Covenant Logistics Group Announces Fourth Quarter Financial and Operating Results

Core Viewpoint - Covenant Logistics Group, Inc. reported its fourth quarter financial results for 2024, highlighting a challenging freight environment but demonstrating resilience through a diversified business model and operational adjustments [2][3][21]. Financial Performance - The company achieved fourth quarter earnings of $0.24 per diluted share and non-GAAP adjusted earnings of $0.49 per diluted share, with total revenue of $277.3 million, a slight increase of 1.2% from the previous year [2][4][29]. - Freight revenue, excluding fuel surcharge, was $251.1 million, up 4.6% year-over-year, while total revenue for the year reached $1.13 billion, a 2.5% increase [4][27][29]. - Net income for the fourth quarter was $6.7 million, down from $12.8 million in the same quarter of 2023, reflecting the impact of increased operating costs [4][26][29]. Segment Performance - The Dedicated segment saw a revenue increase of 22.4% to $80.7 million, driven by a 13.2% increase in average total tractors [8][27]. - The Expedited segment's freight revenue decreased by 0.8% to $83.8 million, with a reduction in average total tractors [8][27]. - Managed Freight's revenue fell by 4.3% to $62.3 million, but operating income improved by approximately 87% year-over-year [14][27]. - The Warehousing segment's revenue was relatively stable, with a slight decrease of 0.8% to $24.4 million, but operating income increased due to improved labor costs [15][27]. Operating Expenses - Operating expenses in the truckload segments increased by 6.6% on a per total mile basis, primarily due to higher driver pay, maintenance costs, and insurance expenses [9][10][11]. - Salaries, wages, and related expenses rose by approximately 10% year-over-year, reflecting growth in the dedicated protein supply chain business [10][26]. - The company recognized a $6.3 million expense related to an earnout payment from a previous acquisition, impacting adjusted results [9][26]. Capitalization and Liquidity - As of December 31, 2024, total net indebtedness decreased by $28.7 million to approximately $219.6 million, with a net indebtedness to total capitalization ratio of 33.4% [16][18]. - The company had cash and cash equivalents of $35.6 million and no borrowings under its ABL credit facility, indicating strong liquidity [18][20]. Outlook - The general freight market is showing signs of improvement, with better balance between capacity and demand, although challenges remain in dedicated markets due to temporary customer shutdowns and adverse weather conditions [21][22]. - The company aims to grow profitably and generate meaningful returns for shareholders while expanding its dedicated fleet and exploring acquisition opportunities [21][22].