CVLG

COVENANT LOGISTICS GROUP, INC.

NYSE · INDUSTRIALS · TRUCKING (NO LOCAL)

29.19

−0.58 −1.95%

USD · close Oct 23

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MKT CAP —P/E 171.7DIV YIELD —FCF YIELD —REV TTM —NET INCOME $3.8M −89.5%NET DEBT $243.9M52W 18.07 – 49.88SEC XBRL · TTM TO Invalid Date

How CVLG rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

53%

of sentences unchanged

Added

221

new sentences

Dropped

210

sentences removed

Length

+613

words, now 22,443

New in FY2025

All share and per share amounts presented in this Annual Report on Form 10-K, including with respect to dividends and in the financial statement and notes hereto have been adjusted for the stock split.
("AAT"), and our 2023 acquisitions of Lew Thompson & Son Trucking, LLC, Lew Thompson & Son Leasing LLC, Lew Thompson & Son Dedicated Leasing, LLC, Josh Thompson Trucking, LLC (collectively "LTST") and Sims Transport Services LLC ("Sims"), and our 2025 acquisition of assets we are operating as Star Logistics Solutions ("Star") are examples of that commitment.
Star provides freight brokerage services.
Our leverage ratio increased in 2025 as compared to the prior year.
We remain focused on investing capital when we can obtain acceptable returns while reducing our leverage.
In January 2022, our Board of Directors (the "Board") approved a quarterly cash dividend program of $0.03125 per share, which was increased to $0.04 per share in August 2022, $0.055 per share in February 2023, and $0.07 per share in February 2025. ● Risk Management—Assess and Mitigate.
We take a company-wide approach to risk management, and our full Board has overall responsibility for and oversees our risk management process, while Board committees oversee risks in specified areas.
To manage these risks, we have at times maintained lower self-insured accident liability retention when economically feasible and expanded our ability to sell our used equipment to increase bargaining power with the tractor and trailer manufacturers. ● Technology .
The Company completed Federal Motor Carrier Safety Administration ("FMCSA") audits on two of its subsidiaries during 2025.
Both resulted in continued "Satisfactory" safety ratings, no fines, and no violations.
We believe the keys to these safety results remain a combination of training, consistent and proactive coaching, utilizing proven safety technologies, and consistent collaboration between all our business units.
The expansion of our safety training program continues to sustain consistent messaging around the culture of safety.
During 2025, we continued to expand implementation of several safety related technologies, including telematics, event recorders, enhancing usage of our dorm/training facility, and testing of truck manufacturer preventative systems.
We believe the ongoing execution of our strategic plan has contributed to the substantial improvement in operating results and profitability we have generated in recent years compared to historical results.
Some of the significant successes resulting from our strategic planning efforts include the Landair Acquisition in 2018; consolidation of our back-office operations; enhancements to recruiting, retention, and business intelligence; upgraded information technology; focus on service and on time delivery; sale of Transport Financial Services; the acquisition of AAT in 2022; the acquisition of LTST and Sims in 2023 and the acquisition of Star in 2025.
Our company-owned tractor fleet has an average age of approximately 2.0 years, compared to an average U.S.
Class 8 tractor age of approximately 6.3 years in 2025.
The primary service offerings are further described below: ● Expedited: In our Expedited business, we operate approximately 800 tractors substantially all of which are driven by two-person driver teams.
Expedited services generally require two-person driver teams on equipment either owned or leased by the Company. ● Dedicated: In our Dedicated business, we operate approximately 1,500 tractors, substantially all of which are driven by a solo driver.
Equipment is either owned or leased by the Company.
The Dedicated reportable segment also provides shuttle and switching services related to shuttling containers and trailers in or around freight yards and to/from warehouses for Dedicated customers. ● Managed Freight: Our Managed Freight reportable segment, includes our brokerage services and TMS.
We also provide shuttle and switching services related to shuttling containers and trailers in or around freight yards and to/from warehouses for Warehousing customers.
The following table reflects our service offerings measured by 2025 total revenue, net of fuel surcharge revenue, which we refer to as "freight revenue": Distribution of Freight Revenue Among Service Offerings Expedited 29.95 % Dedicated 33.47 % Managed Freight 27.08 % Warehousing 9.44 % Other 0.06 % Total 100.00 % In our Expedited and Dedicated reportable segments, we generate revenue by transporting freight for our customers.
A summary of these metrics for our Expedited reportable segment for 2025 and 2024 is as follows: 2025 2024 Average freight revenue per total mile $ 2.10 $ 2.09 Average miles per tractor 177,114 185,340 Average freight revenue per tractor per week $ 7,143 $ 7,416 A summary of the key performance metrics for our Dedicated reportable segment for 2025 and 2024 is as follows: 2025 2024 Average freight revenue per total mile $ 3.13 $ 2.88 Average miles per tractor 74,076 80,556 Average freight revenue per tractor per week $ 4,453 $ 4,436 Within our Managed Freight reportable segment, we derive revenue from providing Brokerage and TMS services, particularly arranging transportation services for customers directly and through relationships with third-party providers and integration with our Expedited reportable segment.
The main factors that impact profitability in terms of expenses are the variable costs of outsourcing the transportation freight for our customers and managing fixed costs, including purchased transportation, salaries, facility warehousing costs, insurance, and selling, general, and administrative expenses.
We have accounted for our investment in TEL using the equity method of accounting and thus our financial results include our proportionate share of TEL's net income since May 2011, or $14.7 million in each of 2025 and 2024.
We had one customer, serviced by our Expedited and Managed Freight reportable segments, that accounted for more than 10% of our consolidated revenue in 2025 and one customer, serviced by our Expedited, Managed Freight, and Warehousing reportable segments, that accounted for more than 10% of our consolidated revenue in 2024.
Our top ten customers accounted for approximately 44% and 45% of our total revenue in 2025 and 2024, respectively.
Our average number of teams as a percentage of our seated fleet was consistent for 2025 as compared to 2024.
Our average open tractors, including wrecked tractors, increased to 4.8% for the year ended December 31, 2025, from approximately 3.3% for the year ended December 31, 2024.
We believe the FMCSA Compliance Safety Accountability program ("CSA"), in conjunction with other U.S.
Department of Transportation ("DOT") regulations, including those related to hours-of-service, English proficiency, non-domiciled CDL's, and ELDs, has reduced and will likely continue to impact capacity in our industry.
We use driver teams in a portion of our tractors.
At December 31, 2025, we employed approximately 2,900 drivers and approximately 1,800 non-driver personnel.
At December 31, 2025, we engaged 110 independent contractor drivers.
Revenue Equipment At December 31, 2025, we operated 2,315 tractors and 6,611 trailers.
Of such tractors, 2,194 tractors were owned, 11 tractors were financed under operating or finance leases, and 110 tractors were provided by independent contractors, who own and drive their own tractors.
Of such trailers, 5,728 trailers were owned, 883 trailers were held under operating or finance leases.
Furthermore, at December 31, 2025, approximately 86% of our trailers were dry vans, 11% of our trailers were refrigerated vans, and the remaining trailers were specialty trailers related to our poultry business.
At December 31, 2025, our tractor fleet had an average age of approximately 2.0 years, and our trailer fleet had an average age of approximately 5.7 years.

and 181 more.

Gone since FY2024

All share and per share amounts presented in this Annual Report on Form 10-K, including with respect to dividends and in the financial statement and notes hereto have been adjusted for the stock split, except for the share amounts presented in the stockholders' equity section of our consolidated balance sheets.
("AAT"), and our 2023 acquisitions of Lew Thompson & Son Trucking, LLC, Lew Thompson & Son Leasing LLC, Lew Thompson & Son Dedicated Leasing, LLC, Josh Thompson Trucking, LLC (collectively "LTST") and Sims Transport Services LLC ("Sims") are examples of that commitment.
Our leverage ratio increased in 2024 as compared to the prior year, as we remain focused on investing capital when we can obtain acceptable returns while maintaining lower leverage than we have historically.
In January 2022, our Board of Directors (the "Board") approved a quarterly cash dividend program of $0.03125 per share, which was increased to $0.04 per share in August 2022 and $0.055 per share in February 2023. ● Risk Management—Assess and Mitigate.
In 2022, the Board established a Risk Committee focused on identification, evaluation, and mitigation of operational, strategic, and environment risks, as well as monitoring and approving risk policies and associated practices for the Company.
The Board believes an actively engaged Risk Committee is vital in recognizing and managing key risks facing the Company.
To manage these risks, we have at times employed fuel hedging contracts on a portion of our fuel usage not covered by customer fuel surcharges, maintain lower self-insured accident liability retention when economically feasible, and expanded our ability to sell our used equipment to increase bargaining power with the tractor and trailer manufacturers. ● Technology .
The Company experienced another record setting year, as measured by accident rates.
The DOT accident rate per million miles, as defined by the Federal Motor Carrier Safety Administration ("FMCSA"), decreased 1% year over year and was the lowest in the Company’s history.
We believe that the key to the improved safety results remains a combination of training, consistent and proactive coaching, utilizing proven safety technologies, and consistent collaboration between all of our business units.
The expansion of our safety training program has allowed us to further increase new driver training and sustain consistent messaging around the culture of safety.
During 2024, we continued to expand implementation of several safety related technologies, including telematics, predictive analytics programs, enhancing usage of our dorm/training facility, and ongoing adoption of truck manufacturer preventative systems.
We believe the ongoing execution of our strategic plan has contributed to the substantial improvement in operating results and profitability we have generated over the past several years.
Some of the significant successes resulting from our strategic planning efforts include the Landair Acquisition in 2018; consolidation of our back-office operations; enhancements to recruiting, retention, and business intelligence; upgraded information technology; focus on service and on time delivery; sale of TFS; the acquisition of AAT in 2022; and the acquisition of LTST and Sims in 2023.
Our company-owned tractor fleet has an average age of approximately 1.6 years, compared to an average U.S.
Class 8 tractor age of approximately 5.7 years in 2024.
The primary service offerings are further described below: ● Expedited: In our Expedited business, we operate approximately 900 tractors substantially all of which are driven by two-person driver teams.
Expedited services generally require two-person driver teams on equipment either owned or leased by the Company. ● Dedicated: In our Dedicated business, we operate approximately 1,400 tractors, substantially all of which are driven by a solo driver.
Equipment is either owned or leased by the Company. ● Managed Freight: Our Managed Freight reportable segment, includes our brokerage services and TMS.
We also provide shuttle and switching services related to shuttling containers and trailers in or around freight yards and to/from warehouses.
The following table reflects the size of each of our reportable segments measured by 2024 total revenue, net of fuel surcharge revenue, which we refer to as "freight revenue": Distribution of Freight Revenue Among Service Offerings Expedited % Dedicated % Managed Freight % Warehousing % Total % In our Expedited and Dedicated reportable segments, we generate revenue by transporting freight for our customers.
A summary of these metrics for our Expedited reportable segment for 2024 and 2023 is as follows: 2024 2023 Average freight revenue per total mile $ 2.09 $ 2.13 Average miles per tractor 185,340 183,717 Average freight revenue per tractor per week $ 7,416 $ 7,501 A summary of the key performance metrics for our Dedicated reportable segment for 2024 and 2023 is as follows: 2024 2023 Average freight revenue per total mile $ 2.88 $ 2.67 Average miles per tractor 80,556 81,387 Average freight revenue per tractor per week $ 4,436 $ 4,162 Within our Managed Freight reportable segment, we derive revenue from providing Brokerage and TMS services, particularly arranging transportation services for customers directly and through relationships with thousands of third-party carriers and integration with our Expedited reportable segment.
We provide Brokerage services directly and through agents, who are paid a commission for the freight they provide.
The main factors that impact profitability in terms of expenses are the variable costs of outsourcing the transportation freight for our customers and managing fixed costs, including purchased transportation, salaries, facility warehousing costs, and selling, general, and administrative expenses.
We have accounted for our investment in TEL using the equity method of accounting and thus our financial results include our proportionate share of TEL's net income since May 2011, or $14.7 million in 2024 and $21.4 million in 2023.
We had one customer, serviced by our Expedited, Managed Freight, and Warehousing reportable segments, that accounted for more than 10% of our consolidated revenue in 2024 and one customer, serviced by our Expedited and Managed Freight reportable segments, that accounted for more than 10% of our consolidated revenue in 2023.
Our top ten customers accounted for approximately 45% and 44% of our total revenue in 2024 and 2023, respectively.
Our average number of teams as a percentage of our seated fleet increased for 2024 as compared to 2023.
Our average open tractors, including wrecked tractors, decreased to 3.3% for the year ended December 31, 2024, from approximately 4.8% for the year ended December 31, 2023.
We continue to educate our drivers and non-driver personnel regarding the FMCSA Compliance Safety Accountability program ("CSA").
We believe CSA, in conjunction with other U.S.
Department of Transportation ("DOT") regulations, including those related to hours-of-service and ELDs, has reduced and will likely continue to impact effective capacity in our industry as well as negatively impact equipment utilization.
Nevertheless, for carriers that are able to successfully manage this regulation-laden environment with driver-friendly equipment, compensation, and operations, we believe opportunities to increase market share may be available.
We use driver teams in a substantial portion of our tractors.
At December 31, 2024, we employed approximately 3,100 drivers and approximately 1,700 non-driver personnel.
At December 31, 2024, we engaged 109 independent contractor drivers.
Revenue Equipment At December 31, 2024, we operated 2,307 tractors and 6,445 trailers.
Of such tractors, 2,196 tractors were owned, 2 tractors were financed under operating or finance leases, and 109 tractors were provided by independent contractors, who own and drive their own tractors.
Of such trailers, 5,804 trailers were owned, 641 trailers were held under operating or finance leases.
Furthermore, at December 31, 2024, approximately 71% of our trailers were dry vans, 12% of our trailers were refrigerated vans, and the remaining trailers were specialty trailers related to our poultry business.

and 170 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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