Covenant Transportation Group Announces Stock Repurchase Plan
11 February 2020 - 8:00AM
Covenant Transportation Group, Inc. (NASDAQ/GS: CVTI) (the
“Company”) announced today that its Board of Directors has approved
a stock repurchase program authorizing the purchase of up to $20
million of the Company's Class A common stock from time-to-time
based upon market conditions and other factors. The stock may be
repurchased on the open market or in privately negotiated
transactions. The repurchased shares will be held as treasury stock
and may be used for general corporate purposes as the Board may
determine. The Company did not place a limit on the duration of the
repurchase program.
The stock repurchase program does not obligate
the Company to repurchase any specific number of shares and the
Company may suspend or terminate the program at any time without
prior notice.
Covenant Transportation Group, Inc. is the
holding company for several transportation providers that offer
premium transportation services for customers throughout the United
States. The consolidated group includes operations from Covenant
Transport and Covenant Transport Solutions of Chattanooga,
Tennessee; Southern Refrigerated Transport of Texarkana, Arkansas;
Landair Transport and Landair Logistics of Greeneville, Tennessee;
and Star Transportation of Nashville, Tennessee. In addition,
Transport Enterprise Leasing, of Chattanooga, Tennessee is an
integral affiliated company providing revenue equipment sales and
leasing services to the trucking industry. The Company's Class A
common stock is traded on the NASDAQ Global Select market under the
symbol, “CVTI”.
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," "intends," “outlook,” 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, the statements relating to authorized stock
repurchases under the stock repurchase plan are forward-looking
statements. The following factors, among others, could cause actual
results to differ materially from those in the forward-looking
statements: the number of shares repurchased, if any; the effects
of repurchasing the shares on debt, equity, and liquidity; the
effects of repurchasing no or a nominal number of shares; and the
ultimate uses of repurchased shares, if any. In addition, several
factors may affect the Company's business and its view as to the
advisability of repurchasing shares or use of any repurchased
shares. These factors, among others, include: elevated experience
in the frequency and severity of claims relating to accident,
cargo, workers' compensation, health, and other claims, increased
insurance premiums, fluctuations in claims expenses that result
from our self-insured retention amounts, including in our excess
layers and in respect of claims for which we commute policy
coverage, and the requirement that we pay additional premiums if
there are claims in certain of those layers, differences between
estimates used in establishing and adjusting claims reserves and
actual results over time, adverse changes in claims experience and
loss development factors, or additional changes in management's
estimates of liability based upon such experience and development
factors that cause our expectations of insurance and claims expense
to be inaccurate or otherwise impacts our results; government
regulations imposed on our captive insurance companies; changes in
the market condition for used revenue equipment and real estate
that impact our capital expenditures and our ability to dispose of
revenue equipment and real estate on the schedule and for the
prices we expect; increases in the prices paid for new revenue
equipment that impact our capital expenditures and our results
generally; changes in management’s estimates of the need for new
tractors and trailers; the effect of any reduction in tractor
purchases on the number of tractors that will be accepted by
manufacturers under tradeback arrangements; our inability to
generate sufficient cash from operations and obtain financing on
favorable terms to meet our significant ongoing capital
requirements; our ability to respond to changes in our industry or
business in light of our substantial indebtedness and lease
obligations; our ability to sustain or increase profitability in
the future; the risks related to our receivables factoring
arrangements; our ability to maintain compliance with the
provisions of our credit agreements, particularly financial
covenants in our revolving credit facility; excess tractor or
trailer capacity in the trucking industry; decreased demand
for our services or loss of one or more of our major customers; our
ability to renew dedicated service offering contracts on the terms
and schedule we expect; surplus inventories, recessionary economic
cycles, and downturns in customers' business cycles; strikes, work
slowdowns, or work stoppages at the Company, customers, ports, or
other shipping related facilities; increases or rapid fluctuations
in fuel prices, as well as fluctuations in hedging activities and
surcharge collection, including, but not limited to, changes in
customer fuel surcharge policies and increases in fuel surcharge
bases by customers; the volume and terms of diesel purchase
commitments and hedging contracts; interest rates, fuel
taxes, tolls, and license and registration fees; increases in
compensation for and difficulty in attracting and retaining
qualified drivers and independent contractors; our ability to
retain our key employees; the risks associated with engaging
independent contractors to provide a portion of our capacity;
seasonal factors such as harsh weather conditions that increase
operating costs; competition from trucking, rail, and intermodal
competitors; our dependence on third-party providers, particularly
in our Managed Freight segment; regulatory requirements that
increase costs, decrease efficiency, or impact the availability or
effective driving time of our drivers and other drivers in the
industry, including the terms and exemptions from hours-of-service
and electronic log requirements for drivers and the Federal Motor
Carrier Safety Administration’s Compliance, Safety, Accountability
program applicable to driver standards and the methodology for
determining a carrier’s Department of Transportation safety rating;
the proper functioning and availability of our management
information and communication systems and other information
technology assets; volatility of our stock price; remediation of a
material weakness in our internal controls, including our ability
to remediate the material weakness by December 31, 2019; our
ability to implement internal controls at Landair by December 31,
2019; impairment of goodwill and other intangible assets; our
ability to effectively manage the challenges associated with doing
business internationally; future outcomes of litigation;
uncertainties in the interpretation of the 2017 Tax Cuts and Jobs
Act and other tax laws; the ability to reduce, or control increases
in, operating costs; changes in the Company’s business strategy
that require the acquisition of new businesses, and the ability to
identify acceptable acquisition candidates, consummate
acquisitions, and integrate acquired operations (including our
acquisition of Landair); our ability to achieve our strategic plan;
fluctuations in the results of Transport Enterprise Leasing, which
are included as equity in income (loss) of affiliate in our
financial statements; our Chairman of the Board and Chief Executive
Officer and his wife control a large portion of our stock and have
substantial control over us, which could limit other stockholders'
ability to influence the outcome of key transactions, including
changes of control; and future share repurchases, if any. Readers
should review and consider these factors along with the various
disclosures by the Company in its press releases, stockholder
reports, and 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.
For further information contact:Richard B.
Cribbs, Executive Vice President and Chief Financial
OfficerRCribbs@covenanttransport.com
For copies of Company information
contact:Theresa Ives, Executive Administrative
AssistantTIves@covenanttransport.com
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