SEC Comment Letter for COVENANT LOGISTICS GROUP, INC. (CVLG) (CIK 0000928658) (CVLG) — Aug 3, 2005
COVENANT LOGISTICS GROUP, INC. (CVLG) (CIK 0000928658)
Date: Aug. 3, 2005 · CIK: 0000928658 · Accession: 0000000000-05-039943
AI Filing Summary & Sentiment
Reasoning
File numbers found in text: 000-24960
Letter
August 3, 2005 Via US Mail and Facsimile Mr. Joey B. Hogan Chief Financial Officer Covenant Transport, Inc. 400 Birmingham Highway Chattanooga, TN 37419
Re: Covenant Transport, Inc. Form 10-K for the year ended December 31, 2004 Commission File Number: 000-24960
Dear Mr. Hogan:
We have reviewed your July 20, 2005 response le tter and have the following comments. Where expanded or revised disclosure is reque sted, you may comply with these comments in future filings. If you disagree, we will consider your explanation as to why our comments are inapplicable or a revision is unnecessary. We also ask you to provide us with supplemental information so we may better understand your disclosu re. Please be as detailed as necessary in your explanation. We look forward to worki ng with you in these respects and welcome any questions you may have about any aspects of our review.
* * * * * * * * * * *
Nature of Business, page 44
1. We understand, from your response to comment 4 of our letter, that the transportation services do not constitute reportable operating segments under SFAS 131. However, your two operating subsidiaries do appear to cons titute reportable operating segments and you state that you are able to anal yze operating results on a subsidia ry basis. If our understanding is correct, please provide additional support for your conclusion that the two operating segments should be aggregated. You state th at two or more operating segments may be aggregated if the segments have similar operati ng characteristics and are similar in each of five areas. However, paragra ph 17 also requires that “aggreg ation be consistent with the
Mr. Joey B. Hogan Covenant Transport, Inc. August 3, 2005 Page 2
objectives and basic principles of the statement.” That is, you may aggregate if presenting the information separately will not provide much useful information to investors. If the information is prepared and made available to management for the purpose of analyzing operating results and key performance indicators, it would appear that a separate presentation would provide useful information to a user of fi nancial statements as well. Please revise or advise. In addition, your res ponse should provide numerical support for your determination that the segments have “similar economic ch aracteristics.” We may have additional comments upon review of your response.
2. As a related matter, if operating segments have been aggregated, the filing should disclose this fact in accordance w ith paragraph 26a of SFAS 131.
* * * * * * * * * * *
As appropriate, please amend your filing and respond to these comments within 10 business days or tell us when you will provide us with a response. You may wish to provide us with marked copies of the amendment to expedite our review. Please furn ish a cover letter with your amendment that keys your responses to our comments and pr ovides any requested supplemental information. Detailed cover letters greatly facilitate our review. Please understand that we may have additional comments after reviewing your amendment and responses to our comments.
We urge all persons who are responsible fo r the accuracy and adequ acy of the disclosure in the filing reviewed by the staff to be certain that they have provided all information investors require for an informed decision. Since the comp any and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the acc uracy and adequacy of the disclosures they have made.
In connection with responding to our comme nts, please provide, in writing, a statement from the company acknowledging that:
the company is responsible for the adequacy and accuracy of the disclo sure in the filing;
staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and
the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federa l securities laws of the United States.
In addition, please be advi sed that the Division of Enforcement has access to all information you provide to the staff of the Divisi on of Corporation Finance in our review of your filing or in response to our comments on your filing.
Mr. Joey B. Hogan Covenant Transport, Inc. August 3, 2005 Page 3
You may contact Amy Geddes at 202- 551-3304 or Margery Reich at 202-551- 3347 if you have questions regarding comments on the financial stat ements and related matters. Please contact me at 202-551-3211 with any other questions.
S i n c e r e l y ,
David R. Humphrey B r a n c h C h i e f
Show Raw Text
August 3, 2005
Via US Mail and Facsimile
Mr. Joey B. Hogan
Chief Financial Officer
Covenant Transport, Inc.
400 Birmingham Highway
Chattanooga, TN 37419
Re: Covenant Transport, Inc.
Form 10-K for the year ended December 31, 2004
Commission File Number: 000-24960
Dear Mr. Hogan:
We have reviewed your July 20, 2005 response le tter and have the following comments.
Where expanded or revised disclosure is reque sted, you may comply with these comments in
future filings. If you disagree, we will consider your explanation as to why our comments are
inapplicable or a revision is unnecessary. We also ask you to provide us with supplemental
information so we may better understand your disclosu re. Please be as detailed as necessary in
your explanation. We look forward to worki ng with you in these respects and welcome any
questions you may have about any aspects of our review.
* * * * * * * * * * *
Nature of Business, page 44
1. We understand, from your response to comment 4 of our letter, that the transportation
services do not constitute reportable operating segments under SFAS 131. However, your
two operating subsidiaries do appear to cons titute reportable operating segments and you
state that you are able to anal yze operating results on a subsidia ry basis. If our understanding
is correct, please provide additional support for your conclusion that the two operating
segments should be aggregated. You state th at two or more operating segments may be
aggregated if the segments have similar operati ng characteristics and are similar in each of
five areas. However, paragra ph 17 also requires that “aggreg ation be consistent with the
Mr. Joey B. Hogan
Covenant Transport, Inc.
August 3, 2005
Page 2
objectives and basic principles of the statement.” That is, you may aggregate if presenting
the information separately will not provide much useful information to investors. If the
information is prepared and made available to management for the purpose of analyzing
operating results and key performance indicators, it would appear that a separate presentation
would provide useful information to a user of fi nancial statements as well. Please revise or
advise. In addition, your res ponse should provide numerical support for your determination
that the segments have “similar economic ch aracteristics.” We may have additional
comments upon review of your response.
2. As a related matter, if operating segments have been aggregated, the filing should disclose
this fact in accordance w ith paragraph 26a of SFAS 131.
* * * * * * * * * * *
As appropriate, please amend your filing and respond to these comments within 10
business days or tell us when you will provide us with a response. You may wish to provide us
with marked copies of the amendment to expedite our review. Please furn ish a cover letter with
your amendment that keys your responses to our comments and pr ovides any requested
supplemental information. Detailed cover letters greatly facilitate our review. Please understand
that we may have additional comments after reviewing your amendment and responses to our
comments.
We urge all persons who are responsible fo r the accuracy and adequ acy of the disclosure
in the filing reviewed by the staff to be certain that they have provided all information investors
require for an informed decision. Since the comp any and its management are in possession of all
facts relating to a company’s disclosure, they are responsible for the acc uracy and adequacy of
the disclosures they have made.
In connection with responding to our comme nts, please provide, in writing, a statement
from the company acknowledging that:
the company is responsible for the adequacy and accuracy of the disclo sure in the filing;
staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and
the company may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federa l securities laws of the United States.
In addition, please be advi sed that the Division of Enforcement has access to all
information you provide to the staff of the Divisi on of Corporation Finance in our review of your
filing or in response to our comments on your filing.
Mr. Joey B. Hogan
Covenant Transport, Inc.
August 3, 2005
Page 3
You may contact Amy Geddes at 202- 551-3304 or Margery Reich at 202-551-
3347 if you have questions regarding comments on the financial stat ements and related matters.
Please contact me at 202-551-3211 with any other questions.
S i n c e r e l y ,
David R. Humphrey
B r a n c h C h i e f