For purposes of determining any liability under the Securities Act, the
information omitted from the form of Prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(b) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of Prospectus shall be deemed
to be a new Registration Statement relating to
II-2
<PAGE>
the securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) For purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to section 13(a) or
section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it meets all of the requirements for filing on Form S-3 and has
duly caused this post-effective Amendment No. 1 to Registration Statement on
Form S-3 to be signed on its behalf by the undersigned thereunto duly
authorized, in the City of Chattanooga, State of Tennessee, on the 30th day of
April, 1998.
COVENANT TRANSPORT, INC.
BY: /S/ DAVID R. PARKER
-----------------------------------------
David R. Parker, Chairman, President,
and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby appoints David R. Parker,
Joey B. Hogan, and Mark A. Scudder, and each of them, as attorneys-in-fact with
full power of substitution, to execute in their respective names, individually
and in each capacity stated below, any and all amendments (including post-
effective amendments) to this Registration Statement as the attorney-in-fact and
to file any such amendment to the Registration Statement, exhibits thereto and
documents required in connection therewith with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and their substitutes, full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in connection therewith, as fully as he might or could do
in person, hereby ratifying and confirming all that said attorneys-in-fact and
their substitutes may lawfully do or cause to be done by virtue hereof. Pursuant
to the requirements of the Securities Act of 1933, as amended, this Registration
Statement has been signed by the following persons or their duly authorized
attorney-in-fact in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ------------------------------ --------------------------- -------------------
Chairman of the Board,
/s/ DAVID R. PARKER President, and Chief
- ------------------------------ Executive Officer April 30, 1998
David R. Parker (principal executive
officer)
Treasurer and Chief
/s/ JOEY B. HOGAN Financial Officer
- ------------------------------ (principal financial and April 30, 1998
Joey B. Hogan accounting officer)
/s/ R. H. LOVIN, JR. Director
- ------------------------------ April 30, 1998
R. H. Lovin, Jr.
/s/ MICHAEL W. MILLER Director
- ------------------------------ April 30, 1998
Michael W. Miller
/s/ WILLIAM T. ALT Director
- ------------------------------ April 30, 1998
William T. Alt
/s/ HUGH O. MACLELLAN, JR. Director
- ------------------------------ April 30, 1998
Hugh O. Maclellan, Jr.
/s/ MARK A. SCUDDER Director
- ------------------------------ April 30, 1998
Mark A. Scudder
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<C> <S>
1 + Form of Underwriting Agreement
3.1++ Restated Articles of Incorporation
3.2++ Amended By-Laws dated September 27, 1994
4.1++ Restated Articles of Incorporation
4.2++ Amended By-Laws dated September 27, 1994
5 + Opinion, including consent of Scudder Law Firm, P.C., counsel to Covenant
Transport, Inc. as to legality of the securities being registered
23.1+ Consent of Scudder Law Firm, P.C. (included in their opinion filed as Exhibit 5
to this Registration Statement)
23.2+ Consent of Coopers & Lybrand L.L.P., independent accountants
24 + Power of Attorney (included on signature page of this Registration Statement)
</TABLE>
- ------------------------
+ Filed as an exhibit to the Registrant's Registration Statement on Form S-3,
Registration No. 333-49755, filed April 9, 1998, and incorporated herein by
reference.
++ 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.
