[X]
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ANNUAL
REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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[
]
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TRANSITION
REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
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A.
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Full
title of the plan and the address of the plan, if different from
that of
the issuer named below:
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B.
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Name
of issuer of the securities held pursuant to the plan and the address
of
its principal executive office:
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Page
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Reports
of Independent Registered Public Accounting Firms
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Statements
of Net Assets Available for Benefits as of December 29, 2004
and
2003
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Statements
of Changes in Net Assets Available for Benefits for the Years ended
December 29, 2004 and 2003
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Notes
to Financial Statements
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Schedule H,
Line 4i - Schedule of Assets (Held at End of Year) -
December 29, 2004
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Exhibits
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Exhibit
23.1 Consent
of Independent Registered Public Accounting Firm
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Exhibit
23.2 Consent
of Independent Registered Public Accounting Firm
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AND
PROFIT SHARING PLAN
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Statements
of Net Assets Available for Benefits
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December
29, 2004 and 2003
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2004
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2003
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Assets:
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Investments,
at fair value (notes 3 and 4)
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$
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16,269,833
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$
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16,344,166
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Participant
Loans
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652,509
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-
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Liabilities:
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Excess
contributions payable
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46,644
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-
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Net
assets available for plan benefits
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$
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16,875,698
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$
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16,344,166
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See
accompanying notes to financial statements.
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AND
PROFIT SHARING PLAN
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Statements
of Changes in Net Assets Available for Benefits
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Years
ended December 29, 2004 and 2003
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2004
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2003
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Additions:
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Investment
income:
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Interest
and dividends
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$
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135,223
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$
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354,160
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Net
appreciation in fair value of investments:
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Mutual
funds
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930,755
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1,267,546
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Covenant
Transport, Inc. common stock
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112,534
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184,434
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Net
investment income
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1,178,512
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1,806,140
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Contributions
from employer
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777,245
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671,714
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Contributions
from participants
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2,377,347
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2,448,356
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Total
additions
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4,333,104
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4,926,210
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Deductions:
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Participants’
benefits
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3,786,621
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3,412,443
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Administrative
fees
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14,951
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6,854
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Net
increase in net assets available for benefits
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531,532
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1,506,913
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Net
assets available for benefits at beginning of year
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16,344,166
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14,837,253
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Net
assets available for benefits at end of year
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$
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16,875,698
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$
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16,344,166
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See
accompanying notes to financial statements.
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(1)
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Summary
of Significant Accounting Policies
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The
following is a summary of significant accounting policies followed
by the
Plan in preparing its financial statements.
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(a)
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Basis
of Presentation
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The
records of the Plan are maintained on the cash basis of accounting.
The
accompanying financial statements of the Covenant Transport, Inc.
401(k)
and Profit Sharing Plan have been prepared on the accrual basis
of
accounting and present the net assets available for benefits and
changes
in those net assets.
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The
preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates
and
assumptions that affect the reported amounts of assets, liabilities
and
changes therein, and disclosure of contingent assets and liabilities.
Actual results could differ from those estimates.
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(b)
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Investments
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Investments
in money market funds, mutual funds, common stock, and common collective
funds are stated at fair value based on quoted market prices or
as
determined by Diversified Investment Advisors (the “Trustee”). Participant
loans are valued at the unpaid principal balance, which approximates
fair
value. Securities transactions are accounted for on a trade date
basis.
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Realized
and unrealized investment gains and losses are included in net
appreciation in fair value of investments in the statements of
changes in
net assets available for plan benefits. Purchases and sales of
securities
are recorded on a trade-date basis. Dividends are recorded on the
ex-dividend date.
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The
Plan’s investments include funds which invest in various types of
investment securities and in various companies in various markets.
Investment securities, generally, are exposed to several risks,
such as
interest rate, market, and credit risks. Due to the level of risk
associated with the funds, it is reasonably possible that changes
in the
values of the funds will occur in the near term and such changes
could
materially affect the amounts reported in the financial statements
and
supplemental schedule.
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(c)
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Fair
Value of Financial Instruments
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Investments
in securities are stated at fair value. In addition, management
of the
Plan believes that the carrying amount of payables is a reasonable
approximation of the fair value due to the short-term nature of
these
instruments.
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(2)
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Description
of the Plan
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The
following description of the Plan provides only general information.
Participants should refer to the Plan agreement for a more complete
description of the Plan’s provisions.
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(a)
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General
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The
Plan is a defined contribution plan and covers substantially all
employees
of Covenant Transport, Inc. and subsidiaries (the “Company”). The
Plan provides for retirement savings to qualified active participants
through both participant and employer contributions and is subject
to
certain provisions of the Employee Retirement Income Security Act
of 1974
(“ERISA”). Employees are eligible to participate in the Plan at the
beginning of a calendar month after the completion of six months
of
service. During 2004, the Plan changed trustees from SunTrust Bank
to
Diversified Investment Advisors. The Plan trustee has overall
responsibility for the investment of assets, accounting for financial
transactions and distributions to participants.
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(b)
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Contributions
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Contributions
to the Plan are made by both participants and the Company. Participants
may contribute up to a maximum of 85% and 100% in 2004 and 2003,
respectively of their annual compensation subject to the limitations
of
the Internal Revenue Code Section 415(c) (3). The Company
may make
discretionary matching contributions to the Plan not to exceed
6% of an
employee’s compensation and may make other types of discretionary
contributions. Annual additions to a participant’s account during any Plan
year, when combined with the total annual additions to the accounts
of the
participant under any other qualified defined contribution plan
maintained
by the Company, cannot exceed certain levels established under
the
Internal Revenue Code Section 402(g).
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(c)
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Participant
Accounts
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The
Plan document requires that the assets of the Plan be accounted
for
separately as to participant and employer contributions and valued
annually, allocating to each participant their share of principal,
income,
and losses. Employer voluntary contributions are allocated to all
eligible
employees based on the employees’ contributions for the period.
Participant accounts may be invested in one or more of the investment
funds available under the Plan at the direction of the
participant.
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(d)
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Participant
Loans
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Other
than the financial conditions listed below, there are no restrictions
on
participants obtaining a loan. Subject to approval, a participant
can
secure a loan from the Plan against his/her account balance for
a minimum
of $1,000 up to the lesser of 50% of the vested account balance
or
$50,000. Loans may generally be repaid over one to five years.
Loans must
be repaid through automatic payroll deductions unless otherwise
provided
for by the Plan Administrator. A participant may only have one
loan
outstanding at a time. The interest rate is the prime rate plus
1% and is
fixed over the life of the loan. A participant may choose to continue
to
participate in the
plan.
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(e)
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Distributions
to Participants
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Upon
retirement, death, disability, or termination of service, a participant
(or participant’s beneficiary in the event of death) may elect to receive
a lump-sum distribution equal to the value of the participant’s vested
account balance.
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Under
the terms of the Plan, participants may make hardship withdrawals
from
their accounts upon furnishing proof of hardship as specified in
the Plan.
Participants with a hardship withdrawal are not allowed to make
contributions to the plan for six months after the
withdrawal.
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Benefits
are recorded when paid.
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(f)
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Vesting
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Participants
are immediately vested in their contributions and the investment
earnings
(losses) thereon.
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Participants
vest in employer contributions 20% each year and are 100%
vested
after five years of credited service. Amounts forfeited by participants
who are terminated from the Plan prior to being 100% vested are
applied to
reduce subsequent Company contributions to the Plan. Forfeitures
totaled
$61,491 and $162,376 in 2004 and 2003, respectively. $9,011 of
forfeitures
were unallocated at December 29, 2004, while the remainder were
used to
reduce Company contributions.
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(g)
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Administrative
Expenses
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The
administrative expenses of the Plan are paid primarily by the Company.
The
Company incurred $46,754 and $49,137 of administrative fees in
2004 and
2003, respectively. These costs include legal, accounting, and
certain
administrative fees.
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(3)
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Transactions
with Parties-In-Interest
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At
December 29, 2004 and 2003, the Plan held investments in
trust funds
and money market accounts sponsored by the trustee with current
values of
$14,399,273 and $12,396,474, respectively. The Plan also held investments
in 154,146 and 96,250 shares of Covenant Transport, Inc.
common stock
with current values of $1,870,560 and $1,901,644 at December 29,
2004
and 2003, respectively. The Plan also held investments in the
participants’ loans with interest rates between 5.25% and 6.25% with a
current value of $652,509 as of December 29, 2004. All administrative
fees
of the plan were paid to
parties-in-interest.
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(4)
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Investments
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The
following investments represent 5% or more of the Plan assets at
December 29, 2004 and
2003:
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2004
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2003
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SunTrust
Employee Benefit Stable Asset Fund
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$
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*
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$
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6,088,638
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STI
Classic Capital Appreciation Fund
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*
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2,464,125
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STI
Classic Value Income Fund
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*
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2,131,204
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Covenant
Transport 401(k) Unitized Stock Fund
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1,870,560
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1,901,644
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STI
Classic Investment Grade Bond Fund
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*
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1,350,567
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Vanguard
500 Index Fund
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*
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1,101,674
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Federated
Kaufmann Fund
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*
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846,540
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Diversified
Stable Pooled Fund
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5,484,430
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*
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Diversified
Equity Growth Fund
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2,389,581
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*
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Diversified
Value Horizon SAF
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2,011,953
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*
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Diversified
Core Bond Fund
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1,313,689
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*
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Diversified
Stock Index Fund
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1,054,751
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*
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Diversified
Mid Cap Growth Fund
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974,664
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*
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(5)
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Income
Tax Status
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The
Internal Revenue Service made a favorable ruling on the application
for
determination of qualification submitted by the Company on September
8,
2003. The plan administrator is not aware of any course of action
or
series of events that might adversely affect the Plan’s qualification
under Section 401(a) of the Internal Revenue Code, and under
which
the Plan would be subject to tax under present income tax law.
Subsequent
to the issuance of the determination letter, the Plan was amended.
Once
qualified, the Plan is required to operate in conformity with the
IRC to
maintain its qualifications. The Plan Administrator believes the
Plan is
being operated in compliance with the applicable requirements of
the IRC
and, therefore believes that the Plan, as amended, is qualified
and the
related trust is tax exempt.
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(6)
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Plan
Termination
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While
it is the Company’s intention to continue the Plan indefinitely, the
Company has the right under the Plan to discontinue its contributions
at
any time and to terminate the Plan subject to the provisions of
ERISA and
the Plan agreement. In the event of Plan termination, participants
will
become 100% vested in their
accounts.
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AND
PROFIT SHARING PLAN
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|||||||
Schedule
H, Line 4i - Schedule of Assets (Held at the End of Year)
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|||||||
December
29, 2004
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|||||||
Identity
of the issue
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Description
of investments
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Current
value
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|||||
Mutual
Funds:
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*
Diversified Equity Growth Fund
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124,587
mutual fund units
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$
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2,389,581
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*
Diversified Value Horizon SAF
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82,322
mutual fund units
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2,011,953
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*
Diversified Core Bond Fund
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104,927
mutual fund units
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1,313,689
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*
Diversified Stock Index Fund
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111,732
mutual fund units
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1,054,751
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*
Diversified Mid Cap Growth Fund
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94,353
mutual fund units
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974,664
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*
Diversified International Fund
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24,366
mutual fund units
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374,499
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*
Diversified Special Equity Fund
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7,509
mutual fund units
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198,229
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*
Diversified Intermediate/Long Horizon Fund
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14,226
mutual fund units
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170,855
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*
Diversified Mid Cap Value
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8,631
mutual fund units
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119,632
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*
Diversified Hi Quality Bond
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9,861
mutual fund units
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113,598
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|||||
*
Diversified Long Horizon SAF
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10,314
mutual fund units
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107,368
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*
Diversified Intermediate Horizon SAF
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3,612
mutual fund units
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41,860
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|||||
*
Diversified Short/Intermediate Horizon SAF
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3,049
mutual fund units
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30,272
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|||||
*
Diversified Short Horizon SAF
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450
mutual fund units
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4,881
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Common
Collective Fund:
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*
Diversified Stable Pooled Fund
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373,014
collective fund units
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5,484,430
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*
Participant Loans
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Loans
to participants, with interest rates from 5.25% to 6.25%.
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652,509
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|||||
*
Investors Bank & Trust Company
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Cash
Reserve Fund
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9,011
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|||||
Common
stock:
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*
Covenant Transport 401(k) Unitized Stock Fund
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154,146
shares
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1,870,560
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|||||
$
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16,922,342
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||||||
*Represents
parties-in-interest to the Plan.
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|||||||
See
accompanying report of independent registered public accounting
firm.
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COVENANT
TRANSPORT, INC. 401(K) AND PROFIT SHARING PLAN
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COVENANT
TRANSPORT, INC.
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Dated:
June 23, 2005
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By:
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/s/
R.H. Lovin, Jr.
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R.H.
Lovin, Jr., Administrator
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