UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 29, 2003 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ______________ Commission file number 0-24960 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: COVENANT TRANSPORT, INC. 401(K) AND PROFIT SHARING PLAN B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: Covenant Transport, Inc. 400 Birmingham Highway Chattanooga, Tennessee 37419 COVENANT TRANSPORT, INC. 401(k) AND PROFIT SHARING PLAN Table of Contents The Covenant Transport, Inc. 401(k) and Profit Sharing Plan (the "Plan") is subject to the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). Accordingly, in lieu of the requirements of Items 1 - 3 of Form 11-K, the Plan is filing financial statements and supplemental schedules prepared in accordance with the financial reporting requirements of ERISA. The following financial statements and supplemental schedules are filed as part of this annual report: Page Report of Independent Registered Public Accounting Firm 1 Statements of Net Assets Available for Plan Benefits as of December 29, 2003 and 2002 2 Statements of Changes in Net Assets Available for Plan Benefits for the Years ended December 29, 2003 and 2002 3 Notes to Financial Statements 4 Schedule 1 Schedule H, Line 4i - Schedule of Assets (Held at End of Year) - December 29, 2003 9 Exhibit Exhibit 23 Consent of Independent Registered Public Accounting Firm Report of Independent Registered Public Accounting Firm The Administrator Covenant Transport, Inc. 401(k) and Profit Sharing Plan: We have audited the accompanying statements of net assets available for plan benefits of the Covenant Transport, Inc. 401(k) and Profit Sharing Plan (Plan) as of December 29, 2003 and 2002, and the related statements of changes in net assets available for plan benefits for the years ended December 29, 2003 and 2002. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Plan as of December 29, 2003 and 2002, and the changes in net assets available for plan benefits for the years then ended in conformity with U.S. generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) as of December 29, 2003 is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ KPMG LLP Atlanta, Georgia June 25, 2004 1 COVENANT TRANSPORT, INC. 401(k) AND PROFIT SHARING PLAN Statements of Net Assets Available for Plan Benefits December 29, 2003 and 2002 2003 2002 ------------------- ------------------- Assets: Investments, at fair value (notes 3 and 4) $ 16,344,166 $ 14,865,621 Liabilities: Excess contributions payable -- 28,368 ------------------- ------------------- Net assets available for plan benefits $ 16,344,166 $ 14,837,253 =================== =================== See accompanying notes to financial statements. 2 COVENANT TRANSPORT, INC. 401(k) AND PROFIT SHARING PLAN Statements of Changes in Net Assets Available for Plan Benefits Years ended December 29, 2003 and 2002 2003 2002 ---------------- ---------------- Additions: Investment income (loss): Interest and dividends $ 354,160 $ 378,967 Net appreciation (depreciation) in fair value of investments: Mutual funds 1,267,546 (1,442,220) Covenant Transport, Inc. common stock 184,434 158,643 ---------------- ---------------- Net investment income (loss) 1,806,140 (904,610) Contributions from employer 671,714 845,909 Contributions from participants 2,448,356 2,808,915 ---------------- ---------------- Total additions 4,926,210 2,750,214 Deductions: Participants' benefits 3,412,443 3,205,175 Administrative fees 6,854 7,258 ---------------- ---------------- Net increase (decrease) in net assets available for plan benefits 1,506,913 (462,219) Net assets available for plan benefits at beginning of year 14,837,253 15,299,472 ---------------- ---------------- Net assets available for plan benefits at end of year $ 16,344,166 $ 14,837,253 ================ ================ See accompanying notes to financial statements. 3 COVENANT TRANSPORT, INC. 401(k) AND PROFIT SHARING PLAN Notes to Financial Statements December 29, 2003 and 2002 (1) Summary of Significant Accounting Policies The following is a summary of significant accounting policies followed by the Plan in preparing its financial statements. (a) Basis of Presentation 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 (the Plan) have been prepared on the accrual basis of accounting and present the net assets available for plan benefits and changes in those net assets. 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. (b) Investments Investments in mutual funds, common stock, and common collective fund are stated at fair value based on quoted market prices or as determined by SunTrust Bank (Trustee). Securities transactions are accounted for on a trade date basis. Realized and unrealized investment gains and losses are included in net appreciation (depreciation) in fair value of investments in the statements of changes in net assets available for plan benefits. 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. (c) Fair Value of Financial Instruments 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. (d) Reclassifications Certain reclassifications were made to the 2002 accounts to conform to classifications adopted in 2003. (2) Description of the Plan 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. 4 (Continued) COVENANT TRANSPORT, INC. 401(k) AND PROFIT SHARING PLAN Notes to Financial Statements December 29, 2003 and 2002 (a) General 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. The Plan is administered by SunTrust Bank Trust, the Plan trustee, who has overall responsibility for the investment of assets, accounting for financial transactions, and distributions to participants. (b) Contributions Contributions to the Plan are made by both participants and the Company. Participants may contribute up to a maximum of 100% 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). (c) Participant Accounts 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 forfeitures. 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. The Plan provides for monthly valuation of accounts. Current investment funds available within the Plan at December 29, 2003 include the following: o SunTrust Employee Benefit Stable Asset Fund - This fund is managed by SunTrust Bank. The fund is a managed portfolio of insurance company guaranteed investment contracts and short-term money market instruments. o STI Classic Investment Grade Bond Fund - This fund is managed by SunTrust Bank. The fund is a bond fund, which invests primarily in government and corporate obligations. o STI Classic Value Income Fund - This fund is managed by SunTrust Bank. The fund is a stock fund, which invests primarily in equity securities. o STI Classic Capital Appreciation Fund - This fund is managed by SunTrust Bank. The fund is a managed portfolio of common stocks, warrants, and convertible securities, which in the advisor's opinion are undervalued. 5 (Continued) COVENANT TRANSPORT, INC. 401(k) AND PROFIT SHARING PLAN Notes to Financial Statements December 29, 2003 and 2002 o Covenant Transport 401(k) Unitized Stock Fund - This fund invests in the stock of Covenant Transport, Inc. o Vanguard 500 Index Fund - This fund is managed by the Vanguard Group. This fund invests in the stocks included in the S&P 500 Index. o Janus Advisor Aggressive Growth Fund - This fund is managed by Janus. This fund invests primarily in common stocks. o STI Classic International Equity Index Fund - This fund is managed by SunTrust Bank. This fund is a stock fund, which invests in foreign stocks. o American Century Ultra Advisor Fund - This fund is managed by American Century Investments. This fund seeks capital growth. The fund invests in equities selected for their appreciation potential with the majority being common stocks that meet standard for earnings and revenue growth. o Federated Kaufmann Fund - This fund is managed by Federated. The fund seeks capital appreciation by investing in small and mid-cap growth companies. o Templeton Foreign Fund - This fund is managed by Franklin Templeton Investments. This fund seeks long-term capital growth. The fund invests primarily in stocks and debt securities in companies and governments outside the United States. o STI Classic Small Cap Value Equity Fund - This fund is managed by SunTrust Bank. The fund invests in a diversified portfolio of equity securities issued by what management considers undervalued companies. o STI Classic Life Vision Growth and Income Fund - This fund is managed by SunTrust Bank. This fund seeks long-term capital appreciation and current income is secondary. The fund primarily invests in equity securities and fixed income securities. o STI Classic Life Vision Moderate Growth Fund - This fund is managed by SunTrust Bank. The fund seeks capital appreciation and current income. The fund primarily invests in equity securities and fixed income securities. (d) Distributions to Participants Upon termination of employment, the participant's account shall be distributed in a lump-sum cash payment as soon as administratively practicable. Under the terms of the Plan, participants may make hardship withdrawals from their accounts upon furnishing proof of hardship as specified in the Plan. (e) Vesting Participants are immediately vested in their contributions and the investment earnings (losses) thereon. 6 (Continued) COVENANT TRANSPORT, INC. 401(k) AND PROFIT SHARING PLAN Notes to Financial Statements December 29, 2003 and 2002 Participants vest in employer contributions 20% each year and are 100% vested after five years of credited service. Amounts forfeited by participants who terminate from the Plan prior to being 100% vested are applied to reduce subsequent Company contributions to the Plan. Forfeitures totaled $162,376 and $107,593 in 2003 and 2002, respectively, and reduced Company contributions by the same amounts. (f) Administrative Expenses The administrative expenses of the Plan are paid primarily by the Company. The Company paid $49,137 and $58,019 of administrative fees in 2003 and 2002, respectively. These costs include legal, accounting, and certain administrative fees. (3) Transactions with Parties-In-Interest At December 29, 2003 and 2002, the Plan held investments in trust funds and money market accounts sponsored by the trustee with current values of $12,396,474 and $11,520,237, respectively. The Plan also held investments in 96,250 and 112,429 shares of Covenant Transport, Inc. common stock with current values of $1,901,644 and $2,015,741 at December 29, 2003 and 2002, respectively. (4) Investments The following investments represent 5% or more of the Plan assets at December 29, 2003 and 2002: 2003 2002 ----------- ----------- SunTrust Employee Benefit Stable Asset Fund $ 6,088,638 $ 5,959,384 STI Classic Investment Grade Bond Fund 1,350,567 1,541,314 STI Classic Value Income Fund 2,131,204 1,766,855 STI Classic Capital Appreciation Fund 2,464,125 2,149,726 Vanguard 500 Index Fund 1,101,674 766,743 Covenant Transport 401(k) Unitized Stock Fund 1,901,644 2,015,741 Federated Kaufmann Fund 846,540 * *The Federated Kaufmann Fund did not exceed 5% of net assets at December 31, 2002. All of the Plan's investments are held by a party-in-interest to the Plan. 7 (Continued) COVENANT TRANSPORT, INC. 401(k) AND PROFIT SHARING PLAN Notes to Financial Statements December 29, 2003 and 2002 (5) Income Tax Status 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. (6) Plan Termination 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. 8 Schedule I COVENANT TRANSPORT, INC. 401(k) AND PROFIT SHARING PLAN Schedule H, Line 4i - Schedule of Assets (Held at the End of Year) December 29, 2003 Current Identity of the issue Description of investments value - -------------------------------------------------------------- --------------------------------------- ------------------- Mutual Funds: * STI Classic Investment Grade Bond Fund 127,532 mutual fund units $ 1,350,567 * STI Classic Value Income Fund 192,000 mutual fund units 2,131,204 * STI Classic Capital Appreciation Fund 203,311 mutual fund units 2,464,125 * STI Classic International Equity Index Fund 18,312 mutual fund units 196,852 Vanguard 500 Index Fund 10,754 mutual fund units 1,101,674 Janus Advisor Aggressive Growth Fund 16 mutual fund units 326 Federated Kaufmann Fund 171,018 mutual fund units 846,540 * STI Classic Small Cap Value Equity Fund 8,220 mutual fund units 144,339 Templeton Foreign Fund 5,356 mutual fund units 56,296 American Century Ultra Advisor Fund 1,562 mutual fund units 41,212 * STI Classic Life Vision Growth and Income Fund 1,345 mutual fund units 14,252 * STI Classic Life Vision Moderate Growth Fund 651 mutual fund units 6,497 Common Collective Fund: * SunTrust Employee Benefit Stable Asset Fund 180,238 collective fund units 6,088,638 Common stock: * Covenant Transport, Inc. 96,250 shares of common stock 1,901,644 ------------------- $ 16,344,166 =================== *SunTrust Bank, Trustee, and Covenant Transport, Inc. are parties-in-interest to the Plan. See accompanying report of independent registered public accounting firm. 9 SIGNATURES The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. COVENANT TRANSPORT, INC. 401(K) AND PROFIT SHARING PLAN COVENANT TRANSPORT, INC. Dated: June 25, 2004 By: /s/ R.H. Lovin, Jr. ----------------------------------- R.H. Lovin, Jr., Administrator 10