Marten Transport Announces Third Quarter Results

Operating income improves 21.8% and net income improves 8.8% over 2019 quarter

MONDOVI, Wis., Oct. 15, 2020 (GLOBE NEWSWIRE) -- Marten Transport, Ltd. (Nasdaq/GS:MRTN) today reported an 8.8% improvement in net income to $18.0 million, or 22 cents per diluted share, for the third quarter ended September 30, 2020, from $16.6 million, or 20 cents per diluted share, for the third quarter of 2019. For the first nine months of 2020, net income improved 10.1% to $49.9 million, or 60 cents per diluted share, from $45.3 million, or 55 cents per diluted share, for the first nine months of 2019.

Results for the 2020 quarter include a gain of $1.7 million on the disposition of a facility as part of Marten’s program to expand and update its facilities. This gain increased earnings for the 2020 quarter by $1.3 million, while earnings for the 2019 quarter increased by $1.4 million due to an additional income tax benefit.

	Operating Results Comparison
						Percentage			Percentage
						Increase			Increase
						Three Months			Nine Months
						Ended			Ended
						September 30,			September 30,
						2020 vs. 2019			2020 vs. 2019
	Operating revenue					0.5	%		3.3	%
	Operating revenue, net of fuel surcharges					3.8	%		6.2	%
	Operating income					21.8	%		17.3	%
	Net income					8.8	%		10.1	%

Operating revenue improved to $216.0 million for the third quarter of 2020 from $215.0 million for the third quarter of 2019, and improved 3.3% to $647.0 million for the first nine months of 2020 from $626.1 million for the first nine months of 2019. Excluding fuel surcharges, operating revenue improved 3.8% to $196.1 million for the 2020 quarter from $188.9 million for the 2019 quarter, and improved 6.2% to $583.6 million for the first nine months of 2020 from $549.7 million for the first nine months of 2019. Fuel surcharge revenue decreased to $19.9 million for the 2020 quarter from $26.1 million for the 2019 quarter and decreased to $63.5 million for the first nine months of 2020 from $76.4 million for the first nine months of 2019 due to significantly lower fuel prices.

Operating income improved 21.8% to $24.4 million for the third quarter of 2020 from $20.0 million for the third quarter of 2019. Operating income improved 17.3% to $67.7 million for the first nine months of 2020 from $57.7 million for the first nine months of 2019. The operating income for the first nine months of 2020 was the highest for the first nine months of any year in Marten’s history.

Operating expenses as a percentage of operating revenue improved to 88.7% for the third quarter of 2020 from 90.7% for the third quarter of 2019. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, improved to 87.6% from 89.4%.

Operating expenses as a percentage of operating revenue improved to 89.5% for the first nine months of 2020 from 90.8% for the first nine months of 2019. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, improved to 88.4% from 89.5%.

Chairman and Chief Executive Officer Randolph L. Marten said, “Our talented and hard-working people continue to drive consistent profitable growth, with our operating income for the first nine months of this year the highest in our history and up 17.3% over the same period of 2019, and our operating ratio, net of fuel surcharges, the best ratio for the first nine months of any year since we became a public company in 1986. The operating income improvement is on top of strong growth in 2019 of 8.7% and in 2018 of 23.7%.”

“We improved our Truckload miles per tractor by 8.5% over the third quarter of 2019 and by 6.2% over the first nine months of 2019, demonstrating our strength of quickly making data-driven decisions and adjustments utilizing our in-house operating technology. We also have been increasing and will continue to increase the compensation for our premium services within the tightening freight market. We expect to build on our success in expanding the capacity we provide within our unique multifaceted business model to support our diverse and growing customer base by offering the best jobs for the industry’s top, experienced drivers.”

“We embrace our responsibility to keep our valued employees safe and healthy as they each contribute to our transporting and distributing the food, beverages and other consumer goods essential to millions of people in North America.”

Marten Transport, with headquarters in Mondovi, Wis., is a multifaceted business offering a network of refrigerated and dry 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, beverages and other consumer packaged goods that require a temperature-controlled or insulated environment. 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 Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 and in Part II, Item 1A of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020. 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

		September 30,				December 31,
(In thousands, except share information)		2020				2019
			(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	88,279			$	31,461
Receivables:
Trade, net			80,719				90,712
Other			2,908				11,055
Prepaid expenses and other			20,640				20,938
Total current assets			192,546				154,166
Property and equipment:
Revenue equipment, buildings and land, office equipment and other			943,058				904,237
Accumulated depreciation			(278,488	)			(263,843	)
Net property and equipment			664,570				640,394
Other noncurrent assets			1,950				2,026
Total assets		$	859,066			$	796,586
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	24,563			$	22,917
Insurance and claims accruals			36,629				31,729
Accrued and other current liabilities			26,755				21,680
Total current liabilities			87,947				76,326
Deferred income taxes			125,890				122,022
Noncurrent operating lease liabilities			521				649
Total liabilities			214,358				198,997
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; 82,680,849 shares at September 30, 2020, and 82,055,199 shares at December 31, 2019, issued and outstanding			827				821
Additional paid-in capital			84,389				79,465
Retained earnings			559,492				517,303
Total stockholders’ equity			644,708				597,589
Total liabilities and stockholders’ equity		$	859,066			$	796,586

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

		Three Months								Nine Months
		Ended September 30,								Ended September 30,
(In thousands, except per share information)		2020				2019				2020				2019
Operating revenue		$	216,011			$	214,973			$	647,041			$	626,086
Operating expenses (income):
Salaries, wages and benefits			74,797				69,312				221,034				201,449
Purchased transportation			37,066				40,435				113,676				117,352
Fuel and fuel taxes			24,268				31,275				73,433				89,904
Supplies and maintenance			12,440				12,116				36,501				34,739
Depreciation			25,580				24,290				76,979				70,295
Operating taxes and licenses			2,749				2,651				8,003				7,422
Insurance and claims			11,243				9,618				35,160				29,355
Communications and utilities			1,999				1,901				5,961				5,801
Gain on disposition of revenue equipment			(2,128	)			(2,559	)			(5,899	)			(5,337	)
Gain on disposition of facility			(1,718	)			-				(1,718	)			-
Other			5,315				5,900				16,223				17,395
Total operating expenses			191,611				194,939				579,353				568,375
Operating income			24,400				20,034				67,688				57,711
Other			(17	)			(255	)			(127	)			(928	)
Income before income taxes			24,417				20,289				67,815				58,639
Income taxes expense			6,373				3,702				17,919				13,316
Net income		$	18,044			$	16,587			$	49,896			$	45,323
Basic earnings per common share		$	0.22			$	0.20			$	0.61			$	0.55
Diluted earnings per common share		$	0.22			$	0.20			$	0.60			$	0.55
Dividends declared per common share		$	0.04			$	0.453			$	0.093			$	0.493

MARTEN TRANSPORT, LTD.
SEGMENT INFORMATION
(Unaudited)

										Dollar				Percentage
										Change				Change
		Three Months								Three Months				Three Months
		Ended								Ended				Ended
		September 30,								September 30,				September 30,
(Dollars in thousands)		2020				2019				2020 vs. 2019				2020 vs. 2019
Operating revenue:
Truckload revenue, net of fuel surcharge revenue		$	85,074			$	82,931			$	2,143				2.6	%
Truckload fuel surcharge revenue			8,549				12,056				(3,507	)			(29.1	)
Total Truckload revenue			93,623				94,987				(1,364	)			(1.4	)
Dedicated revenue, net of fuel surcharge revenue			69,002				59,281				9,721				16.4
Dedicated fuel surcharge revenue			9,335				11,053				(1,718	)			(15.5	)
Total Dedicated revenue			78,337				70,334				8,003				11.4
Intermodal revenue, net of fuel surcharge revenue			19,991				19,336				655				3.4
Intermodal fuel surcharge revenue			1,985				2,961				(976	)			(33.0	)
Total Intermodal revenue			21,976				22,297				(321	)			(1.4	)
Brokerage revenue			22,075				27,355				(5,280	)			(19.3	)
Total operating revenue		$	216,011			$	214,973			$	1,038				0.5	%
Operating income:
Truckload		$	10,546			$	6,956			$	3,590				51.6	%
Dedicated			11,024				9,920				1,104				11.1
Intermodal			1,304				1,210				94				7.8
Brokerage			1,526				1,948				(422	)			(21.7	)
Total operating income		$	24,400			$	20,034			$	4,366				21.8	%
Operating ratio:
Truckload			88.7	%			92.7	%
Dedicated			85.9				85.9
Intermodal			94.1				94.6
Brokerage			93.1				92.9
Consolidated operating ratio			88.7	%			90.7	%

MARTEN TRANSPORT, LTD.
SEGMENT INFORMATION
(Unaudited)

										Dollar				Percentage
										Change				Change
		Nine Months								Nine Months				Nine Months
		Ended								Ended				Ended
		September 30,								September 30,				September 30,
(Dollars in thousands)		2020				2019				2020 vs. 2019				2020 vs. 2019
Operating revenue:
Truckload revenue, net of fuel surcharge revenue		$	254,897			$	246,313			$	8,584				3.5	%
Truckload fuel surcharge revenue			28,058				36,418				(8,360	)			(23.0	)
Total Truckload revenue			282,955				282,731				224				0.1
Dedicated revenue, net of fuel surcharge revenue			200,237				164,365				35,872				21.8
Dedicated fuel surcharge revenue			28,564				30,704				(2,140	)			(7.0	)
Total Dedicated revenue			228,801				195,069				33,732				17.3
Intermodal revenue, net of fuel surcharge revenue			59,127				56,618				2,509				4.4
Intermodal fuel surcharge revenue			6,830				9,253				(2,423	)			(26.2	)
Total Intermodal revenue			65,957				65,871				86				0.1
Brokerage revenue			69,328				82,415				(13,087	)			(15.9	)
Total operating revenue		$	647,041			$	626,086			$	20,955				3.3	%
Operating income:
Truckload		$	28,367			$	22,556			$	5,811				25.8	%
Dedicated			31,009				23,135				7,874				34.0
Intermodal			3,564				5,140				(1,576	)			(30.7	)
Brokerage			4,748				6,880				(2,132	)			(31.0	)
Total operating income		$	67,688			$	57,711			$	9,977				17.3	%
Operating ratio:
Truckload			90.0	%			92.0	%
Dedicated			86.4				88.1
Intermodal			94.6				92.2
Brokerage			93.2				91.7
Consolidated operating ratio			89.5	%			90.8	%

MARTEN TRANSPORT, LTD.
OPERATING STATISTICS
(Unaudited)

		Three Months								Nine Months
		Ended September 30,								Ended September 30,
		2020				2019				2020				2019
Truckload Segment:
Revenue (in thousands)		$	93,623			$	94,987			$	282,955			$	282,731
Average revenue, net of fuel surcharges, per tractor per week(1)		$	3,955			$	3,723			$	3,865			$	3,818
Average tractors(1)			1,637				1,695				1,685				1,654
Average miles per trip			546				545				554				545
Non-revenue miles percentage(2)			10.2	%			11.8	%			10.8	%			11.4	%
Total miles (in thousands)			41,210				39,326				125,082				115,639
Dedicated Segment:
Revenue (in thousands)		$	78,337			$	70,334			$	228,801			$	195,069
Average revenue, net of fuel surcharges, per tractor per week(1)		$	3,295			$	3,392			$	3,304			$	3,412
Average tractors(1)			1,593				1,329				1,548				1,235
Average miles per trip			304				312				306				316
Non-revenue miles percentage(2)			0.7	%			0.7	%			0.7	%			0.7	%
Total miles (in thousands)			33,843				28,859				98,553				79,700
Intermodal Segment:
Revenue (in thousands)		$	21,976			$	22,297			$	65,957			$	65,871
Loads			9,306				8,897				27,736				26,578
Average tractors			99				87				99				85
Brokerage Segment:
Revenue (in thousands)		$	22,075			$	27,355			$	69,328			$	82,415
Loads			13,670				16,059				45,058				47,510
At September 30, 2020 and September 30, 2019:
Total tractors(1)			3,329				3,137
Average age of company tractors (in years)			1.7				1.8
Total trailers			5,368				5,562
Average age of company trailers (in years)			2.9				2.6
Ratio of trailers to tractors(1)			1.6				1.8

		Three Months								Nine Months
		Ended September 30,								Ended September 30,
(In thousands)		2020				2019				2020				2019
Net cash provided by operating activities		$	50,640			$	46,920			$	154,707			$	122,021
Net cash (used for) investing activities			(34,558	)			(52,719	)			(93,748	)			(98,489	)
Net cash (used for) financing activities			(3,126	)			(36,513	)			(4,141	)			(39,815	)
Weighted average shares outstanding:
Basic			82,672				81,982				82,472				81,912
Diluted			83,279				82,701				83,098				82,618

(1	)	Includes tractors driven by both company-employed drivers and independent contractors. Independent contractors provided 132 and 75 tractors as of September 30, 2020 and 2019, respectively.
(2	)	Represents the percentage of miles for which the company is not compensated.