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Company earningsFinanceNewsTruckload Carriers

Covenant shakes up executive roster

Co-Presidents John Tweed and Joey Hogan announced

Covenant Transportation Group (NASDAQ: CVTI) announced several changes to the C-suite ahead of its first quarter 2020 earnings report.

On April 28, the Chattanooga, Tennessee-based truckload (TL) carrier announced that John Tweed and Joey Hogan will serve as co-presidents. Tweed will also assume the role of chief operating officer with Hogan serving as the chief administrative officer.

Tweed joined Covenant in the summer of 2018 after the company acquired Landair, an asset-based contract logistics and TL transportation provider, where he was the CEO prior to the deal. Most recently Tweed served as the Executive Vice President and Chief Operating Officer at Landair.

Tweed will oversee all of Covenant’s operations, sales and safety functions. Additionally, he’s tasked with expanding the company’s contract logistics efforts.

In his new role, Hogan will be responsible for company-wide administrative functions, which include strategic planning, finance, human resources and information technology. He will also be responsible for equipment and maintenance.

Hogan joined Covenant in 1997 as the company’s treasurer, serving in the capacity of President and Chief Operating Officer most recently.

“We are blessed with a deep and talented management team that is highly committed to our strategic vision. The appointments announced today will accelerate our progress by aligning our team’s talents with our most imperative goals,” said Chairman and CEO David Parker.

Paul Bunn was named Executive Vice President and Chief Financial Officer. Bunn joined Covenant in 2009 as the controller, most recently serving under the EVP title since 2019 and as Chief Accounting Officer and Treasurer since 2012.

Richard Cribbs was named Senior Vice President of Strategy and Investor Relations and Treasurer. Cribbs joined Covenant in 2006, serving most recently in the role of EVP and CFO. Cribbs held the CFO role from 2008 until today.

Bunn and Cribbs will continue to report to Hogan.

The moves are made to carry forward the company’s plan to “strengthen our position in the U.S. logistics industry, de-risk our leverage profile, and concentrate our business model on more sustainable, higher margin services and sectors where we can add considerable value to our partner-customers.”

The carrier is seeking to further its footprint into the contract logistics and expedited TL markets with the goal of lowering capital allocated to its other offerings and reducing operating expenses. The press release pointed to recent “contract wins” in dedicated and warehouse services as support for its initiatives.

In recent weeks, Covenant has made several moves designed to refocus on core offerings and improve its liquidity and cost structure, including the closure of its Texarkana facility, which served solo-driven refrigerated operations. Covenant has also reduced the amount it will spend on its fleet, implemented 10% to 15% salary reductions for executives, temporarily suspended its share repurchase program and plans to dispose of an unoccupied facility.

In the press release announcing the Texarkana facility closure, the company reported $75.3 million in cash, cash equivalents and borrowing capacity on its revolving credit facility as of the close of the first quarter. The release noted other sources of liquidity, including unencumbered equipment and accounts receivable in its factoring business.

“I’m confident we have the team to drive Covenant forward and look forward to reporting the progress on our plan as we take this opportunity to strengthen and re-energize the enterprise during the current economic environment and return to normal operations with a brighter future,” concluded Parker.

Shares of CVTI are up 5% in early trading.

Todd Maiden

Based in Richmond, VA, Todd is the finance editor at FreightWaves. Prior to joining FreightWaves, he covered the TLs, LTLs, railroads and brokers for RBC Capital Markets and BB&T Capital Markets. Todd began his career in banking and finance before moving over to transportation equity research where he provided stock recommendations for publicly traded transportation companies.

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