Overview

Covenant Transportation Group's Senior Vice President and Treasurer, M.David Hughes, made the following comments: "Over the past several months, wehave been working diligently to replace our prior financing arrangements withmore flexible and longer term arrangements. We are very pleased to announcesubstantial completion of this process through closing an $85 million amendedand restated revolving credit facility led by Bank of America, J.P. MorganChase, and Textron Financial. Together with the previously announcedapproximately $200 million secured revenue equipment financing facilitythrough Daimler Truck Finance, we have completed the substantial majority ofour refinancing efforts. The achievement of this portion of our financingprogram is a major achievement for CTG, and to complete it in the middle of aglobal credit crisis is even more meaningful. Since June, we have obtainedapproximately $285 million in new financing and financing commitments fromsome of the world's largest and most respected organizations. We appreciatethe expression of confidence and support from all of these institutions. Wefeel comfortable with our current liquidity and financing availability, whilewe are still in the position to further pursue additional financing that wouldbe secured by some of our terminal facilities."

Description of Amended and Restated Credit Agreement

Mr. Hughes continued: "The credit agreement provides for a secured, $85million revolving credit facility, with an accordion feature that allows us torequest an increase in the revolving credit facility of up to $50 million.Availability is subject to a borrowing base, and the borrowing base is limitedby a $15 million availability block, plus any other reserves the agentbank may establish in its judgment. Borrowings under the credit agreement areclassified as either "base rate loans" or "LIBOR loans." Base rate loansaccrue interest at a base rate equal to the agent bank's prime rate plus anapplicable margin that is adjusted quarterly between 0.625% and 1.375% basedon average pricing availability. LIBOR loans accrue interest at LIBOR plus anapplicable margin that is adjusted quarterly between 2.125% and 2.875% basedon average pricing availability. Under the terms of this agreement, averagepricing availability is defined as the sum of the average availability underthis facility and the average eligible cash and cash equivalents held by theCTG borrowing subsidiaries for the applicable period of time. The creditagreement contains a single financial covenant, which requires us to maintaina consolidated fixed charge coverage ratio of at least 1.0 to 1.0. Theobligations under the credit agreement are secured by a pledge ofsubstantially all of our assets, other than revenue equipment and certainother assets financed now or in the future with purchase money debt. Thecredit agreement contains certain restrictions and covenants relating to,among other things, dividends, liens, acquisitions and dispositions, affiliatetransactions, and total indebtedness."

Liquidity

Senior Vice President and Chief Financial Officer, Richard B. Cribbs, thendiscussed the Company's liquidity: "CTG's financial condition and liquidityremain sound in our view. At September 30, we expect to have above $20million of available borrowing capacity under the amended revolving line ofcredit, as well as additional capacity in equipment financing remainingavailable under the Daimler equipment line. We believe that the combinationof these two facilities, as well as other means of financing, provide amplecapacity for all of our equipment replacement needs, as well as workingcapital requirements for the terms of those facilities. Based on ourfinancial and operating expectations, we expect to comply with the applicablefinancial covenant for the foreseeable future."

Update Concerning Third Quarter Financial and Operating Results

Chairman, President and Chief Executive Officer, David R. Parker, offeredthe following comments concerning certain financial and operating data for thethird quarter of 2008: "There have been several positive and negativedevelopments during the quarter to date that we wanted investors to consideralong with the announcement concerning the completion of our credit facility.These developments are as follows:

-- Asset Utilization. We expect consolidated revenue per tractor per week(excluding fuel surcharges) to increase approximately 6% compared with thethird quarter of 2007. We expect average revenue per total mile (excludingfuel surcharges) to increase between 1% and 2% both sequentially and versusthe 2007 quarter, with the balance of the increase in revenue per truck comingfrom higher miles per tractor. The increase in miles per tractor is primarilyattributable to an increase in the percentage of our fleet allocated to ourteam expedited operation and more effective dispatching. The freightenvironment remains weak and, if anything, seems to be deteriorating on aseasonally adjusted basis.

-- Net Fuel Expense. We expect the combination of the decrease in dieselfuel prices, improved surcharge collection from customers, a decrease in non-revenue miles, solid execution of several initiatives designed to reduce fuelconsumption, and simple improved timing as fuel prices were substantiallyhigher at the end of the second quarter creating a positive lag effect insurcharge billing during the quarter to save us more than $3.5 millioncompared with the second quarter of 2008 and to return our cost per mile fornet fuel expense approximately to the same level as the third quarter of 2007.

-- Safety and Claims Expense. Through September 26, our reportableaccident rate per million miles for the quarter reflected the best performancein several years. Unfortunately, a small number of the accidents we didexperience were severe. Based on our self-insured retention levels and ouraccrual policies concerning these types of accidents, we expect to recordbetween $0.11 and $0.14 per mile for insurance and claims expense for thequarter. Over time we believe the improvement in incident rate is a veryimportant accomplishment, and we expect to continue to employ efforts frommany different angles to maintain a strong safety program at each of our CTGoperating subsidiaries.

-- Deferred Debt Issuance Cost. The closing of the amended and restatedcredit agreement is expected to result in a non-cash write-down of this "otherasset" carried on our balance sheet relating to the former credit facility.The amount of the non-cash write-down has not been finalized but is expectedto be in the range of $1.0 million.

"From an income statement perspective, compared with the second quarter of2008, we believe the few items discussed above may contribute approximately$.20 per share in positive developments, more than offset by over $.30 pershare in negative developments discussed above. We caution, however, thatthese estimates are preliminary and could change. Moreover, we have notclosed our financial records for the quarter and are not in a position tocomment on an expected range of consolidated earnings per share for thequarter. Our comments in this press release are limited solely to thespecific items addressed herein."

The Company announced tentative plans to release its third quarterearnings after the market closes on Monday, October 27, 2008, with a liveconference call to discuss our first quarter earnings release planned forTuesday, October 28, 2008, at 10:00 a.m. Eastern time. Dial-in and audioreplay information will be furnished at a later date.

Covenant Transportation Group, Inc. is the holding company for severaltransportation providers that offer premium transportation services forcustomers throughout the United States. The consolidated group includesoperations from Covenant Transport and Covenant Transport Solutions ofChattanooga, Tennessee; Southern Refrigerated Transport of Texarkana,Arkansas; and Star Transportation of Nashville, Tennessee. The Company'sClass A common stock is traded on the Nasdaq National Market under the symbol,"CVTI".

This press release contains certain statements that may be consideredforward-looking statements within the meaning of Section 27A of the SecuritiesAct of 1933, as amended and Section 21E of the Securities Exchange Act of1934, as amended. These statements generally may be identified by their useof terms or phrases such as "expects," "estimates," "anticipates," "projects,""believes," "plans," "intends," "may," "will," "should," "could," "potential,""continue," "future," and terms or phrases of similar substance.Forward-looking statements are based upon the current beliefs and expectationsof our management and are inherently subject to risks and uncertainties, someof which cannot be predicted or quantified, which could cause future eventsand actual results to differ materially from those set forth in, contemplatedby, or underlying the forward-looking statements. In this press release, thestatements regarding expected liquidity and available borrowing capacityincluding the sufficiency to meet equipment replacement and working capitalneeds; compliance with financial covenants; the prospect of additionalfinancing secured by terminal facilities; expected third quarter operating andfinancial data, including asset utilization, net fuel expense, safety andclaims expense, and deferred debt issuance cost; and the expected earnings pershare impact of positive and negative developments discussed in this pressrelease are all forward-looking statements. The following factors, amongothers, could cause actual results to differ materially from those in theforward-looking statements: The financial expectations discussed in thisrelease have not been subjected to all of the review procedures associatedwith the release of actual financial results and are premised on assumptionsconcerning the financial close and certain amounts and management judgmentassociated with the end of each quarter; elevated experience in the frequencyand severity of claims relating to accident, cargo, workers' compensation,health, and other claims, increased insurance premiums, fluctuations in claimsexpenses that result from high self-insured retention amounts and differencesbetween estimates used in establishing and adjusting claims reserves andactual results over time, adverse changes in claims experience and lossdevelopment factors, or additional changes in management's estimates ofliability based upon such experience and development factors that causes ourexpectations of insurance and claims expense to be inaccurate or otherwiseimpacts our results; the continued functioning of the global credit marketsand banking systems, as well as our banks, in accordance with historicalnorms; the availability of credit from financial institutions, including thoseunder our amended credit agreement, consistent with our expectationsconcerning interest rates, advance rates on collateral, and other terms, andwithout significant unexpected reserves; the continued extension of tradepayable credit by vendors in the ordinary course of business on historicalterms; the safety of funds on deposit with financial institutions; changes inthe market for used revenue equipment and real estate that impact our capitalexpenditures and our ability to dispose of or finance revenue equipment andreal estate on the schedule and for the prices we expect; increases in theprices paid for new revenue equipment and changes in the resale value of ourused equipment that impact our capital expenditures or our results generally;our ability to renew Covenant Dedicated contracts on the terms and schedule weexpect; changes in management's estimates of the need for new tractors andtrailers; our ability to improve the performance of all of our subsidiariesand areas of operations; our ability to reduce dependency on broker freight;excess tractor or trailer capacity in the trucking industry; decreased demandfor our services or loss of one or more of our major customers; surpluscustomer inventories; recessionary economic cycles and downturns in customers'business cycles and the impact of the U.S. economy generally, including butnot limited to the effect on freight volumes, pricing, customers' paymentcycles, and the collectability of accounts receivable; strikes, work slowdowns, or work stoppages at the Company, customers, ports, or other shippingrelated facilities; fluctuations in fuel prices and the magnitude and timingof increases and decreases, as well as fluctuations in hedging activities andsurcharge collection, including, but not limited to, changes in customer fuelsurcharge policies and increases in fuel surcharge bases by customers; thevolume and terms of diesel purchase commitments; fuel taxes, tolls, licenseand registration fees, and other government impositions; increases incompensation for and difficulty in attracting and retaining qualified driversand independent contractors; seasonal factors such as harsh weather conditionsthat increase operating costs; competition from trucking, rail, and intermodalcompetitors; regulatory requirements that increase costs or decreaseefficiency, including certification and hours-of-service requirements fordrivers and emissions and safety requirements for equipment; the ability tocontrol increases in operating costs; decreases in productivity that mayoffset or eliminate potential savings from the installation of auxiliary powerunits or unexpected maintenance or other costs associated with such units; andthe ability to identify acceptable acquisition candidates, consummateacquisitions, and integrate acquired operations, including any acquisitionsrelated to changes in business strategy. Readers should review and considerthese factors along with the various disclosures by the Company in its pressreleases, stockholder reports, and filings with the Securities ExchangeCommission. We disclaim any obligation to update or revise any forward-looking statements to reflect actual results or changes in the factorsaffecting the forward-looking information.

SOURCE Covenant Transportation Group, Inc.