928658--3/31/2006--COVENANT_TRANSPORT

related topics

{debt, indebtedness, cash}

{gas, price, oil}

{cost, regulation, environmental}

{cost, operation, labor}

{capital, credit, financial}

{condition, economic, financial}

{acquisition, growth, future}

{stock, price, operating}

{personnel, key, retain}

{competitive, industry, competition}

{loss, insurance, financial}

{customer, product, revenue}

Factors That May Affect Future Results Our business is subject to general economic and business factors that are largely out of our control, any of which could have a materially adverse effect on our operating results. We may not be successful in improving or maintaining our profitability. We self-insure for a significant portion of our claims exposure, which could significantly increase the volatility of, and decrease the amount of, our earnings. Ongoing insurance requirements could constrain our borrowing capacity. We operate in a highly competitive and fragmented industry, and numerous competitive factors could impair our ability to maintain or improve our profitability. We derive a significant portion of our revenue from our major customers, the loss of one or more of which could have a materially adverse effect on our business. Increases in driver compensation or difficulty in attracting and retaining qualified drivers could adversely affect our profitability. We operate in a highly regulated industry, and increased costs of compliance with, or liability for violation of, existing or future regulations could have a materially adverse effect on our business. We have significant ongoing capital requirements that could affect our profitability if we are unable to generate sufficient cash from operations and obtain financing on favorable terms. Fluctuations in the price or availability of fuel, as well as hedging activities, surcharge collection, and the volume and terms of diesel fuel purchase commitments, may increase our costs of operation, which could materially and adversely affect our profitability. We may not make acquisitions in the future, or if we do, we may not be successful in our acquisition strategy. Our operations are subject to various environmental laws and regulations, the violation of which could result in substantial fines or penalties. Increased prices, reduced productivity, and restricted availability of new revenue equipment may adversely affect our earnings and cash flows. Our substantial indebtedness and operating lease obligations could adversely affect our ability to respond to changes in our industry or business. Our revolving credit facility contains restrictive and financial covenants, and we may be unable to comply with these covenants. A default could result in the acceleration of all of our outstanding indebtedness, which could have an adverse effect on our financial condition, liquidity, results of operations, and the price of our common stock. If we are unable to retain our key employees, our business, financial condition, and results of operations could be harmed. Our Chief Executive Officer and President and his wife control a large portion of our stock and have substantial control over us, which could limit your ability to influence the outcome of key transactions, including changes of control. Seasonality and the impact of weather affect our operations and profitability.

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928658--3/31/2006--COVENANT_TRANSPORT_INC