Covenant Transportation Group, Inc. (NASDAQ:CVTI) Q4 2019 Earnings Conference Call - Final Transcript

Jan 24, 2020 • 11:00 am ET

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Covenant Transportation Group, Inc. (NASDAQ:CVTI) Q4 2019 Earnings Conference Call - Final Transcript

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Presentation
Executive
Richard B. Cribbs

plans to become embedded in our customers' supply chains, reduce the cyclicality and seasonality of our financial result through growth in our higher margin yet less volatile services and to enhance sustainable long-term earnings power and return on invested capital for our shareholders through disciplined strategic planning and execution.

Our operational focus areas are as follows. In our Truckload operations, we are seeking to tighten our one-way irregular route truckload freight network to reallocate capacity from solo driven refrigerated to more profitable dedicated and dry-van opportunities, to decrease real estate and revenue equipment capital costs per mile and to reduce other controllable costs. Regarding the dedicated truckload service offering, we have recently been awarded significant new long-term business that is scheduled to be operational beginning with end of second quarter of 2020.

In our Managed Freight operations, we have attained excellent customer retention rates in our more profitable warehousing, transportation management and factoring service offerings. We expect continued growth with these customers as well as with new customer opportunities. We have a strong sales pipeline in these offerings for which we have targeted growth and have already secured some long-term awards for our warehousing services that are scheduled to begin late in the first quarter or during the second quarter of 2020.

From a balance sheet perspective, with net capex scheduled well below normal replacement cycle, along with positive operating cash flows, we expect to reduce net lease adjusted indebtedness over the course of fiscal 2020.

Thank you for your time, and we will now open the call for any questions.