Covenant Logistics Group, Inc. (NYSE:CVLG) Q3 2024 Earnings Conference Call October 24, 2024 10:00 AM ET
Company Participants
Tripp Grant - Chief Financial Officer
Paul Bunn - President
David Parker - Chief Executive Officer
Conference Call Participants
Scott Group - Wolfe Research
Jason Seidl - TD Cowen
Daniel Imbro - Stephens
Jeff Kauffman - Vertical Research Partners
Michael Vermut - Newland Capital
Dan Moore - Scopus
Operator
Welcome to today's Covenant Logistics Group Third Quarter Earnings Release and Investor 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
Good morning, everyone, and welcome to the Covenant Logistics Group third 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 our prepared comments and additional financial information is available on our website at www.covenantlogistics.com\investors.
I am joined on the call today by David Parker and Paul Bunn.
Our core business performed well in the third quarter, overcoming softer-than-anticipated volumes in our Expedited division as a result of lingering weakness in our overall freight environment. Compared to a year ago, consolidated freight revenue increased by approximately $5.2 million, or 2.1%, to $258.6 million and adjusted operating income increased by $1.5 million, or 8.3%, to $19.3 million.
The year-over-year increase in freight revenue was primarily derived from new business growth within our Dedicated segment, partially offset by reductions from Expedited segment and Managed Freight segment. The growth in adjusted operating income was principally derived from both Dedicated and Warehousing segments, offset by reductions from Expedited and Managed Freight.
Adjusted net income of $15.2 million for the current quarter was essentially flat with the third quarter of 2023 primarily because higher adjusted operating income was offset by a $0.6 million increase in pre-tax interest expense and a $1.3 million reduction in pre-tax earnings from our equipment leasing company investment, TEL.
Key highlights for the quarter include:
Our asset-based truckload operations, consisting of Expedited and Dedicated, grew its average tractor count by 169 units, or 7.9%, grew freight revenue by $11.4 million, or 7.2%, and improved its adjusted operating income by $1.6 million, or 12.6%.