Marten Transport Announces Third Quarter Results

MONDOVI, Wis., Oct. 19, 2017 (GLOBE NEWSWIRE) — Marten Transport, Ltd. (Nasdaq/GS:MRTN) today reported net income of $7.9 million, or 14 cents per diluted share, for the third quarter ended September 30, 2017, compared with $8.4 million, or 15 cents per diluted share, for the third quarter of 2016.  Net income was $25.2 million, or 46 cents per diluted share, for the first nine months of both 2017 and 2016. 

Operating revenue increased to $170.7 million for the third quarter of 2017 from $170.5 million for the third quarter of 2016, and increased to $515.3 million for the first nine months of 2017 from $498.5 million for the 2016 nine-month period.  Operating revenue, net of fuel surcharges, was $155.0 million for the 2017 quarter compared with $155.8 million for the 2016 quarter, and improved 1.5% to $467.5 million for the 2017 nine-month period from $460.5 million for the 2016 nine-month period.  Fuel surcharge revenue increased to $15.6 million for the 2017 quarter from $14.7 million for the 2016 quarter, and increased to $47.8 million for the first nine months of 2017 from $37.9 million for the 2016 nine-month period.

Operating expenses as a percentage of operating revenue was 92.4% for the third quarter of 2017 and 91.3% for the third quarter of 2016.  Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, was 91.6% for the third quarter of 2017 and 90.5% for the third quarter of 2016.  

Operating expenses as a percentage of operating revenue was 91.7% for the 2017 nine-month period and 91.2% for the 2016 nine-month period.  Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, was 90.9% for the 2017 nine-month period and 90.5% for the 2016 nine-month period.

Chairman and Chief Executive Officer Randolph L. Marten said, “The improvement in our revenue per tractor for the third quarter did not offset the increase in our operating expenses related to insurance and claims and fuel, the decrease in our gain on disposition of revenue equipment and the negative impact of the recent hurricanes on our Texas and Southeast operations.  In October we have been awarded new dedicated business for over 200 additional tractors starting in this year’s fourth quarter.  We continue to believe that we are well-positioned to capitalize on further profitable growth opportunities with our unique and diversified transportation service solutions.”

On July 7, 2017, Marten effected a five-for-three stock split of its common stock, $.01 par value, in the form of a 66 ⅔% stock dividend.  The consolidated condensed financial statements have been adjusted to give retroactive effect to the stock split for all periods presented.

Marten Transport, with headquarters in Mondovi, Wis., is one of the leading temperature-sensitive truckload carriers in the United States, specializing in transporting and distributing food and other consumer packaged goods that require a temperature-controlled or insulated environment.  Marten’s dry freight services are expanding, with 936 dry trailers operating as of September 30, 2017.  Marten offers service in the United States, Canada and Mexico, concentrating on expedited movements for high-volume customers.  Marten’s common stock is traded on the Nasdaq Global Select Market under the symbol MRTN.

This press release contains certain statements that may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  These statements include our discussion of the Company’s prospects for future growth and by their nature involve substantial risks and uncertainties, and actual results may differ materially from those expressed in such forward-looking statements.  Important factors known to the Company that could cause actual results to differ materially from those discussed in the forward-looking statements are discussed in Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.  The Company undertakes no obligation to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise.

   
MARTEN TRANSPORT, LTD.  
CONSOLIDATED CONDENSED BALANCE SHEETS  
(Unaudited)  
   
    September 30,     December 31,  
(In thousands, except share information)   2017     2016  
                 
ASSETS                
Current assets:                
Cash and cash equivalents   $ 1,159     $ 488  
Receivables:                
Trade, net     72,919       69,199  
Other     4,541       4,436  
Prepaid expenses and other     16,263       19,307  
Total current assets     94,882       93,430  
                 
Property and equipment:                
Revenue equipment, buildings and land, office equipment and other     781,451       759,553  
Accumulated depreciation     (201,882 )     (201,728 )
Net property and equipment     579,569       557,825  
Other assets     1,856       2,493  
Total assets   $ 676,307     $ 653,748  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Current liabilities:                
Accounts payable and accrued liabilities   $ 39,938     $ 41,230  
Insurance and claims accruals     25,197       19,440  
Total current liabilities     65,135       60,670  
Long-term debt           7,886  
Deferred income taxes     149,846       147,854  
Total liabilities     214,981       216,410  
                 
Stockholders’ equity:                
Preferred stock, $.01 par value per share; 2,000,000 shares authorized; no shares issued and outstanding            
Common stock, $.01 par value per share; 96,000,000 shares authorized; 54,521,790 shares at September 30, 2017, and 54,391,525 shares at December 31, 2016, issued and outstanding     545       544  
Additional paid-in capital     75,951       74,175  
Retained earnings     384,830       362,619  
Total stockholders’ equity     461,326       437,338  
Total liabilities and stockholders’ equity   $ 676,307     $ 653,748  
                 

MARTEN TRANSPORT, LTD.  
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS  
(Unaudited)  
   
    Three Months     Nine Months  
    Ended September 30,     Ended September 30,  
(In thousands, except per share information)   2017     2016     2017     2016  
                                 
Operating revenue   $ 170,679     $ 170,464     $ 515,349     $ 498,483  
                                 
Operating expenses (income):                                
Salaries, wages and benefits     53,594       57,090       166,709       168,116  
Purchased transportation     28,668       27,775       85,546       81,997  
Fuel and fuel taxes     26,143       24,845       77,106       68,405  
Supplies and maintenance     10,381       11,618       31,912       33,025  
Depreciation     21,186       20,790       63,875       61,205  
Operating taxes and licenses     2,314       2,297       6,813       6,732  
Insurance and claims     11,336       8,194       29,098       23,245  
Communications and utilities     1,463       1,584       4,531       4,701  
Gain on disposition of revenue equipment     (1,908 )     (3,325 )     (4,882 )     (7,462 )
Other     4,480       4,727       12,112       14,749  
                                 
Total operating expenses     157,657       155,595       472,820       454,713  
                                 
Operating income     13,022       14,869       42,529       43,770  
                                 
Other     14       342       280       794  
                                 
Income before income taxes     13,008       14,527       42,249       42,976  
                                 
Provision for income taxes     5,153       6,090       17,039       17,815  
                                 
Net income   $ 7,855     $ 8,437     $ 25,210     $ 25,161  
                                 
Basic earnings per common share   $ 0.14     $ 0.16     $ 0.46     $ 0.46  
                                 
Diluted earnings per common share   $ 0.14     $ 0.15     $ 0.46     $ 0.46  
                                 
Dividends declared per common share   $ 0.025     $ 0.015     $ 0.055     $ 0.045  
                                 

  

MARTEN TRANSPORT, LTD.  
SEGMENT INFORMATION  
(Unaudited)  
   
                    Dollar     Percentage  
                    Change     Change  
    Three Months     Three Months     Three Months  
    Ended     Ended     Ended  
    September 30,     September 30,     September 30,  
(Dollars in thousands)   2017     2016     2017 vs. 2016     2017 vs. 2016  
Operating revenue:                                
Truckload revenue, net of fuel surcharge revenue   $ 81,836     $ 85,469     $ (3,633 )     (4.3 )%
Truckload fuel surcharge revenue     10,172       9,726       446       4.6  
Total Truckload revenue     92,008       95,195       (3,187 )     (3.3 )
                                 
Dedicated revenue, net of fuel surcharge revenue     39,154       37,669       1,485       3.9  
Dedicated fuel surcharge revenue     2,995       2,967       28       0.9  
Total Dedicated revenue     42,149       40,636       1,513       3.7  
                                 
Intermodal revenue, net of fuel surcharge revenue     17,423       16,381       1,042       6.4  
Intermodal fuel surcharge revenue     2,472       1,979       493       24.9  
Total Intermodal revenue     19,895       18,360       1,535       8.4  
                                 
Brokerage revenue     16,627       16,273       354       2.2  
                                 
Total operating revenue   $ 170,679     $ 170,464     $ 215       0.1 %
                                 
Operating income:                                
Truckload   $ 5,764     $ 6,509     $ (745 )     (11.4 )%
Dedicated     4,514       5,505       (991 )     (18.0 )
Intermodal     1,588       1,645       (57 )     (3.5 )
Brokerage     1,156       1,210       (54 )     (4.5 )
Total operating income   $ 13,022     $ 14,869     $ (1,847 )     (12.4 )%
                                 
Operating ratio:                                
Truckload     93.7 %     93.2 %                
Dedicated     89.3       86.5                  
Intermodal     92.0       91.0                  
Brokerage     93.0       92.6                  
                                 
Consolidated operating ratio     92.4 %     91.3 %                
                                 

MARTEN TRANSPORT, LTD.  
SEGMENT INFORMATION  
(Unaudited)  
   
                    Dollar     Percentage  
                    Change     Change  
    Nine Months     Nine Months     Nine Months  
    Ended     Ended     Ended  
    September 30,     September 30,     September 30,  
(Dollars in thousands)   2017     2016     2017 vs. 2016     2017 vs. 2016  
Operating revenue:                                
Truckload revenue, net of fuel surcharge revenue   $ 251,127     $ 253,514     $ (2,387 )     (0.9 )%
Truckload fuel surcharge revenue     31,453       25,771       5,682       22.0  
Total Truckload revenue     282,580       279,285       3,295       1.2  
                                 
Dedicated revenue, net of fuel surcharge revenue     114,654       109,833       4,821       4.4  
Dedicated fuel surcharge revenue     9,274       7,175       2,099       29.3  
Total Dedicated revenue     123,928       117,008       6,920       5.9  
                                 
Intermodal revenue, net of fuel surcharge revenue     51,111       48,353       2,758       5.7  
Intermodal fuel surcharge revenue     7,085       4,990       2,095       42.0  
Total Intermodal revenue     58,196       53,343       4,853       9.1  
                                 
Brokerage revenue     50,645       48,847       1,798       3.7  
                                 
Total operating revenue   $ 515,349     $ 498,483     $ 16,866       3.4 %
                                 
Operating income:                                
Truckload   $ 19,249     $ 20,400     $ (1,151 )     (5.6 )%
Dedicated     14,075       14,963       (888 )     (5.9 )
Intermodal     5,777       5,396       381       7.1  
Brokerage     3,428       3,011       417       13.8  
Total operating income   $ 42,529     $ 43,770     $ (1,241 )     (2.8 )%
                                 
Operating ratio:                                
Truckload     93.2 %     92.7 %                
Dedicated     88.6       87.2                  
Intermodal     90.1       89.9                  
Brokerage     93.2       93.8                  
                                 
Consolidated operating ratio     91.7 %     91.2 %                
                                 

MARTEN TRANSPORT, LTD.
OPERATING STATISTICS
(Unaudited)
   
    Three Months     Nine Months  
    Ended September 30,     Ended September 30,  
    2017     2016     2017     2016  
Truckload Segment:                                
Revenue (in thousands)   $ 92,008     $ 95,195     $ 282,580     $ 279,285  
Average revenue, net of fuel surcharges, per tractor per week(1)   $ 3,484     $ 3,440     $ 3,455     $ 3,417  
Average tractors(1)     1,787       1,890       1,863       1,896  
Average miles per trip     592       617       598       628  
Non-revenue miles percentage(2)     8.1 %     9.2 %     8.9 %     9.3 %
Total miles (in thousands)     43,340       46,734       135,136       137,495  
                                 
Dedicated Segment:                                
Revenue (in thousands)   $ 42,149     $ 40,636     $ 123,928     $ 117,008  
Average revenue, net of fuel surcharges, per tractor per week(1)   $ 3,441     $ 3,471     $ 3,463     $ 3,426  
Average tractors(1)     866       826       849       819  
Average miles per trip     299       295       297       304  
Non-revenue miles percentage(2)     0.6 %     0.7 %     0.7 %     0.8 %
Total miles (in thousands)     19,705       19,035       57,641       56,507  
                                 
Intermodal Segment:                                
Revenue (in thousands)   $ 19,895     $ 18,360     $ 58,196     $ 53,343  
Loads     10,265       9,223       29,642       26,674  
Average tractors     78       75       79       76  
                                 
Brokerage Segment:                                
Revenue (in thousands)   $ 16,627     $ 16,273     $ 50,645     $ 48,847  
Loads     11,672       12,416       36,604       36,795  
                                 
At September 30, 2017 and September 30, 2016:                                
Total tractors(1)     2,649       2,770                  
Average age of company tractors (in years)     1.4       1.5                  
Total trailers     4,915       4,880                  
Average age of company trailers (in years)     2.8       2.7                  
Ratio of trailers to tractors(1)     1.9       1.8                  
   
    Three Months     Nine Months  
    Ended September 30,     Ended September 30,  
(In thousands)   2017     2016     2017     2016  
                                 
Net cash provided by operating activities   $ 29,490     $ 24,119     $ 94,710     $ 104,270  
Net cash (used for) investing activities     (37,050 )     (29,164 )     (84,015 )     (68,842 )
Net cash provided by (used for) financing activities     (1,339 )     5,012       (10,024 )     (35,687 )
                                 
Weighted average shares outstanding:                                
Basic     54,517       54,218       54,479       54,126  
Diluted     54,890       54,526       54,803       54,422  
   
(1) Includes tractors driven by both company-employed drivers and independent contractors. Independent contractors provided 63 and 72 tractors as of September 30, 2017 and 2016, respectively.  
     
(2) Represents the percentage of miles for which the company is not compensated.
CONTACT: CONTACTS: Tim Kohl, President, and Jim Hinnendael, Executive Vice President and Chief Financial Officer, of Marten Transport, Ltd., 715-926-4216.