Covenant Logistics Group, Inc. (NASDAQ:CVLG) Q2 2023 Earnings Conference Call July 28, 2023 10:00 AM ET
Company Participants
Tripp Grant - Executive Vice President and Chief Financial Officer
Paul Bunn - President and Chief Operating Officer
David Parker - Founder and CEO
Conference Call Participants
Jason Seidl - TD Cowen
Scott Group - Wolfe Research, LLC
Jack Atkins - Stephens
Barry Haimes - Sage Asset Management
Operator
Welcome to today's Covenant Logistics Group Second Quarter Earnings Release Conference Call. Our host for today's call is Tripp Grant. At this time all participants will be in a listen-only mode. Later we will conduct a question-and-answer session.
I would now like to turn the call over to your host, Mr. Grant, you may begin.
Tripp Grant
Thank you, Jen. Good morning, everyone, and welcome to the Covenant Logistics Group second quarter 2023 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. A copy of the prepared comments and additional financial information is available on our website at www.covenantlogistics.com/investors. I'm joined on the call today by David Parker and Paul Bunn.
We are pleased with our results for the quarter, which showed comparative resilience in the midst of a very soft freight environment. Consolidated freight revenue was down 9% compared to a very tough prior year comparable when the freight environment peaked. The decline related primarily to operating approximately 11% fewer weighted average tractors in our truckload operations and less overflow freight handled by our Managed Freight segment due to lower overall demand.
Adjusted operating income fell approximately $12 million or 43% compared to the prior year quarter, primarily as a result of our Expedited and Managed Freight segments, which declined by approximately $7.5 million and $6.5 million, respectively, offset by an increase of approximately $2 million in our Dedicated segment.
Adjusted net income decreased 44% to $14.4 million, and adjusted earnings per share decreased 34% to $1.07 per share compared to the year ago quarter. Weighted average diluted shares decreased as a result of our share repurchase program.
Key highlights for the quarter include; all four of our business segments, including Expedited, Dedicated, Managed Freight and Warehousing, achieved sequential improvement in profitability in the second quarter; the acquisition of Lew Thompson & Son Trucking, Inc., a dedicated contract carrier comprised of approximately 200 tractors, specializing in poultry and live haul transportation. We have been pleased with the operational results to date and are excited about the growth opportunities that lie ahead.