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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
10-K
(Mark
One)
|
[X] |
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 |
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For
the fiscal year ended December 31, 2004 |
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OR |
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[ ] |
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 |
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For
the transition period from to |
Commission
file number 0-24960
COVENANT
TRANSPORT, INC.
(Exact
name of registrant as specified in its charter)
|
Nevada |
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88-0320154 |
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(State
or other jurisdiction of |
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(I.R.S.
Employer |
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incorporation
or organization) |
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Identification
No.) |
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400
Birmingham Hwy. |
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Chattanooga,
TN |
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37419 |
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(Address
of principal executive offices) |
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(Zip
Code) |
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Registrant's
telephone number, including area code: |
423-821-1212 |
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Securities
registered pursuant to Section 12(b) of the Act: |
None |
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Securities
registered pursuant to Section 12(g) of the Act: |
$0.01
Par Value Class A Common Stock |
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(Title of class) |
Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X] Yes
[ ] No
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any
amendments to this Form 10-K. [X]
Indicate
by check mark whether the registrant is an accelerated filer (as defined in Rule
12b-2 of the Act). [X] Yes
[ ] No
The
aggregate market value of the voting stock held by non-affiliates of the
registrant as of June 30, 2004, the last business day of the registrant's
most recently completed fiscal second quarter was approximately
$160.0 million (based upon the $17.09 per share closing price on that date
as reported by Nasdaq). In making this calculation the registrant has assumed,
without admitting for any purpose, that all executive officers, directors, and
affiliated holders of more than 10% of a class of outstanding common stock, and
no other persons, are affiliates.
As of
March 1, 2005, the registrant had 12,340,492 shares of Class A common
stock and 2,350,000 shares of Class B common stock
outstanding.
Materials
from the registrant's definitive proxy statement for the 2005 annual meeting of
stockholders to be held on May 10, 2005 have been incorporated by reference into
Part III of this Form 10-K.
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Part
I |
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Business |
3 |
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Properties |
10 |
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Legal
Proceedings |
10 |
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Submission
of Matters to a Vote of Security Holders |
10 |
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Part
II |
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Market
for Registrant's Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities |
11 |
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Selected
Financial and Operating Data |
12 |
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|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations |
14 |
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Quantitative
and Qualitative Disclosures about Market Risk |
30 |
| |
|
Financial
Statements and Supplementary Data |
31 |
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Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure |
31 |
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Controls
and Procedures |
32 |
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Other
Information |
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Part
III |
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Directors
and Executive Officers of the Registrant |
33 |
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Executive
Compensation |
33 |
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Security
Ownership of Certain Beneficial Owners and Management |
33 |
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Certain
Relationships and Related Transactions |
34 |
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Principal
Accounting Fees and Services |
34 |
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Part
IV |
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Exhibits,
Financial Statement Schedules |
35 |
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37 |
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Reports of Independent Registered Public Accounting
Firm |
38 |
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Financial
Data |
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40 |
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41 |
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42 |
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43 |
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Notes to Consolidated Financial
Statements |
44 |
PART
I
This
Annual Report 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. Such
statements may be identified by their use of terms or phrases such as "expects,"
"estimates," "projects," "believes," "anticipates," "intends," and similar terms
and phrases. Forward-looking statements 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. Readers
should review and consider the factors discussed in "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Factors that May
Affect Future Results" of this Annual Report on Form 10-K, along with various
disclosures in our press releases, stockholder reports, and other filings with
the Securities and Exchange Commission. We disclaim any obligation to update or
revise any forward-looking statements to reflect actual results or changes in
the factors affecting the forward-looking information.
References
in this Annual Report to "we," "us," "our," or the "Company" or similar terms
refer to Covenant Transport, Inc. and its
subsidiaries.
General
We are
one of the ten largest truckload carriers in the United States measured by
revenue, according to Transport
Topics, a
publication of the American Trucking Associations. We focus on targeted markets
where we believe our service standards can provide a competitive advantage. We
are a major carrier for traditional truckload customers such as manufacturers
and retailers, as well as for transportation companies such as freight
forwarders, less-than-truckload carriers, and third-party logistics providers
that require a high level of service to support their businesses.
|
Offering
superior service is a key component of our marketing and operations
strategy. In each of the past ten years, we have provided 99% on-time
performance to our customers, measured by the delivery standards they give
us. By targeting premium service freight, we seek to obtain higher rates,
build long-term service-based customer relationships, and avoid
competition from rail, intermodal, and trucking companies that compete
primarily on the basis of price. |
 |
We were
founded as a provider of expedited long-haul freight transportation, primarily
using two-person driver teams in transcontinental lanes. From our inception in
1986 through the late 1990's, we focused primarily on expedited team service.
During this time, approximately 60% to 70% of our tractors were operated by
teams, and our solo driver operations primarily supported certain customer needs
and provided a driver pool from which to build teams. Our operations were
characterized by very long lengths of haul, intense asset utilization that
generated significant mileage and revenue per truck, and a high level of
customer service.
Beginning
in the late 1990's and continuing into 2001, a combination of customer demand
for additional services, changes in freight distribution patterns, a desire to
reduce exposure to the more cyclical and seasonal long-haul markets, and a
desire for additional growth markets convinced us to offer additional services.
Through our acquisitions of Bud Meyer Truck Line and Southern Refrigerated
Transport, we entered the temperature-controlled market. Through our
acquisitions of Harold Ives Trucking and Con-Way Truckload Services, we
developed a significant solo-driver operation. In addition, over the past
several years, we internally developed the capacity to provide dedicated fleet
services.
The
following charts demonstrate the development of our business into multiple
transportation services.
Today, we
categorize our business into the following four major transportation
services:
|
· |
Expedited
Team Service. At December 31, 2004, we operated approximately 1,030
two-person driver teams, of which approximately 786 teams operated in our
expedited team service, with the remainder of our teams operating in our
dedicated and temperature-controlled services.. Our teams generally
operate over distances ranging from 1,000 to 2,000 miles and had an
average length of haul 1,266 miles in 2004. Our expedited teams offer
service standards such as coast-to-coast delivery in 72 hours,
meeting delivery appointments within 15 minutes, and delivering 99%
of loads on-time. We believe our expedited teams offer greater speed and
reliability than rail, rail-truck intermodal, and solo-driver competitors
at a lower cost than air freight. The main advantage to us of expedited
team service is high revenue per tractor. The main challenges are managing
the mileage on the trucks to avoid decreasing the resale value and
recruiting and pairing two drivers, particularly during driver shortages,
which tend to coincide with strong economic activity that increases
demand. |
| |
|
|
· |
Dedicated
Fleet Service. At December 31, 2004, we operated approximately 554
tractors in our dedicated fleet service. These tractors operate for a
single customer or on a defined route and frequently have contractually
guaranteed revenue. This part of our business has grown rapidly as over
the past two years as customers have desired committed capacity and we
have expanded our participation in their design, development, and
execution of supply chain solutions. We believe the advantages of
dedicated fleet service include protection against rate pressure during
the term of the agreement and predictable equipment utilization and
routes, which assist with driver retention, asset productivity and
management planning. We believe the challenges of dedicated fleets include
limited ability to react to certain cost changes and to increase rates to
take advantage of market shifts. |
| |
|
|
· |
Temperature-Controlled
Service. At December 31, 2004, we operated approximately
648 tractors in our temperature-controlled service. Most operate in
our Southern Refrigerated Transport, or SRT, subsidiary, but we also have
temperature-controlled operations under the Covenant name. Our
temperature-controlled operations primarily transport fresh produce from
the West Coast to the Midwest or Southeast and return with either
temperature-controlled or general commodities. We believe the advantages
of temperature-controlled service include less cyclical freight patterns
and a growing population that requires food products. We believe the
challenges of temperature-controlled service include more expensive
trailers, the perishable nature of commodities, and the fuel and
maintenance expense associated with refrigeration
units. |
| |
|
|
· |
Regional
Truckload Service. At December 31, 2004, we operated approximately
1,488 tractors in our regional truckload service. The average length
of haul was 881 miles in 2004. We expect this to decrease over time as our
business gravitates toward movements with lengths of haul closer to
500-600 miles. According to industry sources, 70-80% of the freight
transported in the United States moves in distances of less than 500
miles. We expect most freight to continue to move in regional lengths of
haul as manufacturers, retailers, and distributors move elements of their
supply chains into closer proximity. We believe the advantages of regional
truckload service include access to large freight volumes, generally
higher rates per mile, and driver-friendly routes. We believe the
disadvantages of regional truckload service include lower equipment
utilization and a greater percentage of non-revenue miles than in
long-haul lanes. |
The
development of our business into four major transportation services has affected
our operating metrics over time. Three measures with significant changes are
average length of haul, average revenue per mile (excluding fuel surcharges),
and average miles per tractor. A description of each follows:
|
Our
average length of haul has decreased significantly as we have increased
the use of solo driver tractors and increased our focus on regional
markets. Shorter lengths of haul frequently involve higher rates per mile
from customers, fewer miles per truck, and a greater percentage of
non-revenue miles caused by re-positioning of equipment. |
 |
|
Average
Revenue Per Mile. Our average revenue per mile has increased sharply.
Average revenue per loaded mile has increased 12.0% since 2000, while
non-revenue miles have also increased. This led to a 10.4% increase in
average revenue per total mile. All revenue per mile numbers exclude fuel
surcharge revenue. |
 |
|
Average
Miles Per Tractor. Our average miles per tractor have decreased because of
a lower percentage of teams in our fleet and a shortening of our average
length of haul. |
 |
|
Because
of the changes in our business, we use average freight revenue per tractor
per week (which excludes fuel surcharges) as our main measure of asset
productivity. This operating metric takes into account the effects of
freight rates, non-revenue miles, and miles per tractor. In addition,
because we calculate average freight revenue per tractor using all of our
trucks, it takes into account the percentage of our fleet that is
unproductive due to lack of drivers, repairs, and other
factors. |
 |
Customers
and Operations
Our
primary customers include manufacturers and retailers, as well as other
transportation companies. In 2004, our five largest customers were Wal-Mart
Stores, Con-Way Transportation, Georgia Pacific, Eagle Global Logistics and Shaw
Industries. In the aggregate, subsidiaries of CNF, Inc. including Con-Way
Transportation and Emery Air Freight, accounted for approximately 9% of our
revenue in 2004 and 11% for 2003 and 2002.
We
operate tractors driven by a single driver and also tractors assigned to
two-person driver teams. Over time the percentage of our revenue generated by
driver teams has trended down, although the mix will depend on a variety of
factors over time. Our single driver tractors generally operate in shorter
lengths of haul, generate fewer miles per tractor, and experience more
non-revenue miles, but the lower productive miles are expected to be offset by
generally higher revenue per loaded mile and the reduced employee expense of
compensating only one driver.
We equip
our tractors with a satellite-based tracking and communications system that
permits direct communication between drivers and fleet managers. We believe that
this system enhances our operating efficiency and improves customer service and
fleet management. This system also updates the tractor's position every 30
minutes, which allows us and our customers to locate freight and accurately
estimate pick-up and delivery times. We also use the system to monitor engine
idling time, speed, performance, and other factors that affect operating
efficiency.
As an
additional service to customers, we offer electronic data interchange and
Internet-based communication for customer usage in tendering loads and accessing
information such as cargo position, delivery times, and billing information.
These services allow us to communicate electronically with our customers,
permitting real-time information flow, reductions or eliminations in paperwork,
and the employment of fewer clerical personnel. Since 1997, we have used a
document imaging system to reduce paperwork and enhance access to important
information.
Our
operations generally follow the seasonal norm for the trucking industry.
Equipment utilization is usually at its highest from May to August, maintains
high levels through October, and generally decreases during the winter holiday
season and as inclement weather impedes operations.
We
operate throughout the United States and in parts of Canada and Mexico, with
substantially all of our revenue generated from within the United States. All of
our assets are domiciled in the United States, and for the past three years less
than one percent of our revenue has been generated in Canada and Mexico. We do
not separately track domestic and foreign revenue from customers or domestic and
foreign long-lived assets, and providing such information would be
impracticable.
Drivers
and Other Personnel
Driver
recruitment, retention, and satisfaction are essential to our success, and we
have made each of these factors a primary element of our strategy. We recruit
both experienced and student drivers as well as independent contractor drivers
who own and drive their own tractor and provide their services to us under
lease. We conduct recruiting and/or driver orientation efforts from four of our
locations and we offer ongoing training throughout our terminal network. We
emphasize driver-friendly operations throughout our organization. We have
implemented automated programs to signal when a driver is scheduled to be routed
toward home, and we assign fleet managers specific tractor units, regardless of
geographic region, to foster positive relationships between the drivers and
their principal contact with us.
The
truckload industry has periodically experienced difficulty in attracting and
retaining enough qualified truck drivers. It is also common for the driver
turnover rate of individual carriers to exceed 100%. We believe a combination of
greater demand for freight transportation and the alternative careers provided
by the expansion in economic activity over the past few years, together with the
demographics of the truck driving population and other factors, have exacerbated
the shortage of drivers recently. This has increased our costs of recruiting,
training, and retaining drivers and has resulted in more of our trucks lacking
drivers.
We use
driver teams in a substantial portion of our tractors. Driver teams permit us to
provide expedited service on selected long-haul lanes because driver teams are
able to handle longer routes and drive more miles while remaining within
Department of Transportation ("DOT") safety rules. The use of teams contributes
to greater equipment utilization of the tractors they drive than obtained with
single drivers. The use of teams, however, increases personnel costs as a
percentage of revenue and the number of drivers we must recruit. At
December 31, 2004, teams operated approximately 30% of our
tractors.
We are
not a party to a collective bargaining agreement. At December 31, 2004, we
employed approximately 4,936 drivers and approximately 927 nondriver personnel.
At December 31, 2004, we also contracted with approximately 217 independent
contractor drivers. We believe that we have a good relationship with our
personnel.
Revenue
Equipment
We
believe that operating high quality, late-model equipment contributes to
operating efficiency, helps us recruit and retain drivers, and is an important
part of providing excellent service to customers. Our policy is to operate our
tractors while under warranty to minimize repair and maintenance cost and reduce
service interruptions caused by breakdowns. We also order most of our equipment
with uniform specifications to reduce our parts inventory and facilitate
maintenance. At December 31, 2004, our tractor fleet had an average age of
approximately 16 months and our trailer fleet had an average age of
approximately 35 months. Approximately 82% of our tractors were equipped with
post October 2002 emission-compliant engines. Approximately 87% of our trailers
were dry vans and the remainder were temperature-controlled vans.
Industry
and Competition
The U.S.
market for truck-based transportation services generated total revenues of
approximately $610.1 billion in 2003 and is projected to follow in line
with the overall U.S. economy. The trucking industry includes both private
fleets and "for-hire" carriers. We operate in the highly fragmented for-hire
truckload segment of this market, which generated estimated revenues of
approximately $270 billion in 2003. Our dedicated business also competes in
the estimated $279 billion private fleet portion of the overall trucking
market, by seeking to convince private fleet operators to outsource or
supplement their private fleets. The trucking industry accounted for
approximately 87% of domestic spending on freight transportation in 2002. All
market estimates contained in this section are derived from data compiled by the
American Trucking Associations.
The
United States trucking industry is highly competitive and includes thousands of
for-hire motor carriers, none of which dominates the market. Service and price
are the principal means of competition in the trucking industry. Measured by
annual revenue, the ten largest dry van truckload carriers accounted for
approximately $12.0 billion or approximately five percent of annual
for-hire truckload revenue in 2003. We compete to some extent with railroads and
rail-truck intermodal service but differentiate our self from rail and
rail-truck intermodal carriers on the basis of service because rail and
rail-truck intermodal movements are subject to delays and disruptions arising
from rail yard congestion, which reduces the effectiveness of such service to
customers with time-definite pick-up and delivery schedules.
We
believe that the cost and complexity of operating trucking fleets are increasing
and that economic and competitive pressures are likely to force many smaller
competitors and private fleets to consolidate or exit the industry over time. As
a result, we believe that larger, better capitalized companies, like us, will
have opportunities to increase profit margins and gain market share. In the
market for dedicated services, we believe that truckload carriers, like us, have
a competitive advantage over truck lessors, who are the other major participants
in the market, because we can offer lower prices by utilizing back-haul freight
within our network that traditional lessors may not have.
Over the
past two years our industry has enjoyed an improved pricing environment compared
with our historical experience. We believe that stronger freight demand and
industry-wide capacity constraints caused by a shortage of truck drivers and a
lack of capital investment in additional revenue equipment by many carriers
contributed to the pricing environment. In addition, many shippers have
recognized that the costs of operating in our industry have increased
significantly, particularly in the areas of driver compensation, revenue
equipment, fuel, and insurance and claims. Although we expect the pricing
environment to remain more favorable than average for at least the remainder of
2005, we cannot assure you that it will do so and we cannot assure you that we
will continue to capitalize on increases in pricing.
Insurance
and Claims
We
operate business with significant self-insured retention amounts for most of our
risk areas, particularly casualty claims and workers' compensation. We chose
this strategy in part because of changes in the insurance market that caused
insurance premiums for low self-insured retention programs to be prohibitively
expensive. Because of higher self-insured retentions, the frequency, severity,
and timing of claims have a significant effect on our insurance and claims
expense, balance sheet reserves, and letter of credit requirements. During the
fourth quarter of 2004, we recorded a $19.6 million non-cash, pretax
increase to our claims reserves. See, "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Increase to Claims
Reserves."
During
the first quarter of 2005, we renewed our casualty and workers' compensation
programs through February 2007. In general, for casualty claims after
March 1, 2005, we are self-insured for personal injury and property damage
claims for amounts up to $2.0 million per occurrence, subject to an
additional $2.0 million self-insured aggregate amount, which results in the
total self-insured retention of up to $4.0 million until the
$2.0 million aggregate threshold is reached. We are self insured for cargo
loss and damage claims for amounts up to $1.0 million per occurrence. We
maintain a workers' compensation plan and group medical plan for our employees
with a deductible amount of $1.0 million for each workers' compensation
claim and a stop loss amount of $275,000 for each group medical claim. The
following chart reflects the major changes in our casualty program since
March 1, 2001:
|
Coverage
Period |
Primary
Coverage |
Primary
Coverage
SIR/deductible |
Excess
Coverage |
Excess
Coverage
SIR/deductible |
| |
|
|
|
|
|
March
2001 - February 2002 |
$1.0
million |
$250,000 |
$49.0
million |
$3.0
million |
|
March
2002 - July 2002 |
$2.0
million |
$500,000 |
$48.0
million |
$3.0
million |
|
July
2002 - November 2002 |
$2.0
million |
$500,000 |
$0
(1) |
$0
(1) |
|
November
2002 - February 2003 |
$4.0
million |
$1.0
million |
$16.0
million |
$3.0
million |
|
March
2003 - February 2004 |
$5.0
million |
$2.0
million (2) |
$15.0
million |
$2.0
million |
|
March
2004 - February 2005 |
$5.0
million |
$2.0
million (3) |
$15.0
million |
$2.0
million |
|
March
2005 - February 2007 |
$2.0
million |
$2.0
million (4) |
$48.0
million |
$0 |
|
(1) |
Represents
period for which no proof of insurance was available from agent and
coverage was determined to be invalid. We expensed the premiums paid in
2002 and settled litigation against the insurance agency in February
2005. |
|
(2) |
Self
insured retention is $1.0 million for cargo claims. Subject to an
additional $2.0 million self-insured aggregate amount, limited to
$1.0 million per occurrence, which results in the total self-insured
retention of up to $3.0 million per occurrence in the
$5.0 million layer until the $2.0 million aggregate threshold is
reached. |
|
(3) |
Self
insured retention is $1.0 million for cargo claims. Subject to an
additional $4.0 million self-insured aggregate amount, limited to
$2.0 million per occurrence, which results in the total self-insured
retention of up to $4.0 million per occurrence in the
$5.0 million layer until the $4.0 million aggregate threshold is
reached. |
|
(4) |
Self
insured retention is $1.0 million for cargo claims. Subject to an
additional $2.0 million self-insured aggregate amount, which results
in the total self-insured retention of up to $4.0 million until the
$2.0 million aggregate threshold is
reached. |
Regulation
We
operate in a highly regulated industry. The primary regulatory agencies
affecting our business are the United States Department of Transportation, or
DOT, and similar state, local agencies that exercise broad powers over our
business, generally governing such activities as authorization to engage in
motor carrier operations, safety, and insurance requirements. Our company
drivers and independent contractors also must comply with the safety and fitness
regulations promulgated by the DOT, including those relating to drug and alcohol
testing, licensing requirements, and additional restrictions imposed by homeland
security requirements in January 2005. The DOT has rated us "satisfactory" which
is the highest safety and fitness rating. Changes in the laws and regulations
governing our industry could affect the economics of the industry by requiring
changes in operating practices or by influencing the demand for, and the costs
of providing, services to shippers. New and more restrictive hours of service
regulations for drivers became effective on January 4, 2004. After nine
months of operation under the revised hours-of-service regulations, citizens'
advocacy groups successfully challenged the regulations in court, alleging that
they were developed without properly considering issues of driver health.
Pending further action by the courts or the effectiveness of new rules
addressing the issues raised by the appellate court, Congress has enacted a law
that extends the effectiveness of the revised hours-of-service rules until
September 30, 2005. We expect that any new rule making resulting from the
litigation will be no
more favorable than existing rules. If driving hours are further restricted by
new revisions to the hours-of-service rules, we could experience a reduction in
driver miles that may adversely affect our business and results of
operations.
Our
operations are subject to various federal, state, and local environmental laws
and regulations, implemented principally by the federal Environmental Protection
Agency and similar state regulatory agencies, governing the management of
hazardous wastes, other discharge of pollutants into the air and surface and
underground waters, and the disposal of certain substances. If we should be
involved in a spill or other accident involving hazardous substances, if any
such substances were found on our property, or if we were found to be in
violation of applicable laws and regulations, we could be responsible for
clean-up costs, property damage, and fines or other penalties, any one of which
could have a materially adverse effect on us.
The
engines used in our tractors are subject to emissions control regulations that
require progressive reductions in exhaust emissions from diesel engines
manufactured after specified dates in 2002, 2007, and 2010. Compliance with such
regulations has increased the cost of our new tractors and lowered our fuel
mileage, and the additional changes required in 2007 and beyond are expected to
have similar effects. These adverse effects combined with the uncertainty as to
the long-term reliability of vehicles equipped with the newly designed diesel
engines and the residual values that will be realized from the disposition of
these vehicles could increase our costs or otherwise adversely affect our
business or operations. At December 31, 2004, approximately 82% of our company
owned tractors were equipped with the new emission compliant
engines.
Fuel
Availability and Cost
We
actively manage our fuel costs by routing our drivers through fuel centers with
which we have negotiated volume discounts. During 2004, the cost of fuel was in
the range at which we received fuel surcharges. Even with the fuel surcharges,
the high price of fuel decreased our profitability. Although we historically
have been able to pass through a substantial part of increases in fuel prices
and taxes to customers in the form of higher rates and surcharges, the increases
usually are not fully recovered. We do not collect surcharges on fuel used for
non-revenue miles or, out-of-route miles, or for fuel used by refrigeration
units or while the tractor is idling.
Additional
Information
At
December 31, 2004, our corporate structure included Covenant Transport, Inc., a
Nevada holding company organized in May 1994 and its wholly owned subsidiaries:
Covenant Transport, Inc., a Tennessee corporation; Covenant Asset Management,
Inc., a Nevada corporation; CIP, Inc., a Nevada corporation; Covenant.com, Inc.,
a Nevada corporation; Southern Refrigerated Transport, Inc. ("SRT"), an Arkansas
corporation; Harold Ives Trucking Co., an Arkansas corporation; CVTI Receivables
Corp. ("CRC"), a Nevada corporation, and Volunteer Insurance Limited, a Cayman
Island company. Terminal Truck Broker, Inc. and Tony Smith Trucking, Inc., both
Arkansas corporations and former subsidiaries, were dissolved in September 2003
and December 2004, respectively.
Our
headquarters are located at 400 Birmingham Highway, Chattanooga, Tennessee
37419, and our website address is www.covenanttransport.com. Our
Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K, and all other reports we file with the SEC pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")
are available free of charge through our website. Information contained in or
available through our website is not incorporated by reference into, and you
should not consider such information to be part of, this Annual Report on Form
10-K.
Our
headquarters and main terminal are located on approximately 180 acres of
property in Chattanooga, Tennessee. This facility includes an office building of
approximately 182,000 square feet, a maintenance facility of approximately
65,000 square feet, a body shop of approximately 16,600 square feet, and a truck
wash. We maintain sixteen terminals located on our major traffic lanes in or
near the cities listed below. These terminals provide a base for drivers in
proximity to their homes, a transfer location for trailer relays on
transcontinental routes, parking space for equipment dispatch, and the other
uses indicated below.
|
Terminal
Locations |
Maintenance |
Recruiting/
Orientation |
Sales |
Ownership |
|
Chattanooga,
Tennessee |
x |
x |
x |
Owned |
|
Dalton,
Georgia |
x |
|
|
Owned |
|
Greensboro,
North Carolina |
|
|
|
Leased |
|
Dayton,
Ohio |
|
|
|
Leased |
|
Sayreville,
New Jersey |
|
|
|
Leased |
|
Indianapolis,
Indiana |
|
|
|
Leased |
|
Ashdown,
Arkansas |
x |
x |
x |
Owned |
|
|
