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Marten Transport Announces Second Quarter Results

MONDOVI, Wis., July 17, 2018 (GLOBE NEWSWIRE) -- Marten Transport, Ltd. (Nasdaq/GS:MRTN) today reported a 49.9% improvement in net income to $13.7 million, or 25 cents per diluted share, for the second quarter ended June 30, 2018, from $9.1 million, or 17 cents per diluted share, for the second quarter of 2017. The second quarter earnings improved 32.6% sequentially from 2018 first quarter net income of $10.3 million, or 19 cents per diluted share. Net income improved 38.5% to $24.0 million, or 44 cents per diluted share, for the first six months of 2018, from $17.4 million, or 32 cents per diluted share, for the first half of 2017.

Operating revenue improved 14.9% to $197.0 million for the second quarter of 2018 from $171.5 million for the second quarter of 2017, and improved 11.4% to $384.0 million for the first six months of 2018 from $344.7 million for the 2017 six-month period. Excluding fuel surcharges, operating revenue improved 8.5% to $169.2 million for the 2018 quarter from $155.9 million for the 2017 quarter, and improved 6.6% to $333.1 million for the first six months of 2018 from $312.5 million for the 2017 six-month period. Fuel surcharge revenue increased to $27.8 million for the 2018 quarter from $15.6 million for the 2017 quarter, and increased to $50.9 million for the first six months of 2018 from $32.2 million for the 2017 six-month period.

Operating expenses for the second quarter of 2018 were 90.8% of operating revenue, compared with 90.9% for the second quarter of 2017. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, improved to 89.2% for the second quarter of 2018 from 90.0% for the second quarter of 2017.

Operating expenses for the first six months of 2018 were 91.7% of operating revenue, compared with 91.4% for the 2017 six-month period. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, improved to 90.4% for the first six months of 2018 from 90.6% for the 2017 six-month period.

Chairman and Chief Executive Officer Randolph L. Marten said, “Our improved top- and bottom-line results demonstrate the balanced strength of Marten’s unique multifaceted business model, with significant increases in the operating income produced across our four distinct operating platforms – Truckload, Dedicated, Intermodal and Brokerage. With our talented people continuing to position our operations to capitalize on the strengthening freight environment, we expect to deliver continued growth with increasing compensation for our premium services, additional freight with existing and new customers, and our emphasis on operating efficiencies and cost controls.”

“Our agreements with a number of customers included a shift beginning in this year’s first quarter from line haul to fuel surcharge revenue, which reduced our Dedicated and Truckload revenue, net of fuel surcharges, by $200 and $43 per tractor per week in the second quarter, and by $155 and $28 per tractor per week in the first half of this year. The change reduced our revenue excluding fuel surcharges by $3.8 million for the second quarter and by $5.4 million for this year’s first six months, while increasing our fuel surcharge revenue by the same amounts.”

Marten Transport, with headquarters in Mondovi, Wis., 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 1,523 dry trailers operating as of June 30, 2018. Marten 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, 2017. 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
(Unaudited)
 
    June 30,     December 31,  
(In thousands, except share information)   2018     2017  
                 
ASSETS                
Current assets:                
Cash and cash equivalents   $ 22,003     $ 15,791  
Receivables:                
Trade, net     80,492       74,886  
Other     12,247       6,131  
Prepaid expenses and other     19,876       19,810  
Total current assets     134,618       116,618  
                 
Property and equipment:                
Revenue equipment, buildings and land, office equipment and other     805,723       783,648  
Accumulated depreciation     (218,071 )     (211,728 )
Net property and equipment     587,652       571,920  
Other assets     2,169       1,865  
Total assets   $ 724,439     $ 690,403  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Current liabilities:                
Accounts payable and accrued liabilities   $ 45,782     $ 38,100  
Insurance and claims accruals     25,574       26,177  
Total current liabilities     71,356       64,277  
Deferred income taxes     103,841       100,626  
Total liabilities     175,197       164,903  
                 
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; 54,659,074 shares at June 30, 2018, and 54,533,455
shares at December 31, 2017, issued and outstanding
    547       545  
Additional paid-in capital     78,366       76,413  
Retained earnings     470,329       448,542  
Total stockholders’ equity     549,242       525,500  
Total liabilities and stockholders’ equity   $ 724,439     $ 690,403  
                 

                                                                                                       

 
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)     2018       2017       2018       2017  
                                 
Operating revenue   $ 197,024     $ 171,511     $ 383,984     $ 344,670  
                                 
Operating expenses (income):                                
Salaries, wages and benefits     63,250       56,715       122,072       113,115  
Purchased transportation     35,048       27,516       70,074       56,878  
Fuel and fuel taxes     31,742       25,007       60,786       50,963  
Supplies and maintenance     10,251       10,541       20,687       21,531  
Depreciation     22,193       21,306       44,008       42,689  
Operating taxes and licenses     2,364       2,252       4,651       4,499  
Insurance and claims     8,941       8,848       19,231       17,762  
Communications and utilities     1,647       1,487       3,330       3,068  
Gain on disposition of revenue equipment     (2,160 )     (1,871 )     (3,371 )     (2,974 )
Other     5,525       4,141       10,699       7,632  
                                 
Total operating expenses     178,801       155,942       352,167       315,163  
                                 
Operating income     18,223       15,569       31,817       29,507  
                                 
Other     (138 )     125       (327 )     266  
                                 
Income before income taxes     18,361       15,444       32,144       29,241  
                                 
Income taxes expense     4,659       6,303       8,111       11,886  
                                 
Net income   $ 13,702     $ 9,141     $ 24,033     $ 17,355  
                                 
Basic earnings per common share   $ 0.25     $ 0.17     $ 0.44     $ 0.32  
                                 
Diluted earnings per common share   $ 0.25     $ 0.17     $ 0.44     $ 0.32  
                                 
Dividends declared per common share   $ 0.025     $ 0.015     $ 0.05     $ 0.03  
                                 


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)   2018     2017     2018 vs. 2017     2018 vs. 2017  
Operating revenue:                                
Truckload revenue, net of fuel surcharge revenue   $ 80,525     $ 84,480     $ (3,955 )     (4.7 )%
Truckload fuel surcharge revenue     13,879       10,434       3,445       33.0  
Total Truckload revenue     94,404       94,914       (510     (0.5 )
                                 
Dedicated revenue, net of fuel surcharge revenue     47,232       38,601       8,631       22.4  
Dedicated fuel surcharge revenue     9,739       2,901       6,838       235.7  
Total Dedicated revenue     56,971       41,502       15,469       37.3  
                                 
Intermodal revenue, net of fuel surcharge revenue     21,291       16,877       4,414       26.2  
Intermodal fuel surcharge revenue     4,179       2,238       1,941       86.7  
Total Intermodal revenue     25,470       19,115       6,355       33.2  
                                 
Brokerage revenue     20,179       15,980       4,199       26.3  
                                 
Total operating revenue   $ 197,024     $ 171,511     $ 25,513       14.9 %
                                 
Operating income:                                
Truckload   $ 8,689     $ 7,511     $ 1,178       15.7 %
Dedicated     5,584       5,074       510       10.1  
Intermodal     2,512       2,040       472       23.1  
Brokerage     1,438       944       494       52.3  
Total operating income   $ 18,223     $ 15,569     $ 2,654       17.0 %
                                 
Operating ratio:                                
Truckload     90.8 %     92.1 %                
Dedicated     90.2       87.8                  
Intermodal     90.1       89.3                  
Brokerage     92.9       94.1                  
Consolidated operating ratio     90.8 %     90.9 %                


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)   2018     2017     2018 vs. 2017     2018 vs. 2017  
Operating revenue:                                
Truckload revenue, net of fuel surcharge revenue   $ 160,741     $ 169,291     $ (8,550 )     (5.1 )%
Truckload fuel surcharge revenue     26,680       21,281       5,399       25.4  
Total Truckload revenue     187,421       190,572       (3,151     (1.7 )
                                 
Dedicated revenue, net of fuel surcharge revenue     89,596       75,500       14,096       18.7  
Dedicated fuel surcharge revenue     16,208       6,279       9,929       158.1  
Total Dedicated revenue     105,804       81,779       24,025       29.4  
                                 
Intermodal revenue, net of fuel surcharge revenue     42,099       33,688       8,411       25.0  
Intermodal fuel surcharge revenue     8,023       4,613       3,410       73.9  
Total Intermodal revenue     50,122       38,301       11,821       30.9  
                                 
Brokerage revenue     40,637       34,018       6,619       19.5  
                                 
Total operating revenue   $ 383,984     $ 344,670     $ 39,314       11.4 %
                                 
Operating income:                                
Truckload   $ 15,504     $ 13,485     $ 2,019       15.0 %
Dedicated     8,072       9,561       (1,489     (15.6 )
Intermodal     5,490       4,189       1,301       31.1  
Brokerage     2,751       2,272       479       21.1  
Total operating income   $ 31,817     $ 29,507     $ 2,310       7.8 %
                                 
Operating ratio:                                
Truckload     91.7 %     92.9 %                
Dedicated     92.4       88.3                  
Intermodal     89.0       89.1                  
Brokerage     93.2       93.3                  
Consolidated operating ratio     91.7 %     91.4 %                


 
MARTEN TRANSPORT, LTD.
OPERATING STATISTICS
(Unaudited)
 
    Three Months     Six Months  
    Ended June 30,     Ended June 30,  
    2018     2017     2018     2017  
Truckload Segment:                                
Revenue (in thousands)   $ 94,404     $ 94,914     $ 187,421     $ 190,572  
Average revenue, net of fuel surcharges, per tractor per week(1)   $ 3,795     $ 3,467     $ 3,736     $ 3,441  
Average tractors(1)     1,632       1,875       1,664       1,903  
Average miles per trip     568       589       585       602  
Non-revenue miles percentage(2)     9.6 %     9.0 %     8.2 %     9.3 %
Total miles (in thousands)     39,502       45,736       80,084       91,796  
                                 
Dedicated Segment:                                
Revenue (in thousands)   $ 56,971     $ 41,502     $ 105,804     $ 81,779  
Average revenue, net of fuel surcharges, per tractor per week(1)   $ 3,282     $ 3,488     $ 3,275     $ 3,475  
Average tractors(1)     1,107       851       1,058       840  
Average miles per trip     300       292       299       296  
Non-revenue miles percentage(2)     0.7 %     0.7 %     0.9 %     0.7 %
Total miles (in thousands)     23,747       19,357       44,882       37,936  
                                 
Intermodal Segment:                                
Revenue (in thousands)   $ 25,470     $ 19,115     $ 50,122     $ 38,301  
Loads     10,622       9,793       21,359       19,377  
Average tractors     91       81       86       79  
                                 
Brokerage Segment:                                
Revenue (in thousands)   $ 20,179     $ 15,980     $ 40,637     $ 34,018  
Loads     12,120       11,578       24,009       24,932  
                                 
At June 30, 2018 and June 30, 2017:                                
Total tractors(1)     2,761       2,711                  
Average age of company tractors (in years)     1.6       1.5                  
Total trailers     5,402       4,925                  
Average age of company trailers (in years)     2.6       2.8                  
Ratio of trailers to tractors(1)     2.0       1.8                  

   

    Three Months     Six Months  
    Ended June 30,     Ended June 30,  
(In thousands)   2018     2017     2018     2017  
                                 
Net cash provided by operating activities   $ 44,193     $ 27,546     $ 67,375     $ 65,220  
Net cash (used for) investing activities     (31,785 )     (26,003 )     (59,177 )     (46,965 )
Net cash (used for) financing activities     (803     (550 )     (1,986 )     (8,685 )
                                 
Weighted average shares outstanding:                                
Basic     54,613       54,493       54,592       54,459  
Diluted     55,126       54,802       55,115       54,772  


(1)   Includes tractors driven by both company-employed drivers and independent contractors. Independent contractors provided 52 and 63 tractors as of June 30, 2018 and 2017, respectively. 
   
(2)   Represents the percentage of miles for which the company is not compensated.

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