Marten Transport Announces Fourth Quarter and Year End Results

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

MONDOVI, Wis., Jan. 23, 2020 (GLOBE NEWSWIRE) -- Marten Transport, Ltd. (Nasdaq/GS:MRTN) today reported the highest operating revenue and operating income for any year in its history. For each of the fourth quarters ended December 31, 2019 and December 31, 2018, net income was $15.7 million, or 29 cents per diluted share. For the year ended December 31, 2019, net income improved 11.0% to $61.1 million, or $1.11 per diluted share, from $55.0 million, or $1.00 per diluted share, for 2018.

	Operating Results Comparison
	Net income used to calculate the percentage increase from 2017 to 2018 below excludes a $56.5 million deferred income tax benefit in the fourth quarter of 2017.
			Percentage			Percentage			Percentage
			Change			Change			Change
			Year			Year			Three Months
			Ended			Ended			Ended
			December 31,			December 31,			December 31,
			2019 vs. 2018			2018 vs. 2017			2019 vs. 2018
	Operating revenue		7.1	%		12.8	%		6.5	%
	Operating income		8.7	%		23.7	%		(3.8	)%
	Net income		11.0	%		62.7	%		0.1	%

Operating revenue improved 6.5% to $217.2 million for the fourth quarter of 2019 from $204.0 million for the fourth quarter of 2018, and improved 7.1% to a record $843.3 million for 2019 from $787.6 million for 2018. Excluding fuel surcharges, operating revenue improved 7.7% to $190.2 million for the 2019 quarter from $176.5 million for the 2018 quarter, and improved 8.6% to $739.9 million for 2019 from $681.4 million for 2018. Fuel surcharge revenue decreased slightly to $27.0 million for the 2019 quarter from $27.4 million for the 2018 quarter, and decreased to $103.4 million for 2019 from $106.2 million for 2018.

Operating income was $18.8 million for the fourth quarter of 2019, compared with $19.5 million for the fourth quarter of 2018, and improved 8.7% to a record $76.5 million for 2019 from $70.3 million for 2018.

Operating expenses as a percentage of operating revenue were 91.3% for the fourth quarter of 2019, compared with 90.4% for the fourth quarter of 2018. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, were 90.1% for the 2019 quarter, compared with 88.9% for the 2018 quarter.

Operating expenses as a percentage of operating revenue improved to 90.9% for 2019 from 91.1% for 2018. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, were 89.7% for each year.

Chairman and Chief Executive Officer Randolph L. Marten said, “Our talented people earned the highest operating revenue and operating income for any year in our history, exceeding the previous records set for each in 2018 by 7.1% and 8.7%, respectively. We overcame a softer freight environment to deliver our best operating ratio, net of fuel surcharges, over the last 14 years through the disciplined execution of our unique multifaceted business model across our diverse customer base. We added 329 Dedicated and 101 Truckload tractors throughout 2019, profitably growing the size of our fleet by 16.1% since the beginning of the year – and expect to continue to expand our capacity in 2020. We’re off to a strong start with recent awards of new dedicated business with several customers for over 185 additional tractors starting in 2019’s fourth and 2020’s first quarters.”

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 1,650 dry vans operating as of December 31, 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

		December 31,				December 31,
(In thousands, except share information)		2019				2018
			(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	31,461			$	56,763
Receivables:
Trade, net			90,712				83,033
Other			11,055				3,808
Prepaid expenses and other			20,938				19,924
Total current assets			154,166				163,528
Property and equipment:
Revenue equipment, buildings and land, office equipment and other			904,237				816,430
Accumulated depreciation			(263,843	)			(228,200	)
Net property and equipment			640,394				588,230
Other noncurrent assets			2,026				2,146
Total assets		$	796,586			$	753,904
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	22,917			$	15,704
Insurance and claims accruals			31,729				28,103
Accrued and other current liabilities			21,680				28,166
Total current liabilities			76,326				71,973
Deferred income taxes			122,022				105,977
Noncurrent operating lease liabilities			649				-
Total liabilities			198,997				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; 54,703,466 shares at December 31, 2019, and 54,466,691 shares at December 31, 2018, issued and outstanding			547				545
Additional paid-in capital			79,465				76,814
Retained earnings			517,577				498,595
Total stockholders’ equity			597,589				575,954
Total liabilities and stockholders’ equity		$	796,586			$	753,904

MARTEN TRANSPORT, LTD.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)

		Three Months								Year
		Ended December 31,								Ended December 31,
(In thousands, except per share information)		2019				2018				2019				2018
Operating revenue		$	217,185			$	203,961			$	843,271			$	787,594
Operating expenses (income):
Salaries, wages and benefits			72,707				65,924				274,156				252,047
Purchased transportation			41,596				38,670				158,948				144,611
Fuel and fuel taxes			31,437				29,189				121,341				121,633
Supplies and maintenance			11,998				9,592				46,737				40,853
Depreciation			24,842				22,305				95,137				88,585
Operating taxes and licenses			2,678				2,418				10,100				9,473
Insurance and claims			8,846				10,859				38,201				38,657
Communications and utilities			1,908				1,641				7,709				6,634
Gain on disposition of revenue equipment			(3,343	)			(2,038	)			(8,680	)			(7,244	)
Other			5,729				5,863				23,124				21,997
Total operating expenses			198,398				184,423				766,773				717,246
Operating income			18,787				19,538				76,498				70,348
Other			(262	)			(234	)			(1,190	)			(681	)
Income before income taxes			19,049				19,772				77,688				71,029
Income taxes expense			3,301				4,035				16,617				16,002
Net income		$	15,748			$	15,737			$	61,071			$	55,027
Basic earnings per common share		$	0.29			$	0.29			$	1.12			$	1.01
Diluted earnings per common share		$	0.29			$	0.29			$	1.11			$	1.00
Dividends declared per common share		$	0.03			$	0.025			$	0.77			$	0.10

MARTEN TRANSPORT, LTD.
SEGMENT INFORMATION
(Unaudited)

										Dollar				Percentage
										Change				Change
		Three Months								Three Months				Three Months
		Ended								Ended				Ended
		December 31,								December 31,				December 31,
(Dollars in thousands)		2019				2018				2019 vs. 2018				2019 vs. 2018
Operating revenue:
Truckload revenue, net of fuel surcharge revenue		$	82,991			$	81,020			$	1,971				2.4	%
Truckload fuel surcharge revenue			12,278				12,979				(701	)			(5.4	)
Total Truckload revenue			95,269				93,999				1,270				1.4
Dedicated revenue, net of fuel surcharge revenue			59,570				49,041				10,529				21.5
Dedicated fuel surcharge revenue			11,345				10,216				1,129				11.1
Total Dedicated revenue			70,915				59,257				11,658				19.7
Intermodal revenue, net of fuel surcharge revenue			21,132				21,738				(606	)			(2.8	)
Intermodal fuel surcharge revenue			3,391				4,226				(835	)			(19.8	)
Total Intermodal revenue			24,523				25,964				(1,441	)			(5.5	)
Brokerage revenue			26,478				24,741				1,737				7.0
Total operating revenue		$	217,185			$	203,961			$	13,224				6.5	%
Operating income:
Truckload		$	7,110			$	9,537			$	(2,427	)			(25.4	)%
Dedicated			8,110				5,268				2,842				53.9
Intermodal			1,472				3,153				(1,681	)			(53.3	)
Brokerage			2,095				1,580				515				32.6
Total operating income		$	18,787			$	19,538			$	(751	)			(3.8	)%
Operating ratio:
Truckload			92.5	%			89.9	%
Dedicated			88.6				91.1
Intermodal			94.0				87.9
Brokerage			92.1				93.6
Consolidated operating ratio			91.3	%			90.4	%

MARTEN TRANSPORT, LTD.
SEGMENT INFORMATION
(Unaudited)

										Dollar				Percentage
										Change				Change
		Year								Year				Year
		Ended								Ended				Ended
		December 31,								December 31,				December 31,
(Dollars in thousands)		2019				2018				2019 vs. 2018				2019 vs. 2018
Operating revenue:
Truckload revenue, net of fuel surcharge revenue		$	329,304			$	322,324			$	6,980				2.2	%
Truckload fuel surcharge revenue			48,696				53,016				(4,320	)			(8.1	)
Total Truckload revenue			378,000				375,340				2,660				0.7
Dedicated revenue, net of fuel surcharge revenue			223,935				187,137				36,798				19.7
Dedicated fuel surcharge revenue			42,049				36,715				5,334				14.5
Total Dedicated revenue			265,984				223,852				42,132				18.8
Intermodal revenue, net of fuel surcharge revenue			77,750				85,572				(7,822	)			(9.1	)
Intermodal fuel surcharge revenue			12,644				16,453				(3,809	)			(23.2	)
Total Intermodal revenue			90,394				102,025				(11,631	)			(11.4	)
Brokerage revenue			108,893				86,377				22,516				26.1
Total operating revenue		$	843,271			$	787,594			$	55,677				7.1	%
Operating income:
Truckload		$	29,666			$	35,067			$	(5,401	)			(15.4	)%
Dedicated			31,245				18,589				12,656				68.1
Intermodal			6,612				11,150				(4,538	)			(40.7	)
Brokerage			8,975				5,542				3,433				61.9
Total operating income		$	76,498			$	70,348			$	6,150				8.7	%
Operating ratio:
Truckload			92.2	%			90.7	%
Dedicated			88.3				91.7
Intermodal			92.7				89.1
Brokerage			91.8				93.6
Consolidated operating ratio			90.9	%			91.1	%

MARTEN TRANSPORT, LTD.
OPERATING STATISTICS
(Unaudited)

		Three Months								Year
		Ended December 31,								Ended December 31,
		2019				2018				2019				2018
Truckload Segment:
Revenue (in thousands)		$	95,269			$	93,999			$	378,000			$	375,340
Average revenue, net of fuel surcharges, per tractor per week(1)		$	3,736			$	3,941			$	3,797			$	3,833
Average tractors(1)			1,690				1,564				1,663				1,613
Average miles per trip			554				558				548				573
Non-revenue miles percentage(2)			12.0	%			11.4	%			11.6	%			9.5	%
Total miles (in thousands)			39,538				36,171				155,177				153,514
Dedicated Segment:
Revenue (in thousands)		$	70,915			$	59,257			$	265,984			$	223,852
Average revenue, net of fuel surcharges, per tractor per week(1)		$	3,286			$	3,360			$	3,378			$	3,300
Average tractors(1)			1,380				1,111				1,272				1,088
Average miles per trip			313				321				315				309
Non-revenue miles percentage(2)			0.6	%			0.5	%			0.7	%			0.7	%
Total miles (in thousands)			29,114				24,025				108,814				93,269
Intermodal Segment:
Revenue (in thousands)		$	24,523			$	25,964			$	90,394			$	102,025
Loads			9,731				10,493				36,309				42,425
Average tractors			107				91				91				88
Brokerage Segment:
Revenue (in thousands)		$	26,478			$	24,741			$	108,893			$	86,377
Loads			15,690				14,314				63,200				51,104
At December 31, 2019 and December 31, 2018:
Total tractors(1)			3,212				2,755
Average age of company tractors (in years)			1.8				1.7
Total trailers			5,464				5,347
Average age of company trailers (in years)			2.4				2.5
Ratio of trailers to tractors(1)			1.7				1.9

   

		Three Months								Year
		Ended December 31,								Ended December 31,
(In thousands)		2019				2018				2019				2018
Net cash provided by operating activities		$	33,570			$	38,526			$	153,180			$	150,623
Net cash (used for) investing activities			(41,151	)			(12,428	)			(137,229	)			(101,270	)
Net cash (used for) financing activities			(1,438	)			(5,074	)			(41,253	)			(8,381	)
Weighted average shares outstanding:
Basic			54,695				54,514				54,630				54,590
Diluted			55,216				55,014				55,113				55,149

       

(1	)	Includes tractors driven by both company-employed drivers and independent contractors. Independent contractors provided 92 and 46 tractors as of December 31, 2019 and 2018, respectively.
(2	)	Represents the percentage of miles for which the company is not compensated.