6 months Net PCF roughly $45.5 MM

If you look at the Power Units vs the Drivers, Tells me that 1621 power units with 2200 drivers, is a high team rate.  It also tells me that they are doing roughly 32% profit margins on the Gross.  However they probably have a large volume on the brokerage side, and are buying both to expand the Volume by Spinning this carrier off in the future… as US Express would say, “Two is always stronger than one.”

That is $90MM in Positive Cash Flow over course of one year, if they keep pace the last half,which is usually the busiest part of the year.

However, the next few months are usually higher volume, for everyone— The thing is the driver shortage and the industry wide recruitment for drivers.


Now, the downside to this is that the equipment of Covenant is older, not up to date—-NOT saying they do not take care of their equipment, but they have not kept the fleet current, so are or should be seeing high maintenance for the onsite and offsite maintenance and upkeep.  Before the business was sold, they kept this up.  However, with the buy out and some other public shit—-Stock Exchange and shit…..this business has not updated their fleet as I feel as they should…..

Large owner operator presence in the Landair business.  Keep that in mind, they are wanting the volume from the ports that is why this is a smart buy.  This will give the notion of the increase in drivers with power units ratio, due to the Owner Operators that are under lease..  Landair if I do recall, not sure if this is correct, has a large percentage of Owner Operators….which gives way to Volume and savings on the Self Insured Policy ….for Covenant.  Increasing those margins.  Savings there ……. PLUS Instant VOLUME, from the business, whether name is changed or not……..Still the Shareholders—-Need to pay attention to the cost of share and the Uptick you are going to see from the shear volume over this business over next 2yrs.

My opinion, Keep Ownership of Landair but let them stay independent, being they most likely are self insured:  I do not see any real savings there…

Depending on this Managements actual Direction of this business….and what their capitalization play is on the far side of this deal besides long term ownership after first 5 yrs of ownership …….

Buy prior to Busy Season, Instant volume, Paper, and Assets-  Gives Covenant a bit of a power play…..that they could keep private and spin off to the markets…however I think Portfolio Play, and should keep the paper flow in to Covenant, while Landair keeps their separate identity, not tainting the customers perspective of either business.

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