# EDGAR Filing Document

**Accession Number:** 0000928658
**File Stem:** 0001008886-23-000004
**Filing Date:** 2023-1
**Character Count:** 62469
**Document Hash:** fde9dceb6001b4e15619ff5cc1082d35
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001008886-23-000004.hdr.sgml**: 20230125

**ACCESSION NUMBER**: 0001008886-23-000004

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 14

**CONFORMED PERIOD OF REPORT**: 20230125

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230125

**DATE AS OF CHANGE**: 20230125

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** COVENANT LOGISTICS GROUP, INC.
- **CENTRAL INDEX KEY:** 0000928658
- **STANDARD INDUSTRIAL CLASSIFICATION:** TRUCKING (NO LOCAL) [4213]
- **IRS NUMBER:** 880320154
- **STATE OF INCORPORATION:** NV
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-24960
- **FILM NUMBER:** 23553153

**BUSINESS ADDRESS:**
- **STREET 1:** 400 BIRMINGHAM HIGHWAY
- **CITY:** CHATTANOOGA
- **STATE:** TN
- **ZIP:** 37419
- **BUSINESS PHONE:** 4238211212

**MAIL ADDRESS:**
- **STREET 1:** 400 BIRMINGHAM HIGHWAY
- **CITY:** CHATTANOOGA
- **STATE:** TN
- **ZIP:** 37419

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** COVENANT TRANSPORTATION GROUP INC
- **DATE OF NAME CHANGE:** 20070522

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** COVENANT TRANSPORT INC
- **DATE OF NAME CHANGE:** 19940818

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### UNITED STATES

### SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

#### ___________________________________________________________________

### FORM 8-K

#### CURRENT REPORT

#### Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):

January 25, 2023

#### ___________________________________________________________________
**COVENANT LOGISTICS GROUP, INC.**

(Exact name of registrant as specified in its charter)

Nevada 000-24960 88-0320154 <br> (State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer &nbsp;&nbsp;&nbsp;&nbsp;Identification No.)

400 Birmingham Hwy, Chattanooga, TN 37419 <br> (Address of principal executive offices) (Zip Code)

(423) 821-1212

(Registrant's telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

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| | | |
|:---|:---|:---|
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| $0.01 Par Value Class A common stock | CVLG<br>| NASDAQ |

---

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

---

| | |
|:---|:---|
|  | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Emerging growth company ☐ |
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ] | If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ] |

---

------

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| | | |
|:---|:---|:---|
| **Item 2.02** | **Results of Operations and Financial Condition.** | **Results of Operations and Financial Condition.** |
|  | On January 25, 2023, Covenant Logistics Group, Inc., a Nevada corporation (the "Company"), issued a press release announcing its financial and operating results for the quarter and year ended December 31, 2022. A copy of the press release is attached to this report as Exhibit 99.1. | On January 25, 2023, Covenant Logistics Group, Inc., a Nevada corporation (the "Company"), issued a press release announcing its financial and operating results for the quarter and year ended December 31, 2022. A copy of the press release is attached to this report as Exhibit 99.1. |
| **Item 9.01** | **Financial Statements and Exhibits.** | **Financial Statements and Exhibits.** |
|  | (d) | **Exhibits.** |
|  | EXHIBIT<br> <u>NUMBER</u> | <u>EXHIBIT DESCRIPTION</u> |
|  | [99.1](exhibit991.htm) | Covenant Logistics Group, Inc. press release announcing its financial and operating results for the quarter and year ended December 31, 2022. |
|  | 104 | Cover Page Interactive Data File. |
|  | The information contained in Items 2.02 and 9.01 of this report and the exhibit hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. | The information contained in Items 2.02 and 9.01 of this report and the exhibit hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or incorporated by reference in any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. |

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#### SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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| | | |
|:---|:---|:---|
|  | **COVENANT LOGISTICS GROUP, INC.** | **COVENANT LOGISTICS GROUP, INC.** |
|  | (Registrant) |  |
| Date: January 25, 2023 | By: | /s/ James S. Grant |
|  |  | James S. Grant |
|  |  | Executive Vice President and Chief Financial Officer |

---

## Exhibit 99.1

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**Exhibit 99.1**<br>

<br> ![](cvlglogo.jpg)<br>

#### COVENANT LOGISTICS GROUP ANNOUNCES FOURTH QUARTER

#### FINANCIAL AND OPERATING RESULTS

CHATTANOOGA, TENNESSEE – January 25, 2023 - Covenant Logistics Group, Inc. (NASDAQ/GS: CVLG) ("Covenant" or the "Company") announced today financial and operating results for the fourth quarter ended December 31, 2022. The Company's conference call to discuss the quarter will be held at 10:00 A.M. Eastern Time on Thursday, January 26, 2023.

Chairman and Chief Executive Officer, David R. Parker, commented: "Fourth quarter earnings were $0.81 per diluted share and non-GAAP adjusted earnings were $1.37 per diluted share. The primary difference between the two relates to an early lease abandonment and disposal charge and excess equipment expense discussed in further detail below (the "Equipment Adjustment").

"For 2022, we generated over $1.0 billion in freight revenue, the highest annual earnings per share in our history, and a 15.3% return on average invested capital. We were also successful in acquiring AAT, repurchasing 3.4 million or approximately 20% of outstanding common stock, and for the first time in Company history distributing four quarterly dividend payments, all while maintaining moderately low debt.

"Despite these unprecedented achievements, our fourth quarter results undoubtedly reflect sequential softening in the freight market, continued inflationary pressure and the cost of significant excess equipment. While we anticipate improved equipment related costs in 2023, we believe the freight market, as a combination of freight rates and volumes, will remain unfavorable compared to the prior year for the next several quarters.

"Our asset-based segments, Expedited and Dedicated, contributed approximately 67% of total revenue, 19% of operating income, 62% of total freight revenue, and 59% of adjusted operating income in the quarter. Our Expedited segment grew revenue and improved adjusted margins compared to the fourth quarter last year. Our Dedicated segment produced comparable revenue and improved adjusted margins year over year. We continue to work to improve the durability of contracts in these segments to lower volatility across economic and freight cycles.

"Our asset-light segments, Managed Freight and Warehousing, contributed approximately 33% of total revenue, 81% of operating income, 38% of total freight revenue, and 41% of adjusted operating income in the quarter and combined to generate comparable margins and returns. Managed Freight continued to exceed our expectations through strong execution and effective coordination with our Expedited and Dedicated segments. Warehousing was able to grow revenue through new customer startups but had diminished margins primarily due to incremental cost headwinds associated with new customer startups and investments in capacity for future growth in this segment.

"Our 49% equity method investment with Transport Enterprise Leasing ("TEL") contributed pre-tax net income of $3.9 million, or $0.21 per share, compared to $5.2 million, or $0.23 per share, in the 2021 quarter. The reduced contribution from TEL experienced in the quarter was a result of a increased depreciation taken on certain used high-mileage tractors. This adjustment at TEL is related to similar make and model year equipment but is separate from the Equipment Adjustment. We anticipate sequential improvement to TEL's results in the first quarter of 2023."

A summary of our fourth quarter financial performance:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** <br> **December 31,** | **Three Months Ended** <br> **December 31,** | **Year Ended**<br> **December 31,** | **Year Ended**<br> **December 31,** |
| **($000s, except per share information)** | **2022** | **2021** | **2022** | **2021** |
| Total Revenue | $296057 | $294228 | $1216858 | $1046003 |
| Freight Revenue, Excludes Fuel Surcharge | $255327 | $267022 | $1046396 | $949913 |
| Operating Income | $10904 | $18237 | $120682 | $67162 |
| Adjusted Operating Income <sup>(1)</sup> | $22010 | $18824 | $97244 | $71205 |
| Operating Ratio | 96.3% | 93.8% | 90.1% | 93.6% |
| Adjusted Operating Ratio <sup>(1)</sup> | 91.4% | 93.0% | 90.7% | 92.5% |
| Net Income | $11504 | $17732 | $108682 | $60731 |
| Adjusted Net Income <sup>(1)</sup> | $19522 | $18169 | $90543 | $61287 |
| Earnings per Diluted Share | $0.81 | $1.05 | $7.00 | $3.57 |
| Adjusted Earnings per Diluted Share <sup>(1)</sup> | $1.37 | $1.07 | $5.84 | $3.61 |
| <sup>(1)</sup> Represents non-GAAP measures. | <sup>(1)</sup> Represents non-GAAP measures. |  |  |  |

---

------

#### Equipment Adjustment
In an effort to improve our driver experience, service and operating cost, we made the decision earlier in the year to aggressively reduce the average age of our equipment. We did this through the combination of acquiring additional unbudgeted trucks in the fourth quarter and increasing our original tractor order for 2023. During the fourth quarter we made significant progress on the plan but incurred unusual expense from two items: (i) an early lease abandonment and disposal charge and (ii) excess equipment due to delivery of a large number of new tractors combined with delays in removing existing leased tractors from operations. Overall, we are pleased to be taking delivery of new units and exiting older, less efficient units, which will reduce our average fleet age and improve operating efficiency. Nevertheless, the fourth quarter cost was significant. The excess equipment is excluded from our operating statistics. The early lease abandonment and disposal charge relates to tractors pulled from operations during the fourth quarter, which have been the source of significant operational headwinds throughout the year due to poor fuel economy, unusually high maintenance costs and elevated down time. Because we have no intended future use for these units, we have abandoned the right of use asset associated with the leases, which extend through the fourth quarter of 2023. The charge reflects the current period costs, the write down of the remaining right of use asset, plus the estimated cost of refurbishment and turn-in. The combination of these two factors resulted in the following incremental expense in the period:

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| | |
|:---|:---|
| Lease abandonment and disposal expense  | $7.5 million |
| Excess equipment expense  | $2.5 million |

---

The pre-tax financial impact of the items outlined above negatively impacted our fourth quarter results. However, we believe the future benefits of improved fuel economy, utilization and maintenance costs will outweigh this cost.

------

#### Truckload Operating Data and Statistics

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** <br> **December 31,** | **Three Months Ended** <br> **December 31,** | **Year Ended**<br> **December 31,** | **Year Ended**<br> **December 31,** |
| **($000s, except statistical information)** | **2022** | **2021** | **2022** | **2021** |
| **Combined Truckload** |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Total Revenue | $198339 | $169674 | $815710 | $661604 |
| &nbsp;&nbsp;&nbsp; Freight Revenue, excludes Fuel Surcharge | $157911 | $142670 | $646559 | $566213 |
| &nbsp;&nbsp;&nbsp; Operating Income | $2094 | $6855 | $81639 | $31707 |
| &nbsp;&nbsp;&nbsp; Adj. Operating Income <sup>(1)</sup> | $12906 | $7149 | $57024 | $33804 |
| &nbsp;&nbsp;&nbsp; Operating Ratio | 98.9% | 96.0% | 90.0% | 95.2% |
| &nbsp;&nbsp;&nbsp; Adj. Operating Ratio <sup>(1)</sup> | 91.8% | 95.0% | 91.2% | 94.0% |
| &nbsp;&nbsp;&nbsp; Average Freight Revenue per Tractor per Week | $5417 | $4732 | $5388 | $4509 |
| &nbsp;&nbsp;&nbsp; Average Freight Revenue per Total Mile | $2.53 | $2.24 | $2.45 | $2.07 |
| &nbsp;&nbsp;&nbsp; Average Miles per Tractor per Period | 28116 | 27805 | 114636 | 113485 |
| &nbsp;&nbsp;&nbsp; Weighted Average Tractors for Period | 2218 | 2294 | 2301 | 2408 |
| **Expedited** |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Total Revenue | $114479 | $85924 | $452713 | $337063 |
| &nbsp;&nbsp;&nbsp; Freight Revenue, excludes Fuel Surcharge | $90364 | $71782 | $355360 | $289350 |
| &nbsp;&nbsp;&nbsp; Operating Income | $5972 | $5585 | $60552 | $33064 |
| &nbsp;&nbsp;&nbsp; Adj. Operating Income <sup>(1)</sup> | $10334 | $5585 | $45927 | $33064 |
| &nbsp;&nbsp;&nbsp; Operating Ratio | 94.8% | 93.5% | 86.6% | 90.2% |
| &nbsp;&nbsp;&nbsp; Adj. Operating Ratio <sup>(1)</sup> | 88.6% | 92.2% | 87.1% | 88.6% |
| &nbsp;&nbsp;&nbsp; Average Freight Revenue per Tractor per Week | $7639 | $6557 | $7604 | $6498 |
| &nbsp;&nbsp;&nbsp; Average Freight Revenue per Total Mile | $2.39 | $2.06 | $2.32 | $1.97 |
| &nbsp;&nbsp;&nbsp; Average Miles per Tractor per Period | 42073 | 41925 | 170925 | 172080 |
| &nbsp;&nbsp;&nbsp; Weighted Average Tractors for Period | 900 | 833 | 896 | 854 |
| **Dedicated** |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Total Revenue | $83860 | $83750 | $362997 | $324541 |
| &nbsp;&nbsp;&nbsp; Freight Revenue, excludes Fuel Surcharge | $67547 | $70888 | $291199 | $276863 |
| &nbsp;&nbsp;&nbsp; Operating Income (Loss) | $(3878) | $1270 | $21087 | $(1357) |
| &nbsp;&nbsp;&nbsp; Adj. Operating Income<sup>(1)</sup> | $2572 | $1564 | $11097 | $740 |
| &nbsp;&nbsp;&nbsp; Operating Ratio | 104.6% | 98.5% | 94.2% | 100.4% |
| &nbsp;&nbsp;&nbsp; Adj. Operating Ratio <sup>(1)</sup> | 96.2% | 97.8% | 96.2% | 99.7% |
| &nbsp;&nbsp;&nbsp; Average Freight Revenue per Tractor per Week | $3899 | $3692 | $3975 | $3417 |
| &nbsp;&nbsp;&nbsp; Average Freight Revenue per Total Mile | $2.76 | $2.46 | $2.63 | $2.19 |
| &nbsp;&nbsp;&nbsp; Average Miles per Tractor per Period | 18586 | 19755 | 78728 | 81284 |
| &nbsp;&nbsp;&nbsp; Weighted Average Tractors for Period | 1318 | 1461 | 1405 | 1554 |
| <sup>(1)</sup> Represents non-GAAP measures. | <sup>(1)</sup> Represents non-GAAP measures. |  |  |  |

---

#### Combined Truckload Revenue
Paul Bunn, the Company's President and Chief Operating Officer commented on truckload operations, "For the quarter, total revenue in our truckload operations increased 16.9%, to $198.3 million, while averaging 76 fewer tractors, compared to 2021. The revenue increase consisted of $15.2 million higher freight revenue and $13.4 million higher fuel surcharge revenue. The increase in freight revenue primarily related to a 14.5% increase in average freight revenue per tractor, offset by a 3.3% decrease in the average operating fleet size. The fleet reduction is largely attributable to exiting unprofitable business within our Dedicated fleet."

#### Expedited Truckload Revenue
Mr. Bunn added, "Freight revenue in our Expedited segment increased $18.6 million, or 25.9%. Average total tractors increased by 67 units or 8.0% to 900, compared to 833 in the prior year quarter. The increase in tractors was attributable to the acquisition of AAT in the first quarter of the year and the increased ability to recruit and onboard qualified drivers. Average freight revenue per tractor per week increased 16.5% as a result of significant FEMA freight hauled in October related to hurricane Ian and the addition of AAT during the first quarter of 2022."

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#### Dedicated Truckload Revenue
"For the quarter, freight revenue in our Dedicated segment decreased $3.3 million, or 4.7%. Average total tractors decreased by 143 units or 9.8% to 1,318, compared to 1,461 in the prior year quarter. The decrease in tractors was attributable to the exit of unprofitable business during the year. Average freight revenue per tractor per week increased 5.6%."

#### Combined Truckload Operating Expenses
Mr. Bunn continued, "Our truckload operating cost per total mile increased 59 cents or 23.1%. Of this amount, approximately 16 cents related to the Equipment Adjustment and 19 cents is related to increased fuel costs (before netting increased fuel surcharge recovery revenue, which is reflected in adjusted cost per mile). The remainder was largely due to increases in salaries and wages, operations and maintenance, and insurance expense. On a non-GAAP or adjusted basis, our truckload operating cost per total mile increased approximately 20 cents or 9.2%.

"Salaries, wages and related expense increased year-over-year $6.6 million on an absolute basis and 13 cents on a per total mile basis. Driver pay and related benefits comprised approximately 70% of the increase, while non-driver pay and related benefits comprised the remaining 30%.

"Operations and maintenance related expense increased year-over-year by $3.0 million, or 5 cents per total mile, compared to the 2021 quarter. The combination of the increased average age of our equipment, combined with general inflationary costs of tires, parts and maintenance activities and increased overage, shortage, and damage expense all contributed to the increase. Going forward, as we execute our equipment replacement plan and the average age of our fleet is reduced, we anticipate improvements to these results.

"Insurance related expense increased year-over-year by $3.7 million, or 6 cents per total mile, compared to the 2021 quarter primarily due to the unfavorable development of a small number of prior period claims, as well as claims experience during the current quarter.

"Gain on sale of equipment increased to $1.0 million in the quarter, compared to $0.1 million in the prior year."

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#### Managed Freight Segment

#### <br>

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** <br> **December 31,** | **Three Months Ended** <br> **December 31,** | **Year Ended**<br> **December 31,** | **Year Ended**<br> **December 31,** |
| **($000s)** | **2022** | **2021** | **2022** | **2021** |
| &nbsp;&nbsp;&nbsp; Freight Revenue | $76171 | $108132 | $320985 | $321236 |
| &nbsp;&nbsp;&nbsp; Operating Income | $8795 | $10952 | $36858 | $32461 |
| &nbsp;&nbsp;&nbsp; Adj. Operating Income <sup>(1)</sup> | $8830 | $10988 | $36999 | $32986 |
| &nbsp;&nbsp;&nbsp; Operating Ratio | 88.5% | 89.9% | 88.5% | 89.9% |
| &nbsp;&nbsp;&nbsp; Adj. Operating Ratio <sup>(1)</sup> | 88.4% | 89.8% | 88.5% | 89.7% |
| <sup>(1)</sup> Represents non-GAAP measures. | <sup>(1)</sup> Represents non-GAAP measures. |  |  |  |

---

"For the quarter, Managed Freight's freight revenue decreased 29.6%, from the prior year quarter. Operating income and adjusted operating income declined 20.0% compared to the fourth quarter of 2021. Managed Freight's reduced freight revenue is attributable to reduced volumes of overflow freight from both Expedited and Dedicated truckload operations which was at an all-time high during the fourth quarter 2021. Revenue and operating income in this segment are expected to fluctuate with changes in the freight market and our percentage of contracted versus non-contracted freight."

#### Warehousing Segment

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended** <br> **December 31,** | **Three Months Ended** <br> **December 31,** | **Year Ended**<br> **December 31,** | **Year Ended**<br> **December 31,** |
| **($000s)** | **2022** | **2021** | **2022** | **2021** |
| &nbsp;&nbsp;&nbsp; Freight Revenue | $21245 | $16220 | $78852 | $62464 |
| &nbsp;&nbsp;&nbsp; Operating Income | $15 | $430 | $2185 | $2994 |
| &nbsp;&nbsp;&nbsp; Adj. Operating Income <sup>(1)</sup> | $274 | $687 | $3221 | $4415 |
| &nbsp;&nbsp;&nbsp; Operating Ratio | 99.9% | 97.4% | 97.3% | 95.3% |
| &nbsp;&nbsp;&nbsp; Adj. Operating Ratio <sup>(1)</sup> | 98.7% | 95.8% | 95.9% | 92.9% |
| <sup>(1)</sup> Represents non-GAAP measures. | <sup>(1)</sup> Represents non-GAAP measures. |  |  |  |

---

"For the quarter, Warehousing's freight revenue increased 31.0% versus the prior year quarter. The increase in revenue was primarily driven by the year-over-year impact of new customer business added during the current year. Operating income and adjusted operating income for the Warehousing segment decreased $0.4 million compared to the fourth quarter of 2021. The year-over-year decline in profitability with this segment is largely attributable to temporary incremental costs associated with new startup business and the costs of securing additional unoccupied leased space in key locations, which is consistent with our longer-term growth strategy. Over time, we anticipate margins in this segment to normalize in the mid to high single digits."

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#### Capitalization, Liquidity and Capital Expenditures
Tripp Grant, the Company's Chief Financial Officer, added the following comments: "At December 31, 2022, our total indebtedness, composed of total debt and finance lease obligations, net of cash ("net indebtedness"), increased by $17.9 million to approximately $46.4 million as compared to December 31, 2021. In addition, our net indebtedness to total capitalization increased to 10.9% at December 31, 2022 from 7.5% at December 31, 2021.

The increase in net indebtedness is primarily attributable to the base purchase price paid for the acquisition of AAT in the amount of $38.5 million, the repurchase of approximately 3.4 million shares under our stock repurchase programs for $84.8 million, net capital expenditures of $47.5 million and dividend payments of $4.3 million, offset by cash flows from operations.

"At December 31, 2022, we had cash and cash equivalents totaling $68.7 million. Under our ABL credit facility, we had no borrowings outstanding, undrawn letters of credit outstanding of $23.9 million, and available borrowing capacity of $86.1 million. The sole financial covenant under our ABL facility is a fixed charge coverage ratio covenant that is tested only when available borrowing capacity is below a certain threshold. Based on availability as of December 31, 2022, no testing was required, and we do not expect testing to be required in the foreseeable future.

"Our net capital investment through December 31, 2022, used $47.5 million as compared to proceeds of $8.8 million for the prior year period. At the end of the quarter, we had $6.0 million in assets held for sale that we anticipate disposing within twelve months. The average age of our tractors has sequentially declined from the third quarter by three months to 26 months and is expected to continue to decline throughout 2023 as we normalize the average age of our fleet.

"Our baseline expectation for net capital expenditures in 2023 is $75 million to $85 million, which includes a range of $87 million to $97 million for revenue generating equipment offset by cash proceeds on the sale of a terminal of approximately $12 million, net of transaction costs. Our capital investment plan reflects our priorities of improving operational uptime, lowering operating costs, and maintaining a driver-friendly fleet. We expect the benefits of improved utilization, fuel economy and maintenance costs to produce acceptable returns despite increased prices of new equipment and potentially lower values of used equipment.

"Based on our current capital structure and expected 2023 net capital expenditures, we believe we have substantial flexibility to continue to repurchase stock, declare quarterly dividends and evaluate other capital allocation alternatives."

------

#### Subsequent Event: Real Estate Sale

#### <br>
On January 13, 2023, the Company sold a Tennessee based terminal property for approximately $12 million in cash net of transaction costs and expects to record a pretax gain on sale of property of approximately $8 million in the first quarter of 2023.

#### Outlook

#### <br>
Mr. Parker concluded, "2022 was a remarkable year for Covenant, and I'm very proud of what our team has accomplished. Our results were in part the product of an exceptional freight market in the first half of the year and in part the result of an intentional, multi-year effort to evolve toward a less cyclical business model. We cannot eliminate the impact of economic and freight market cycles, but we view our 2022 results as incremental progress toward delivering solid, more consistent returns for our stockholders.

"As we look toward 2023, we anticipate a very difficult freight environment for at least the first half of the year which could compress rates and margins when compared to 2022. However, we believe our more resilient operating model, together with the steps we are taking to reduce costs and inefficiencies, will mitigate a portion of our historical volatility throughout economic and freight market cycles. Overall, I am pleased with our current position, which features a de-leveraged balance sheet, strong liquidity and a reduction of approximately 20% of the shares outstanding compared to a year ago. We will remain focused on growing our market share, continuing to improve our operations, and becoming a stronger, more profitable, and more predictable business with the opportunity for significant and sustained value creation."

#### Conference Call Information

The Company will host a live conference call tomorrow, January 26, 2023, at 10:00 a.m. Eastern time to discuss the quarter. Individuals may access the call by dialing 877-550-1505 (U.S./Canada) and 0800-524-4760 (International). An audio replay will be available for one week following the call at 800-645-7964, access code 3895#. For additional financial and statistical information regarding the Company that is expected to be discussed during the conference call, please visit our website at www.covenantlogistics.com/investors under the icon "Earnings Info."

Covenant Logistics Group, Inc., through its subsidiaries, offers a portfolio of transportation and logistics services to customers throughout the United States. Primary services include asset- based expedited and dedicated truckload capacity, as well as asset-light warehousing, transportation management, and freight brokerage capability. In addition, Transport Enterprise Leasing is an affiliated company providing revenue equipment sales and leasing services to the trucking industry. Covenant's Class A common stock is traded on the NASDAQ Global Select market under the symbol, "CVLG."

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(1)** See GAAP to Non-GAAP Reconciliation in the schedules included with this release. In addition to operating income (loss), operating ratio, net income, and earnings per diluted share, we use adjusted operating income (loss), adjusted operating ratio, adjusted net income, and adjusted earnings per diluted share, non-GAAP measures, as key measures of profitability. Adjusted operating income (loss), adjusted operating ratio, adjusted net income, and adjusted diluted earnings per share are not substitutes for operating income (loss), operating ratio, net income, and earnings per diluted share measured in accordance with GAAP. There are limitations to using non-GAAP financial measures. We believe our presentation of these non-GAAP financial measures are useful because it provides investors and securities analysts with supplemental information that we use internally for purposes of assessing profitability. Further, our Board and management use non-GAAP operating income (loss), operating ratio, net income, and earnings per diluted share measures on a supplemental basis to remove items that may not be an indicator of performance from period-to-period. Although we believe that adjusted operating income (loss), adjusted operating ratio, adjusted net income, and adjusted diluted earnings per share improves comparability in analyzing our period-to-period performance, they could limit comparability to other companies in our industry, if those companies define such measures differently. Because of these limitations, adjusted operating income (loss), adjusted operating ratio, adjusted net income, and adjusted earnings per diluted share should not be considered measures of income generated by our business or discretionary cash available to us to invest in the growth of our business. Management compensates for these limitations by primarily relying on GAAP results and using non-GAAP financial measures on a supplemental basis.

** 

For further information contact:

M. Paul Bunn, President and Chief Operating Officer

PBunn@covenantlogistics.com

Tripp Grant, Chief Financial Officer

TGrant@covenantlogistics.com

For copies of Company information contact:

Brooke McKenzie, Executive Administrative Assistant

BMcKenzie@covenantlogistics.com

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Covenant Logistics Group, Inc.** | **Covenant Logistics Group, Inc.** | **Covenant Logistics Group, Inc.** | **Covenant Logistics Group, Inc.** | **Covenant Logistics Group, Inc.** | **Covenant Logistics Group, Inc.** | **Covenant Logistics Group, Inc.** |
| **Key Financial and Operating Statistics** | **Key Financial and Operating Statistics** | **Key Financial and Operating Statistics** | **Key Financial and Operating Statistics** | **Key Financial and Operating Statistics** | **Key Financial and Operating Statistics** | **Key Financial and Operating Statistics** |
|  | **Income Statement Data** | **Income Statement Data** | **Income Statement Data** | **Income Statement Data** | **Income Statement Data** | **Income Statement Data** |
|  | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| **($s in 000s, except per share data)** | **2022** | **2021** | **% Change** | **2022** | **2021** | **% Change** |
| Freight revenue | $**255327** | $**267022** | **(4.4**<br>**%)** | $**1046396** | $**949913** | 10.2<br>**%** |
| Fuel surcharge revenue | 40730 | 27206 | 49.7% | 170462 | 96090 | 77.4% |
| &nbsp;&nbsp;&nbsp; Total revenue | $296057 | $294228 | 0.6% | $1216858 | $1046003 | 16.3% |
| Operating expenses: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Salaries, wages, and related expenses | 101295 | 91637 |  | 402276 | 350246 |  |
| &nbsp;&nbsp;&nbsp; Fuel expense | 39954 | 28273 |  | 166410 | 103641 |  |
| &nbsp;&nbsp;&nbsp; Operations and maintenance | 18803 | 15323 |  | 79051 | 59269 |  |
| &nbsp;&nbsp;&nbsp; Revenue equipment rentals and purchased transportation | 81343 | 106358 |  | 325624 | 331685 |  |
| &nbsp;&nbsp;&nbsp; Operating taxes and licenses | 3213 | 2667 |  | 11931 | 10899 |  |
| &nbsp;&nbsp;&nbsp; Insurance and claims | 14794 | 10350 |  | 50547 | 38788 |  |
| &nbsp;&nbsp;&nbsp; Communications and utilities | 1662 | 1233 |  | 5385 | 4558 |  |
| &nbsp;&nbsp;&nbsp; General supplies and expenses | 9346 | 7701 |  | 37762 | 29673 |  |
| &nbsp;&nbsp;&nbsp; Depreciation and amortization | 15778 | 12565 |  | 57512 | 53881 |  |
| &nbsp;&nbsp;&nbsp; Gain on disposition of property and equipment, net | (1035) | (116) |  | (40322) | (3799) |  |
| Total operating expenses | 285153 | 275991 |  | 1096176 | 978841 |  |
| Operating income | 10904 | 18237 |  | 120682 | 67162 |  |
| Interest expense, net | 827 | 616 |  | 3.083 | 2791 |  |
| Income from equity method investment | (3931) | (5210) |  | (25193) | (14782) |  |
|  Income from continuing operations before income taxes | 14008 | 22831 |  | 142792 | 79153 |  |
| Income tax expense | 2729 | 5099 |  | 34860 | 20962 |  |
| Income from continuing operations | 11279 | 17732 |  | 107932 | 58191 |  |
| Income from discontinued operations, net of tax | 225 | - |  | 750 | 2540 |  |
| Net income | $11504 | $17732 |  | $108682 | $60731 |  |
| **Basic earnings per share** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Income from continuing operations | $0.83 | $1.06 |  | $7.19 | $3.46 |  |
| &nbsp;&nbsp;&nbsp; Income from discontinued operations | $0.02 | $- |  | $0.05 | $0.15 |  |
| &nbsp;&nbsp;&nbsp; Net income | $0.85 | $1.06 |  | $7.24 | $3.61 |  |
| **Diluted earnings per share** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp; Income from continuing operations | $0.79 | $1.05 |  | $6.95 | $3.42 |  |
| &nbsp;&nbsp;&nbsp; Income from discontinued operations | $0.02 | $- |  | $0.05 | $0.15 |  |
| &nbsp;&nbsp;&nbsp; Net income | $0.81 | $1.05 |  | $7.00 | $3.57 |  |
|  Basic weighted average shares outstanding (000s) | 13544 | 16718 |  | 15006 | 16803 |  |
|  Diluted weighted average shares outstanding (000s) | 14205 | 16974 |  | 15524 | 17020 |  |
|  | **Segment Freight Revenues** | **Segment Freight Revenues** | **Segment Freight Revenues** | **Segment Freight Revenues** | **Segment Freight Revenues** | **Segment Freight Revenues** |
|  | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| **($s in 000's)** | **2022** | **2021** | **% Change** | **2022** | **2021** | **% Change** |
| Expedited - Truckload | $90364 | $71782 | 25.9% | $355360 | $289350 | 22.8% |
| Dedicated - Truckload | 67547 | 70888 | (4.7%) | 291199 | 276863 | 5.2% |
| &nbsp;&nbsp;&nbsp; Combined Truckload | 157911 | 142670 | 10.7% | 646559 | 566213 | 14.2% |
| Managed Freight | 76171 | 108132 | (29.6%) | 320985 | 321236 | (0.1%) |
| Warehousing | 21245 | 16220 | 31.0% | 78852 | 62464 | 26.2% |
| &nbsp;&nbsp;&nbsp; Consolidated Freight Revenue | $255327 | $267022 | (4.4<br> %) | $1046396 | $949913 | 10.2% |
|  | **Truckload Operating Statistics** | **Truckload Operating Statistics** | **Truckload Operating Statistics** | **Truckload Operating Statistics** | **Truckload Operating Statistics** | **Truckload Operating Statistics** |
|  | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
|  | **2022** | **2021** | **% Change** | **2022** | **2021** | **% Change** |
| Average freight revenue per loaded mile | $2.86 | $2.53 | 13.0% | $2.77 | $2.33 | 18.9% |
| Average freight revenue per total mile | $2.53 | $2.24 | 12.9% | $2.45 | $2.07 | 18.4% |
| Average freight revenue per tractor per week | $5417 | $4732 | 14.5% | $5388 | $4509 | 219.5% |
| Average miles per tractor per period | 28116 | 27805 | 1.1% | 114636 | 113485 | 1.0% |
| Weighted avg. tractors for period | 2218 | 2294 | (3.3%) | 2301 | 2408 | (4.4)% |
| Tractors at end of period | 2138 | 2294 | (6.7%) | 2138 | 2291 | (6.7)% |
| Trailers at end of period | 5367 | 5331 | 0.7% | 5367 | 5331 | 0.7% |
|  | **Selected Balance Sheet Data** | **Selected Balance Sheet Data** |  |  |  |  |
| **($s in '000's, except per share data)** | **12/31/2022** | **12/31/2021** |  |  |  |  |
| Total assets | $796645 | $651662 |  |  |  |  |
| Total stockholders' equity | $377128 | $349699 |  |  |  |  |
|  Total indebtedness, comprised of total debt and finance leases, net of cash | $46356 | $28473 |  |  |  |  |
| Net Indebtedness to Capitalization Ratio | 10.9% | 7.5% |  |  |  |  |
| Leverage Ratio<sup>(1)</sup> | 0.34 | 0.24 |  |  |  |  |
|  Tangible book value per end-of-quarter basic share | $19.97 | $17.10 |  |  |  |  |
| <sup>(1)</sup> Leverage Ratio is calculated as ending total indebtedness, comprised of total debt and finance leases, net of cash, divided by the trailing twelve months sum of operating income (loss), depreciation and amortization, and gain on disposition of property and equipment, net. | <sup>(1)</sup> Leverage Ratio is calculated as ending total indebtedness, comprised of total debt and finance leases, net of cash, divided by the trailing twelve months sum of operating income (loss), depreciation and amortization, and gain on disposition of property and equipment, net. | <sup>(1)</sup> Leverage Ratio is calculated as ending total indebtedness, comprised of total debt and finance leases, net of cash, divided by the trailing twelve months sum of operating income (loss), depreciation and amortization, and gain on disposition of property and equipment, net. | <sup>(1)</sup> Leverage Ratio is calculated as ending total indebtedness, comprised of total debt and finance leases, net of cash, divided by the trailing twelve months sum of operating income (loss), depreciation and amortization, and gain on disposition of property and equipment, net. | <sup>(1)</sup> Leverage Ratio is calculated as ending total indebtedness, comprised of total debt and finance leases, net of cash, divided by the trailing twelve months sum of operating income (loss), depreciation and amortization, and gain on disposition of property and equipment, net. | <sup>(1)</sup> Leverage Ratio is calculated as ending total indebtedness, comprised of total debt and finance leases, net of cash, divided by the trailing twelve months sum of operating income (loss), depreciation and amortization, and gain on disposition of property and equipment, net. | <sup>(1)</sup> Leverage Ratio is calculated as ending total indebtedness, comprised of total debt and finance leases, net of cash, divided by the trailing twelve months sum of operating income (loss), depreciation and amortization, and gain on disposition of property and equipment, net. |

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Covenant Logistics Group, Inc.** | **Covenant Logistics Group, Inc.** | **Covenant Logistics Group, Inc.** | **Covenant Logistics Group, Inc.** | **Covenant Logistics Group, Inc.** | **Covenant Logistics Group, Inc.** | **Covenant Logistics Group, Inc.** |
| **Non-GAAP Reconciliation (Unaudited)** | **Non-GAAP Reconciliation (Unaudited)** | **Non-GAAP Reconciliation (Unaudited)** | **Non-GAAP Reconciliation (Unaudited)** | **Non-GAAP Reconciliation (Unaudited)** | **Non-GAAP Reconciliation (Unaudited)** | **Non-GAAP Reconciliation (Unaudited)** |
| **Adjusted Operating Income and Adjusted Operating Ratio <sup>(1)</sup>** | **Adjusted Operating Income and Adjusted Operating Ratio <sup>(1)</sup>** | **Adjusted Operating Income and Adjusted Operating Ratio <sup>(1)</sup>** | **Adjusted Operating Income and Adjusted Operating Ratio <sup>(1)</sup>** | **Adjusted Operating Income and Adjusted Operating Ratio <sup>(1)</sup>** | **Adjusted Operating Income and Adjusted Operating Ratio <sup>(1)</sup>** | **Adjusted Operating Income and Adjusted Operating Ratio <sup>(1)</sup>** |
| ***(Dollars in thousands)*** | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| **GAAP Presentation** | **2022** | **2021** | **bps Change** | **2022** | **2021** | **bps Change** |
| Total revenue | $**296057** | $**294228** |  | $**1216858** | $**1046003** |  |
| Total operating expenses | 285153 | 275991 |  | 1096176 | 978841 |  |
| &nbsp;&nbsp;&nbsp; Operating income | $10904 | $18237 |  | $120682 | $67162 |  |
| &nbsp;&nbsp;&nbsp; Operating ratio | 96.3% | 93.8% | 250 | 90.1% | 93.6% | (350) |
| **Non-GAAP Presentation** | **2022** | **2021** | **bps Change** | **2022** | **2021** | **bps Change** |
| Total revenue | $**296057** | $**294228** |  | $**1216858** | $**1046003** |  |
| Fuel surcharge revenue | (40730) | (27206) |  | (170462) | (96090) |  |
| &nbsp;&nbsp;&nbsp; Freight revenue (total revenue, excluding fuel surcharge) | 255327 | 267022 |  | 1046396 | 949913 |  |
| Total operating expenses | 285153 | 275991 |  | 1096176 | 978841 |  |
| Adjusted for: |  |  |  |  |  |  |
| Fuel surcharge revenue | (40730) | (27206) |  | (170462) | (96090) |  |
| Amortization of intangibles <sup>(2)</sup> | (1121) | (587) |  | (4306) | (4043) |  |
| Gain on disposal of terminals, net | - | - |  | 38542 | - |  |
| Contingent consideration liability adjustment | - | - |  | (813) | - |  |
| Abandonment and excess revenue equipment | (9985) | - |  | (9985) | - |  |
| &nbsp;&nbsp;&nbsp; Adjusted operating expenses | 233317 | 229020 |  | 949152 | 878708 |  |
| &nbsp;&nbsp;&nbsp; Adjusted operating income | 22010 | 21235 |  | 97244 | 71205 |  |
| &nbsp;&nbsp;&nbsp; Adjusted operating ratio | 91.4% | 91.5% | (160) | 90.7% | 92.5% | (180) |
| <sup>(1)</sup> Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP operating income and operating ratio to consolidated non-GAAP Adjusted operating income and Adjusted operating ratio. | <sup>(1)</sup> Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP operating income and operating ratio to consolidated non-GAAP Adjusted operating income and Adjusted operating ratio. | <sup>(1)</sup> Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP operating income and operating ratio to consolidated non-GAAP Adjusted operating income and Adjusted operating ratio. | <sup>(1)</sup> Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP operating income and operating ratio to consolidated non-GAAP Adjusted operating income and Adjusted operating ratio. | <sup>(1)</sup> Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP operating income and operating ratio to consolidated non-GAAP Adjusted operating income and Adjusted operating ratio. | <sup>(1)</sup> Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP operating income and operating ratio to consolidated non-GAAP Adjusted operating income and Adjusted operating ratio. | <sup>(1)</sup> Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP operating income and operating ratio to consolidated non-GAAP Adjusted operating income and Adjusted operating ratio. |
| <sup>(2)</sup> "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets. | <sup>(2)</sup> "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets. | <sup>(2)</sup> "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets. | <sup>(2)</sup> "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets. | <sup>(2)</sup> "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets. | <sup>(2)</sup> "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets. | <sup>(2)</sup> "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets. |

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| | | | | |
|:---|:---|:---|:---|:---|
| **Non-GAAP Reconciliation (Unaudited)** | **Non-GAAP Reconciliation (Unaudited)** | **Non-GAAP Reconciliation (Unaudited)** | **Non-GAAP Reconciliation (Unaudited)** | **Non-GAAP Reconciliation (Unaudited)** |
| **Adjusted Net Income and Adjusted EPS <sup>(1)</sup>** | **Adjusted Net Income and Adjusted EPS <sup>(1)</sup>** | **Adjusted Net Income and Adjusted EPS <sup>(1)</sup>** | **Adjusted Net Income and Adjusted EPS <sup>(1)</sup>** | **Adjusted Net Income and Adjusted EPS <sup>(1)</sup>** |
| ***(Dollars in thousands)*** | **Three Months Ended**<br> **December 31,** | **Three Months Ended**<br> **December 31,** | **Year Ended**<br> **December 31,** | **Year Ended**<br> **December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
| **GAAP Presentation - Net income** | $11504 | $17732 | $108682 | $60731 |
| Adjusted for: |  |  |  |  |
| Amortization of intangibles <sup>(2)</sup> | 1121 | 587 | 4306 | 4043 |
| Strategic restructuring adjusting items: |  |  |  |  |
| Discontinued operations reversal of loss contingency <sup>(3)</sup> | (300) | - | (1000) | (3411) |
| Gain on disposal of terminal, net | - | - | (38542) | - |
| Contingent consideration liability adjustment | - | - | 813 | - |
| Abandonment and excess revenue equipment | 9985 | - | 9985 | - |
| Total adjustments before taxes | 10806 | 587 | (24438) | 632 |
| Provision for income tax expense at effective rate | (2788) | (150) | 6299 | 76 |
| Tax effected adjustments | $8018 | $437 | $(18139) | $556 |
| **Non-GAAP Presentation - Adjusted net income** | $19522 | $18169 | $90543 | $61287 |
| **GAAP Presentation - Diluted earnings per share ("EPS")** | $0.81 | $1.05 | $7.00 | $3.57 |
| Adjusted for: |  |  |  |  |
| Amortization of intangibles <sup>(2)</sup> | 0.08 | 0.03 | 0.28 | 0.24 |
| Discontinued operations reversal of loss contingency<sup>(3)</sup> | (0.02) | - | (0.06) | (0.20) |
| Gain on sale of terminal, net | - | - | (2.48) | - |
| Contingent consideration liability adjustment | - | - | 0.05 | - |
| Abandonment and excess revenue equipment | 0.70 |  | 0.64 | - |
| Total adjustments before taxes | 0.76 | 0.03 | (1.57) | 0.04 |
| Provision for income tax expense at effective rate | (0.20) | (0.01) | 0.41 | - |
| &nbsp;&nbsp;&nbsp; Tax effected adjustments | $0.56 | $0.02 | $(1.16) | $0.04 |
| &nbsp;&nbsp;&nbsp; **Non-GAAP Presentation - Adjusted EPS** | $1.37 | $1.07 | $5.84 | $3.61 |
| <sup>(1)</sup> Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP net income to consolidated non-GAAP adjusted net income and consolidated GAAP diluted earnings per share to non-GAAP consolidated Adjusted EPS. | <sup>(1)</sup> Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP net income to consolidated non-GAAP adjusted net income and consolidated GAAP diluted earnings per share to non-GAAP consolidated Adjusted EPS. | <sup>(1)</sup> Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP net income to consolidated non-GAAP adjusted net income and consolidated GAAP diluted earnings per share to non-GAAP consolidated Adjusted EPS. | <sup>(1)</sup> Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP net income to consolidated non-GAAP adjusted net income and consolidated GAAP diluted earnings per share to non-GAAP consolidated Adjusted EPS. | <sup>(1)</sup> Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP net income to consolidated non-GAAP adjusted net income and consolidated GAAP diluted earnings per share to non-GAAP consolidated Adjusted EPS. |
| <sup>(2)</sup> "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets. | <sup>(2)</sup> "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets. | <sup>(2)</sup> "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets. | <sup>(2)</sup> "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets. | <sup>(2)</sup> "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets. |
| <sup>(3)</sup> "Discontinued Operations reversal of loss contingency" reflects the non-cash reversal of a previously recorded loss contingency that is no longer considered probable. The original loss contingency was recorded in Q4 2020 as a result of our disposal of our former accounts receivable factoring segment, TFS. | <sup>(3)</sup> "Discontinued Operations reversal of loss contingency" reflects the non-cash reversal of a previously recorded loss contingency that is no longer considered probable. The original loss contingency was recorded in Q4 2020 as a result of our disposal of our former accounts receivable factoring segment, TFS. | <sup>(3)</sup> "Discontinued Operations reversal of loss contingency" reflects the non-cash reversal of a previously recorded loss contingency that is no longer considered probable. The original loss contingency was recorded in Q4 2020 as a result of our disposal of our former accounts receivable factoring segment, TFS. | <sup>(3)</sup> "Discontinued Operations reversal of loss contingency" reflects the non-cash reversal of a previously recorded loss contingency that is no longer considered probable. The original loss contingency was recorded in Q4 2020 as a result of our disposal of our former accounts receivable factoring segment, TFS. | <sup>(3)</sup> "Discontinued Operations reversal of loss contingency" reflects the non-cash reversal of a previously recorded loss contingency that is no longer considered probable. The original loss contingency was recorded in Q4 2020 as a result of our disposal of our former accounts receivable factoring segment, TFS. |

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| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Covenant Logistics Group, Inc.** | **Covenant Logistics Group, Inc.** | **Covenant Logistics Group, Inc.** | **Covenant Logistics Group, Inc.** | **Covenant Logistics Group, Inc.** | **Covenant Logistics Group, Inc.** | **Covenant Logistics Group, Inc.** | **Covenant Logistics Group, Inc.** | **Covenant Logistics Group, Inc.** | **Covenant Logistics Group, Inc.** | **Covenant Logistics Group, Inc.** |
| **Non-GAAP Reconciliation (Unaudited)** | **Non-GAAP Reconciliation (Unaudited)** | **Non-GAAP Reconciliation (Unaudited)** | **Non-GAAP Reconciliation (Unaudited)** | **Non-GAAP Reconciliation (Unaudited)** | **Non-GAAP Reconciliation (Unaudited)** | **Non-GAAP Reconciliation (Unaudited)** | **Non-GAAP Reconciliation (Unaudited)** | **Non-GAAP Reconciliation (Unaudited)** | **Non-GAAP Reconciliation (Unaudited)** | **Non-GAAP Reconciliation (Unaudited)** |
| **Adjusted Operating Income and Adjusted Operating Ratio <sup>(1)</sup>** | **Adjusted Operating Income and Adjusted Operating Ratio <sup>(1)</sup>** | **Adjusted Operating Income and Adjusted Operating Ratio <sup>(1)</sup>** | **Adjusted Operating Income and Adjusted Operating Ratio <sup>(1)</sup>** | **Adjusted Operating Income and Adjusted Operating Ratio <sup>(1)</sup>** | **Adjusted Operating Income and Adjusted Operating Ratio <sup>(1)</sup>** | **Adjusted Operating Income and Adjusted Operating Ratio <sup>(1)</sup>** | **Adjusted Operating Income and Adjusted Operating Ratio <sup>(1)</sup>** | **Adjusted Operating Income and Adjusted Operating Ratio <sup>(1)</sup>** | **Adjusted Operating Income and Adjusted Operating Ratio <sup>(1)</sup>** | **Adjusted Operating Income and Adjusted Operating Ratio <sup>(1)</sup>** |
| ***(Dollars in thousands)*** | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Three Months Ended December 31,** |
| **GAAP Presentation** | **2022** | **2022** | **2022** | **2022** | **2022** | **2021** | **2021** | **2021** | **2021** | **2021** |
|  | Expedited | Dedicated | Combined Truckload | Managed Freight | Warehousing | Expedited | Dedicated | Combined Truckload | Managed Freight | Warehousing |
| Total revenue | $**114479** | $**83860** | $**198339** | $**76171** | $**21547** | $**85924** | $**83750** | $**169674** | $**108132** | $**16422** |
| Total operating expenses | 108507 | 87738 | $**196245** | $67376 | 21532 | 80339 | 82480 | 162819 | 97180 | 15992 |
| &nbsp;&nbsp;&nbsp; Operating income (loss) | $5972 | $(3878) | $2094 | $8795 | $15 | $5585 | $1270 | $6855 | $10952 | $430 |
| &nbsp;&nbsp;&nbsp; Operating ratio | 94.8 | 104.6% | 98.9% | 88.5% | 99.9% | 93.5% | 98.5% | 96.0% | 89.9% | 97.4% |
| **Non-GAAP Presentation** |  |  |  |  |  |  |  |  |  |  |
| Total revenue | $**114479** | $**83860** | $**198338** | $**76171** | $**21547** | $**85924** | $**83750** | $**169674** | $**108132** | $**16422** |
| Fuel surcharge revenue | (24115) | (16313) | (40428) | - | (302) | (14142) | (12862) | (27004) | - | (202) |
|  Freight revenue (total revenue, excluding fuel surcharge) | 90364 | 67547 | 157911 | 76171 | 21245 | 71782 | 70888 | 142670 | 108132 | 16220 |
| Total operating expenses | 108507 | 87738 | 196245 | 67376 | 21532 | 80339 | 82480 | 162819 | 97180 | 15992 |
| Adjusted for: |  |  |  |  |  |  |  |  |  |  |
| Fuel surcharge revenue | (24115) | (16313) | (40428) | - | (302) | (14142) | (12862) | (27004) | - | (202) |
|  Amortization of intangibles <sup>(2)</sup> | (533) | (294) | (827) | (35) | (259) | - | (294) | (294) | (36) | (257) |
|  Abandonment of revenue equipment | (3829) | (6156) | (9985) | - | - | - | - | - | - | - |
| &nbsp;&nbsp;&nbsp; Adjusted operating expenses | 80030 | 64975 | 145005 | 67341 | 20971 | 66197 | 69324 | 135521 | 97144 | 15533 |
| &nbsp;&nbsp;&nbsp; Adjusted operating income (loss) | 10334 | 2572 | 12906 | 8830 | 274 | 5585 | 1564 | 7149 | 10988 | 687 |
| &nbsp;&nbsp;&nbsp; Adjusted operating ratio | 88.6% | 96.2% | 91.8% | 88.4% | 98.7% | 92.2% | 97.8% | 95.0% | 89.8% | 95.8% |
|  | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** | **Year Ended December 31,** |
| **GAAP Presentation** | **2022** | **2022** | **2022** | **2022** | **2022** | **2021** &nbsp;&nbsp;&nbsp;&nbsp;  | **2021** &nbsp;&nbsp;&nbsp;&nbsp;  | **2021** &nbsp;&nbsp;&nbsp;&nbsp;  | **2021** &nbsp;&nbsp;&nbsp;&nbsp;  | **2021** &nbsp;&nbsp;&nbsp;&nbsp;  |
|  | Expedited | Dedicated | Combined Truckload | Managed Freight | Warehousing | Expedited | Dedicated | Combined Truckload | Managed Freight | Warehousing |
| Total revenue | $**452713** | $**362997** | $**815710** | $**320985** | $**80163** | $**337063** | $**324541** | $**661604** | $**321236** | $**63163** |
| Total operating expenses | 392161 | $341910 | $**734071** | $284127 | $77978 | $303999 | $325898 | $629897 | $288775 | $60169 |
| &nbsp;&nbsp;&nbsp; Operating income (loss) | $60552 | $21087 | $81639 | $36858 | $2185 | $33064 | $(1357) | $31707 | $32461 | $2994 |
| &nbsp;&nbsp;&nbsp; Operating ratio | 86.6% | 94.2% | 90.0% | 88.5% | 97.3% | 90.2% | 100.4% | 95.2% | 89.9% | 95.3% |
| **Non-GAAP Presentation** |  |  |  |  |  |  |  |  |  |  |
| Total revenue | $**452713** | $**362997** | $**815710** | $**320985** | $**80163** | $**337063** | $**324541** | $**661604** | $**321236** | $**63163** |
| Fuel surcharge revenue | (97353) | (71798) | $**(169151)** | - | (1311) | (47713) | (47678) | (95391) | - | (699) |
|  Freight revenue (total revenue, excluding fuel surcharge) | 335360 | 291199 | 646559 | 320985 | 78852 | 289350 | 276863 | 566213 | 321236 | 62464 |
| Total operating expenses | 392161 | 341910 | 734071 | 284127 | 77978 | 303999 | 325898 | 629897 | 288775 | 60169 |
| Adjusted for: |  |  |  |  |  |  |  |  |  |  |
| Fuel surcharge revenue | (97353) | (71798) | (169151) | - | (1311) | (47713) | (47678) | (95391) | - | (699) |
|  Amortization of intangibles <sup>(2)</sup> | (1956) | (1173) | (3129) | (141) | (1036) | - | (2097) | (2097) | (525) | (1421) |
|  Gain on disposal of terminals, net | 21223 | 17319 | 38542 | - | - | - | - | - | - | - |
|  Contingent consideration liability adjustment | (813) | - | (813) | - | - | - | - | - | - | - |
|  Abandonment and excess revenue equipment | (3829) | (6156) | (9985) | - | - | - | - | - | - | - |
| &nbsp;&nbsp;&nbsp; Adjusted operating expenses | 309433 | 280102 | 589535 | 283986 | 75631 | 256286 | 276123 | 532409 | 288250 | 58049 |
| &nbsp;&nbsp;&nbsp; Adjusted operating income (loss) | 45927 | 11097 | 57024 | 36999 | 3221 | 33064 | 740 | 33804 | 32986 | 4415 |
| &nbsp;&nbsp;&nbsp; Adjusted operating ratio | 87.1% | 96.2% | 91.2% | 88.5% | 95.9% | 88.6% | 99.7% | 94.0% | 89.7% | 92.9% |
| <sup>(1)</sup> Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP operating income and operating ratio to consolidated non-GAAP Adjusted operating income and Adjusted operating ratio. | <sup>(1)</sup> Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP operating income and operating ratio to consolidated non-GAAP Adjusted operating income and Adjusted operating ratio. | <sup>(1)</sup> Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP operating income and operating ratio to consolidated non-GAAP Adjusted operating income and Adjusted operating ratio. | <sup>(1)</sup> Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP operating income and operating ratio to consolidated non-GAAP Adjusted operating income and Adjusted operating ratio. | <sup>(1)</sup> Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP operating income and operating ratio to consolidated non-GAAP Adjusted operating income and Adjusted operating ratio. | <sup>(1)</sup> Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP operating income and operating ratio to consolidated non-GAAP Adjusted operating income and Adjusted operating ratio. | <sup>(1)</sup> Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP operating income and operating ratio to consolidated non-GAAP Adjusted operating income and Adjusted operating ratio. | <sup>(1)</sup> Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP operating income and operating ratio to consolidated non-GAAP Adjusted operating income and Adjusted operating ratio. | <sup>(1)</sup> Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP operating income and operating ratio to consolidated non-GAAP Adjusted operating income and Adjusted operating ratio. | <sup>(1)</sup> Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP operating income and operating ratio to consolidated non-GAAP Adjusted operating income and Adjusted operating ratio. | <sup>(1)</sup> Pursuant to the requirements of Regulation G, this table reconciles consolidated GAAP operating income and operating ratio to consolidated non-GAAP Adjusted operating income and Adjusted operating ratio. |
| <sup>(2)</sup> "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets. | <sup>(2)</sup> "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets. | <sup>(2)</sup> "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets. | <sup>(2)</sup> "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets. | <sup>(2)</sup> "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets. | <sup>(2)</sup> "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets. | <sup>(2)</sup> "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets. | <sup>(2)</sup> "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets. | <sup>(2)</sup> "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets. | <sup>(2)</sup> "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets. | <sup>(2)</sup> "Amortization of intangibles" reflects the non-cash amortization expense relating to intangible assets. |

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