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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Marten Transport Announces Second Quarter Results

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