MRTN Marten Transport Ltd

Marten Transport, Ltd. (Nasdaq/GS:MRTN) today reported net income of $21.9 million, or 27 cents per diluted share, for the second quarter ended June 30, 2023, compared with $31.7 million, or 39 cents per diluted share, for the second quarter of 2022. For the six-month period ended June 30, 2023, net income was $44.4 million, or 55 cents per diluted share, compared with $59.2 million, or 72 cents per diluted share, for the 2022 six-month period.

Operating revenue was $285.7 million for the second quarter of 2023 compared with $329.6 million for the second quarter of 2022. Excluding fuel surcharges, operating revenue was $248.6 million for the 2023 quarter compared with $269.1 million for the 2022 quarter. Fuel surcharge revenue decreased to $37.0 million for the 2023 quarter from $60.4 million for the 2022 quarter due to significantly lower fuel prices.

Operating revenue was $583.7 million for the first six months of 2023 compared with $616.8 million for the first six months of 2022. Excluding fuel surcharges, operating revenue was $503.6 million for the 2023 period compared with $514.4 million for the 2022 period. Fuel surcharge revenue decreased to $80.1 million for the 2023 period compared with $102.4 million for the 2022 period.

Operating income was $28.2 million for the second quarter of 2023 compared with $40.9 million for the second quarter of 2022 – the highest amount for any quarter in Marten’s history.

Operating income was $57.2 million for the first six months of 2023 compared with $76.8 million for the first six months of 2022.

Operating expenses as a percentage of operating revenue were 90.1% for the 2023 quarter and 87.6% for the 2022 quarter. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, were 88.7% for the 2023 quarter and 84.8% for the 2022 quarter – the best ratio for any quarter since Marten became a public company in 1986.

Operating expenses as a percentage of operating revenue were 90.2% for the first six months of 2023 and 87.6% for the first six months of 2022. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, were 88.6% for the 2023 period and 85.1% for the 2022 period.

Executive Chairman Randolph L. Marten stated, “While the soft freight market demand, excess capacity and inflationary costs continue to put considerable pressure on industry pricing, volumes and margins, we recorded our second-highest second quarter operating revenue and net income in our history.”

“The disciplined execution of our unique business model by our talented people utilizing our adaptive and proprietary operating technology, along with our emphasis on operating efficiencies and cost controls, are key strengths to our minimizing the current impact of the weak freight market on our operations -- and are also strengths that we will maintain as we invest in and position our premium service solutions to capitalize on profitable organic growth opportunities as the market necessarily recovers.”

Current Investor Presentation

Marten Transport, with headquarters in Mondovi, Wis., is a multifaceted business offering a network of refrigerated and dry truck-based transportation capabilities across Marten’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, Mexico and Canada, 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 Marten’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, 2022. 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, Chief Executive Officer, Doug Petit, 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
		June 30,				December 31,
(In thousands, except share information)		2023				2022
		(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	80,528			$	80,600
Receivables:
Trade, net			111,577				120,702
Other			10,646				7,218
Prepaid expenses and other			29,208				27,320
Total current assets			231,959				235,840
Property and equipment:
Revenue equipment, buildings and land, office equipment and other			1,122,659				1,074,832
Accumulated depreciation			(352,139	)			(346,665	)
Net property and equipment			770,520				728,167
Other noncurrent assets			1,605				1,672
Total assets		$	1,004,084			$	965,679
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	36,107			$	37,299
Insurance and claims accruals			47,665				45,747
Accrued and other current liabilities			47,248				41,264
Total current liabilities			131,020				124,310
Deferred income taxes			132,737				137,041
Noncurrent operating lease liabilities			307				409
Total liabilities			264,064				261,760
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; 81,301,468 shares at June 30, 2023, and 81,115,132 shares at December 31, 2022, issued and outstanding			813				811
Additional paid-in capital			48,663				47,188
Retained earnings			690,544				655,920
Total stockholders’ equity			740,020				703,919
Total liabilities and stockholders’ equity		$	1,004,084			$	965,679

MARTEN TRANSPORT, LTD.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
		Three Months								Six Months
		Ended June 30,								Ended June 30,
(In thousands, except per share information)		2023				2022				2023				2022
Operating revenue		$	285,672			$	329,565			$	583,695			$	616,846
Operating expenses (income):
Salaries, wages and benefits			96,332				96,460				194,848				185,809
Purchased transportation			48,299				67,480				102,402				124,790
Fuel and fuel taxes			42,215				61,337				89,011				105,705
Supplies and maintenance			17,408				13,352				33,395				25,665
Depreciation			29,427				26,865				58,957				53,008
Operating taxes and licenses			2,756				2,663				5,524				5,303
Insurance and claims			12,481				13,443				27,551				26,147
Communications and utilities			2,510				2,239				5,041				4,504
Gain on disposition of revenue equipment			(3,550	)			(4,812	)			(8,796	)			(9,352	)
Other			9,581				9,601				18,539				18,472
Total operating expenses			257,459				288,628				526,472				540,051
Operating income			28,213				40,937				57,223				76,795
Other			(1,077	)			(36	)			(1,921	)			(43	)
Income before income taxes			29,290				40,973				59,144				76,838
Income taxes expense			7,416				9,312				14,768				17,644
Net income		$	21,874			$	31,661			$	44,376			$	59,194
Basic earnings per common share		$	0.27			$	0.39			$	0.55			$	0.72
Diluted earnings per common share		$	0.27			$	0.39			$	0.55			$	0.72
Dividends declared per common share		$	0.06			$	0.06			$	0.12			$	0.12

MARTEN TRANSPORT, LTD.
SEGMENT INFORMATION
(Unaudited)
										Dollar				Percentage
										Change				Change
		Three Months								Three Months				Three Months
		Ended								Ended				Ended
		June 30,								June 30,				June 30,
(Dollars in thousands)		2023				2022				2023 vs. 2022				2023 vs. 2022
Operating revenue:
Truckload revenue, net of fuel surcharge revenue		$	101,268			$	101,808			$	(540	)			(0.5	)%
Truckload fuel surcharge revenue			15,870				25,164				(9,294	)			(36.9	)
Total Truckload revenue			117,138				126,972				(9,834	)			(7.7	)
Dedicated revenue, net of fuel surcharge revenue			87,437				84,389				3,048				3.6
Dedicated fuel surcharge revenue			17,548				25,966				(8,418	)			(32.4	)
Total Dedicated revenue			104,985				110,355				(5,370	)			(4.9	)
Intermodal revenue, net of fuel surcharge revenue			18,754				27,681				(8,927	)			(32.2	)
Intermodal fuel surcharge revenue			3,611				9,286				(5,675	)			(61.1	)
Total Intermodal revenue			22,365				36,967				(14,602	)			(39.5	)
Brokerage revenue			41,184				55,271				(14,087	)			(25.5	)
Total operating revenue		$	285,672			$	329,565			$	(43,893	)			(13.3	)%
Operating income:
Truckload		$	9,569			$	16,088			$	(6,519	)			(40.5	)%
Dedicated			14,173				14,039				134				1.0
Intermodal			(165	)			4,097				(4,262	)			(104.0	)
Brokerage			4,636				6,713				(2,077	)			(30.9	)
Total operating income		$	28,213			$	40,937			$	(12,724	)			(31.1	)%
Operating ratio:
Truckload			91.8	%			87.3	%
Dedicated			86.5				87.3
Intermodal			100.7				88.9
Brokerage			88.7				87.9
Consolidated operating ratio			90.1	%			87.6	%
Operating ratio, net of fuel surcharges:
Truckload			90.6	%			84.2	%
Dedicated			83.8				83.4
Intermodal			100.9				85.2
Brokerage			88.7				87.9
Consolidated operating ratio, net of fuel surcharges			88.7	%			84.8	%

MARTEN TRANSPORT, LTD.
SEGMENT INFORMATION
(Unaudited)
										Dollar				Percentage
										Change				Change
		Six Months								Six Months				Six Months
		Ended								Ended				Ended
		June 30,								June 30,				June 30,
(Dollars in thousands)		2023				2022				2023 vs. 2022				2023 vs. 2022
Operating revenue:
Truckload revenue, net of fuel surcharge revenue		$	203,588			$	196,978			$	6,610				3.4	%
Truckload fuel surcharge revenue			34,176				42,784				(8,608	)			(20.1	)
Total Truckload revenue			237,764				239,762				(1,998	)			(0.8	)
Dedicated revenue, net of fuel surcharge revenue			174,268				162,810				11,458				7.0
Dedicated fuel surcharge revenue			37,166				44,305				(7,139	)			(16.1	)
Total Dedicated revenue			211,434				207,115				4,319				2.1
Intermodal revenue, net of fuel surcharge revenue			42,155				53,286				(11,131	)			(20.9	)
Intermodal fuel surcharge revenue			8,799				15,323				(6,524	)			(42.6	)
Total Intermodal revenue			50,954				68,609				(17,655	)			(25.7	)
Brokerage revenue			83,543				101,360				(17,817	)			(17.6	)
Total operating revenue		$	583,695			$	616,846			$	(33,151	)			(5.4	)%
Operating income:
Truckload		$	19,610			$	31,659			$	(12,049	)			(38.1	)%
Dedicated			27,857				24,684				3,173				12.9
Intermodal			622				9,133				(8,511	)			(93.2	)
Brokerage			9,134				11,319				(2,185	)			(19.3	)
Total operating income		$	57,223			$	76,795			$	(19,572	)			(25.5	)%
Operating ratio:
Truckload			91.8	%			86.8	%
Dedicated			86.8				88.1
Intermodal			98.8				86.7
Brokerage			89.1				88.8
Consolidated operating ratio			90.2	%			87.6	%
Operating ratio, net of fuel surcharges:
Truckload			90.4	%			83.9	%
Dedicated			84.0				84.8
Intermodal			98.5				82.9
Brokerage			89.1				88.8
Consolidated operating ratio, net of fuel surcharges			88.6	%			85.1	%

MARTEN TRANSPORT, LTD.
OPERATING STATISTICS
(Unaudited)
		Three Months								Six Months
		Ended June 30,								Ended June 30,
		2023				2022				2023				2022
Truckload Segment:
Revenue (in thousands)		$	117,138			$	126,972			$	237,764			$	239,762
Average revenue, net of fuel surcharges, per tractor per week(1)		$	4,472			$	5,080			$	4,521			$	5,030
Average tractors(1)			1,742				1,542				1,742				1,515
Average miles per trip			505				509				507				514
Non-revenue miles percentage(2)			12.4	%			10.7	%			12.5	%			10.6	%
Total miles (in thousands)			39,321				36,752				77,558				72,124
Dedicated Segment:
Revenue (in thousands)		$	104,985			$	110,355			$	211,434			$	207,115
Average revenue, net of fuel surcharges, per tractor per week(1)		$	3,986			$	4,072			$	3,973			$	3,962
Average tractors(1)			1,687				1,594				1,696				1,589
Average miles per trip			332				341				332				341
Non-revenue miles percentage(2)			1.3	%			1.0	%			1.2	%			1.1	%
Total miles (in thousands)			34,833				34,134				68,909				66,887
Intermodal Segment:
Revenue (in thousands)		$	22,365			$	36,967			$	50,954			$	68,609
Loads			6,267				8,703				13,544				16,997
Average tractors			170				175				175				169
Brokerage Segment:
Revenue (in thousands)		$	41,184			$	55,271			$	83,543			$	101,360
Loads			22,718				25,322				43,406				45,006
At June 30, 2023 and June 30, 2022:
Total tractors(1)			3,516				3,395
Average age of company tractors (in years)			1.7				1.6
Total trailers			5,786				5,521
Average age of company trailers (in years)			4.2				3.6
Ratio of trailers to tractors(1)			1.6				1.6
Total refrigerated containers			791				784

		Three Months								Six Months
		Ended June 30,								Ended June 30,
(In thousands)		2023				2022				2023				2022
Net cash provided by operating activities		$	48,969			$	58,730			$	98,201			$	98,670
Net cash (used for) investing activities			(60,359	)			(35,413	)			(88,639	)			(35,004	)
Net cash (used for) financing activities			(4,370	)			(21,470	)			(9,634	)			(52,287	)
Weighted average shares outstanding:
Basic			81,263				81,689				81,236				82,310
Diluted			81,412				82,015				81,394				82,617

(1	)	Includes tractors driven by both company-employed drivers and independent contractors. Independent contractors provided 98 and 85 tractors as of June 30, 2023 and 2022, respectively.
(2	)	Represents the percentage of miles for which the company is not compensated.