Marten Transport Announces Fourth Quarter and Year

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Posted On: 01/26/2017 4:30:34 PM

Posted By: News Desk 2018

Marten Transport Announces Fourth Quarter and Year End Results

MONDOVI, Wis., Jan. 26, 2017 (GLOBE NEWSWIRE) -- Marten Transport, Ltd. (Nasdaq/GS:MRTN) today reported net income of $8.3 million, or 25 cents per diluted share, for the fourth quarter of 2016 compared with $8.8 million, or 26 cents per diluted share, for the fourth quarter of 2015. Net income was $33.5 million, or $1.02 per diluted share, for the year ended December 31, 2016 compared with $35.7 million, or $1.06 per diluted share, for 2015. Results for 2015 included a gain on the disposition of facilities of $392,000 for the fourth quarter and $4.1 million for the year. Net income improved to $33.5 million in 2016 from $33.3 million, or 99 cents per diluted share, in 2015 excluding the facilities gain.

Operating revenue improved 2.3% to $172.7 million for the fourth quarter of 2016 from $168.8 million for the fourth quarter of 2015, and improved 0.9% to $671.1 million for 2016 from $665.0 million for 2015, despite lower fuel surcharges due to decreased fuel prices in 2016. Operating revenue, net of fuel surcharges, improved 2.2% to $157.4 million for the 2016 quarter from $154.0 million for the 2015 quarter, and increased 4.3% to $617.9 million for 2016 from $592.6 million for 2015. Fuel surcharge revenue increased to $15.3 million for the fourth quarter of 2016 from $14.7 million for the 2015 quarter, and decreased 26.4% to $53.2 million for 2016 from $72.3 million for 2015.

Operating expenses as a percentage of operating revenue was 91.6% for the fourth quarter of 2016 and 91.0% for the fourth quarter of 2015. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, was 90.8% for the fourth quarter of 2016. The operating ratio, net of both fuel surcharges and the gain on the facility disposition, was 90.4% for the fourth quarter of 2015.

Operating expenses as a percentage of operating revenue was 91.3% for 2016 and 90.8% for 2015. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, was 90.6% for 2016. The operating ratio, net of both fuel surcharges and the gain on the facility dispositions, was 90.4% for 2015.

Chairman and Chief Executive Officer Randolph L. Marten said, “Despite persistent softness in the freight market, which has challenged our truckload segment, we have continued to demonstrate the strength of our unique multifaceted business model by achieving our eighth consecutive year-over-year increase in quarterly operating income within each of our dedicated, intermodal and brokerage segments. We increased our average number of truckload and dedicated tractors by 226 tractors, or 9.1%, in 2016 over 2015 with the expansion of our dedicated operations. We remain confident in our ability to profitably capitalize on growth opportunities across all of our business units with our competitive position, cost control emphasis, modern fleet and strong balance sheet.”

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 921 dry trailers operating as of December 31, 2016. 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, 2015. 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)

	December 31,			December 31,
(In thousands, except share information)		2016			2015

ASSETS
Current assets:
Cash and cash equivalents	$	488		$	434
Receivables:
Trade, net		69,199			70,597
Other		4,436			10,885
Prepaid expenses and other		19,307			18,134
Total current assets		93,430			100,050

Property and equipment:
Revenue equipment, buildings and land,
office equipment and other		759,553			724,597
Accumulated depreciation		(201,728	)		(196,588	)
Net property and equipment		557,825			528,009
Other assets		2,493			3,469

Total assets	$	653,748		$	631,528

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	41,230		$	33,641
Insurance and claims accruals		19,440			16,235
Total current liabilities		60,670			49,876
Long-term debt		7,886			37,867
Deferred income taxes		147,854			134,364
Total liabilities		216,410			222,107


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; 32,634,915 shares
at December 31, 2016, and 32,759,806 shares at
December 31, 2015, issued and outstanding		326			328
Additional paid-in capital		74,175			76,468
Retained earnings		362,837			332,625

Total stockholders’ equity		437,338			409,421

Total liabilities and stockholders’ equity	$	653,748		$	631,528

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

	Three Months						Year
	Ended December 31,						Ended December 31,
(In thousands, except per share information)		2016			2015			2016			2015

Operating revenue	$	172,661		$	168,773		$	671,144		$	664,994
Operating expenses (income):
Salaries, wages and benefits		56,711			54,554			224,827			209,455
Purchased transportation		28,722			29,687			110,719			118,030
Fuel and fuel taxes		25,670			23,269			94,075			104,582
Supplies and maintenance		10,887			10,584			43,912			43,319
Depreciation		21,240			19,854			82,445			75,323
Operating taxes and licenses		2,367			2,729			9,099			8,914
Insurance and claims		8,978			7,279			32,223			29,252
Communications and utilities		1,586			1,539			6,287			5,886
Gain on disposition of revenue equipment		(3,040	)		(741	)		(10,502	)		(5,584	)
Gain on disposition of facilities		-			(392	)		-			(4,104	)
Other		5,007			5,174			19,756			18,858

Total operating expenses		158,128			153,536			612,841			603,931

Operating income		14,533			15,237			58,303			61,063
Other		443			225			1,237			372

Income before income taxes		14,090			15,012			57,066			60,691

Provision for income taxes		5,787			6,222			23,602			24,946

Net income	$	8,303		$	8,790		$	33,464		$	35,745

Basic earnings per common share	$	0.25		$	0.26		$	1.03		$	1.07

Diluted earnings per common share	$	0.25		$	0.26		$	1.02		$	1.06

Dividends declared per common share	$	0.025		$	0.025		$	0.10		$	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)		2016			2015		2016 vs. 2015			2016 vs. 2015
Operating revenue:
Truckload revenue, net of fuel
surcharge revenue	$	86,453		$	85,874		$	579		0.7	%
Truckload fuel surcharge revenue		10,113			9,964			149		1.5
Total Truckload revenue		96,566			95,838			728		0.8

Dedicated revenue, net of fuel
surcharge revenue		37,174			33,323			3,851		11.6
Dedicated fuel surcharge revenue		3,188			2,677			511		19.1
Total Dedicated revenue		40,362			36,000			4,362		12.1

Intermodal revenue, net of fuel
surcharge revenue		16,155			15,599			556		3.6
Intermodal fuel surcharge revenue		1,992			2,090			(98	)	(4.7	)
Total Intermodal revenue		18,147			17,689			458		2.6

Brokerage revenue		17,586			19,246			(1,660	)	(8.6	)

Total operating revenue	$	172,661		$	168,773		$	3,888		2.3	%

Operating income:
Truckload	$	7,038		$	7,903		$	(865	)	(10.9	)%
Dedicated		4,587			4,322			265		6.1
Intermodal		1,735			1,460			275		18.8
Brokerage		1,173			1,160			13		1.1
Total operating income before gain
on disposition of facilities		14,533			14,845			(312	)	(2.1	)
Gain on disposition of facilities		-			392			(392	)	(100.0	)
Total operating income	$	14,533		$	15,237		$	(704	)	(4.6	)%

Operating ratio:
Truckload		92.7	%		91.8	%
Dedicated		88.6			88.0
Intermodal		90.4			91.7
Brokerage		93.3			94.0
Consolidated operating ratio before
gain on disposition of facilities		91.6	%		91.2	%

Consolidated operating ratio		91.6	%		91.0	%

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)		2016			2015		2016 vs. 2015			2016 vs. 2015
Operating revenue:
Truckload revenue, net of fuel
surcharge revenue	$	339,967		$	348,101		$	(8,134	)	(2.3	)%
Truckload fuel surcharge revenue		35,884			50,260			(14,376	)	(28.6	)
Total Truckload revenue		375,851			398,361			(22,510	)	(5.7	)

Dedicated revenue, net of fuel
surcharge revenue		147,007			107,264			39,743		37.1
Dedicated fuel surcharge revenue		10,363			11,008			(645	)	(5.9	)
Total Dedicated revenue		157,370			118,272			39,098		33.1

Intermodal revenue, net of fuel
surcharge revenue		64,508			65,877			(1,369	)	(2.1	)
Intermodal fuel surcharge revenue		6,982			11,081			(4,099	)	(37.0	)
Total Intermodal revenue		71,490			76,958			(5,468	)	(7.1	)

Brokerage revenue		66,433			71,403			(4,970	)	(7.0	)

Total operating revenue	$	671,144		$	664,994		$	6,150		0.9	%

Operating income:
Truckload	$	27,438		$	35,517		$	(8,079	)	(22.7	)%
Dedicated		19,550			12,818			6,732		52.5
Intermodal		7,131			4,832			2,299		47.6
Brokerage		4,184			3,792			392		10.3
Total operating income before gain
on disposition of facilities		58,303			56,959			1,344		2.4
Gain on disposition of facilities		-			4,104			(4,104	)	(100.0	)
Total operating income	$	58,303		$	61,063		$	(2,760	)	(4.5	)%

Operating ratio:
Truckload		92.7	%		91.1	%
Dedicated		87.6			89.2
Intermodal		90.0			93.7
Brokerage		93.7			94.7
Consolidated operating ratio before
gain on disposition of facilities		91.3	%		91.4	%

Consolidated operating ratio		91.3	%		90.8	%

MARTEN TRANSPORT, LTD.
OPERATING STATISTICS
(Unaudited)

	Three Months						Year
	Ended December 31,						Ended December 31,
		2016			2015			2016			2015
Truckload Segment:
Revenue (in thousands)	$	96,566		$	95,838		$	375,851		$	398,361
Average revenue, net of fuel surcharges,
per tractor per week⁽¹⁾	$	3,456		$	3,400		$	3,427		$	3,529
Average tractors⁽¹⁾		1,903			1,921			1,898			1,892
Average miles per trip		608			639			623			666
Non-revenue miles percentage⁽²⁾		9.1	%		9.4	%		9.2	%		9.4	%
Total miles (in thousands)		46,786			45,098			184,281			186,268

Dedicated Segment:
Revenue (in thousands)	$	40,362		$	36,000		$	157,370		$	118,272
Average revenue, net of fuel surcharges,
per tractor per week⁽¹⁾	$	3,448		$	3,405		$	3,432		$	3,433
Average tractors⁽¹⁾		820			745			819			599
Average miles per trip		295			324			301			347
Non-revenue miles percentage⁽²⁾		0.8	%		1.5	%		0.8	%		1.6	%
Total miles (in thousands)		18,826			17,499			75,333			57,381

Intermodal Segment:
Revenue (in thousands)	$	18,147		$	17,689		$	71,490		$	76,958
Loads		9,273			8,639			35,947			36,404
Average tractors		76			82			76			89

Brokerage Segment:
Revenue (in thousands)	$	17,586		$	19,246		$	66,433		$	71,403
Loads		12,926			13,228			49,721			48,060

At December 31, 2016 and December 31, 2015:
Total tractors⁽¹⁾		2,785			2,740
Average age of company tractors (in years)		1.4			1.5
Total trailers		4,854			4,700
Average age of company trailers (in years)		2.7			2.6
Ratio of trailers to tractors⁽¹⁾		1.7			1.7


	Three Months						Year
	Ended December 31,						Ended December 31,
(In thousands)		2016			2015			2016			2015

Net cash provided by operating activities	$	29,425		$	26,816		$	133,566		$	128,238
Net cash (used for) investing activities		(28,448	)		(21,555	)		(97,290	)		(125,081	)
Net cash (used for) financing activities		(664	)		(4,972	)		(36,222	)		(2,846	)

Weighted average shares outstanding:
Basic		32,598			33,248			32,506			33,477
Diluted		32,770			33,434			32,677			33,715

(1) Includes tractors driven by both company-employed drivers and independent contractors. Independent contractors provided 68 and 65 tractors as of December 31, 2016 and 2015, 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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