Covenant Logistics : 4th Quarter 2024 Scripts
CVLG
Covenant Logistics Group 4th Quarter 2024 Conference Call
Mr. Grant - Good morning everyone and welcome to the Covenant Logistics Group fourth quarter 2024 conference call. As a reminder:
This call will contain forward-looking statements under the Private Securities Litigation Reform Act, which are subject to risks and uncertainties that could cause actual results to differ materially. Please review our SEC filings and most recent risk factors. We undertake no obligation to publicly update or revise any forward-looking statements.
Our prepared comments and additional financial information are available on our website at www.covenantlogistics.cominvestors.
Joining me today are CEO David Parker, President Paul Bunn and COO Dustin Koehl.
Before addressing the quarter's results, I would like to take a moment to comment on the year as a whole. For the second consecutive year, our business model demonstrated durability in a weak general freight environment, which would not have been possible without the commitment of our talented team executing on a common strategic goal. In 2025, we will continue to focus on factors within our control that make Covenant a more profitable and consistent company over the long term. We made great strides in 2024, and will continue to work on improving our model and financial results in the year ahead.
Focusing now on the quarter. The positives and negatives for the quarter roughly offset to deliver consolidated operating results consistent with our expectations. On a segment basis, in general, Dedicated performed below expectations and Expedited was on target, while Managed Freight and Warehousing exceeded our profitability expectations.
Year-over-year highlights for the quarter include:
Now providing a little more color on the performance of the individual business segments:
Thanks Tripp,
volumes within our specialized government services fleet, AAT. Compared to the prior year, Expedited's average fleet size shrunk by 40 units or 4.4%, to 875 average tractors in the period. We expect the size of this fleet to flex up and down modestly based on various market factors. While we are pleased with the durability of our operating margin in this segment over the past two years, as general market conditions improve in 2025, our focus will be on improving margins through rate increases, exiting less profitable business, and adding more profitable business.
Regarding our outlook for the future:
We expect consolidated earnings to improve for 2025 compared with 2024 based on the following assumptions:
2
to achieve improved pricing year-over-year under certain Expedited, non-specialized Dedicated, and Managed Freight contracts. The level of increase is expected to build throughout the year as contracts renew.
Based on these assumptions, we believe 2025 will be a year of recovery for the industry and Covenant. Our goal is to steadily improve our customer and freight mix, and our margins, while continuing to review growth opportunities in "nichey" businesses. Our primary objective remains improving long term returns to our investors by filling network needs, developing our team, and aligning with customers who truly need value added services. Additionally, with modest leverage and significant liquidity, we have the full range of capital allocation alternatives available to us.
Thank you for your time and we will now open the call for any questions.
3
Disclaimer
Covenant Logistics Group Inc. published this content on January 24, 2025, and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on January 24, 2025 at 14:54:15.035.