Marten Transport Announces Fourth Quarter and Year End Results

MONDOVI, Wis., Jan. 25, 2018 (GLOBE NEWSWIRE) -- Marten Transport, Ltd. (Nasdaq/GS:MRTN) today reported net income of $65.1 million, or $1.18 per diluted share, for the fourth quarter ended December 31, 2017 – results that include a deferred income taxes benefit of $56.5 million related to the federal Tax Cuts and Jobs Act of 2017. Excluding that benefit, net income improved 3.7% to $8.6 million, or 16 cents per diluted share, for the fourth quarter of 2017 from $8.3 million, or 15 cents per diluted share, for the fourth quarter of 2016. Net income was $90.3 million, or $1.65 per diluted share, for the year ended December 31, 2017. Excluding the deferred income taxes benefit, 2017 net income improved 1.1% to $33.8 million, or 62 cents per diluted share, from $33.5 million, or 61 cents per diluted share, for 2016.

Earnings Impact of Deferred Income Taxes Benefit
Three Months Year
Ended Ended
(In thousands, except share information) Dec. 31, 2017 Dec. 31, 2017
Net income:
Excluding deferred income taxes benefit $ 8,609 $33,819
Deferred income taxes benefit 56,465 56,465
Net income $65,074 $90,284
Diluted earnings per common share*:
Excluding deferred income taxes benefit $ 0.16 $0.62
Deferred income taxes benefit 1.03 1.03
Diluted earnings per common share $1.18 $1.65
*Differences in rounding exist for the diluted earnings per common share amounts for the three months ended Dec. 31, 2017.

Operating revenue improved 5.9% to $182.8 million for the fourth quarter of 2017 from $172.7 million for the fourth quarter of 2016, and improved 4.0% to $698.1 million for 2017 from $671.1 million for 2016. Excluding fuel surcharges, operating revenue improved 3.9% to $163.4 million for the 2017 quarter from $157.4 million for the 2016 quarter, and improved 2.1% to $631.0 million for 2017 from $617.9 million for 2016. Fuel surcharge revenue increased to $19.3 million for the fourth quarter of 2017 from $15.3 million for the 2016 quarter, and increased to $67.1 million for 2017 from $53.2 million for 2016.

Operating expenses as a percentage of operating revenue was 92.2% for the fourth quarter of 2017 and 91.6% for the fourth quarter of 2016. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, was 91.2% for the fourth quarter of 2017 compared to 90.8% for the fourth quarter of 2016.

Operating expenses as a percentage of operating revenue was 91.9% for 2017 and 91.3% for 2016. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, was 91.0% for 2017 compared to 90.6% for 2016.

Chairman and Chief Executive Officer Randolph L. Marten said, “We are pleased to report improvements in both our top- and bottom-line results for the quarter and year, results our people achieved while overcoming significantly less gain on disposition of our revenue equipment in 2017. We fully capitalized on the strengthening freight environment to better our average revenue per tractor by 7.1% in our Truckload operations and by 2.5% in our Dedicated operations from the 2016 to the 2017 quarter, along with revenue increases in both our Intermodal and Brokerage operations. We continue to earn awards of new Dedicated business and expect our number of Dedicated tractors to increase to over 1,150 by June 2018. We also improved our balance sheet position with $15.8 million in cash at the end of 2017 from $7.9 million in debt at the beginning of the year. We expect to further capitalize on profitable growth opportunities with our diversified platform, cost control emphasis, modern fleet, strong balance sheet and the smart, hard work of our people.”

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 966 dry trailers operating as of December 31, 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.

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
(Unaudited)
December 31,
December 31,
(In thousands, except share information)2017 2016
ASSETS
Current assets:
Cash and cash equivalents$15,791 $488
Receivables:
Trade, net 74,886 69,199
Other 6,131 4,436
Prepaid expenses and other 19,810 19,307
Total current assets 116,618 93,430
Property and equipment:
Revenue equipment, buildings and land, office equipment and other 783,648 759,553
Accumulated depreciation (211,728) (201,728)
Net property and equipment 571,920 557,825
Other assets 1,865 2,493
Total assets$690,403 $653,748
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities$38,100 $41,230
Insurance and claims accruals 26,177 19,440
Total current liabilities 64,277 60,670
Long-term debt - 7,886
Deferred income taxes 100,626 147,854
Total liabilities 164,903 216,410
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; 54,533,455 shares at December 31, 2017, and 54,391,525 shares at December 31, 2016, issued and outstanding 545 544
Additional paid-in capital 76,413 74,175
Retained earnings 448,542 362,619
Total stockholders’ equity 525,500 437,338
Total liabilities and stockholders’ equity$690,403 $653,748


MARTEN TRANSPORT, LTD.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Year
Ended December 31, Ended December 31,
(In thousands, except per share information) 2017 2016 2017 2016
Operating revenue $182,771 $172,661 $698,120 $671,144
Operating expenses (income):
Salaries, wages and benefits 59,382 56,711 226,091 224,827
Purchased transportation 32,803 28,722 118,349 110,719
Fuel and fuel taxes 28,284 25,670 105,390 94,075
Supplies and maintenance 9,701 10,887 41,613 43,912
Depreciation 21,245 21,240 85,120 82,445
Operating taxes and licenses 2,180 2,367 8,993 9,099
Insurance and claims 9,487 8,978 38,585 32,223
Communications and utilities 1,516 1,586 6,047 6,287
Gain on disposition of revenue equipment (617) (3,040) (5,499) (10,502)
Other 4,457 5,007 16,569 19,756
Total operating expenses 168,438 158,128 641,258 612,841
Operating income 14,333 14,533 56,862 58,303
Other 109 443 389 1,237
Income before income taxes 14,224 14,090 56,473 57,066
Income taxes (benefit) expense (50,850) 5,787 (33,811) 23,602
Net income $65,074 $8,303 $90,284 $33,464
Basic earnings per common share $1.19 $0.15 $1.66 $0.62
Diluted earnings per common share $1.18 $0.15 $1.65 $0.61
Dividends declared per common share $0.025 $0.015 $0.08 $0.06

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)2017 2016 2017 vs. 2016 2017 vs. 2016
Operating revenue:
Truckload revenue, net of fuel surcharge revenue$85,469 $86,453 $(984) (1.1)%
Truckload fuel surcharge revenue 12,161 10,113 2,048 20.3
Total Truckload revenue 97,630 96,566 1,064 1.1
Dedicated revenue, net of fuel surcharge revenue 39,037 37,174 1,863 5.0
Dedicated fuel surcharge revenue 3,916 3,188 728 22.8
Total Dedicated revenue 42,953 40,362 2,591 6.4
Intermodal revenue, net of fuel surcharge revenue 19,171 16,155 3,016 18.7
Intermodal fuel surcharge revenue 3,254 1,992 1,262 63.4
Total Intermodal revenue 22,425 18,147 4,278 23.6
Brokerage revenue 19,763 17,586 2,177 12.4
Total operating revenue$182,771 $172,661 $10,110 5.9%
Operating income:
Truckload$7,077 $7,038 $39 0.6%
Dedicated 2,999 4,587 (1,588) (34.6)
Intermodal 2,526 1,735 791 45.6
Brokerage 1,731 1,173 558 47.6
Total operating income$14,333 $14,533 $(200) (1.4)%
Operating ratio:
Truckload 92.8% 92.7%
Dedicated 93.0 88.6
Intermodal 88.7 90.4
Brokerage 91.2 93.3
Consolidated operating ratio 92.2% 91.6%

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) 2017
2016 2017 vs. 2016
2017 vs. 2016
Operating revenue:
Truckload revenue, net of fuel surcharge revenue $336,596 $339,967 $(3,371) (1.0)%
Truckload fuel surcharge revenue 43,614 35,884 7,730 21.5
Total Truckload revenue 380,210 375,851 4,359 1.2
Dedicated revenue, net of fuel surcharge revenue 153,691 147,007 6,684 4.5
Dedicated fuel surcharge revenue 13,190 10,363 2,827 27.3
Total Dedicated revenue 166,881 157,370 9,511 6.0
Intermodal revenue, net of fuel surcharge revenue 70,282 64,508 5,774 9.0
Intermodal fuel surcharge revenue 10,339 6,982 3,357 48.1
Total Intermodal revenue 80,621 71,490 9,131 12.8
Brokerage revenue 70,408 66,433 3,975 6.0
Total operating revenue $698,120 $671,144 $26,976 4.0%
Operating income:
Truckload $26,326 $27,438 $(1,112) (4.1)%
Dedicated 17,074 19,550 (2,476) (12.7)
Intermodal 8,303 7,131 1,172 16.4
Brokerage 5,159 4,184 975 23.3
Total operating income $56,862 $58,303 $(1,441) (2.5)%
Operating ratio:
Truckload 93.1% 92.7%
Dedicated 89.8 87.6
Intermodal 89.7 90.0
Brokerage 92.7 93.7
Consolidated operating ratio 91.9% 91.3%


MARTEN TRANSPORT, LTD.
OPERATING STATISTICS
(Unaudited)
Three Months
Year
Ended December 31,
Ended December 31,
2017 2016 2017 2016
Truckload Segment:
Revenue (in thousands) $97,630 $96,566 $380,210 $375,851
Average revenue, net of fuel surcharges, per tractor per week(1) $3,700 $3,456 $3,514 $3,427
Average tractors(1) 1,758 1,903 1,837 1,898
Average miles per trip 601 608 599 623
Non-revenue miles percentage(2) 6.2% 9.1% 8.3% 9.2%
Total miles (in thousands) 43,624 46,786 178,760 184,281
Dedicated Segment:
Revenue (in thousands) $42,953 $40,362 $166,881 $157,370
Average revenue, net of fuel surcharges, per tractor per week(1) $3,535 $3,448 $3,481 $3,432
Average tractors(1) 840 820 847 819
Average miles per trip 296 295 297 301
Non-revenue miles percentage(2) 1.1% 0.8% 0.8% 0.8%
Total miles (in thousands) 19,461 18,826 77,102 75,333
Intermodal Segment:
Revenue (in thousands) $22,425 $18,147 $80,621 $71,490
Loads 10,554 9,273 40,196 35,947
Average tractors 78 76 79 76
Brokerage Segment:
Revenue (in thousands) $19,763 $17,586 $70,408 $66,433
Loads 11,667 12,926 48,271 49,721
At December 31, 2017 and December 31, 2016:
Total tractors(1) 2,738 2,785
Average age of company tractors (in years) 1.5 1.4
Total trailers 4,909 4,854
Average age of company trailers (in years) 2.8 2.7
Ratio of trailers to tractors(1) 1.8 1.7
Three Months
Year
Ended December 31,
Ended December 31,
(In thousands) 2017 2016 2017 2016
Net cash provided by operating activities $27,169 $29,531 $121,879 $133,801
Net cash (used for) investing activities (11,303) (28,448) (95,318) (97,290)
Net cash (used for) financing activities (1,234) (770) (11,258) (36,457)
Weighted average shares outstanding:
Basic 54,529 54,329 54,492 54,177
Diluted 54,979 54,616 54,850 54,461
(1) Includes tractors driven by both company-employed drivers and independent contractors. Independent contractors provided 60 and 68 tractors as of December 31, 2017 and 2016, respectively.
(2) Represents the percentage of miles for which the company is not compensated.


Source:Marten Transport, Ltd.