Covenant Logistics Group, Inc. (NASDAQ:CVLG) Q1 2024 Results Conference Call April 25, 2024 10:00 AM ET
Company Participants
Tripp Grant - Executive Vice President & Chief Financial Officer
Paul Bunn - President & Chief Operating Officer
David Parker - Founder & Chief Executive Officer
Conference Call Participants
Scott Group - Wolfe Research
Elliot Alper - TD Cowen
Jeff Kauffman - Vertical Research Partners
Operator
Welcome to today's Covenant Logistics Group First Quarter Earnings Release Conference Call. Our host for today's call is Tripp Grant. [Operator Instructions]
I would now like to turn the call over to your host. Mr. Grant, you may begin.
Tripp Grant
Yes. Thank you. Good morning, everyone, and welcome to the Covenant Logistics Group First 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. A copy of the prepared comments and additional financial information is available on our website at www.covenentlogistics.com/investors.
I'm joined on the call today by David Parker and Paul Bunn. We were pleased with our first quarter's operational results despite the lingering weakness in the overall freight environment and the severe weather that challenges early in the quarter. Compared to a year ago, consolidated freight revenue increased by approximately $14.3 million or 6.1%. While each of our business segments grew freight revenue, the asset-based segments consisting of expedited and dedicated were the primary contributors with growth in the average tractor fleet and improved utilization compared to a year ago. Adjusted operating income increased approximately $2.2 million or 17.3% compared to the prior year quarter.
Our asset light segments consisting of managed freight and warehousing grew adjusted operating income by a combined $3.3 million partially offset by $1.1 million of reduced adjusted operating income from our asset-based segments. Compared to the prior period, increased interest expense of $2.6 million and reduced pretax income from our equipment leasing company investment TEL of $2.3 million, resulted in a decline in adjusted net income of approximately $9.7 million to $11.6 million.
Key highlights include all 4 of our reportable operating segments were successful in growing freight revenue compared to the prior year quarter. Our combined truckload segments navigated difficult weather conditions and improved utilization by 5.4% compared to a year ago, partially offsetting the impact of rate reductions of approximately 1.7%. We successfully executed 2 new start-ups in our dedicated fleet during the quarter and added to the pipeline of new customers in our expedited fleet. Our net capital investment for revenue-producing equipment was approximately $12 million for the quarter, consisting primarily of specialized equipment CapEx for poultry-related growth.