Marten Transport Announces Third Quarter Results

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

Mondovi, Wisconsin, UNITED STATES


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.

                                                                                

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.

 


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