Marten Transport Announces Third Quarter Results

Marten Transport, Ltd.
·12 mins read

Operating income improves 21.8% and net income improves 8.8% over 2019 quarter

MONDOVI, Wis., Oct. 15, 2020 (GLOBE NEWSWIRE) -- Marten Transport, Ltd. (Nasdaq/GS:MRTN) today reported an 8.8% improvement in net income to $18.0 million, or 22 cents per diluted share, for the third quarter ended September 30, 2020, from $16.6 million, or 20 cents per diluted share, for the third quarter of 2019. For the first nine months of 2020, net income improved 10.1% to $49.9 million, or 60 cents per diluted share, from $45.3 million, or 55 cents per diluted share, for the first nine months of 2019.

Results for the 2020 quarter include a gain of $1.7 million on the disposition of a facility as part of Marten’s program to expand and update its facilities. This gain increased earnings for the 2020 quarter by $1.3 million, while earnings for the 2019 quarter increased by $1.4 million due to an additional income tax benefit.

Operating Results Comparison

Percentage

Percentage

Increase

Increase

Three Months

Nine Months

Ended

Ended

September 30,

September 30,

2020 vs. 2019

2020 vs. 2019

Operating revenue

0.5

%

3.3

%

Operating revenue, net of fuel surcharges

3.8

%

6.2

%

Operating income

21.8

%

17.3

%

Net income

8.8

%

10.1

%

Operating revenue improved to $216.0 million for the third quarter of 2020 from $215.0 million for the third quarter of 2019, and improved 3.3% to $647.0 million for the first nine months of 2020 from $626.1 million for the first nine months of 2019. Excluding fuel surcharges, operating revenue improved 3.8% to $196.1 million for the 2020 quarter from $188.9 million for the 2019 quarter, and improved 6.2% to $583.6 million for the first nine months of 2020 from $549.7 million for the first nine months of 2019. Fuel surcharge revenue decreased to $19.9 million for the 2020 quarter from $26.1 million for the 2019 quarter and decreased to $63.5 million for the first nine months of 2020 from $76.4 million for the first nine months of 2019 due to significantly lower fuel prices.

Operating income improved 21.8% to $24.4 million for the third quarter of 2020 from $20.0 million for the third quarter of 2019. Operating income improved 17.3% to $67.7 million for the first nine months of 2020 from $57.7 million for the first nine months of 2019. The operating income for the first nine months of 2020 was the highest for the first nine months of any year in Marten’s history.

Operating expenses as a percentage of operating revenue improved to 88.7% for the third quarter of 2020 from 90.7% for the third quarter of 2019. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, improved to 87.6% from 89.4%.

Operating expenses as a percentage of operating revenue improved to 89.5% for the first nine months of 2020 from 90.8% for the first nine months of 2019. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, improved to 88.4% from 89.5%.

Chairman and Chief Executive Officer Randolph L. Marten said, “Our talented and hard-working people continue to drive consistent profitable growth, with our operating income for the first nine months of this year the highest in our history and up 17.3% over the same period of 2019, and our operating ratio, net of fuel surcharges, the best ratio for the first nine months of any year since we became a public company in 1986. The operating income improvement is on top of strong growth in 2019 of 8.7% and in 2018 of 23.7%.”

“We improved our Truckload miles per tractor by 8.5% over the third quarter of 2019 and by 6.2% over the first nine months of 2019, demonstrating our strength of quickly making data-driven decisions and adjustments utilizing our in-house operating technology. We also have been increasing and will continue to increase the compensation for our premium services within the tightening freight market. We expect to build on our success in expanding the capacity we provide within our unique multifaceted business model to support our diverse and growing customer base by offering the best jobs for the industry’s top, experienced drivers.”

“We embrace our responsibility to keep our valued employees safe and healthy as they each contribute to our transporting and distributing the food, beverages and other consumer goods essential to millions of people in North America.”

Marten Transport, with headquarters in Mondovi, Wis., is a multifaceted business offering a network of refrigerated and dry 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, beverages and other consumer packaged goods that require a temperature-controlled or insulated environment. 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 Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 and in Part II, Item 1A of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020. 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

September 30,

December 31,

(In thousands, except share information)

2020

2019

(Unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$

88,279

$

31,461

Receivables:

Trade, net

80,719

90,712

Other

2,908

11,055

Prepaid expenses and other

20,640

20,938

Total current assets

192,546

154,166

Property and equipment:

Revenue equipment, buildings and land, office equipment and other

943,058

904,237

Accumulated depreciation

(278,488

)

(263,843

)

Net property and equipment

664,570

640,394

Other noncurrent assets

1,950

2,026

Total assets

$

859,066

$

796,586

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

24,563

$

22,917

Insurance and claims accruals

36,629

31,729

Accrued and other current liabilities

26,755

21,680

Total current liabilities

87,947

76,326

Deferred income taxes

125,890

122,022

Noncurrent operating lease liabilities

521

649

Total liabilities

214,358

198,997

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; 82,680,849 shares at September 30, 2020, and
82,055,199 shares at December 31, 2019, issued and outstanding

827

821

Additional paid-in capital

84,389

79,465

Retained earnings

559,492

517,303

Total stockholders’ equity

644,708

597,589

Total liabilities and stockholders’ equity

$

859,066

$

796,586


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)

2020

2019

2020

2019

Operating revenue

$

216,011

$

214,973

$

647,041

$

626,086

Operating expenses (income):

Salaries, wages and benefits

74,797

69,312

221,034

201,449

Purchased transportation

37,066

40,435

113,676

117,352

Fuel and fuel taxes

24,268

31,275

73,433

89,904

Supplies and maintenance

12,440

12,116

36,501

34,739

Depreciation

25,580

24,290

76,979

70,295

Operating taxes and licenses

2,749

2,651

8,003

7,422

Insurance and claims

11,243

9,618

35,160

29,355

Communications and utilities

1,999

1,901

5,961

5,801

Gain on disposition of revenue equipment

(2,128

)

(2,559

)

(5,899

)

(5,337

)

Gain on disposition of facility

(1,718

)

-

(1,718

)

-

Other

5,315

5,900

16,223

17,395

Total operating expenses

191,611

194,939

579,353

568,375

Operating income

24,400

20,034

67,688

57,711

Other

(17

)

(255

)

(127

)

(928

)

Income before income taxes

24,417

20,289

67,815

58,639

Income taxes expense

6,373

3,702

17,919

13,316

Net income

$

18,044

$

16,587

$

49,896

$

45,323

Basic earnings per common share

$

0.22

$

0.20

$

0.61

$

0.55

Diluted earnings per common share

$

0.22

$

0.20

$

0.60

$

0.55

Dividends declared per common share

$

0.04

$

0.453

$

0.093

$

0.493


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)

2020

2019

2020 vs. 2019

2020 vs. 2019

Operating revenue:

Truckload revenue, net of fuel surcharge revenue

$

85,074

$

82,931

$

2,143

2.6

%

Truckload fuel surcharge revenue

8,549

12,056

(3,507

)

(29.1

)

Total Truckload revenue

93,623

94,987

(1,364

)

(1.4

)

Dedicated revenue, net of fuel surcharge revenue

69,002

59,281

9,721

16.4

Dedicated fuel surcharge revenue

9,335

11,053

(1,718

)

(15.5

)

Total Dedicated revenue

78,337

70,334

8,003

11.4

Intermodal revenue, net of fuel surcharge revenue

19,991

19,336

655

3.4

Intermodal fuel surcharge revenue

1,985

2,961

(976

)

(33.0

)

Total Intermodal revenue

21,976

22,297

(321

)

(1.4

)

Brokerage revenue

22,075

27,355

(5,280

)

(19.3

)

Total operating revenue

$

216,011

$

214,973

$

1,038

0.5

%

Operating income:

Truckload

$

10,546

$

6,956

$

3,590

51.6

%

Dedicated

11,024

9,920

1,104

11.1

Intermodal

1,304

1,210

94

7.8

Brokerage

1,526

1,948

(422

)

(21.7

)

Total operating income

$

24,400

$

20,034

$

4,366

21.8

%

Operating ratio:

Truckload

88.7

%

92.7

%

Dedicated

85.9

85.9

Intermodal

94.1

94.6

Brokerage

93.1

92.9

Consolidated operating ratio

88.7

%

90.7

%



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)

2020

2019

2020 vs. 2019

2020 vs. 2019

Operating revenue:

Truckload revenue, net of fuel surcharge revenue

$

254,897

$

246,313

$

8,584

3.5

%

Truckload fuel surcharge revenue

28,058

36,418

(8,360

)

(23.0

)

Total Truckload revenue

282,955

282,731

224

0.1

Dedicated revenue, net of fuel surcharge revenue

200,237

164,365

35,872

21.8

Dedicated fuel surcharge revenue

28,564

30,704

(2,140

)

(7.0

)

Total Dedicated revenue

228,801

195,069

33,732

17.3

Intermodal revenue, net of fuel surcharge revenue

59,127

56,618

2,509

4.4

Intermodal fuel surcharge revenue

6,830

9,253

(2,423

)

(26.2

)

Total Intermodal revenue

65,957

65,871

86

0.1

Brokerage revenue

69,328

82,415

(13,087

)

(15.9

)

Total operating revenue

$

647,041

$

626,086

$

20,955

3.3

%

Operating income:

Truckload

$

28,367

$

22,556

$

5,811

25.8

%

Dedicated

31,009

23,135

7,874

34.0

Intermodal

3,564

5,140

(1,576

)

(30.7

)

Brokerage

4,748

6,880

(2,132

)

(31.0

)

Total operating income

$

67,688

$

57,711

$

9,977

17.3

%

Operating ratio:

Truckload

90.0

%

92.0

%

Dedicated

86.4

88.1

Intermodal

94.6

92.2

Brokerage

93.2

91.7

Consolidated operating ratio

89.5

%

90.8

%



MARTEN TRANSPORT, LTD.
OPERATING STATISTICS
(Unaudited)

Three Months

Nine Months

Ended September 30,

Ended September 30,

2020

2019

2020

2019

Truckload Segment:

Revenue (in thousands)

$

93,623

$

94,987

$

282,955

$

282,731

Average revenue, net of fuel surcharges, per tractor per week(1)

$

3,955

$

3,723

$

3,865

$

3,818

Average tractors(1)

1,637

1,695

1,685

1,654

Average miles per trip

546

545

554

545

Non-revenue miles percentage(2)

10.2

%

11.8

%

10.8

%

11.4

%

Total miles (in thousands)

41,210

39,326

125,082

115,639

Dedicated Segment:

Revenue (in thousands)

$

78,337

$

70,334

$

228,801

$

195,069

Average revenue, net of fuel surcharges, per tractor per week(1)

$

3,295

$

3,392

$

3,304

$

3,412

Average tractors(1)

1,593

1,329

1,548

1,235

Average miles per trip

304

312

306

316

Non-revenue miles percentage(2)

0.7

%

0.7

%

0.7

%

0.7

%

Total miles (in thousands)

33,843

28,859

98,553

79,700

Intermodal Segment:

Revenue (in thousands)

$

21,976

$

22,297

$

65,957

$

65,871

Loads

9,306

8,897

27,736

26,578

Average tractors

99

87

99

85

Brokerage Segment:

Revenue (in thousands)

$

22,075

$

27,355

$

69,328

$

82,415

Loads

13,670

16,059

45,058

47,510

At September 30, 2020 and September 30, 2019:

Total tractors(1)

3,329

3,137

Average age of company tractors (in years)

1.7

1.8

Total trailers

5,368

5,562

Average age of company trailers (in years)

2.9

2.6

Ratio of trailers to tractors(1)

1.6

1.8



Three Months

Nine Months

Ended September 30,

Ended September 30,

(In thousands)

2020

2019

2020

2019

Net cash provided by operating activities

$

50,640

$

46,920

$

154,707

$

122,021

Net cash (used for) investing activities

(34,558

)

(52,719

)

(93,748

)

(98,489

)

Net cash (used for) financing activities

(3,126

)

(36,513

)

(4,141

)

(39,815

)

Weighted average shares outstanding:

Basic

82,672

81,982

82,472

81,912

Diluted

83,279

82,701

83,098

82,618


(1

)

Includes tractors driven by both company-employed drivers and independent contractors. Independent contractors provided 132 and 75 tractors as of September 30, 2020 and 2019, respectively.

(2

)

Represents the percentage of miles for which the company is not compensated.