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    Michael Vermut • Newland Capital

    Michael Vermut's questions to Covenant Logistics Group Inc (CVLG) leadership

    Michael Vermut's questions to Covenant Logistics Group Inc (CVLG) leadership • Q4 2024

    Question

    Michael Vermut of Newland Capital pointed to the company's strong balance sheet and significant valuation discount to its peers. He asked about the potential for initiating a share buyback program given the positive outlook and the large valuation gap.

    Answer

    Executive James Grant acknowledged the valuation discount and confirmed the company is comfortable with its current leverage. He stated that share repurchases are a key part of their capital allocation 'playbook,' referencing the successful $110 million in buybacks during 2022-2023. President Paul Bunn added that the company intends to be on 'offense' with its capital allocation strategy to maximize long-term shareholder value, keeping all options open.

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    Michael Vermut's questions to Covenant Logistics Group Inc (CVLG) leadership • Q3 2024

    Question

    Michael Vermut of Newland Capital questioned the capital allocation strategy, asking about the potential for share repurchases versus M&A, and sought clarification on the company's earnings leverage potential given its reduced share count.

    Answer

    CEO David Parker reiterated the company's flexible capital allocation policy, stating they will pursue attractive acquisitions or execute share buybacks, saying 'we're going to love ourselves' if the market doesn't. He and Executive M. Bunn confirmed that while the business model is more stable, the significantly lower share count provides substantial EPS leverage in an upcycle. They stressed that the company is structurally different and more resilient than its historical performance suggests.

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