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Marten Transport Announces Third Quarter Results

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

MONDOVI, Wis., Oct. 17, 2019 (GLOBE NEWSWIRE) -- Marten Transport, Ltd. (Nasdaq/GS:MRTN) today reported the highest operating revenue and operating income for any quarter in its history, with the previous record for each set in this year’s second quarter. For the third quarter ended September 30, 2019, net income improved 8.7% to $16.6 million, or 30 cents per diluted share, from $15.3 million, or 28 cents per diluted share, for the third quarter of 2018. For the first nine months of 2019, net income improved 15.4% to $45.3 million, or 82 cents per diluted share, from $39.3 million, or 71 cents per diluted share, for the first nine months of 2018. Earnings for the 2019 quarter include an additional income tax benefit of $1.4 million, or 2.5 cents per diluted share, while the 2018 quarter’s earnings include an additional income tax benefit of $493,000, or one cent per diluted share, net of related operating expenses.

       
  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   Nine Months   Trailing Twelve  
      Ended   Ended   Months Ended  
      September 30,   September 30,   September 30,  
      2019 vs. 2018   2019 vs. 2018   2019 vs. 2018  
                       
  Operating revenue   7.7   7.3 %   8.3 %  
                       
  Operating income   5.5 %   13.6 %   18.6 %  
                       
  Net income   8.7 %   15.4 %   27.5 %  
                       
  Diluted earnings per common share   8.8 %   15.5 %   27.6 %  
     

Operating revenue improved 7.7% to a record $215.0 million for the third quarter of 2019 from $199.6 million for the third quarter of 2018, and improved 7.3% to $626.1 million for the first nine months of 2019 from $583.6 million for the first nine months of 2018. For the trailing twelve months ended September 30, 2019, operating revenue improved 8.3% to $830.0 million from $766.4 million for the similar period ended September 30, 2018. Excluding fuel surcharges, operating revenue improved 10.0% to $188.9 million for the 2019 quarter from $171.8 million for the 2018 quarter, and improved 8.9% to $549.7 million for the first nine months of 2019 from $504.9 million for the first nine months of 2018. Fuel surcharge revenue decreased to $26.1 million for the 2019 quarter from $27.9 million for the 2018 quarter, and decreased to $76.4 million for the first nine months of 2019 from $78.8 million for the first nine months of 2018.

Operating income improved 5.5% to a record $20.0 million for the third quarter of 2019 from $19.0 million for the third quarter of 2018, and improved 13.6% to $57.7 million for the first nine months of 2019 from $50.8 million for the first nine months of 2018. For the trailing twelve months ended September 30, 2019, operating income improved 18.6% to $77.2 million from $65.1 million for the similar period ended September 30, 2018. 

Operating expenses as a percentage of operating revenue were 90.7% for the third quarter of 2019, compared with 90.5% for the third quarter of 2018. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, were 89.4% for the 2019 quarter, compared with 88.9% for the 2018 quarter.

Operating expenses as a percentage of operating revenue improved to 90.8% for the first nine months of 2019 from 91.3% for the first nine months of 2018. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, improved to 89.5% from 89.9%.

Operating expenses as a percentage of operating revenue improved to 90.7% for the trailing twelve months ended September 30, 2019 from 91.5% for the similar period ended September 30, 2018. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, improved to 89.4% from 90.3%.

Chairman and Chief Executive Officer Randolph L. Marten said, “We earned the highest operating revenue and operating income for any quarter in our history, exceeding the previous record for each we produced in this year’s second quarter. Our talented people consistently deliver this profitable growth through the disciplined execution of our unique multifaceted business model across our diverse customer base - and overcame the negative impact of the recent hurricane and flooding on our Southeast and Texas operations during the third quarter. We added 43 Truckload and 41 Dedicated tractors this quarter, increasing our year-to-date growth to 149 Truckload and 230 Dedicated tractors, a combined 14.2% fleet growth since the beginning of the year. We expect to continue expanding our capacity to service our customers by offering the best jobs for the industry’s best drivers.”

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 1,718 dry vans operating as of September 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

    September 30,     December 31,  
(In thousands, except share information)   2019     2018  
     (Unaudited)          
ASSETS                
Current assets:                
Cash and cash equivalents   $ 40,480     $ 56,763  
Receivables:                
Trade, net     85,149       83,033  
Other     3,694       3,808  
Prepaid expenses and other     18,576       19,924  
Total current assets     147,899       163,528  
                 
Property and equipment:                
Revenue equipment, buildings and land, office equipment and other     891,326       816,430  
Accumulated depreciation     (261,474 )     (228,200 )
Net property and equipment     629,852       588,230  
Other noncurrent assets     3,204       2,146  
Total assets   $ 780,955     $ 753,904  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Current liabilities:                
Accounts payable   $ 27,777     $ 15,704  
Insurance and claims accruals     30,647       28,103  
Accrued and other current liabilities     26,506       28,166  
Total current liabilities     84,930       71,973  
Deferred income taxes     112,454       105,977  
Noncurrent operating lease liabilities     714       -  
Total liabilities     198,098       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; 54,687,065 shares at September 30, 2019, and 54,466,691 shares at December 31, 2018, issued and outstanding     547       545  
Additional paid-in capital     78,840       76,814  
Retained earnings     503,470       498,595  
Total stockholders’ equity     582,857       575,954  
Total liabilities and stockholders’ equity   $ 780,955     $ 753,904  
                 


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)     2019     2018     2019     2018  
                                 
Operating revenue   $ 214,973     $ 199,649     $ 626,086     $ 583,633  
                                 
Operating expenses (income):                                
Salaries, wages and benefits     69,312       64,051       201,449       186,123  
Purchased transportation     40,435       35,867       117,352       105,941  
Fuel and fuel taxes     31,275       31,658       89,904       92,444  
Supplies and maintenance     12,116       10,574       34,739       31,261  
Depreciation     24,290       22,272       70,295       66,280  
Operating taxes and licenses     2,651       2,404       7,422       7,055  
Insurance and claims     9,618       8,567       29,355       27,798  
Communications and utilities     1,901       1,663       5,801       4,993  
Gain on disposition of revenue equipment     (2,559 )     (1,835 )     (5,337 )     (5,206 )
Other     5,900       5,435       17,395       16,134  
                                 
Total operating expenses     194,939       180,656       568,375       532,823  
                                 
Operating income     20,034       18,993       57,711       50,810  
                                 
Other     (255 )     (120 )     (928 )     (447 )
                                 
Income before income taxes     20,289       19,113       58,639       51,257  
                                 
Income taxes expense     3,702       3,856       13,316       11,967  
                                 
Net income   $ 16,587     $ 15,257     $ 45,323     $ 39,290  
                                 
Basic earnings per common share   $ 0.30     $ 0.28     $ 0.83     $ 0.72  
                                 
Diluted earnings per common share   $ 0.30     $ 0.28     $ 0.82     $ 0.71  
                                 
Dividends declared per common share   $ 0.68     $ 0.025     $ 0.74     $ 0.075  
                                 


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)   2019     2018     2019 vs. 2018     2019 vs. 2018  
Operating revenue:                                
Truckload revenue, net of fuel surcharge revenue   $ 82,931     $ 80,563     $ 2,368       2.9 %
Truckload fuel surcharge revenue     12,056       13,357       (1,301 )     (9.7 )
Total Truckload revenue     94,987       93,920       1,067       1.1  
                                 
Dedicated revenue, net of fuel surcharge revenue     59,281       48,500       10,781       22.2  
Dedicated fuel surcharge revenue     11,053       10,291       762       7.4  
Total Dedicated revenue     70,334       58,791       11,543       19.6  
                                 
Intermodal revenue, net of fuel surcharge revenue     19,336       21,735       (2,399 )     (11.0 )
Intermodal fuel surcharge revenue     2,961       4,204       (1,243 )     (29.6 )
Total Intermodal revenue     22,297       25,939       (3,642 )     (14.0 )
                                 
Brokerage revenue     27,355       20,999       6,356       30.3  
                                 
Total operating revenue   $ 214,973     $ 199,649     $ 15,324       7.7 %
                                 
Operating income:                                
Truckload   $ 6,956     $ 10,026     $ (3,070 )     (30.6 )%
Dedicated     9,920       5,249       4,671       89.0  
Intermodal     1,210       2,507       (1,297 )     (51.7 )
Brokerage     1,948       1,211       737       60.9  
Total operating income   $ 20,034     $ 18,993     $ 1,041       5.5 %
                                 
Operating ratio:                                
Truckload     92.7 %     89.3 %                
Dedicated     85.9       91.1                  
Intermodal     94.6       90.3                  
Brokerage     92.9       94.2                  
Consolidated operating ratio     90.7 %     90.5 %                

                                                                                                                                           

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)   2019     2018     2019 vs. 2018     2019 vs. 2018  
Operating revenue:                                
Truckload revenue, net of fuel surcharge revenue   $ 246,313     $ 241,304     $ 5,009       2.1 %
Truckload fuel surcharge revenue     36,418       40,037       (3,619 )     (9.0 )
Total Truckload revenue     282,731       281,341       1,390       0.5  
                                 
Dedicated revenue, net of fuel surcharge revenue     164,365       138,096       26,269       19.0  
Dedicated fuel surcharge revenue     30,704       26,499       4,205       15.9  
Total Dedicated revenue     195,069       164,595       30,474       18.5  
                                 
Intermodal revenue, net of fuel surcharge revenue     56,618       63,834       (7,216 )     (11.3 )
Intermodal fuel surcharge revenue     9,253       12,227       (2,974 )     (24.3 )
Total Intermodal revenue     65,871       76,061       (10,190 )     (13.4 )
                                 
Brokerage revenue     82,415       61,636       20,779       33.7  
                                 
Total operating revenue   $ 626,086     $ 583,633     $ 42,453       7.3 %
                                 
Operating income:                                
Truckload   $ 22,556     $ 25,530     $ (2,974 )     (11.6 )%
Dedicated     23,135       13,321       9,814       73.7  
Intermodal     5,140       7,997       (2,857 )     (35.7 )
Brokerage     6,880       3,962       2,918       73.6  
Total operating income   $ 57,711     $ 50,810     $ 6,901       13.6 %
                                 
Operating ratio:                                
Truckload     92.0 %     90.9 %                
Dedicated     88.1       91.9                  
Intermodal     92.2       89.5                  
Brokerage     91.7       93.6                  
Consolidated operating ratio     90.8 %     91.3 %                


MARTEN TRANSPORT, LTD.
OPERATING STATISTICS
(Unaudited)   

    Three Months     Nine Months  
    Ended September 30,     Ended September 30,  
    2019     2018     2019     2018  
Truckload Segment:                                
Revenue (in thousands)   $ 94,987     $ 93,920     $ 282,731     $ 281,341  
Average revenue, net of fuel surcharges, per tractor per week(1)   $ 3,723     $ 3,925     $ 3,818     $ 3,797  
Average tractors(1)     1,695       1,561       1,654       1,629  
Average miles per trip     545       564       545       578  
Non-revenue miles percentage(2)     11.8 %     10.4 %     11.4 %     8.9 %
Total miles (in thousands)     39,326       37,259       115,639       117,343  
                                 
Dedicated Segment:                                
Revenue (in thousands)   $ 70,334     $ 58,791     $ 195,069     $ 164,595  
Average revenue, net of fuel surcharges, per tractor per week(1)   $ 3,392     $ 3,287     $ 3,412     $ 3,279  
Average tractors(1)     1,329       1,123       1,235       1,080  
Average miles per trip     312       317       316       305  
Non-revenue miles percentage(2)     0.7 %     0.6 %     0.7 %     0.8 %
Total miles (in thousands)     28,859       24,362       79,700       69,244  
                                 
Intermodal Segment:                                
Revenue (in thousands)   $ 22,297     $ 25,939     $ 65,871     $ 76,061  
Loads     8,897       10,573       26,578       31,932  
Average tractors     87       89       85       87  
                                 
Brokerage Segment:                                
Revenue (in thousands)   $ 27,355     $ 20,999     $ 82,415     $ 61,636  
Loads     16,059       12,781       47,510       36,790  
                                 
At September 30, 2019 and September 30, 2018:                                
Total tractors(1)     3,137       2,751                  
Average age of company tractors (in years)     1.8       1.6                  
Total trailers     5,562       5,397                  
Average age of company trailers (in years)     2.6       2.6                  
Ratio of trailers to tractors(1)     1.8       2.0                  

   

    Three Months     Nine Months  
    Ended September 30,     Ended September 30,  
(In thousands)   2019     2018     2019     2018  
                                 
Net cash provided by operating activities   $ 46,101     $ 44,722     $ 119,610     $ 112,097  
Net cash (used for) investing activities     (51,900 )     (29,665 )     (96,078 )     (88,842 )
Net cash (used for) financing activities     (36,513     (1,321 )     (39,815 )     (3,307 )
                                 
Weighted average shares outstanding:                                
Basic     54,655       54,661       54,608       54,615  
Diluted     55,134       55,194       55,078       55,151  

       

(1) Includes tractors driven by both company-employed drivers and independent contractors. Independent contractors provided 75 and 50 tractors as of September 30, 2019 and 2018, respectively. 
   
(2) Represents the percentage of miles for which the company is not compensated.