Marten Transport Announces Third Quarter Results - Marten Transport (NASDAQ:MRTN)

MONDOVI, Wis., Oct. 19, 2017 (GLOBE NEWSWIRE) -- Marten Transport, Ltd. (Nasdaq/GS:MRTN) today reported net income of $7.9 million, or 14 cents per diluted share, for the third quarter ended September 30, 2017, compared with $8.4 million, or 15 cents per diluted share, for the third quarter of 2016. Net income was $25.2 million, or 46 cents per diluted share, for the first nine months of both 2017 and 2016.

Operating revenue increased to $170.7 million for the third quarter of 2017 from $170.5 million for the third quarter of 2016, and increased to $515.3 million for the first nine months of 2017 from $498.5 million for the 2016 nine-month period. Operating revenue, net of fuel surcharges, was $155.0 million for the 2017 quarter compared with $155.8 million for the 2016 quarter, and improved 1.5% to $467.5 million for the 2017 nine-month period from $460.5 million for the 2016 nine-month period. Fuel surcharge revenue increased to $15.6 million for the 2017 quarter from $14.7 million for the 2016 quarter, and increased to $47.8 million for the first nine months of 2017 from $37.9 million for the 2016 nine-month period.

Operating expenses as a percentage of operating revenue was 92.4% for the third quarter of 2017 and 91.3% for the third quarter of 2016. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, was 91.6% for the third quarter of 2017 and 90.5% for the third quarter of 2016.

Operating expenses as a percentage of operating revenue was 91.7% for the 2017 nine-month period and 91.2% for the 2016 nine-month period. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, was 90.9% for the 2017 nine-month period and 90.5% for the 2016 nine-month period.

Chairman and Chief Executive Officer Randolph L. Marten said, "The improvement in our revenue per tractor for the third quarter did not offset the increase in our operating expenses related to insurance and claims and fuel, the decrease in our gain on disposition of revenue equipment and the negative impact of the recent hurricanes on our Texas and Southeast operations. In October we have been awarded new dedicated business for over 200 additional tractors starting in this year's fourth quarter. We continue to believe that we are well-positioned to capitalize on further profitable growth opportunities with our unique and diversified transportation service solutions."

On July 7, 2017, Marten effected a five-for-three stock split of its common stock, $.01 par value, in the form of a 66 ⅔% stock dividend. The consolidated condensed financial statements have been adjusted to give retroactive effect to the stock split for all periods presented.

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 936 dry trailers operating as of September 30, 2017. 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 our 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, 2016. The Company undertakes no obligation to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise.


MARTEN TRANSPORT, LTD.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)

	September 30,			December 31,
(In thousands, except share information)	2017			2016

ASSETS
Current assets:
Cash and cash equivalents	$	1,159		$	488
Receivables:
Trade, net		72,919			69,199
Other		4,541			4,436
Prepaid expenses and other		16,263			19,307
Total current assets		94,882			93,430

Property and equipment:
Revenue equipment, buildings and land, office equipment and other		781,451			759,553
Accumulated depreciation		(201,882	)		(201,728	)
Net property and equipment		579,569			557,825
Other assets		1,856			2,493
Total assets	$	676,307		$	653,748

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	39,938		$	41,230
Insurance and claims accruals		25,197			19,440
Total current liabilities		65,135			60,670
Long-term debt		-			7,886
Deferred income taxes		149,846			147,854
Total liabilities		214,981			216,410

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; 96,000,000 shares authorized; 54,521,790 shares at September 30, 2017, and 54,391,525 shares at December 31, 2016, issued and outstanding		545			544
Additional paid-in capital		75,951			74,175
Retained earnings		384,830			362,619
Total stockholders' equity		461,326			437,338
Total liabilities and stockholders' equity	$	676,307		$	653,748

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)	2017			2016			2017			2016

Operating revenue	$	170,679		$	170,464		$	515,349		$	498,483

Operating expenses (income):
Salaries, wages and benefits		53,594			57,090			166,709			168,116
Purchased transportation		28,668			27,775			85,546			81,997
Fuel and fuel taxes		26,143			24,845			77,106			68,405
Supplies and maintenance		10,381			11,618			31,912			33,025
Depreciation		21,186			20,790			63,875			61,205
Operating taxes and licenses		2,314			2,297			6,813			6,732
Insurance and claims		11,336			8,194			29,098			23,245
Communications and utilities		1,463			1,584			4,531			4,701
Gain on disposition of revenue equipment		(1,908	)		(3,325	)		(4,882	)		(7,462	)
Other		4,480			4,727			12,112			14,749

Total operating expenses		157,657			155,595			472,820			454,713

Operating income		13,022			14,869			42,529			43,770

Other		14			342			280			794

Income before income taxes		13,008			14,527			42,249			42,976

Provision for income taxes		5,153			6,090			17,039			17,815

Net income	$	7,855		$	8,437		$	25,210		$	25,161

Basic earnings per common share	$	0.14		$	0.16		$	0.46		$	0.46

Diluted earnings per common share	$	0.14		$	0.15		$	0.46		$	0.46

Dividends declared per common share	$	0.025		$	0.015		$	0.055		$	0.045

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)	2017			2016			2017 vs. 2016			2017 vs. 2016
Operating revenue:
Truckload revenue, net of fuel surcharge revenue	$	81,836		$	85,469		$	(3,633	)		(4.3	)%
Truckload fuel surcharge revenue		10,172			9,726			446			4.6
Total Truckload revenue		92,008			95,195			(3,187	)		(3.3	)

Dedicated revenue, net of fuel surcharge revenue		39,154			37,669			1,485			3.9
Dedicated fuel surcharge revenue		2,995			2,967			28			0.9
Total Dedicated revenue		42,149			40,636			1,513			3.7

Intermodal revenue, net of fuel surcharge revenue		17,423			16,381			1,042			6.4
Intermodal fuel surcharge revenue		2,472			1,979			493			24.9
Total Intermodal revenue		19,895			18,360			1,535			8.4

Brokerage revenue		16,627			16,273			354			2.2

Total operating revenue	$	170,679		$	170,464		$	215			0.1	%

Operating income:
Truckload	$	5,764		$	6,509		$	(745	)		(11.4	)%
Dedicated		4,514			5,505			(991	)		(18.0	)
Intermodal		1,588			1,645			(57	)		(3.5	)
Brokerage		1,156			1,210			(54	)		(4.5	)
Total operating income	$	13,022		$	14,869		$	(1,847	)		(12.4	)%

Operating ratio:
Truckload		93.7	%		93.2	%
Dedicated		89.3			86.5
Intermodal		92.0			91.0
Brokerage		93.0			92.6

Consolidated operating ratio		92.4	%		91.3	%

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)	2017			2016			2017 vs. 2016			2017 vs. 2016
Operating revenue:
Truckload revenue, net of fuel surcharge revenue	$	251,127		$	253,514		$	(2,387	)		(0.9	)%
Truckload fuel surcharge revenue		31,453			25,771			5,682			22.0
Total Truckload revenue		282,580			279,285			3,295			1.2

Dedicated revenue, net of fuel surcharge revenue		114,654			109,833			4,821			4.4
Dedicated fuel surcharge revenue		9,274			7,175			2,099			29.3
Total Dedicated revenue		123,928			117,008			6,920			5.9

Intermodal revenue, net of fuel surcharge revenue		51,111			48,353			2,758			5.7
Intermodal fuel surcharge revenue		7,085			4,990			2,095			42.0
Total Intermodal revenue		58,196			53,343			4,853			9.1

Brokerage revenue		50,645			48,847			1,798			3.7

Total operating revenue	$	515,349		$	498,483		$	16,866			3.4	%

Operating income:
Truckload	$	19,249		$	20,400		$	(1,151	)		(5.6	)%
Dedicated		14,075			14,963			(888	)		(5.9	)
Intermodal		5,777			5,396			381			7.1
Brokerage		3,428			3,011			417			13.8
Total operating income	$	42,529		$	43,770		$	(1,241	)		(2.8	)%

Operating ratio:
Truckload		93.2	%		92.7	%
Dedicated		88.6			87.2
Intermodal		90.1			89.9
Brokerage		93.2			93.8

Consolidated operating ratio		91.7	%		91.2	%

MARTEN TRANSPORT, LTD.
OPERATING STATISTICS
(Unaudited)

	Three Months						Nine Months
	Ended September 30,						Ended September 30,
	2017			2016			2017			2016
Truckload Segment:
Revenue (in thousands)	$	92,008		$	95,195		$	282,580		$	279,285
Average revenue, net of fuel surcharges, per tractor per week⁽¹⁾	$	3,484		$	3,440		$	3,455		$	3,417
Average tractors⁽¹⁾		1,787			1,890			1,863			1,896
Average miles per trip		592			617			598			628
Non-revenue miles percentage⁽²⁾		8.1	%		9.2	%		8.9	%		9.3	%
Total miles (in thousands)		43,340			46,734			135,136			137,495

Dedicated Segment:
Revenue (in thousands)	$	42,149		$	40,636		$	123,928		$	117,008
Average revenue, net of fuel surcharges, per tractor per week⁽¹⁾	$	3,441		$	3,471		$	3,463		$	3,426
Average tractors⁽¹⁾		866			826			849			819
Average miles per trip		299			295			297			304
Non-revenue miles percentage⁽²⁾		0.6	%		0.7	%		0.7	%		0.8	%
Total miles (in thousands)		19,705			19,035			57,641			56,507

Intermodal Segment:
Revenue (in thousands)	$	19,895		$	18,360		$	58,196		$	53,343
Loads		10,265			9,223			29,642			26,674
Average tractors		78			75			79			76

Brokerage Segment:
Revenue (in thousands)	$	16,627		$	16,273		$	50,645		$	48,847
Loads		11,672			12,416			36,604			36,795

At September 30, 2017 and September 30, 2016:
Total tractors⁽¹⁾		2,649			2,770
Average age of company tractors (in years)		1.4			1.5
Total trailers		4,915			4,880
Average age of company trailers (in years)		2.8			2.7
Ratio of trailers to tractors⁽¹⁾		1.9			1.8

	Three Months						Nine Months
	Ended September 30,						Ended September 30,
(In thousands)	2017			2016			2017			2016

Net cash provided by operating activities	$	29,490		$	24,119		$	94,710		$	104,270
Net cash (used for) investing activities		(37,050	)		(29,164	)		(84,015	)		(68,842	)
Net cash provided by (used for) financing activities		(1,339	)		5,012			(10,024	)		(35,687	)

Weighted average shares outstanding:
Basic		54,517			54,218			54,479			54,126
Diluted		54,890			54,526			54,803			54,422

(1) Includes tractors driven by both company-employed drivers and independent contractors. Independent contractors provided 63 and 72 tractors as of September 30, 2017 and 2016, respectively.

(2) Represents the percentage of miles for which the company is not compensated.

CONTACTS: Tim Kohl, President, and Jim Hinnendael, Executive Vice President and Chief Financial Officer, of Marten Transport, Ltd., 715-926-4216.

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