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Marten Transport, Ltd. (NASDAQ: MRTN) has reported a strong second quarter, with a significant operating ratio increase in both its dedicated and truckload segments.
The improvement in OR for the company overall was 250 basis points to 88.1% from 90.6%. The gains in the company's truckload and dedicated divisions were offset in part by deterioration in the company's intermodal and brokerage divisions. The truckload OR was up to 88.3% from 91.6%, or 330 basis points, while dedicated rose to 84.8% from 88.5%, 270 basis points.
Overall, the company's operating revenue in the quarter was essentially flat, rising just 0.1% to $85.96 million. Marten's gain in operating revenue came mostly out of its dedicated division, where operating revenue net of fuel rose 19.4% to $67 million. Meanwhile, operating revenue in the truckload division net of fuel rose to $85.96 million, up from $83.21 million, a gain of 3.3%.
The bottom line at the company was operating income of $25.25 million, up from $19.9 million in the second quarter of 2019. Net income was up to $18.13 million from $15.19 million.
There has been a significant focus for all companies, not just trucking, on liquidity. Marten appears to be in strong shape on that front. It ended the quarter with $75.3 million in cash, up from $31.46 million at the end of last year.
Marten does not have a call with investors to discuss its earnings.
Stock split, dividend maintenance means a 50% effective jump in payout
Marten also announced that it was splitting its stock 3-for-2. It is holding its dividend payout at 4 cents per share per quarter, and Marten described the combination of the split and the maintenance of the dividend as effectively a 50% increase in the dividend payout.
Among the operating highlights in the Marten release:
— Marten saw an increase in salaries, wages and benefits to $73.47 million from $68.61 million, a gain of 7%. However, it kept purchased transportation in check, declining to $36.1 million from $38.66 million. Total operating expenses dropped to $187.1 million from $192.1 million, a decline that was less than the roughly $10 million drop it saw in its fuel expenses.
— Dedicated has been a strong division for Marten in recent quarters. The operating income of the group rose to $11.45 million from $7.7 million a year ago, an increase of 48.7%. Operating revenue for the group rose to $67 million, an increase of 19.4%, net of fuel revenue. To illustrate how much the dedicated group has grown in prominence in the company, in the third quarter of 2018, which included a once-in-a-lifetime freight market, dedicated revenue (net of fuel) was 60% of the revenue of the truckload division. In the second quarter of this year, it was 78%. The dedicated segment saw its miles driven jump to 33.174 million from 27.198 million, an increase of almost 22%. That helped offset the average revenue per tractor per week dropping to $3,314 from $3,460.
— Truckload revenue edged down to $94.2 million from $96 million. Average revenue per tractor per week was down to $3,829 from $3,876. Nonrevenue miles percentage declined to 10.9% from 11.1%, and total miles driven rose to 42.83 million from 39 million.
— Brokerage revenue fell by roughly $6 million, to $22.456 million from $28.455 million, a drop of 21%. Loads plunged to 15,280 from 16,185.
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