Morning, everyone. Thank you for joining us. My name's John McNamara. I'm with Three Part Advisors. Our next presentation is Covenant Logistics. Covenant is a trucking and logistics holding company that has made great progress evolving from a deeply cyclical long-haul trucker to a more diversified logistics platform, reallocating capital to higher return businesses, prioritizing free cash flow, and de-leveraging. Covenant's also a Three Part Advisors advisory client, so if anybody wants to meet with management afterwards, just get in touch with me. I'll be happy to set that up. Stock trades on the New York Stock Exchange under the symbol CVLG. With us today is Tripp Grant, Chief Financial Officer. Tripp? Thank you, John. I just got back from Missoula, Montana for the last three or four days fly fishing. If in the middle of my presentation I start telling fish stories or working on my back cast, that's because I've been in a boat for the last three days. But thank you for joining us. Covenant is a place that I've been for the last seven years after swearing that I would never be in transportation. I cut my teeth in consumer healthcare, worked at a company called Chattem in Chattanooga. Worked there for 13 years. In 2010, it was acquired by a French pharmaceutical company, and we launched brands like Allegra, Nasacort, Xyzal and sold different products that made a lot of money. That business model was incredibly simple and incredibly profitable. When we were acquired in 2010, we were acquired by the French pharmaceutical company, and they had a headquarters then. The U.S. headquarters was in Bridgewater, New Jersey versus Chattanooga, where I was born and raised. I remember thinking, I was like, "Well, I'm not going to bring my family up to New Jersey." All of our family's from Chattanooga. Then our former president at Chattem was on the board at Covenant Logistics, and he said, "Well, would you be interested in transportation?" I said, "Bob, I love you, and I have all the respect for you in the world, but I have no interest in transportation. It's too hard. We don't make nearly as much money. It's cyclical. It's risky. It's seasonal. All of the bad stuff. It's capital intensive." He said, "Well, just go. I think you'll like and enjoy talking to the people. It's got its challenges." So in the summer of 2019, after I was released and they moved the commercial operations up to New Jersey, I went and started talking to the folks at Covenant and fell in love with the people and the culture, and joined at a really pivotal time. What I found just over the years is I was right. Trucking is a really tough business. But it was really about the people. The people that we work with every day, and the management team, especially today, are the most committed people I've ever met, and that's what's made it fun for me. I think that's what's really dialed into a lot of our success or the secret formula behind the success. It's not a particular line of business or a certain customer or a customer mix or anything, that magic that we're doing, that I'll talk about here in just a minute. It's really a lot of talented, hardworking people that go out and get after it every single day. That's one of the more unique things that I've found about transportation that I really love. Since I got there, I got there at a really interesting time in 2019. We were in the middle of our strategic planning, and we had all of these ideas on what to do, what not to do, what to get out of, what to invest in. They weren't actionable. Right after that, COVID hit, and we weren't sure if COVID was going to last three weeks, three months, three years, or forever. We said, "You know what? This is a perfect time to go ahead and start executing on a lot of these strategic plans." They were hard things, and they resulted in, I think, only 20% or 30% of the current management team, which is the top 15 people in the company, are with the company today back in 2020. So it was painful. There was a lot of turnover. We reorganized the company, and our desire was really just what this thing highlights, this slide highlights right here. Key investment highlights is really just the stuff we're doing, and it's really just about being different. There is so much commoditized freight in our industry that people try to compete over. What that means is when the market is soft, they're taking hits on rate and utilization and shrinking their fleets. When the market is tight, because it is a very cyclical industry, then they take rates up, then they grow their truck count and all of this stuff, and it's just a simple supply and demand model. It's a commoditized industry for the whole. There is 1% of it that I fully believe is not commoditized, and we're focused on that 1%. This slide does a good job of talking about some of our keys to success, none of which are earth-shattering, but diversification has been huge for us. We operate in four different segments. Two truckload segments, expedited and dedicated, of which we have about 2,200 trucks. Two asset-light segments, managed freight, which if you're familiar with trucking, basically it's an asset-light brokerage and warehousing. Warehousing is our smallest segment, but I think I like that the most. You don't have fatalities in warehousing. Maybe you have a few work comp claims, but you're not out on the road having catastrophic accidents, which is part of the game in truckload. This diversification has really, really served us well for the last five or six years, and we've been able to successfully grow it. The other thing I think that makes us different, and it's something I recognized when I got into trucking, started coming to conferences and industry events. Truckers, it's like the Wild West a little bit. They love talking about their trucks, how many trucks they have, how many trailers they have, and their top-line revenue. Nobody really likes to talk about profit or margin or, in trucking world, OR, operating ratio. But it's something that I'm like, "My goodness, this thing is target-rich environment," because everybody's just competing for revenue and truck count. It's easy to grow with bad revenue, but it's hard to make money consistently. What we've focused our strategy on is just a capital return model that optimizes cash flow. John said it in his intro, and it's simple. It's conferences like these with generalists and micro-cap folks that I talk to a lot that are focused on cash flow. It's so unique because of the trucking-specific conferences I go to, they play the cycle. I think the difference between us is Covenant is focused on making the 2031 or the 2032 Covenant a better Covenant by the actions that we're taking today. We want to have a great 2026, but we also want to make some strategic decisions in 2026 that are going to make us better for the next five years. There's a lot of companies out there in our peer group that are actually making. There's a lot of commercial disruption, I call it, because they're out to strike vengeance. We've been in a three-year freight recession, the back half of 2022, 2023, 2024, and all of 2025, so 3. 5 years. It started the very tail end of 2025. We started seeing capacity come out of the market through regulation enforcement, and then it has been on the upswing ever since, all of 2026. We think the remainder of 2026 is going to continue to improve. Again, through longer-term thinking versus shorter-term thinking, trying to repair and constantly improve the model. We are where we are today. I think we've got a good model, but there's always 10% that's underperforming at the bottom that before we start growing our truck count, that we need to purge out, because that 10% is highly underperforming. I'm not going to sit up here and read all these slides. I'll probably be one of the quicker presentations, but we were founded by our founder. You can see David Parker over to the far side. David founded the company 40 years ago. He founded it on Christian principles. He is one of the most upstanding men I've ever met or have had the pleasure to work with. He's also given us the freedom to make really big decisions. I came from a company that wasn't as free. You could make a decision there. David has, like I said, he's in Florida the next last two weeks, and he spent probably almost two, 2.5 months there a year. He still stays engaged, don't get me wrong. When he's in Chattanooga, he's there every single day, but not to the extent that he was before. I give David a lot of credit for allowing Paul and Dustin, Joey Ballard, and I to make some really big decisions to his company that he founded. We're a public company, but he still owns quite a bit of the stock. He's involved with it day to day, and it is like a third child for him. He loves the company, and I think you can tell that we're a younger generation, I guess, of leadership. David has taught us a lot. But I think he draws some energy from us because we have a lot of energy and a lot of desires to make the Covenant and the model better. We think outside of the box a little bit more than a very tenured management team. I think that's led to some of our success. Again, this just gives you an idea of where we operate. Our expedited fleet runs all over the country, so there's not really any sort of DOTs or identifiers on this map for our expedited. But each one of these blue circles is a dedicated fleet, and a red dot is where our warehousing units are. You can see where our wheelhouse is and our committed capacity. We run about 2,200 tractors across our fleet, all fleets. We generally have a 2:1 tractor-trailer ratio or trailer-tractor ratio. Over 5 million square foot of warehouse space and almost 5,000 total employees with our drivers. It is a big machine. Driver turnover can range anywhere from 150% in our teams business, and higher, quite honestly, in a really tight freight market, or down to 50% in some of our niche service offerings that are more vocational or pay their drivers very well, allow the drivers to take their truck homes in the evenings, spend the night in their own beds. Whereas our expedited units are out three weeks a year or three weeks at a time. They very seldom get to go home, and they're having to live in a truck with somebody else. It's a hard job, so you have a lot of turnover in it. Revenue is a little over $1 billion, and it's split probably a little bit, I'd say 65% on the asset side between expedited and dedicated and 35% on the asset light side, managed freight and warehousing. I spoke a little bit about this earlier, and I talked about just the transformation. It is amazing to me how many conversations that I still have about Covenant. I'll get calls from investors or potential investors who are. They'll go, "I followed Covenant 15 years ago, and y'all are all OTR. You had 4,000 tractors, and you could barely make a dollar share each year. If you did, it was a great year. Today, you got 2,200 tractors. $1.53 is a trough case scenario or $1.52, whatever we did last year, and you're doing it with less." I said, "Well, we've evolved. We have more of a percentage of the business in the asset-light business that is consistently making money, good times or bad. We've also, going back to what I said earlier, diversified what we do." We've transformed ourselves from 100% asset based, primarily long haul player to a more focused, committed carrier of dedicated contracts, dedicated business. We're going to continue that because we feel like that's where the need, that's where the value prop comes from. Customers that use dedicated services and need dedicated services all year round are the customers that aren't outbidding you out every 12 months. That's been our real focus. This just illustrates, I'm not going to talk too much about this, but you can tell. What I'm most proud of is doing more with less. You can see our truck count in 2006 was 3,700 trucks. In 2018, it was 3,000. Each year, 2021 is 2,150 and 2026 is 2,200. I think as we go into 2027, we will be able to start growing that back up to 2,400. But we got really serious in 2020 about capital allocation. We said this business is too risky to have trucks on the road that are not returning capital, pull them off. We took some tail costs, like insurance policies, insurance claims that take two or three years to develop, those costs that kind of just stay with you as you downsize your fleet. But I think growing over the next, we feel like we have stabilized things over the last two, three quarters and we will start to grow this from 2,200 up to maybe 2,400, 2,500 again with the right type of business. This just talks about over the last six years, what we have done. Lots of really good focus. We always say whatever we do, we want to be really good at it. In this business, the margins are too thin not to be. We have four segments that we are absolutely committed to and want to be the best at. I think if you were to ask any of our customers how we perform in any one of our four segments, whether it is expedited, dedicated, warehousing, or managed freight, they would all say we provide a high level of service. But it is no secret that a lot of our improvement has been through acquisitions. We have done a lot of M&A over the last five, six years, starting with an ammunitions and explosives business. It has not been just that we have sold off tractors, gotten out of certain businesses to acquire other businesses. Acquired an asset like an ammunitions and explosives business in 2022. Then we acquired a live haul business in 2023. So we went from missiles, bombs, bullets, and top secret stuff that I cannot even see what we are hauling to live chickens and live turkeys within a 12-month span, 14-month span. People are like, "Y'all do not know what y'all are doing." But the difference is every one of those things prints money, and we can do them exceptionally well. So at their heart, that AAT, that ammunitions and explosives business is a teams-based business. That is what Dave founded the company on. We have a good foundation of teams-based drivers that we can feed that business and treat those drivers really well and grow that business. There is a lot of credentialing, there is a lot of clearance that you have to get to the government to be able to touch that freight and to drive that freight. But we have been successful at it, and the service levels are off the charts. The same thing with poultry. We continue to win business. When we bought that business, it was 200 trucks. Today, it is over 800. We bought it in 2023. So we grew it in the worst cycle possible, almost quadrupled it. We have got line of sight for two additional 200 trucks, and we are earning our growth, and winning it from one of the best dedicated truckload carriers that is out there. I will not name their names because we have become bulletin board material for them. But we constantly get good feedback from our poultry customers that have tried to do it themselves or tried to hire out to a very reputable other poultry transportation company. All of them have continued to say that, "You guys are the best. We want to give you more." We've just worked, and we see line of sight to 1,000 trucks in the next 12 months. We're excited about that. That's part of the acquisition. It is very hard to grow organically the right way in transportation. I think what I would say is about part of our M&A strategy is to get smaller companies like mom-and-pop type companies that they stay in their backyard, but we can grow them pretty significantly over a short amount of time, just with some capital infusion and some human capital infusion too, with resources on operations. We're happy about that. I've talked about this, the four lines of business, managed freight, expedited, dedicated. I'll hit up managed freight. Again, it's just brokerage. Just think of it as brokerage. Expedited teams, that's when you need to get something that is high value, high security, or that is very time sensitive from point A to point B, long length of haul, 1,500 mi, you're using our expedited services. Dedicated. I always describe dedicated services as the closest thing a customer can do to hire a driver and to buy a truck and a trailer and operate it themselves. We do it for them. We dispatch, we have resources on site, work closely with their operations, and make sure that they do it well. A lot of these companies just don't want the risk of being a trucker, and so we've grown a lot through private fleet conversions. Warehousing, I talked about earlier. It's basically labor and technology in a warehouse that's leased coterminous with a customer contract. Had a lot of, I think we've almost tripled that over the last six years. It's taken us longer, but it is a very good, profitable business that not every one of our peers do. I probably won't get into this. These are just some of the details of our individual segments. I will talk about TEL. TEL is a minority investment. We own 49% of them. They started, I believe, in 2016 with a $4.9 million investment from Covenant for 49% of the equity. Today, their EBITDA is higher than ours. We account for them below the line, but they help us when we acquire tractors. We buy together. Their fleet is bigger than ours, tractors and trailers, and so when we go and buy equipment, we can buy at scale a lot better. They sell our equipment, and they also offer some diversity into our earnings. Like I said, growing from in 10 years, 11 years, that fast, and continue to grow. They've got a very diverse portfolio of customers, even through three years of a down cycle. We'll start to probably grow again next year. It's been a good chunk of our diversity, I would say. Just opportunities. To give you an idea of Covenant, in a normalized cycle, our EBITDA is probably around 150. It troughed down to about 125 this last year on a trailing 12-month basis. It can peak anywhere from 175- 185, I think, with where we are right now. Our debt today is a little over 2 x, so $280 million, I would say, is probably around where our debt is today. When we pull all the triggers, like we've acquired 25% of the stock over the last five years. As part of our reorganization, we leveraged, we sold terminals, we let go of people, we downsized. Like I said, it was brutal. The good of that was some cash proceeds from things that we sold. We did not have a one-way reefer business. We sold 500 tractors and 1,000 reefers. Then COVID hit, and we were valued at $6 a share. We were like, "Maybe we ought to start buying back some stock." So we bought back over 25% of the company in probably a three-year period at an average stock price probably less than $20 or right at $20. That was pre-split, so $10. We just did a stock split, so about $10, I think. Then we went through the acquisitions of AAT and Lew Thompson and a couple other smaller ones. So we are bullish on stock repurchase. We feel like if you're going to invest in somebody, and we can't find anybody else to invest in, you got excess capital, invest in yourself if the stock is suppressed. So that's a little bit about us. Again, really focused on capital allocation. We started doing a dividend two or three years ago. But I think the magic is in the fleet management and how we think about culling out the 10%, 15%, not just focused on growth-oriented. Growth, don't get me wrong, is tremendously important, but I think our salespeople get frustrated with me because we got stuff out there that's running 115 OR, and then we've got stuff out there that's running a 75 OR, and then when you put it all together, it comes into a 94 OR. I'm just like, "Guys, y'all got to fire some people before we think about buying new trucks. Get rid of that stuff. It's addition by subtraction." So, that's what you're seeing us in the middle of, I think. Over the last two quarters, we've done a pretty good job of that and maybe some of that in the third quarter. But I think moving in from 2026- 2027, we'll start to grow, particularly the dedicated fleet. Strong I could remember is probably expedited. At that point, we make a point and get their margins to double digits over the next short term. Our goal is to get expedited's margins to high teens over the next 12 months if we can. It's a little bit of a more fluid segment with how that operates with the teams business. So, that's about it. That's all I was. Covered most of this verbally, but we got a little bit of time left. Any questions that I can help? You have a business that does some kind of sensitive transport for the U.S. government or military. How big is that and growing? Are you seeing any increase activity there? Oh, yeah. That would be the AAT. AAT. Yeah. When we got it was 20 trucks. It's right at 60. We've got line of sight at 80. One of the most frustrating things. We bought it from a company who started it with one truck, and it took them forever to get to the credential, and then they grew to 10, and they operated with 10 trucks forever, and then 20. It was on its way down because they didn't have the team infrastructure to support the turnover and to grow it. When we got it, we took it and doubled it pretty quickly. With all of the conflict going on, we're starting to see opportunities. This is what I'm most encouraged about. If it's 60 trucks today, just with the Department of Defense, that credential, that secret clearance from the government and that credential, it's a different credentialing agency that does it. It's not the Department of Defense. We've got line of sight into some of the direct contractors, some of the companies that are making the weapons, and they're like a four-year backlog on production. Our biggest focus right now as a company is try to turn that from 50- 200, because these drivers are the cream. They make a $200,000 a year. When they go into military sites, their truck's getting turned inside out every time they go in. It's a hard business, don't get me wrong, but those guys, they do it. We'll pay them that much because they spin off a lot of cash in that business and do extremely well. They're the cream of the crop, perfect safety records, and if they have an accident, their job's probably gone too, if there's any liability on their side. There is a tremendous amount of growth opportunity there. With it being government and tied and the sensitivity around it's not like just knocking on a door and walking in and saying, "Hey, we'd like to haul your freight, your guns." We've got a lot of our best resources focused on cracking that nut and trying to double it, triple it, quadruple it over the next. Is it competitive, like different competitive, or do you guys run in a certain space? We are in there, and we operate in a certain area or lane. It is not very competitive, but what we have seen is the 60 or so credentialed DOTs that are in there, of those, there's probably 25 or 30. A lot of them have multiple DOTs for just insurance-related areas. Like if you get banned out of this one, you can operate out of this one. They can move trucks in and truck out and fluctuate the capacity in there out of the same DOT. There's opportunity. It's not just governmental stuff. I've seen one of those companies. It is a cash machine. They're a private company, and they do a lot. They've moved out of the government stuff because they found more value in high-value pharma, final mile delivery, van, truckload. Straight truck stuff, small truck, and I guess hauling body parts or maybe it is better than missiles. It's something that, I don't know. You find stuff in here and you're like, "All right, well. Take some acquisitions. It's better than Walmart. I did not mean to say that. But some of the large retailers are very price sensitive, and every year you go through this process and they're like, "They want us to take a 2% cut?" And they're telling us and then their procurement group's telling us, "You got to cut." And I'm just like, "There's only so much of that you can do. Would you look for M&A opportunities that have been. 100%, yeah. AATs of the world? 100%, yeah. Or maybe so much money they want to sell. Or what we've found on the couple that we've looked at has been legacy family business, or they're just way too big for it. We'd never be able to afford them. Legacy family business that want to have a say in the business for the next five years and want to run it their way. We can go in and quickly see they're not running it how we would run it. They use a lot of owner-operators. Their driver, it's just a very different model, how they think about backhaul. In that business, you make so much money on the line haul, you go back bobtailed. You're done. You go back. You don't want to waste your time picking up a $2 a mile piece of freight and non-government and risk something more profitable. You take a lot of deadhead. It's a very specific formula, and culture and a lot of those things dial into it. It's not just anybody that we could find, but we've looked at several. Yes, sir. Yeah. I wanted to ask about chicken, but I was short on time, so I'll skip that. Ask you about the labor. You mentioned some of the turnover in your groups with how you guys approach that to have performance. Yeah. On the drivers, one, it's different, and I think that's what I like about our models. We've got a wide variety of different driver pools. Our poultry drivers are home every night. Their loops are 50 mi loops. They can do eight in a day, where they're going out to the mill, to the farm, mill, farm, mill, farm, and then they come home and sleep every night. Expedited, they're out three weeks at a time. I think part of it is in the DNA of the company. David founded the company on the expedited framework, and we have a very big infrastructure. As I called it, a big machine. We're constantly dialing and getting people in and trained. A lot of times we have people waiting on trucks, till a driver leaves. Then we'll have a standby driver on deck or a trainee that's ready to go out with a trainer for a month and operate on his own. But it takes a lot to go into it. There's a lot of resources invested in keeping that teams business going. You mentioned there's been some instances where wait for the first time in a while. What does that mean for your CapEx going forward? Yeah. I think 2027, it does have the opportunity to go up. Our equipment people, I don't think like me as much because they do their equipment plan based on a piece of paper. X miles divided by 400,000 is when we typically get rid of them. We need 700 trucks. Well, I'm just like, "Well, we got 200 trucks out there today that aren't producing revenue." So a big part of our story this year has been lighter CapEx based on wheat and feed. We've seen a pretty downturn on the teams fleet. If you could peek under the covers of our teams, we've got half the fleet running an 80 OR, and then the other half running 100 OR. I'm like, "Starve that group. Don't give them a truck. Make them quit." I do think that you're probably looking at, if with the growth we're talking about, if normalized CapEx, if we do $60 million in CapEx this year, net CapEx, you're probably looking at $80 million- $90 million next year with some growth and some additional wheat and feed to come out of our expedited teams base. You think about those trucks come out every 18 months, where it's just a capital chewing. It's just a hard business. Not only are you recruiting full time, whether you need them or not, you're constantly ordering trucks and preparing trucks because they're coming off the road. They're putting so many miles on a truck per year. Any other questions? All right, I think I'm over time, but thank you for attending. Appreciate you all.