Chairman and Chief Executive Officer,
“In the fourth quarter we experienced the continuation of an exceptionally strong freight market resulting from growing economic activity, low inventories, and supply chain disruptions, accompanied by constrained capacity due to a national driver and equipment shortage. These conditions have continued into the first quarter of 2022.
“Our asset-based segments, Expedited and Dedicated, contributed approximately 58% of total revenue in the quarter and performed well in an environment characterized by strong freight demand, an extremely competitive driver market, workforce volatility due to COVID-19, and rising costs. Our Expedited segment grew revenue and produced adjusted margins similar to the fourth quarter last year, with improved pricing and utilization overcoming significant driver pay increases and a smaller available fleet. We also implemented multi-year contracts with certain major customers that should lessen the impact of economic cycles on this segment. Our Dedicated segment improved year-over-year and sequentially by producing higher revenue and better margins, progress needed to meet our targeted returns. Compared with the fourth quarter of 2020, operating margins in Expedited and Dedicated were negatively impacted by approximately 250 basis points primarily related to catch-up vesting of prior year performance-based compensation due to our record results, incremental costs to secure short-term capacity to service short-term freight commitments and lack of gain on sale due to delays in equipment deliveries, all of which are not expected to continue into 2022.
Our asset-light segments, Managed Freight and Warehousing, contributed approximately 42% of total revenue in the quarter and combined to generate favorable margins and returns. Managed Freight produced record performance as a result of strong execution and effective coordination with our Expedited and Dedicated segments. Warehousing was able to grow revenue but fell short of our margin goals mainly due to start-up rent on a new facility and increased labor costs.
We are also pleased to report that
A summary of our fourth quarter financial performance:
Three Months Ended | Year Ended | ||||||||||||||
($000s, except per share information) | 2021 | 2020 | 2021 | 2020 | |||||||||||
Total Revenue | $ | 294,228 | $ | 225,228 | $ | 1,046,003 | $ | 838,561 | |||||||
Freight Revenue, Excludes Fuel Surcharge | $ | 267,022 | $ | 210,856 | $ | 949,913 | $ | 776,218 | |||||||
Operating Income (Loss) | $ | 18,237 | $ | 9,566 | $ | 67,162 | $ | (14,027 | ) | ||||||
Adjusted Operating Income (1) | $ | 18,824 | $ | 13,233 | $ | 71,205 | $ | 26,865 | |||||||
Operating Ratio | 93.8 | % | 95.8 | % | 93.6 | % | 101.7 | % | |||||||
Adjusted Operating Ratio (1) | 93.0 | % | 93.7 | % | 92.5 | % | 96.5 | % | |||||||
Net Income (Loss) | $ | 17,732 | $ | (25,665 | ) | $ | 60,731 | $ | (42,718 | ) | |||||
Adjusted Net Income (1) | $ | 18,169 | $ | 10,438 | $ | 61,287 | $ | 18,681 | |||||||
Earnings (Loss) per Diluted Share | $ | 1.05 | $ | (1.50 | ) | $ | 3.57 | $ | (2.46 | ) | |||||
Adjusted Earnings per Diluted Share (1) | $ | 1.07 | $ | 0.61 | $ | 3.61 | $ | 1.08 | |||||||
(1) Represents non-GAAP measures. | |||||||||||||||
Truckload Operating Data and Statistics
Three Months Ended | Year Ended | ||||||||||||||
($000s, except statistical information) | 2021 | 2020 | 2021 | 2020 | |||||||||||
Combined Truckload | |||||||||||||||
Total Revenue | $ | 169,674 | $ | 145,674 | $ | 661,604 | $ | 608,854 | |||||||
Freight Revenue, excludes Fuel Surcharge | $ | 142,670 | $ | 131,406 | $ | 566,213 | $ | 546,974 | |||||||
Operating Income (Loss) | $ | 6,855 | $ | 3,068 | $ | 31,707 | $ | (22,573 | ) | ||||||
Adj. Operating Income (Loss) (1) | $ | 7,149 | $ | 6,184 | $ | 33,804 | $ | 12,985 | |||||||
Operating Ratio | 96.0 | % | 97.9 | % | 95.2 | % | 103.7 | % | |||||||
Adj. Operating Ratio (1) | 95.0 | % | 95.3 | % | 94.0 | % | 97.6 | % | |||||||
Average Freight Revenue per Tractor per Week | $ | 4,732 | $ | 4,032 | $ | 4,509 | $ | 3,872 | |||||||
Average Freight Revenue per Total Mile | $ | 2.24 | $ | 1.90 | $ | 2.07 | $ | 1.85 | |||||||
Average Miles per Tractor per Period | 27,805 | 27,867 | 113,485 | 109,622 | |||||||||||
Weighted Average Tractors for Period | 2,294 | 2,480 | 2,408 | 2,702 | |||||||||||
Expedited | |||||||||||||||
Total Revenue | $ | 85,924 | $ | 75,855 | $ | 337,063 | $ | 320,202 | |||||||
Freight Revenue, excludes Fuel Surcharge | $ | 71,782 | $ | 69,434 | $ | 289,350 | $ | 291,471 | |||||||
Operating Income (Loss) | $ | 5,585 | $ | 4,782 | $ | 33,064 | $ | (7,037 | ) | ||||||
Adj. Operating Income (Loss) (1) | $ | 5,585 | $ | 6,111 | $ | 33,064 | $ | 9,305 | |||||||
Operating Ratio | 93.5 | % | 93.7 | % | 90.2 | % | 102.2 | % | |||||||
Adj. Operating Ratio (1) | 92.2 | % | 91.2 | % | 88.6 | % | 96.8 | % | |||||||
Average Freight Revenue per Tractor per Week | $ | 6,557 | $ | 5,687 | $ | 6,498 | $ | 5,031 | |||||||
Average Freight Revenue per Total Mile | $ | 2.06 | $ | 1.87 | $ | 1.97 | $ | 1.82 | |||||||
Average Miles per Tractor per Period | 41,925 | 40,016 | 172,080 | 144,636 | |||||||||||
Weighted Average Tractors for Period | 833 | 929 | 854 | 1,108 | |||||||||||
Dedicated | |||||||||||||||
Total Revenue | $ | 83,750 | $ | 69,819 | $ | 324,541 | $ | 288,652 | |||||||
Freight Revenue, excludes Fuel Surcharge | $ | 70,888 | $ | 61,972 | $ | 276,863 | $ | 255,503 | |||||||
Operating Income (Loss) | $ | 1,270 | $ | (1,714 | ) | $ | (1,357 | ) | $ | (15,536 | ) | ||||
Adj. Operating Income (Loss) (1) | $ | 1,564 | $ | 73 | $ | 740 | $ | 3,680 | |||||||
Operating Ratio | 98.5 | % | 102.5 | % | 100.4 | % | 105.4 | % | |||||||
Adj. Operating Ratio (1) | 97.8 | % | 99.9 | % | 99.7 | % | 98.6 | % | |||||||
Average Freight Revenue per Tractor per Week | $ | 3,692 | $ | 3,040 | $ | 3,417 | $ | 3,066 | |||||||
Average Freight Revenue per Total Mile | $ | 2.46 | $ | 1.94 | $ | 2.19 | $ | 1.88 | |||||||
Average Miles per Tractor per Period | 19,755 | 20,590 | 81,284 | 85,284 | |||||||||||
Weighted Average Tractors for Period | 1,461 | 1,551 | 1,554 | 1,594 | |||||||||||
(1) Represents non-GAAP measures. | |||||||||||||||
Combined Truckload Revenue
Expedited Truckload Revenue
Dedicated Truckload Revenue
“For the quarter, freight revenue in our Dedicated segment increased
Combined Truckload Operating Expenses
“Salaries, wages and related expense increased year-over-year
“Operations and maintenance related expense increased year-over-year by
Managed Freight Segment
Three Months Ended | Year Ended | ||||||||||||||
($000s) | 2021 | 2020 | 2021 | 2020 | |||||||||||
Freight Revenue | $ | 108,132 | $ | 64,884 | $ | 321,236 | $ | 177,579 | |||||||
Operating Income (Loss) | $ | 10,952 | $ | 5,375 | $ | 32,461 | $ | 4,482 | |||||||
Adj. Operating Income (1) | $ | 10,988 | $ | 5,539 | $ | 32,986 | $ | 8,129 | |||||||
Operating Ratio | 89.9 | % | 91.7 | % | 89.9 | % | 97.5 | % | |||||||
Adj. Operating Ratio (1) | 89.8 | % | 91.5 | % | 89.7 | % | 95.4 | % | |||||||
(1) Represents non-GAAP measures. | |||||||||||||||
“For the quarter, Managed Freight’s freight revenue increased
Warehousing Segment
Three Months Ended | Year Ended | ||||||||||||||
($000s) | 2021 | 2020 | 2021 | 2020 | |||||||||||
Freight Revenue | $ | 16,220 | $ | 14,566 | $ | 62,464 | $ | 51,665 | |||||||
Operating Income | $ | 430 | $ | 1,122 | $ | 2,994 | $ | 4,063 | |||||||
Adj. Operating Income (1) | $ | 687 | $ | 1,509 | $ | 4,415 | $ | 5,749 | |||||||
Operating Ratio | 97.4 | % | 92.4 | % | 95.3 | % | 92.2 | % | |||||||
Adj. Operating Ratio (1) | 95.8 | % | 89.6 | % | 92.9 | % | 88.9 | % | |||||||
(1) Represents non-GAAP measures. | |||||||||||||||
“For the quarter, Warehousing’s freight revenue increased 11.4% versus the prior year quarter. The increase in revenue was primarily driven by the year-over-year impact of new customer business. Operating income for the Warehousing segment was
Capitalization, Liquidity and Capital Expenditures
“At
“Our net capital investment for the quarter used
“For 2022 we are planning for a sizable increase in net capital expenditures as we return to a more normalized equipment replacement cycle. This replacement effort will occur against a backdrop of substantial price increases for new equipment, strong prices for used equipment, and industry-wide order cutbacks and deferrals by equipment manufacturers. The timing, cost, and projected fleet net capital expenditures will depend on how these factors play out. Our baseline expectation for 2022 fleet net capital expenditures is a range of
“Based on our current capital structure and expected 2022 net capital expenditures, we expect to generate free cash flow and have substantial flexibility to maintain moderate financial leverage and evaluate capital allocation alternatives.”
Outlook
“Our outlook is positive for continued operational progress during 2022. For at least the first few months of 2022, we anticipate a strong freight market accompanied by constrained capacity due to a national driver and equipment shortage. During this period, we expect a continuation of significant increases in pricing and operating costs, and we expect to continue to improve the margin expectation in certain Dedicated contracts and the duration of fleet commitments in certain Expedited contracts. Later in the year, we expect demand to become more balanced as supply chains gain fluidity, economic growth potentially slows, and consumer spending on services rebounds.
We expect cost pressure to persist even if freight demand moderates. From wages and insurance, to equipment and parts, to fuel prices and interest rates, the cost of our business is increasing. During the first half of 2022, we will have difficult comparisons due to unusually low insurance and claims and overhead expense during the 2021 period. Overall, absent a substantial, near-term deterioration in market forces, we expect a combination of pricing gains, improvement in our Dedicated segment, revenue growth, and continued focus on cost control, to support 2022 operating results similar to those in 2021, although the timing of various market factors and the speed of our execution could cause a range of possible results.
“For the longer term, we intend to steadily and intentionally grow the percentage of our revenue generated by Dedicated, Managed Freight, and Warehousing segments, while selectively investing in the Expedited segment to remain a leader in that sector. At the same time, we will continue to diligently pursue reducing unnecessary overhead, improving our safety, service, and productivity, diversifying our customer base with less seasonal and cyclical exposure, improving customer contracts, and investing in systems, technology, and people to support the growth of these previously under-invested areas. Over time, we expect Expedited and Dedicated to generate high single-digit to low double-digit operating margins, and Managed Freight and Warehousing to generate mid-to-high single-digit operating margins. Based on our expected asset intensity, these operating margins should produce double-digit returns on invested capital.
“With diligence and accountability, we expect to grow our market share organically and through acquisitions, continue to improve our operations, and be a stronger, more profitable, and more predictable business with the opportunity for significant and sustained value creation. Based on our anticipated cash flow generation profile, we will be able to continue our dividend program and evaluate a full range of capital allocation alternatives, including debt paydown, organic growth, acquisition and disposition opportunities, and stock repurchases.”
Quarterly Dividend Program
The Company’s board of directors has adopted a quarterly cash dividend program of
Conference Call Information
The Company will host a live conference call tomorrow,
(1) See GAAP to Non-GAAP Reconciliation in the schedules included with this release. In addition to operating income (loss), operating ratio, net income (loss), and earnings (loss) per diluted share, we use adjusted operating income (loss), adjusted operating ratio, adjusted net income (loss), and adjusted earnings (loss) per diluted share, non-GAAP measures, as key measures of profitability. Adjusted operating income (loss), adjusted operating ratio, adjusted net income (loss), and adjusted diluted earnings (loss) per share are not substitutes for operating income (loss), operating ratio, net income (loss), and earnings (loss) per diluted share measured in accordance with GAAP. There are limitations to using non-GAAP financial measures. We believe our presentation of these non-GAAP financial measures are useful because it provides investors and securities analysts with supplemental information that we use internally for purposes of assessing profitability. Further, our Board and management use non-GAAP operating income (loss), operating ratio, net income (loss), and earnings (loss) per diluted share measures on a supplemental basis to remove items that may not be an indicator of performance from period-to-period. Although we believe that adjusted operating income (loss), adjusted operating ratio, adjusted net income (loss), and adjusted diluted earnings (loss) per share improves comparability in analyzing our period-to-period performance, they could limit comparability to other companies in our industry, if those companies define such measures differently. Because of these limitations, adjusted operating income (loss), adjusted operating ratio, adjusted net income (loss), and adjusted earnings (loss) per diluted share should not be considered measures of income generated by our business or discretionary cash available to us to invest in the growth of our business. Management compensates for these limitations by primarily relying on GAAP results and using non-GAAP financial measures on a supplemental basis.
This press release contains certain statements that may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are subject to the safe harbor created by those sections and the Private Securities Litigation Reform Act of 1995, as amended. Such statements may be identified by their use of terms or phrases such as “expects,” “estimates,” “projects,” “believes,” “anticipates,” “plans,” “could,” “would,” “may,” “will,” "intends," “outlook,” “focus,” “seek,” “potential,” “mission,” “continue,” “goal,” “target,” “objective,” derivations thereof, and similar terms and phrases. Forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, which could cause future events and actual results to differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. In this press release, statements relating to future availability and covenant testing under our ABL credit facility, expected fleet age and warranty coverage, net capital expenditures, capital allocation alternatives, compensation headwinds, the payment of dividends, and the statements under “Outlook” are forward-looking statements. The following factors, among others could cause actual results to differ materially from those in the forward-looking statements: Our business is subject to economic, credit, business, and regulatory factors affecting the truckload industry that are largely beyond our control including cost inflation and global supply chain disruption that could affect (i) the volume, pricing, and predictability of customer demand, (ii) the availability, pricing, and delivery schedule of equipment and parts, (iii) the availability and compensation of employees and third-party capacity providers, and (iv) other aspects of our business; We may not be successful in achieving our strategic plan; We operate in a highly competitive and fragmented industry; We may not grow substantially in the future and we may not be successful in improving our profitability; We may not make acquisitions in the future, or if we do, we may not be successful in our acquisition strategy; Increases in driver compensation or difficulties attracting and retaining qualified drivers could have a materially adverse effect on our profitability and the ability to maintain or grow our fleet; Our engagement of independent contractors to provide a portion of our capacity exposes us to different risks than we face with our tractors driven by company drivers; We derive a significant portion of our revenues from our major customers; Fluctuations in the price or availability of fuel, the volume and terms of diesel fuel purchase commitments, surcharge collection, and hedging activities may increase our costs of operation; We depend on third-party providers, particularly in our Managed Freight segment; We depend on the proper functioning and availability of our management information and communication systems and other information technology assets (including the data contained therein) and a system failure or unavailability, including those caused by cybersecurity breaches, or an inability to effectively upgrade such systems and assets could cause a significant disruption to our business; If we are unable to retain our key employees, our business, financial condition, and results of operations could be harmed; Seasonality and the impact of weather and other catastrophic events affect our operations and profitability; We self-insure for a significant portion of our claims exposure, which could significantly increase the volatility of, and decrease the amount of, our earnings; Our self-insurance for auto liability claims and our use of captive insurance companies could adversely impact our operations; We have experienced, and may experience additional, erosion of available limits in our aggregate insurance policies; We may experience additional expense to reinstate insurance policies due to liability claims; We operate in a highly regulated industry; If our independent contractor drivers are deemed by regulators or judicial process to be employees, our business, financial condition, and results of operations could be adversely affected; Developments in labor and employment law and any unionizing efforts by employees could have a materially adverse effect on our results of operations; The Compliance Safety Accountability program adopted by the
For further information contact:
JHogan@covenantlogistics.com
TGrant@covenantlogistics.com
For copies of Company information contact:
BMcKenzie@covenantlogistics.com
Key Financial and Operating Statistics | |||||||||||||||||
Income Statement Data | |||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||
($s in 000s, except per share data) | 2021 | 2020 | % Change | 2021 | 2020 | % Change | |||||||||||
Freight revenue | $ | 267,022 | $ | 210,856 | 26.6 | % | $ | 949,913 | $ | 776,218 | 22.4 | % | |||||
Fuel surcharge revenue | 27,206 | 14,372 | 89.3 | % | 96,090 | 62,343 | 54.1 | % | |||||||||
Total revenue | $ | 294,228 | $ | 225,228 | 30.6 | % | $ | 1,046,003 | $ | 838,561 | 24.7 | % | |||||
Operating expenses: | |||||||||||||||||
Salaries, wages, and related expenses | 91,637 | 79,059 | 350,246 | 315,023 | |||||||||||||
Fuel expense | 28,273 | 18,179 | 103,641 | 77,443 | |||||||||||||
Operations and maintenance | 15,323 | 11,412 | 59,269 | 48,368 | |||||||||||||
Revenue equipment rentals and purchased transportation | 106,358 | 71,028 | 331,685 | 222,705 | |||||||||||||
Operating taxes and licenses | 2,667 | 2,066 | 10,899 | 11,621 | |||||||||||||
Insurance and claims | 10,350 | 12,562 | 38,788 | 53,052 | |||||||||||||
Communications and utilities | 1,233 | 1,241 | 4,558 | 5,898 | |||||||||||||
General supplies and expenses | 7,701 | 6,575 | 29,673 | 34,143 | |||||||||||||
Depreciation and amortization | 12,565 | 14,199 | 53,881 | 65,472 | |||||||||||||
Gain on disposition of property and equipment, net | (116 | ) | (659 | ) | (3,799 | ) | (7,706 | ) | |||||||||
Impairment of long lived property & equipment | - | - | - | 26,569 | |||||||||||||
Total operating expenses | 275,991 | 215,662 | 978,841 | 852,588 | |||||||||||||
Operating income (loss) | 18,237 | 9,566 | 67,162 | (14,027 | ) | ||||||||||||
Interest expense, net | 616 | 924 | 2,791 | 6,841 | |||||||||||||
Income from equity method investment | (5,210 | ) | (2,973 | ) | (14,782 | ) | (3,944 | ) | |||||||||
Income (loss) from continuing operations before income taxes | 22,831 | 11,615 | 79,153 | (16,924 | ) | ||||||||||||
Income tax expense (benefit) | 5,099 | 4,166 | 20,962 | (2,804 | ) | ||||||||||||
Income (loss) from continuing operations | 17,732 | 7,449 | 58,191 | (14,120 | ) | ||||||||||||
Income from discontinued operations, net of tax | - | (33,114 | ) | 2,540 | (28,598 | ) | |||||||||||
Net income (loss) | $ | 17,732 | $ | (25,665 | ) | $ | 60,731 | $ | (42,718 | ) | |||||||
Basic earnings (loss) per share | |||||||||||||||||
Income (loss) from continuing operations | $ | 1.06 | $ | 0.43 | $ | 3.46 | $ | (0.81 | ) | ||||||||
Income from discontinued operations | $ | - | $ | (1.93 | ) | $ | 0.15 | $ | (1.65 | ) | |||||||
Net income (loss) | $ | 1.06 | $ | (1.50 | ) | $ | 3.61 | $ | (2.46 | ) | |||||||
Diluted earnings (loss) per share | |||||||||||||||||
Income (loss) from continuing operations | $ | 1.05 | $ | 0.43 | $ | 3.42 | $ | (0.81 | ) | ||||||||
Income from discontinued operations | $ | - | $ | (1.93 | ) | $ | 0.15 | $ | (1.65 | ) | |||||||
Net income (loss) | $ | 1.05 | $ | (1.50 | ) | $ | 3.57 | $ | (2.46 | ) | |||||||
Basic weighted average shares outstanding (000s) | 16,718 | 17,135 | 16,803 | 17,358 | |||||||||||||
Diluted weighted average shares outstanding (000s) | 16,974 | 17,135 | 17,020 | 17,358 |
Segment Freight Revenues | ||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||
($s in 000's) | 2021 | 2020 | % Change | 2021 | 2020 | % Change | ||||||||||||
Expedited - Truckload | $ | 71,782 | $ | 69,434 | 3.4 | % | $ | 289,350 | $ | 291,471 | (0.7 | %) | ||||||
Dedicated - Truckload | 70,888 | 61,972 | 14.4 | % | 276,863 | 255,503 | 8.4 | % | ||||||||||
Combined Truckload | 142,670 | 131,406 | 8.6 | % | 566,213 | 546,974 | 3.5 | % | ||||||||||
Managed Freight | 108,132 | 64,884 | 66.7 | % | 321,236 | 177,579 | 80.9 | % | ||||||||||
Warehousing | 16,220 | 14,566 | 11.4 | % | 62,464 | 51,665 | 20.9 | % | ||||||||||
Consolidated Freight Revenue | $ | 267,022 | $ | 210,856 | 26.6 | % | $ | 949,913 | $ | 776,218 | 22.4 | % | ||||||
Truckload Operating Statistics | ||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||
2021 | 2020 | % Change | 2021 | 2020 | % Change | |||||||||||||
Average freight revenue per loaded mile | $ | 2.53 | $ | 2.11 | 19.9 | % | $ | 2.33 | $ | 2.04 | 14.2 | % | ||||||
Average freight revenue per total mile | $ | 2.24 | $ | 1.90 | 17.9 | % | $ | 2.07 | $ | 1.85 | 11.9 | % | ||||||
Average freight revenue per tractor per week | $ | 4,732 | $ | 4,032 | 17.4 | % | $ | 4,509 | $ | 3,872 | 16.5 | % | ||||||
Average miles per tractor per period | 27,805 | 27,867 | (0.2 | %) | 113,485 | 109,622 | 3.5 | % | ||||||||||
Weighted avg. tractors for period | 2,294 | 2,480 | (7.5 | %) | 2,408 | 2,702 | (10.9 | %) | ||||||||||
Tractors at end of period | 2,291 | 2,461 | (6.9 | %) | 2,291 | 2,461 | (6.9 | %) | ||||||||||
Trailers at end of period | 5,331 | 5,647 | (5.6 | %) | 5,331 | 5,647 | (5.6 | %) | ||||||||||
Selected Balance Sheet Data | ||||||||||||||||||
($s in '000's, except per share data) | ||||||||||||||||||
Total assets | $ | 650,387 | $ | 676,716 | ||||||||||||||
Total stockholders' equity | $ | 349,699 | $ | 290,642 | ||||||||||||||
Total indebtedness, net of cash | $ | 65,839 | $ | 101,963 | ||||||||||||||
Net Indebtedness to Capitalization Ratio | 15.8 | % | 26.0 | % | ||||||||||||||
Leverage Ratio(1) | 0.72 | 2.89 | ||||||||||||||||
Tangible book value per end-of-quarter basic share | $ | 17.10 | $ | 13.03 | ||||||||||||||
(1) Leverage Ratio is calculated as average total indebtedness, net of cash, divided by the sum of operating income (loss), depreciation and amortization, gain on disposition of property and equipment, net, and impairment of long lived property and equipment. |
Non-GAAP Reconciliation (Unaudited) | ||||||||||||||||||
Adjusted Operating Income and Adjusted Operating Ratio (1) | ||||||||||||||||||
(Dollars in thousands) | Three Months Ended | Year Ended | ||||||||||||||||
GAAP Presentation | 2021 | 2020 | bps Change | 2021 | 2020 | bps Change | ||||||||||||
Total revenue | $ | 294,228 | $ | 225,228 | $ | 1,046,003 | $ | 838,561 | ||||||||||
Total operating expenses | 275,991 | 215,662 | 978,841 | 852,588 | ||||||||||||||
Operating income (loss) | $ | 18,237 | $ | 9,566 | $ | 67,162 | $ | (14,027 | ) | |||||||||
Operating ratio | 93.8 | % | 95.8 | % | (200 | ) | 93.6 | % | 101.7 | % | (810 | ) | ||||||
Non-GAAP Presentation | 2021 | 2020 | bps Change | 2021 | 2020 | bps Change | ||||||||||||
Total revenue | $ | 294,228 | $ | 225,228 | $ | 1,046,003 | $ | 838,561 | ||||||||||
Fuel surcharge revenue | (27,206 | ) | (14,372 | ) | (96,090 | ) | (62,343 | ) | ||||||||||
Freight revenue (total revenue, excluding fuel surcharge) | 267,022 | 210,856 | 949,913 | 776,218 | ||||||||||||||
Total operating expenses | 275,991 | 215,662 | 978,841 | 852,588 | ||||||||||||||
Adjusted for: | ||||||||||||||||||
Fuel surcharge revenue | (27,206 | ) | (14,372 | ) | (96,090 | ) | (62,343 | ) | ||||||||||
Amortization of intangibles (2) | (587 | ) | (1,152 | ) | (4,043 | ) | (5,097 | ) | ||||||||||
Bad debt expense associated with customer bankruptcy and high credit risk customers | - | - | - | (2,617 | ) | |||||||||||||
Insurance policy erosion | - | - | - | (4,447 | ) | |||||||||||||
Strategic restructuring adjusting items: | ||||||||||||||||||
Gain on disposal of terminals, net | - | (972 | ) | - | 4,740 | |||||||||||||
Impairment of real estate and related tangible assets | - | - | - | (9,790 | ) | |||||||||||||
Impairment of revenue equipment and related charges | - | - | - | (17,604 | ) | |||||||||||||
Restructuring related severance and other | - | (1,543 | ) | - | (4,334 | ) | ||||||||||||
Abandonment of information technology infrastructure | - | - | - | (1,048 | ) | |||||||||||||
Contract exit costs and other restructuring | - | - | - | (695 | ) | |||||||||||||
Adjusted operating expenses | 248,198 | 197,623 | 878,708 | 749,353 | ||||||||||||||
Adjusted operating income | 18,824 | 13,233 | 71,205 | 26,865 | ||||||||||||||
Adjusted operating ratio | 93.0 | % | 93.7 | % | (70 | ) | 92.5 | % | 96.5 | % | (400 | ) | ||||||
(1) Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP operating income and operating ratio to consolidated non-GAAP Adjusted operating income and Adjusted operating ratio. | ||||||||||||||||||
(2) "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets. | ||||||||||||||||||
Non-GAAP Reconciliation (Unaudited) | ||||||||||||||||||
Adjusted Net Income and Adjusted EPS (1) | ||||||||||||||||||
(Dollars in thousands) | Three Months Ended | Year Ended | ||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||
GAAP Presentation - Net (loss) income | $ | 17,732 | $ | (25,665 | ) | $ | 60,731 | $ | (42,718 | ) | ||||||||
Adjusted for: | ||||||||||||||||||
Amortization of intangibles (2) | 587 | 1,152 | 4,043 | 5,097 | ||||||||||||||
Bad debt expense associated with customer bankruptcy and high credit risk customers | - | - | - | 2,617 | ||||||||||||||
Insurance policy erosion | - | - | - | 4,447 | ||||||||||||||
Strategic restructuring adjusting items: | ||||||||||||||||||
Discontinued operations reversal of loss contingency (3) | - | 44,151 | (3,411 | ) | 40,431 | |||||||||||||
Loss (gain) on disposal of terminals, net | - | 972 | - | (4,740 | ) | |||||||||||||
Impairment of real estate and related tangible assets | - | - | - | 9,790 | ||||||||||||||
Impairment of revenue equipment and related charges | - | - | - | 17,604 | ||||||||||||||
Restructuring related severance and other | - | 1,543 | - | 4,334 | ||||||||||||||
Abandonment of information technology infrastructure | - | - | - | 1,048 | ||||||||||||||
Contract exit costs and other restructuring | - | - | - | 695 | ||||||||||||||
Total adjustments before taxes | 587 | 47,818 | 632 | 81,323 | ||||||||||||||
Provision for income tax expense at effective rate | (150 | ) | (11,715 | ) | (76 | ) | (19,924 | ) | ||||||||||
Tax effected adjustments | $ | 437 | $ | 36,103 | $ | 556 | $ | 61,399 | ||||||||||
Non-GAAP Presentation - Adjusted net income | $ | 18,169 | $ | 10,438 | $ | 61,287 | $ | 18,681 | ||||||||||
GAAP Presentation - Diluted (loss) earnings per share ("EPS") | $ | 1.05 | $ | (1.50 | ) | $ | 3.57 | $ | (2.46 | ) | ||||||||
Adjusted for: | ||||||||||||||||||
Amortization of intangibles (2) | 0.03 | 0.07 | 0.24 | 0.29 | ||||||||||||||
Bad debt expense associated with customer bankruptcy and high credit risk customers | - | - | - | 0.15 | ||||||||||||||
Insurance policy erosion and premium reinstatement expense | - | - | - | 0.26 | ||||||||||||||
Strategic restructuring adjusting items: | ||||||||||||||||||
Discontinued operations reversal of loss contingency(3) | - | 2.58 | (0.20 | ) | 2.33 | |||||||||||||
Gain on sale of terminal, net | - | 0.06 | - | (0.27 | ) | |||||||||||||
Impairment of real estate and related tangible assets | - | - | - | 0.56 | ||||||||||||||
Impairment of revenue equipment and related charges | - | - | - | 1.01 | ||||||||||||||
Restructuring related severance and other | - | 0.09 | - | 0.25 | ||||||||||||||
Abandonment of information technology infrastructure | - | - | - | 0.06 | ||||||||||||||
Contract exit costs and other restructuring | - | - | - | 0.04 | ||||||||||||||
Total adjustments before taxes | 0.03 | 2.79 | 0.04 | 4.69 | ||||||||||||||
Provision for income tax expense at effective rate | (0.01 | ) | (0.68 | ) | - | (1.15 | ) | |||||||||||
Tax effected adjustments | $ | 0.02 | $ | 2.11 | $ | 0.04 | $ | 3.54 | ||||||||||
Non-GAAP Presentation - Adjusted EPS | $ | 1.07 | $ | 0.61 | $ | 3.61 | $ | 1.08 | ||||||||||
(1) Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP net income to consolidated non-GAAP adjusted net income and consolidated GAAP diluted earnings per share to non-GAAP consolidated Adjusted EPS. | ||||||||||||||||||
(2) "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets. | ||||||||||||||||||
(3) "Discontinued Operations reversal of loss contingency" reflects the non-cash reversal of a previously recorded loss contingency that is no longer considered probable. The original loss contingency was recorded in Q4 2020 as a result of our disposal of our former accounts receivable factoring segment, TFS. |
Non-GAAP Reconciliation (Unaudited) | |||||||||||||||||||||||||||||||
Adjusted Operating Income and Adjusted Operating Ratio (1) | |||||||||||||||||||||||||||||||
(Dollars in thousands) | Three Months Ended | ||||||||||||||||||||||||||||||
GAAP Presentation | 2021 | 2020 | |||||||||||||||||||||||||||||
Expedited | Dedicated | Combined Truckload | Managed Freight | Warehousing | Expedited | Dedicated | Combined Truckload | Managed Freight | Warehousing | ||||||||||||||||||||||
Total revenue | $ | 85,924 | $ | 83,750 | $ | 169,674 | $ | 108,132 | $ | 16,422 | $ | 75,855 | $ | 69,819 | $ | 145,674 | $ | 64,884 | $ | 14,670 | |||||||||||
Total operating expenses | 80,339 | 82,480 | $ | 162,819 | $ | 97,180 | 15,992 | 71,073 | 71,533 | 142,606 | 59,509 | 13,548 | |||||||||||||||||||
Operating income (loss) | $ | 5,585 | $ | 1,270 | $ | 6,855 | $ | 10,952 | $ | 430 | $ | 4,782 | $ | (1,714 | ) | $ | 3,068 | $ | 5,375 | $ | 1,122 | ||||||||||
Operating ratio | 93.5 | % | 98.5 | % | 96.0 | % | 89.9 | % | 97.4 | % | 93.7 | % | 102.5 | % | 97.9 | % | 91.7 | % | 92.4 | % | |||||||||||
Non-GAAP Presentation | |||||||||||||||||||||||||||||||
Total revenue | $ | 85,924 | $ | 83,750 | $ | 169,674 | $ | 108,132 | $ | 16,422 | $ | 75,855 | $ | 69,819 | $ | 145,674 | $ | 64,884 | $ | 14,670 | |||||||||||
Fuel surcharge revenue | (14,142 | ) | (12,862 | ) | (27,004 | ) | - | (202 | ) | (6,421 | ) | (7,847 | ) | (14,268 | ) | - | (104 | ) | |||||||||||||
Freight revenue (total revenue, excluding fuel surcharge) | 71,782 | 70,888 | 142,670 | 108,132 | 16,220 | 69,434 | 61,972 | 131,406 | 64,884 | 14,566 | |||||||||||||||||||||
Total operating expenses | 80,339 | 82,480 | 162,819 | 97,180 | 15,992 | 71,073 | 71,533 | 142,606 | 59,509 | 13,548 | |||||||||||||||||||||
Adjusted for: | |||||||||||||||||||||||||||||||
Fuel surcharge revenue | (14,142 | ) | (12,862 | ) | (27,004 | ) | - | (202 | ) | (6,421 | ) | (7,847 | ) | (14,268 | ) | - | (104 | ) | |||||||||||||
Amortization of intangibles (2) | - | (294 | ) | (294 | ) | (36 | ) | (257 | ) | - | (601 | ) | (601 | ) | (164 | ) | (387 | ) | |||||||||||||
Strategic restructuring adjusting items: | |||||||||||||||||||||||||||||||
Gain on disposal of terminals, net | - | - | - | - | - | (514 | ) | (458 | ) | (972 | ) | - | - | ||||||||||||||||||
Restructuring related severance and other | - | - | - | - | - | (815 | ) | (728 | ) | (1,543 | ) | - | - | ||||||||||||||||||
Adjusted operating expenses | 66,197 | 69,324 | 135,521 | 97,144 | 15,533 | 63,323 | 61,899 | 125,222 | 59,345 | 13,057 | |||||||||||||||||||||
Adjusted operating income (loss) | 5,585 | 1,564 | 7,149 | 10,988 | 687 | 6,111 | 73 | 6,184 | 5,539 | 1,509 | |||||||||||||||||||||
Adjusted operating ratio | 92.2 | % | 97.8 | % | 95.0 | % | 89.8 | % | 95.8 | % | 91.2 | % | 99.9 | % | 95.3 | % | 91.5 | % | 89.6 | % | |||||||||||
Year Ended | |||||||||||||||||||||||||||||||
GAAP Presentation | 2021 | 2020 | |||||||||||||||||||||||||||||
Expedited | Dedicated | Combined Truckload | Managed Freight | Warehousing | Expedited | Dedicated | Combined Truckload | Managed Freight | Warehousing | ||||||||||||||||||||||
Total revenue | $ | 337,063 | $ | 324,541 | $ | 661,604 | $ | 321,236 | $ | 63,163 | $ | 320,202 | $ | 288,652 | $ | 608,854 | $ | 177,579 | $ | 52,128 | |||||||||||
Total operating expenses | 303,999 | $ | 325,898 | $ | 629,897 | $ | 288,775 | $ | 60,169 | $ | 327,239 | $ | 304,188 | $ | 631,427 | $ | 173,097 | $ | 48,065 | ||||||||||||
Operating income (loss) | $ | 33,064 | $ | (1,357 | ) | $ | 31,707 | $ | 32,461 | $ | 2,994 | $ | (7,037 | ) | $ | (15,536 | ) | $ | (22,573 | ) | $ | 4,482 | $ | 4,063 | |||||||
Operating ratio | 90.2 | % | 100.4 | % | 95.2 | % | 89.9 | % | 95.3 | % | 102.2 | % | 105.4 | % | 103.7 | % | 97.5 | % | 92.2 | % | |||||||||||
Non-GAAP Presentation | |||||||||||||||||||||||||||||||
Total revenue | $ | 337,063 | $ | 324,541 | $ | 661,604 | $ | 321,236 | $ | 63,163 | $ | 320,202 | $ | 288,652 | $ | 608,854 | $ | 177,579 | $ | 52,128 | |||||||||||
Fuel surcharge revenue | (47,713 | ) | (47,678 | ) | ($ | 95,391 | ) | - | (699 | ) | (28,731 | ) | (33,149 | ) | (61,880 | ) | - | (463 | ) | ||||||||||||
Freight revenue (total revenue, excluding fuel surcharge) | 289,350 | 276,863 | 566,213 | 321,236 | 62,464 | 291,471 | 255,503 | 546,974 | 177,579 | 51,665 | |||||||||||||||||||||
Total operating expenses | 303,999 | 325,898 | 629,897 | 288,775 | 60,169 | 327,239 | 304,188 | 631,427 | 173,097 | 48,065 | |||||||||||||||||||||
Adjusted for: | |||||||||||||||||||||||||||||||
Fuel surcharge revenue | (47,713 | ) | (47,678 | ) | (95,391 | ) | - | (699 | ) | (28,731 | ) | (33,149 | ) | (61,880 | ) | - | (463 | ) | |||||||||||||
Amortization of intangibles (2) | - | (2,097 | ) | (2,097 | ) | (525 | ) | (1,421 | ) | - | (2,777 | ) | (2,777 | ) | (633 | ) | (1,686 | ) | |||||||||||||
Bad debt expense associated with customer bankruptcy and high credit risk customers | - | - | - | - | - | (972 | ) | (867 | ) | (1,839 | ) | (778 | ) | - | |||||||||||||||||
Strategic restructuring adjusting items: | |||||||||||||||||||||||||||||||
Insurance policy erosion | - | - | - | - | - | (2,627 | ) | (1,820 | ) | (4,447 | ) | - | - | ||||||||||||||||||
Gain on disposal of terminals, net | - | - | - | - | - | 2,505 | 2,235 | 4,740 | - | - | |||||||||||||||||||||
Impairment of real estate and related tangible assets | - | - | - | - | - | (3,991 | ) | (3,563 | ) | (7,554 | ) | (2,236 | ) | - | |||||||||||||||||
Impairment of revenue equipment and related charges | - | - | - | - | - | (8,046 | ) | (9,558 | ) | (17,604 | ) | - | - | ||||||||||||||||||
Restructuring related severance and other | - | - | - | - | - | (2,290 | ) | (2,044 | ) | (4,334 | ) | - | - | ||||||||||||||||||
Abandonment of information technology infrastructure | - | - | - | - | - | (554 | ) | (494 | ) | (1,048 | ) | - | - | ||||||||||||||||||
Contract exit costs and other restructuring | - | - | - | - | - | (367 | ) | (328 | ) | (695 | ) | - | - | ||||||||||||||||||
Adjusted operating expenses | 256,286 | 276,123 | 532,409 | 288,250 | 58,049 | 282,166 | 251,823 | 533,989 | 169,450 | 45,916 | |||||||||||||||||||||
Adjusted operating income (loss) | 33,064 | 740 | 33,804 | 32,986 | 4,415 | 9,305 | 3,680 | 12,985 | 8,129 | 5,749 | |||||||||||||||||||||
Adjusted operating ratio | 88.6 | % | 99.7 | % | 94.0 | % | 89.7 | % | 92.9 | % | 96.8 | % | 98.6 | % | 97.6 | % | 95.4 | % | 88.9 | % | |||||||||||
(1) Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP operating income and operating ratio to consolidated non-GAAP Adjusted operating income and Adjusted operating ratio. | |||||||||||||||||||||||||||||||
(2) "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets. |
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