Covenant Transportation Group lost $40 million in the fourth quarter as a result of the weak economy and equipment impairment charges.
Revenue in the quarter, including fuel surcharges, fell 11.4 percent to $171 million during the quarter compared with fourth quarter 2007. In the full year 2008, Covenant lost $53.4 million compared with $16.7 million in 2007. Revenue for the year increased 2.2 percent to $615.8 million, from $603 million in 2007.
Impairment charges on assets and goodwill due to lower values on used equipment totaled $33.6 million in the quarter. In addition, "a small number of severe accidents" and workers' compensation claims cost the company an additional $4.3 million.
"We are disappointed to recognize the impairments, because they indicate a very weak economy that may continue for some time, as well as our failure to perform as well as we would like," said Covenant Chairman, President and CEO David R. Parker. "However, these accounting charges do not change anything fundamental about our business operations or our future earnings potential."