MONDOVI, Wis. — 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. |
