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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.


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