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Marten Transport Announces Third Quarter Results

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

MONDOVI, Wis., Oct. 16, 2018 (GLOBE NEWSWIRE) -- Marten Transport, Ltd. (Nasdaq/GS:MRTN) today reported the highest operating income and operating revenue for any quarter in its history. For the third quarter ended September 30, 2018, net income improved 94.2% to $15.3 million, or 28 cents per diluted share, from $7.9 million, or 14 cents per diluted share, for the third quarter of 2017. For the first nine months of 2018, net income improved 55.9% to $39.3 million, or 71 cents per diluted share, from $25.2 million, or 46 cents per diluted share, for the first nine months of 2017. Earnings for the third quarter of 2018 include an additional income tax benefit of $493,000, or one cent per diluted share, net of related expenses.

Operating income improved 45.9% to a record $19.0 million for the third quarter of 2018 from $13.0 million for the third quarter of 2017, and improved 19.5% to $50.8 million for the first nine months of 2018 from $42.5 million for the 2017 nine-month period. The third quarter operating income also improved 4.2% sequentially from second quarter of 2018 operating income of $18.2 million.

Operating revenue improved 17.0% to a record $199.6 million for the third quarter of 2018 from $170.7 million for the third quarter of 2017, and improved 13.3% to $583.6 million for the first nine months of 2018 from $515.3 million for the 2017 nine-month period. Excluding fuel surcharges, operating revenue improved 10.8% to $171.8 million for the 2018 quarter from $155.0 million for the 2017 quarter, and improved 8.0% to $504.9 million for the first nine months of 2018 from $467.5 million for the 2017 nine-month period. Fuel surcharge revenue increased to $27.9 million for the 2018 quarter from $15.6 million for the 2017 quarter, and increased to $78.8 million for the first nine months of 2018 from $47.8 million for the 2017 nine-month period.

Operating expenses for the third quarter of 2018 improved to 90.5% of operating revenue from 92.4% for the third quarter of 2017. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, improved to 88.9% for the third quarter of 2018 from 91.6% for the third quarter of 2017.

Operating expenses for the first nine months of 2018 improved to 91.3% of operating revenue from 91.7% for the 2017 nine-month period. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, improved to 89.9% for the first nine months of 2018 from 90.9% for the 2017 nine-month period.

Chairman and Chief Executive Officer Randolph L. Marten said, “We are encouraged by our record operating income and operating revenue in this quarter, along with our best operating ratio, net of fuel surcharges, over the last 14 quarters. These top- and bottom-line results are a direct result of the continued disciplined execution of our unique multifaceted business model by our dedicated and experienced Marten workforce while capitalizing on the strengthened freight environment. We also improved our balance sheet position with $35.7 million in cash at September 30, 2018 compared with $15.8 million at the beginning of the year. We expect to drive continued growth across all of our operating platforms with increasing compensation for our premium services, additional freight with existing and new customers, and our emphasis on operating efficiencies and cost controls.”

“Our agreements with a number of customers included a shift beginning in this year’s first quarter from line haul to fuel surcharge revenue, which reduced our Dedicated and Truckload revenue, net of fuel surcharges, by $200 and $43 per tractor per week in the third quarter, and by $171 and $33 per tractor per week in the first nine months of this year. The change reduced our revenue excluding fuel surcharges by $3.8 million for the third quarter and by $9.3 million for this year’s first nine months, while increasing our fuel surcharge revenue by the same amounts.”

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 1,580 dry trailers operating as of September 30, 2018. 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 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, 2017. 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)   2018     2017  
       (Unaudited)          
ASSETS                
Current assets:                
Cash and cash equivalents   $ 35,739     $ 15,791  
Receivables:                
Trade, net     84,055       74,886  
Other     6,993       6,131  
Prepaid expenses and other     18,816       19,810  
Total current assets     145,603       116,618  
                 
Property and equipment:                
Revenue equipment, buildings and land, office equipment and other     820,523       783,648  
Accumulated depreciation     (223,087 )     (211,728 )
Net property and equipment     597,436       571,920  
Other assets     2,281       1,865  
  Total assets   $ 745,320     $ 690,403  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Current liabilities:                
Accounts payable and accrued liabilities   $ 48,259     $ 38,100  
Insurance and claims accruals     25,295       26,177  
Total current liabilities     73,554       64,277  
Deferred income taxes     107,696       100,626  
Total liabilities     181,250       164,903  
                 
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; 54,662,924 shares at September 30, 2018, and 54,533,455 shares at December 31, 2017, issued and outstanding     547       545  
Additional paid-in capital     79,304       76,413  
Retained earnings     484,219       448,542  
Total stockholders’ equity     564,070       525,500  
Total liabilities and stockholders’ equity   $ 745,320     $ 690,403  
                 


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)     2018       2017       2018       2017  
                                 
Operating revenue   $ 199,649     $ 170,679     $ 583,633     $ 515,349  
                                 
Operating expenses (income):                                
Salaries, wages and benefits     64,051       53,594       186,123       166,709  
Purchased transportation     35,867       28,668       105,941       85,546  
Fuel and fuel taxes     31,658       26,143       92,444       77,106  
Supplies and maintenance     10,574       10,381       31,261       31,912  
Depreciation     22,272       21,186       66,280       63,875  
Operating taxes and licenses     2,404       2,314       7,055       6,813  
Insurance and claims     8,567       11,336       27,798       29,098  
Communications and utilities     1,663       1,463       4,993       4,531  
Gain on disposition of revenue equipment     (1,835 )     (1,908 )     (5,206 )     (4,882 )
Other     5,435       4,480       16,134       12,112  
                                 
Total operating expenses     180,656       157,657       532,823       472,820  
                                 
Operating income     18,993       13,022       50,810       42,529  
                                 
Other     (120 )     14       (447 )     280  
                                 
Income before income taxes     19,113       13,008       51,257       42,249  
                                 
Income taxes expense     3,856       5,153       11,967       17,039  
                                 
Net income   $ 15,257     $ 7,855     $ 39,290     $ 25,210  
                                 
Basic earnings per common share   $ 0.28     $ 0.14     $ 0.72     $ 0.46  
                                 
Diluted earnings per common share   $ 0.28     $ 0.14     $ 0.71     $ 0.46  
                                 
Dividends declared per common share   $ 0.025     $ 0.025     $ 0.075     $ 0.055  
                                 

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)   2018     2017     2018 vs. 2017     2018 vs. 2017  
Operating revenue:                                
Truckload revenue, net of fuel surcharge revenue   $ 80,563     $ 81,836     $ (1,273 )     (1.6 )%
Truckload fuel surcharge revenue     13,357       10,172       3,185       31.3  
Total Truckload revenue     93,920       92,008       1,912       2.1  
                                 
Dedicated revenue, net of fuel surcharge revenue     48,500       39,154       9,346       23.9  
Dedicated fuel surcharge revenue     10,291       2,995       7,296       243.6  
Total Dedicated revenue     58,791       42,149       16,642       39.5  
                                 
Intermodal revenue, net of fuel surcharge revenue     21,735       17,423       4,312       24.7  
Intermodal fuel surcharge revenue     4,204       2,472       1,732       70.1  
Total Intermodal revenue     25,939       19,895       6,044       30.4  
                                 
Brokerage revenue     20,999       16,627       4,372       26.3  
                                 
Total operating revenue   $ 199,649     $ 170,679     $ 28,970       17.0 %
                                 
Operating income:                                
Truckload   $ 10,026     $ 5,764     $ 4,262       73.9 %
Dedicated     5,249       4,514       735       16.3  
Intermodal     2,507       1,588       919       57.9  
Brokerage     1,211       1,156       55       4.8  
Total operating income   $ 18,993     $ 13,022     $ 5,971       45.9 %
                                 
Operating ratio:                                
Truckload     89.3 %     93.7 %                
Dedicated     91.1       89.3                  
Intermodal     90.3       92.0                  
Brokerage     94.2       93.0                  
Consolidated operating ratio     90.5 %     92.4 %                
                                 

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)   2018     2017     2018 vs. 2017     2018 vs. 2017  
Operating revenue:                                
Truckload revenue, net of fuel surcharge revenue   $ 241,304     $ 251,127     $ (9,823 )     (3.9 )%
Truckload fuel surcharge revenue     40,037       31,453       8,584       27.3  
Total Truckload revenue     281,341       282,580       (1,239     (0.4 )
                                 
Dedicated revenue, net of fuel surcharge revenue     138,096       114,654       23,442       20.4  
Dedicated fuel surcharge revenue     26,499       9,274       17,225       185.7  
Total Dedicated revenue     164,595       123,928       40,667       32.8  
                                 
Intermodal revenue, net of fuel surcharge revenue     63,834       51,111       12,723       24.9  
Intermodal fuel surcharge revenue     12,227       7,085       5,142       72.6  
Total Intermodal revenue     76,061       58,196       17,865       30.7  
                                 
Brokerage revenue     61,636       50,645       10,991       21.7  
                                 
Total operating revenue   $ 583,633     $ 515,349     $ 68,284       13.3 %
                                 
Operating income:                                
Truckload   $ 25,530     $ 19,249     $ 6,281       32.6 %
Dedicated     13,321       14,075       (754     (5.4 )
Intermodal     7,997       5,777       2,220       38.4  
Brokerage     3,962       3,428       534       15.6  
Total operating income   $ 50,810     $ 42,529     $ 8,281       19.5 %
                                 
Operating ratio:                                
Truckload     90.9 %     93.2 %                
Dedicated     91.9       88.6                  
Intermodal     89.5       90.1                  
Brokerage     93.6       93.2                  
Consolidated operating ratio     91.3 %     91.7 %                
                                 

MARTEN TRANSPORT, LTD.
OPERATING STATISTICS
(Unaudited)

             
    Three Months     Nine Months  
    Ended September 30,     Ended September 30,  
    2018     2017     2018     2017  
Truckload Segment:                                
Revenue (in thousands)   $ 93,920     $ 92,008     $ 281,341     $ 282,580  
Average revenue, net of fuel surcharges, per tractor per week(1)   $ 3,925     $ 3,484     $ 3,797     $ 3,455  
Average tractors(1)     1,561       1,787       1,629       1,863  
Average miles per trip     564       592       578       598  
Non-revenue miles percentage(2)     10.4 %     8.1 %     8.9 %     8.9 %
Total miles (in thousands)     37,259       43,340       117,343       135,136  
                                 
Dedicated Segment:                                
Revenue (in thousands)   $ 58,791     $ 42,149     $ 164,595     $ 123,928  
Average revenue, net of fuel surcharges, per tractor per week(1)   $ 3,287     $ 3,441     $ 3,279     $ 3,463  
Average tractors(1)     1,123       866       1,080       849  
Average miles per trip     317       299       305       297  
Non-revenue miles percentage(2)     0.6 %     0.6 %     0.8 %     0.7 %
Total miles (in thousands)     24,362       19,705       69,244       57,641  
                                 
Intermodal Segment:                                
Revenue (in thousands)   $ 25,939     $ 19,895     $ 76,061     $ 58,196  
Loads     10,573       10,265       31,932       29,642  
Average tractors     89       78       87       79  
                                 
Brokerage Segment:                                
Revenue (in thousands)   $ 20,999     $ 16,627     $ 61,636     $ 50,645  
Loads     12,781       11,672       36,790       36,604  
                                 
At September 30, 2018 and September 30, 2017:                                
Total tractors(1)     2,751       2,649                  
Average age of company tractors (in years)     1.6       1.4                  
Total trailers     5,397       4,915                  
Average age of company trailers (in years)     2.6       2.8                  
Ratio of trailers to tractors(1)     2.0       1.9                  
                                 
                                 


    Three Months     Nine Months  
    Ended September 30,     Ended September 30,  
(In thousands)   2018     2017     2018     2017  
                                 
Net cash provided by operating activities   $ 44,722     $ 29,490     $ 112,097     $ 94,710  
Net cash (used for) investing activities     (29,665 )     (37,050 )     (88,842 )     (84,015 )
Net cash (used for) financing activities     (1,321     (1,339 )     (3,307 )     (10,024 )
                                 
Weighted average shares outstanding:                                
Basic     54,661       54,517       54,615       54,479  
Diluted     55,194       54,890       55,151       54,803  

(1) Includes tractors driven by both company-employed drivers and independent contractors. Independent contractors provided 50 and 63 tractors as of September 30, 2018 and 2017, respectively. 
(2) Represents the percentage of miles for which the company is not compensated. 

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