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Marten Transport Announces Second Quarter Results

Reports highest operating revenue and operating income for any quarter in Company history

MONDOVI, Wis., July 18, 2019 (GLOBE NEWSWIRE) -- Marten Transport, Ltd. (Nasdaq/GS:MRTN) today reported the highest operating revenue and operating income for any quarter in its history. For the second quarter ended June 30, 2019, net income improved 10.9% to $15.2 million, or 28 cents per diluted share, from $13.7 million, or 25 cents per diluted share, for the second quarter of 2018. The second quarter earnings improved 12.1% sequentially from 2019 first quarter net income of $13.5 million, or 25 cents per diluted share. Net income improved 19.6% to $28.7 million, or 52 cents per diluted share, for the first six months of 2019, from $24.0 million, or 44 cents per diluted share, for the first six months of 2018.

       
  Operating Results Comparison    
       
  Net income and diluted earnings per common share used to calculate the TTM percentage change below exclude a $56.5 million deferred income tax benefit in the fourth quarter of 2017.      
       
      Percentage   Percentage   Percentage  
      Change   Change   Change  
      Three Months   Six Months   Trailing Twelve  
      Ended   Ended   Months Ended  
      June 30,   June 30,   June 30,  
      2019 vs. 2018   2019 vs. 2018   2019 vs. 2018  
                       
  Operating revenue   7.6   7.1 %   10.5 %  
                       
  Operating income   9.4 %   18.4 %   28.8 %  
                       
  Net income   10.9 %   19.6 %   47.5 %  
                       
  Diluted earnings per common share   11.0 %   19.7 %   47.4 %  
     

Operating revenue improved 7.6% to a record $212.1 million for the second quarter of 2019 from $197.0 million for the second quarter of 2018, and improved 7.1% to $411.1 million for the first six months of 2019 from $384.0 million for the first six months of 2018. Operating revenue also improved 10.5% to $814.7 million for the trailing twelve months ended June 30, 2019 from $737.4 million for the similar period ended June 30, 2018. Excluding fuel surcharges, operating revenue improved 9.5% to $185.4 million for the 2019 quarter from $169.2 million for the 2018 quarter, and improved 8.3% to $360.8 million for the first six months of 2019 from $333.1 million for the first six months of 2018. Fuel surcharge revenue decreased to $26.7 million for the 2019 quarter from $27.8 million for the 2018 quarter, and decreased to $50.3 million for the first six months of 2019 from $50.9 million for the first six months of 2018.

Operating income improved 9.4% to a record $19.9 million for the second quarter of 2019 from $18.2 million for the second quarter of 2018, and improved 18.4% to $37.7 million for the first six months of 2019 from $31.8 million for the first six months of 2018. Operating income also improved 28.8% to $76.2 million for the trailing twelve months ended June 30, 2019 from $59.2 million for the similar period ended June 30, 2018. 

Operating expenses as a percentage of operating revenue improved to 90.6% for the second quarter of 2019 from 90.8% for the second quarter of 2018. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, was 89.2% for each period.

Operating expenses as a percentage of operating revenue improved to 90.8% for first six months of 2019 from 91.7% for the first six months of 2018. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, improved to 89.6% from 90.4%.

Operating expenses as a percentage of operating revenue improved to 90.6% for the trailing twelve months ended June 30, 2019 from 92.0% for the similar period ended June 30, 2018. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, improved to 89.3% from 90.9%.

Chairman and Chief Executive Officer Randolph L. Marten said, “We are pleased to report that Marten’s talented people have produced the highest operating revenue and operating income for any quarter in our history. We’re also confident in our ability to continue to deliver profitable organic growth. We added 41 Truckload and 138 Dedicated tractors during the second quarter - on top of our growth of 65 Truckload and 51 Dedicated tractors in the first quarter. We expect to carry forward this success in recruiting and retaining the industry’s top, experienced drivers to continue to capitalize on the strong current and expected demand for our premium services with our diversified customer base.”

Marten Transport, with headquarters in Mondovi, Wis., is a multifaceted business offering a network of truck-based transportation capabilities across the Company’s five distinct business platforms - Truckload, Dedicated, Intermodal, Brokerage and MRTN de Mexico. Marten 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 1,596 dry vans operating as of June 30, 2019. The Company 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 a 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, 2018. The Company undertakes no obligation to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise.

CONTACTS: Tim Kohl, President, and Jim Hinnendael, Executive Vice President and Chief Financial Officer, of Marten Transport, Ltd., 715-926-4216.

MARTEN TRANSPORT, LTD.
CONSOLIDATED CONDENSED BALANCE SHEETS

    June 30,     December 31,  
(In thousands, except share information)   2019     2018  
      (Unaudited)          
ASSETS                
Current assets:                
Cash and cash equivalents   $ 82,792     $ 56,763  
Receivables:                
Trade, net     87,044       83,033  
Other     3,354       3,808  
Prepaid expenses and other     19,724       19,924  
Total current assets     192,914       163,528  
                 
Property and equipment:                
Revenue equipment, buildings and land, office equipment and other     857,410       816,430  
Accumulated depreciation     (256,836 )     (228,200 )
Net property and equipment     600,574       588,230  
Other noncurrent assets     3,107       2,146  
Total assets   $ 796,595     $ 753,904  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Current liabilities:                
Accounts payable   $ 24,293     $ 15,704  
Insurance and claims accruals     30,907       28,103  
Accrued and other current liabilities     29,976       28,166  
Total current liabilities     85,176       71,973  
Deferred income taxes     108,578       105,977  
Noncurrent operating lease liabilities     451       -  
Total liabilities     194,205       177,950  
                 
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; 192,000,000 shares authorized; 54,633,188 shares at June 30, 2019, and 54,466,691 shares at December 31, 2018, issued and outstanding     546       545  
Additional paid-in capital     77,789       76,814  
Retained earnings     524,055       498,595  
Total stockholders’ equity     602,390       575,954  
Total liabilities and stockholders’ equity   $ 796,595     $ 753,904  
                 

MARTEN TRANSPORT, LTD.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)

             
    Three Months     Six Months  
    Ended June 30,     Ended June 30,  
(In thousands, except per share information)   2019     2018     2019     2018  
                                 
Operating revenue   $ 212,090     $ 197,024     $ 411,113     $ 383,984  
                                 
Operating expenses (income):                                
Salaries, wages and benefits     68,613       63,250       132,137       122,072  
Purchased transportation     38,668       35,048       76,917       70,074  
Fuel and fuel taxes     30,952       31,742       58,629       60,786  
Supplies and maintenance     11,502       10,251       22,623       20,687  
Depreciation     23,462       22,193       46,005       44,008  
Operating taxes and licenses     2,438       2,364       4,771       4,651  
Insurance and claims     9,862       8,941       19,737       19,231  
Communications and utilities     1,950       1,647       3,900       3,330  
Gain on disposition of revenue equipment     (1,230 )     (2,160 )     (2,778 )     (3,371 )
Other     5,929       5,525       11,495       10,699  
                                 
Total operating expenses     192,146       178,801       373,436       352,167  
                                 
Operating income     19,944       18,223       37,677       31,817  
                                 
Other     (395 )     (138 )     (673 )     (327 )
                                 
Income before income taxes     20,339       18,361       38,350       32,144  
                                 
Income taxes expense     5,149       4,659       9,614       8,111  
                                 
Net income   $ 15,190     $ 13,702     $ 28,736     $ 24,033  
                                 
Basic earnings per common share   $ 0.28     $ 0.25     $ 0.53     $ 0.44  
                                 
Diluted earnings per common share   $ 0.28     $ 0.25     $ 0.52     $ 0.44  
                                 
Dividends declared per common share   $ 0.03     $ 0.025     $ 0.06     $ 0.05  
                                 

MARTEN TRANSPORT, LTD. 
SEGMENT INFORMATION 
(Unaudited)   

                             
                    Dollar     Percentage  
                    Change     Change  
    Three Months     Three Months     Three Months  
    Ended     Ended     Ended  
    June 30,     June 30,     June 30,  
(Dollars in thousands)   2019     2018     2019 vs. 2018     2019 vs. 2018  
Operating revenue:                                
Truckload revenue, net of fuel surcharge revenue   $ 83,215     $ 80,525     $ 2,690       3.3 %
Truckload fuel surcharge revenue     12,807       13,879       (1,072 )     (7.7 )
Total Truckload revenue     96,022       94,404       1,618       1.7  
                                 
Dedicated revenue, net of fuel surcharge revenue     56,160       47,232       8,928       18.9  
Dedicated fuel surcharge revenue     10,850       9,739       1,111       11.4  
Total Dedicated revenue     67,010       56,971       10,039       17.6  
                                 
Intermodal revenue, net of fuel surcharge revenue     17,527       21,291       (3,764 )     (17.7 )
Intermodal fuel surcharge revenue     3,076       4,179       (1,103 )     (26.4 )
Total Intermodal revenue     20,603       25,470       (4,867 )     (19.1 )
                                 
Brokerage revenue     28,455       20,179       8,276       41.0  
                                 
Total operating revenue   $ 212,090     $ 197,024     $ 15,066       7.6 %
                                 
Operating income:                                
Truckload   $ 8,045     $ 8,689     $ (644 )     (7.4 )%
Dedicated     7,700       5,584       2,116       37.9  
Intermodal     1,536       2,512       (976 )     (38.9 )
Brokerage     2,663       1,438       1,225       85.2  
Total operating income   $ 19,944     $ 18,223     $ 1,721       9.4 %
                                 
Operating ratio:                                
Truckload     91.6 %     90.8 %                
Dedicated     88.5       90.2                  
Intermodal     92.5       90.1                  
Brokerage     90.6       92.9                  
Consolidated operating ratio     90.6 %     90.8 %                
                                 

MARTEN TRANSPORT, LTD. 
SEGMENT INFORMATION 
(Unaudited)

                             
                    Dollar     Percentage  
                    Change     Change  
    Six Months     Six Months     Six Months  
    Ended     Ended     Ended  
    June 30,     June 30,     June 30,  
(Dollars in thousands)   2019     2018     2019 vs. 2018     2019 vs. 2018  
Operating revenue:                                
Truckload revenue, net of fuel surcharge revenue   $ 163,382     $ 160,741     $ 2,641       1.6 %
Truckload fuel surcharge revenue     24,362       26,680       (2,318 )     (8.7 )
Total Truckload revenue     187,744       187,421       323       0.2  
                                 
Dedicated revenue, net of fuel surcharge revenue     105,084       89,596       15,488       17.3  
Dedicated fuel surcharge revenue     19,651       16,208       3,443       21.2  
Total Dedicated revenue     124,735       105,804       18,931       17.9  
                                 
Intermodal revenue, net of fuel surcharge revenue     37,282       42,099       (4,817 )     (11.4 )
Intermodal fuel surcharge revenue     6,292       8,023       (1,731 )     (21.6 )
Total Intermodal revenue     43,574       50,122       (6,548 )     (13.1 )
                                 
Brokerage revenue     55,060       40,637       14,423       35.5  
                                 
Total operating revenue   $ 411,113     $ 383,984     $ 27,129       7.1 %
                                 
Operating income:                                
Truckload   $ 15,600     $ 15,504     $ 96       0.6 %
Dedicated     13,215       8,072       5,143       63.7  
Intermodal     3,930       5,490       (1,560 )     (28.4 )
Brokerage     4,932       2,751       2,181       79.3  
Total operating income   $ 37,677     $ 31,817     $ 5,860       18.4 %
                                 
Operating ratio:                                
Truckload     91.7 %     91.7 %                
Dedicated     89.4       92.4                  
Intermodal     91.0       89.0                  
Brokerage     91.0       93.2                  
Consolidated operating ratio     90.8 %     91.7 %                
                                 

MARTEN TRANSPORT, LTD.
OPERATING STATISTICS
(Unaudited)

             
    Three Months     Six Months  
    Ended June 30,     Ended June 30,  
    2019     2018     2019     2018  
Truckload Segment:                                
Revenue (in thousands)   $ 96,022     $ 94,404     $ 187,744     $ 187,421  
Average revenue, net of fuel surcharges, per tractor per week(1)   $ 3,876     $ 3,795     $ 3,867     $ 3,736  
Average tractors(1)     1,652       1,632       1,634       1,664  
Average miles per trip     532       568       546       585  
Non-revenue miles percentage(2)     11.1 %     9.6 %     11.2 %     8.2 %
Total miles (in thousands)     39,077       39,502       76,313       80,084  
                                 
Dedicated Segment:                                
Revenue (in thousands)   $ 67,010     $ 56,971     $ 124,735     $ 105,804  
Average revenue, net of fuel surcharges, per tractor per week(1)   $ 3,460     $ 3,282     $ 3,424     $ 3,275  
Average tractors(1)     1,248       1,107       1,187       1,058  
Average miles per trip     314       300       318       299  
Non-revenue miles percentage(2)     0.7 %     0.7 %     0.7 %     0.9 %
Total miles (in thousands)     27,198       23,747       50,841       44,882  
                                 
Intermodal Segment:                                
Revenue (in thousands)   $ 20,603     $ 25,470     $ 43,574     $ 50,122  
Loads     8,430       10,622       17,681       21,359  
Average tractors     81       91       84       86  
                                 
Brokerage Segment:                                
Revenue (in thousands)   $ 28,455     $ 20,179     $ 55,060     $ 40,637  
Loads     16,185       12,120       31,451       24,009  
                                 
At June 30, 2019 and June 30, 2018:                                
Total tractors(1)     3,047       2,761                  
Average age of company tractors (in years)     1.9       1.6                  
Total trailers     5,437       5,402                  
Average age of company trailers (in years)     2.6       2.6                  
Ratio of trailers to tractors(1)     1.8       2.0                  

   

    Three Months     Six Months  
    Ended June 30,     Ended June 30,  
(In thousands)   2019     2018     2019     2018  
                                 
Net cash provided by operating activities   $ 36,706     $ 44,193     $ 73,509     $ 67,375  
Net cash (used for) investing activities     (38,267 )     (31,785 )     (44,178 )     (59,177 )
Net cash (used for) financing activities     (1,173 )     (803 )     (3,302 )     (1,986 )
                                 
Weighted average shares outstanding:                                
Basic     54,616       54,613       54,585       54,592  
Diluted     55,081       55,126       55,055       55,115  

       

(1 ) Includes tractors driven by both company-employed drivers and independent contractors. Independent contractors provided 55 and 52 tractors as of June 30, 2019 and 2018, respectively.
   
(2 ) Represents the percentage of miles for which the company is not compensated.