MRTN Marten Transport Ltd

Marten Transport, Ltd. (Nasdaq/GS:MRTN) today reported net income of $13.6 million, or 17 cents per diluted share, for the third quarter ended September 30, 2023, compared with $25.6 million, or 32 cents per diluted share, for the third quarter of 2022. For the nine-month period ended September 30, 2023, net income was $58.0 million, or 71 cents per diluted share, compared with $84.8 million, or $1.03 per diluted share, for the 2022 nine-month period.

Operating revenue was $279.5 million for the third quarter of 2023 compared with $324.4 million for the third quarter of 2022. Excluding fuel surcharges, operating revenue was $239.1 million for the 2023 quarter compared with $269.3 million for the 2022 quarter. Fuel surcharge revenue decreased to $40.5 million for the 2023 quarter from $55.1 million for the 2022 quarter.

Operating revenue was $863.2 million for the first nine months of 2023 compared with $941.3 million for the first nine months of 2022. Excluding fuel surcharges, operating revenue was $742.6 million for the 2023 period compared with $783.8 million for the 2022 period. Fuel surcharge revenue decreased to $120.6 million for the 2023 period from $157.5 million for the 2022 period.

Operating income was $17.2 million for the third quarter of 2023 compared with $33.8 million for the third quarter of 2022. For the first nine months of 2023, operating income was $74.5 million compared with $110.6 million for the first nine months of 2022.

Operating expenses as a percentage of operating revenue were 93.8% for the 2023 quarter and 89.6% for the 2022 quarter. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, were 92.8% for the 2023 quarter and 87.5% for the 2022 quarter.

Operating expenses as a percentage of operating revenue were 91.4% for the first nine months of 2023 and 88.3% for the first nine months of 2022. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, were 90.0% for the 2023 period and 85.9% for the 2022 period.

Executive Chairman Randolph L. Marten stated, “Our earnings this quarter were significantly pressured by the industry-wide weak demand, cumulative impact of reduced freight rates with the resulting freight network disruption, and inflationary operating costs within the current freight market recession. Additionally, the record heat and rising fuel prices each month of the third quarter led to an increase in our mile-adjusted net fuel expense of $3.9 million, or 4 cents per diluted share, from this year’s second quarter to third quarter.”

“We are focused on both minimizing the current freight market’s impact on our operations, and investing in and positioning our premium service solutions to capitalize on profitable organic growth opportunities as the market necessarily recovers - with fair compensation for our services. To that end, we have not agreed to any rate reductions since early August.”

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.

MARTEN TRANSPORT, LTD.
CONSOLIDATED CONDENSED BALANCE SHEETS
		September 30,				December 31,
(In thousands, except share information)		2023				2022
			(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	68,067			$	80,600
Receivables:
Trade, net			117,820				120,702
Other			11,695				7,218
Prepaid expenses and other			27,004				27,320
Total current assets			224,586				235,840
Property and equipment:
Revenue equipment, buildings and land, office equipment and other			1,129,415				1,074,832
Accumulated depreciation			(358,414	)			(346,665	)
Net property and equipment			771,001				728,167
Other noncurrent assets			1,617				1,672
Total assets		$	997,204			$	965,679
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	42,042			$	37,299
Insurance and claims accruals			46,282				45,747
Accrued and other current liabilities			33,320				41,264
Total current liabilities			121,644				124,310
Deferred income taxes			125,887				137,041
Noncurrent operating lease liabilities			316				409
Total liabilities			247,847				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; 81,308,968 shares at September 30, 2023, and 81,115,132 shares at December 31, 2022, issued and outstanding			813				811
Additional paid-in capital			49,280				47,188
Retained earnings			699,264				655,920
Total stockholders’ equity			749,357				703,919
Total liabilities and stockholders’ equity		$	997,204			$	965,679

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)		2023				2022				2023				2022
Operating revenue		$	279,538			$	324,448			$	863,233			$	941,294
Operating expenses (income):
Salaries, wages and benefits			92,620				99,773				287,468				285,582
Purchased transportation			49,673				64,403				152,075				189,193
Fuel and fuel taxes			48,695				57,299				137,706				163,004
Supplies and maintenance			17,896				14,855				51,291				40,520
Depreciation			29,017				28,381				87,974				81,389
Operating taxes and licenses			2,821				2,748				8,345				8,051
Insurance and claims			13,254				11,949				40,805				38,096
Communications and utilities			2,584				2,135				7,625				6,639
Gain on disposition of revenue equipment			(3,014	)			(1,070	)			(11,810	)			(10,422	)
Other			8,762				10,209				27,301				28,681
Total operating expenses			262,308				290,682				788,780				830,733
Operating income			17,230				33,766				74,453				110,561
Other			(1,017	)			(264	)			(2,938	)			(307	)
Income before income taxes			18,247				34,030				77,391				110,868
Income taxes expense			4,649				8,384				19,417				26,028
Net income		$	13,598			$	25,646			$	57,974			$	84,840
Basic earnings per common share		$	0.17			$	0.32			$	0.71			$	1.04
Diluted earnings per common share		$	0.17			$	0.32			$	0.71			$	1.03
Dividends declared per common share		$	0.06			$	0.06			$	0.18			$	0.18

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)		2023				2022				2023 vs. 2022				2023 vs. 2022
Operating revenue:
Truckload revenue, net of fuel surcharge revenue		$	96,516			$	105,905			$	(9,389	)			(8.9	)%
Truckload fuel surcharge revenue			17,711				23,471				(5,760	)			(24.5	)
Total Truckload revenue			114,227				129,376				(15,149	)			(11.7	)
Dedicated revenue, net of fuel surcharge revenue			82,963				86,178				(3,215	)			(3.7	)
Dedicated fuel surcharge revenue			18,834				24,039				(5,205	)			(21.7	)
Total Dedicated revenue			101,797				110,217				(8,420	)			(7.6	)
Intermodal revenue, net of fuel surcharge revenue			18,122				24,303				(6,181	)			(25.4	)
Intermodal fuel surcharge revenue			3,925				7,600				(3,675	)			(48.4	)
Total Intermodal revenue			22,047				31,903				(9,856	)			(30.9	)
Brokerage revenue			41,467				52,952				(11,485	)			(21.7	)
Total operating revenue		$	279,538			$	324,448			$	(44,910	)			(13.8	)%
Operating income/(loss):
Truckload		$	2,738			$	14,319			$	(11,581	)			(80.9	)%
Dedicated			11,286				13,005				(1,719	)			(13.2	)
Intermodal			(1,074	)			778				(1,852	)			(238.0	)
Brokerage			4,280				5,664				(1,384	)			(24.4	)
Total operating income		$	17,230			$	33,766			$	(16,536	)			(49.0	)%
Operating ratio:
Truckload			97.6	%			88.9	%
Dedicated			88.9				88.2
Intermodal			104.9				97.6
Brokerage			89.7				89.3
Consolidated operating ratio			93.8	%			89.6	%
Operating ratio, net of fuel surcharges:
Truckload			97.2	%			86.5	%
Dedicated			86.4				84.9
Intermodal			105.9				96.8
Brokerage			89.7				89.3
Consolidated operating ratio, net of fuel surcharges			92.8	%			87.5	%

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)		2023				2022				2023 vs. 2022				2023 vs. 2022
Operating revenue:
Truckload revenue, net of fuel surcharge revenue		$	300,104			$	302,883			$	(2,779	)			(0.9	)%
Truckload fuel surcharge revenue			51,887				66,255				(14,368	)			(21.7	)
Total Truckload revenue			351,991				369,138				(17,147	)			(4.6	)
Dedicated revenue, net of fuel surcharge revenue			257,231				248,988				8,243				3.3
Dedicated fuel surcharge revenue			56,000				68,344				(12,344	)			(18.1	)
Total Dedicated revenue			313,231				317,332				(4,101	)			(1.3	)
Intermodal revenue, net of fuel surcharge revenue			60,277				77,589				(17,312	)			(22.3	)
Intermodal fuel surcharge revenue			12,724				22,923				(10,199	)			(44.5	)
Total Intermodal revenue			73,001				100,512				(27,511	)			(27.4	)
Brokerage revenue			125,010				154,312				(29,302	)			(19.0	)
Total operating revenue		$	863,233			$	941,294			$	(78,061	)			(8.3	)%
Operating income/(loss):
Truckload		$	22,348			$	45,978			$	(23,630	)			(51.4	)%
Dedicated			39,143				37,689				1,454				3.9
Intermodal			(452	)			9,911				(10,363	)			(104.6	)
Brokerage			13,414				16,983				(3,569	)			(21.0	)
Total operating income		$	74,453			$	110,561			$	(36,108	)			(32.7	)%
Operating ratio:
Truckload			93.7	%			87.5	%
Dedicated			87.5				88.1
Intermodal			100.6				90.1
Brokerage			89.3				89.0
Consolidated operating ratio			91.4	%			88.3	%
Operating ratio, net of fuel surcharges:
Truckload			92.6	%			84.8	%
Dedicated			84.8				84.9
Intermodal			100.7				87.2
Brokerage			89.3				89.0
Consolidated operating ratio, net of fuel surcharges			90.0	%			85.9	%

MARTEN TRANSPORT, LTD.OPERATING STATISTICS(Unaudited)
		Three Months								Nine Months
		Ended September 30,								Ended September 30,
		2023				2022				2023				2022
Truckload Segment:
Revenue (in thousands)		$	114,227			$	129,376			$	351,991			$	369,138
Average revenue, net of fuel surcharges, per tractor per week(1)		$	4,285			$	4,889			$	4,442			$	4,980
Average tractors(1)			1,714				1,648				1,732				1,560
Average miles per trip			529				508				515				512
Non-revenue miles percentage(2)			12.1	%			11.3	%			12.4	%			10.8	%
Total miles (in thousands)			39,093				38,441				116,651				110,565
Dedicated Segment:
Revenue (in thousands)		$	101,797			$	110,217			$	313,231			$	317,332
Average revenue, net of fuel surcharges, per tractor per week(1)		$	3,900			$	4,006			$	3,949			$	3,977
Average tractors(1)			1,619				1,637				1,670				1,605
Average miles per trip			339				337				335				340
Non-revenue miles percentage(2)			1.3	%			1.2	%			1.2	%			1.1	%
Total miles (in thousands)			33,039				34,513				101,948				101,400
Intermodal Segment:
Revenue (in thousands)		$	22,047			$	31,903			$	73,001			$	100,512
Loads			6,327				7,610				19,871				24,607
Average tractors			154				182				168				173
Brokerage Segment:
Revenue (in thousands)		$	41,467			$	52,952			$	125,010			$	154,312
Loads			24,077				24,896				67,483				69,902
At September 30, 2023 and September 30, 2022:
Total tractors(1)			3,454				3,575
Average age of company tractors (in years)			1.8				1.7
Total trailers			5,726				5,679
Average age of company trailers (in years)			4.4				3.8
Ratio of trailers to tractors(1)			1.7				1.6
Total refrigerated containers			788				803

		Three Months								Nine Months
		Ended September 30,								Ended September 30,
(In thousands)		2023				2022				2023				2022
Net cash provided by operating activities		$	28,132			$	64,551			$	126,333			$	163,221
Net cash (used for) investing activities			(35,831	)			(57,412	)			(124,470	)			(92,416	)
Net cash (used for) financing activities			(4,762	)			(4,021	)			(14,396	)			(56,308	)
Weighted average shares outstanding:
Basic			81,306				81,061				81,260				81,889
Diluted			81,454				81,347				81,414				82,155

(1)		Includes tractors driven by both company-employed drivers and independent contractors. Independent contractors provided 99 and 90 tractors as of September 30, 2023 and 2022, respectively.
(2)		Represents the percentage of miles for which the company is not compensated.

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.