MONDOVI, Wis., Jan. 28, 2008 (PRIME NEWSWIRE) -- Marten Transport, Ltd. (Nasdaq:MRTN) announced today its financial and operating results for the quarter and year ended Dec. 31, 2007.
Operating revenue, consisting of revenue from truckload and logistics operations, increased 10.0% to $144.8 million in the fourth quarter of 2007 from $131.7 million in the 2006 quarter. For 2007, operating revenue increased 7.9% to $560.0 million from $518.9 million in 2006. Truckload revenue increased 3.7% to $123.2 million from $118.8 million in the 2006 quarter. For 2007, truckload revenue increased 2.7% to $490.5 million from $477.7 million in 2006. Logistics revenue, which consists of revenue from brokerage and intermodal operations, increased 67.6% to $21.6 million from $12.9 million in the 2006 quarter. For 2007, logistics revenue increased 68.5% to $69.5 million from $41.2 million in 2006.
Operating revenue included fuel surcharges of $26.0 million and $87.1 million for the fourth quarter and yearly periods of 2007, compared with $17.8 million and $77.3 million for the fourth quarter and yearly periods of 2006. Operating revenue, net of fuel surcharges, increased 4.3% to $118.8 million in the 2007 quarter and 7.1% to $472.9 million in the 2007 year.
For the fourth quarter, net income was $3.0 million, or 14 cents per diluted share, compared with $5.2 million, or 24 cents per diluted share, for the same quarter of 2006. For 2007, net income was $15.0 million, or 68 cents per diluted share, compared with $24.5 million, or $1.12 per diluted share, for 2006.
Chairman, President and Chief Executive Officer Randolph L. Marten said, "As we expected, industry-wide capacity has continued to exceed freight demand, which has pressured freight rates, fuel surcharge reimbursement, non-revenue miles, and miles per tractor. In that difficult environment, our plan for the fourth quarter was to decrease the number of tractors in our fleet to allow us to improve average miles per tractor and focus on the best available freight. We reduced our average fleet size by approximately 100 tractors from this year's third quarter. Our average truckload revenue per tractor per week, net of fuel surcharges, increased 1.9% quarter-over-quarter to $3,095.
"In general, strong fleet management and our focus on service with well-established customer relationships allowed us to hold average truckload revenue per loaded mile, net of fuel surcharges, steady from the fourth quarter of 2006. Non-revenue miles crept up to 7.7%, while average miles per trip decreased 5.4%. A smaller fleet helped us improve average miles per tractor for the fourth quarter of 2007 by 2.3% over the fourth quarter of 2006.
"We continued to grow our logistics business in the fourth quarter of 2007. Logistics revenue, net of intermodal fuel surcharges, grew to $20.5 million in the fourth quarter, an increase of 65.7% over the 2006 quarter. For the year, logistics revenue, net of intermodal fuel surcharges, grew 68.4% to $66.2 million, compared to $39.3 million for 2006. Logistics revenue consists of revenue from our internal brokerage and intermodal operations and from revenue associated with our 45% interest in MW Logistics, LLC, a third-party provider of logistics services.
"Purchased transportation expense grew as a percentage of operating revenue in the 2007 quarter compared with the 2006 quarter. The growth in purchased transportation expense was primarily the result of continuing growth in our logistics business.
"Supplies and maintenance expense increased as a percentage of operating revenue, reflecting a combination of costs associated with a slightly older fleet and an increase in the size of our trailer fleet associated with growth of our intermodal logistics business. The average age of our company tractors in the fourth quarter of 2007 was 2.0 years, compared with 1.5 years in the fourth quarter of 2006. We expect the tractors' average age will improve in 2008 as nearly 325 paid-for tractors are placed in service.
"Insurance and claims expense decreased approximately $1.0 million from the fourth quarter of 2006. Insurance and claims expense as a percentage of operating revenue for the 2007 quarter was more consistent with our average experience over the past several quarters, while the fourth quarter of 2006 was marked by unusually high accident severity.
"Net fuel expense (fuel and fuel taxes less fuel surcharges) decreased by approximately 7.8% quarter over quarter. The decrease was primarily attributable to a 3.1% decrease in the number of miles driven by company drivers and to reduced idling time resulting from the installation of additional auxiliary power units for our tractors that provide heat, air conditioning and electrical power for our drivers without idling the tractor engine. Auxiliary power units were installed in approximately 60% of our company-owned tractors as of Dec. 31, 2007, and we expect to have these units installed in approximately 90% of our company-owned fleet by the third quarter of 2008. The impact of decreased miles and reduced idling time was partially offset by an increase in our average cost of fuel during the fourth quarter of 2007 to $3.15 per gallon from $2.45 per gallon in the 2006 quarter. Our average cost of fuel during 2007 increased to $2.78 per gallon from $2.60 per gallon in 2006.
"Salaries, wages and benefits expense decreased as a percentage of operating revenue, primarily due to growth of logistics revenue, a reduction in the total number of miles driven by company drivers and careful management of the number of our non-driver employees. Our ratio of tractors to non-driver personnel remained above five-to-one in the fourth quarter of 2007 despite decreasing the number of tractors and substantially growing our logistics business.
"Gain on disposition of revenue equipment was approximately $764,000 lower in the fourth quarter of 2007 than in the fourth quarter of 2006, primarily due to a decline in the market for used tractors and, to a lesser extent, trailers.
"Our operating ratio (operating expenses as a percentage of operating revenue) was 96.1% for the fourth quarter of 2007 compared with 93.4% for the fourth quarter of 2006. Our operating ratio was 95.0% for the year of 2007 compared with 92.1% for the year of 2006.
"At Dec. 31, 2007, our balance sheet reflected approximately $236.9 million in stockholders' equity and $44.6 million in debt, for a debt-to-capitalization ratio of approximately 15.9%."
Looking forward to 2008, Mr. Marten offered the following comments: "We still expect industry-wide capacity to exceed demand at least into the second quarter of 2008. In light of those general economic assumptions, our goal is to continue to maintain our rate structure by focusing on profitable freight and strong service performance, while we aggressively control our costs.
"We anticipate net capital expenditures of less than $15 million in 2008, which is significantly below the level of net capital expenditures during the last several years due to the number of tractors paid-for but not placed in service as of Dec. 31, 2007."
Marten Transport, with headquarters in Mondovi, Wis., is one of the leading temperature-sensitive truckload carriers in the United States. Marten specializes in transporting food and other consumer packaged goods that require a temperature-sensitive or insulated environment. Marten offers nationwide service, 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. Such statements may be identified by their use of terms or phrases such as "expects," "estimates," "projects," "believes," "anticipates," "plans," "intends," and similar terms and phrases. Forward-looking statements are based upon the current beliefs and expectations of the Company's management and are inherently subject to significant risks and uncertainties, some of which cannot be predicted or quantified, which could cause future events and actual results to differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. In this release, forward-looking statements involve, among other things, our expectations concerning freight demand, our ability to control our costs, the average age of our company tractors, and capital expenditures. The following factors, among others, could cause actual results to differ materially from those in forward-looking statements: the risk that our perception of the cyclicality of the markets we primarily serve is incorrect or there are recessionary economic cycles and downturns in customers' business cycles; increases in the prices paid for new revenue equipment and changes in the resale value of our used equipment causing our gain on disposition to fluctuate; excess tractor or trailer capacity in the trucking industry; decreased demand for our services or loss of one or more of our major customers; our ability to maintain profitability in or continue to grow our logistics business; surplus inventories; strikes, work slow downs, or work stoppages at the company, customers, ports, or other shipping related facilities; increases or rapid fluctuations in fuel prices as well as fluctuations in surcharge collection; the volume and terms of diesel purchase commitments; interest rates, fuel taxes, tolls, and license and registration fees; increased indebtedness, and associated interest expense, arising from upgrading our fleet of equipment; shortages in supply of new equipment from manufacturers; increases in compensation for and difficulty in attracting and retaining qualified drivers and independent contractors; elevated experience in the frequency and severity of claims relating to accident, cargo, workers' compensation, health, and other claims; changes in management's estimates of liability based upon such experience and development factors; increases in insurance premiums and deductible amounts; seasonal factors such as harsh weather conditions that increase operating costs; decreases in productivity that may offset or eliminate potential savings from the installation of auxiliary power units or unexpected maintenance or other costs associated with such units; competition from trucking, rail, and intermodal competitors; and regulatory requirements that increase costs or decrease efficiency, including new emissions standards for engines and the adoption of ultra-low sulfur diesel fuel and revised hours-of-service requirements for drivers. Readers should review and consider these factors along with the various disclosures by the Company in its press releases, stockholder reports, and filings with the Securities and Exchange Commission. The Company does not assume, and specifically disclaims, any obligation to update forward-looking statements.
MARTEN TRANSPORT, LTD.
CONSOLIDATED CONDENSED BALANCE SHEETS
Dec. 31, Dec. 31,
(In thousands, except share information) 2007 2006
---------------------------
(Unaudited)
ASSETS
Current assets:
Cash $ 3,618 $ 2,988
Marketable securities 350 300
Receivables:
Trade, net 51,539 48,005
Other 6,175 6,458
Prepaid expenses and other 13,823 14,227
Deferred income taxes 4,653 4,532
---------------------------
Total current assets 80,158 76,510
---------------------------
Property and equipment:
Revenue equipment 423,261 406,449
Buildings and land 12,099 10,945
Office equipment and other 12,070 11,335
Less accumulated depreciation (122,246) (98,841)
---------------------------
Net property and equipment 325,184 329,888
Other assets 2,048 4,424
---------------------------
TOTAL ASSETS $ 407,390 $ 410,822
===========================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Checks issued in excess of cash balances $ -- $ 804
Accounts payable 14,653 12,690
Insurance and claims accruals 17,431 16,073
Accrued liabilities 17,731 24,855
Current maturities of long-term debt 5,000 5,000
---------------------------
Total current liabilities 54,815 59,422
Long-term debt, less current maturities 39,643 53,659
Deferred income taxes 74,719 75,835
---------------------------
Total liabilities 169,177 188,916
---------------------------
Minority interest 1,283 913
---------------------------
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;
48,000,000 shares authorized; 21,811,837
shares at December 31, 2007, and
21,764,773 shares at December 31, 2006,
issued and outstanding 218 218
Additional paid-in capital 74,570 73,601
Retained earnings 162,142 147,174
---------------------------
Total stockholders' equity 236,930 220,993
---------------------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 407,390 $ 410,822
===========================
MARTEN TRANSPORT, LTD.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Three Months Year
Ended Dec. 31, Ended Dec. 31,
-------------------------------------
(In thousands, 2007 2006 2007 2006
except per share information) -------------------------------------
(Unaudited)(Unaudited)(Unaudited)
OPERATING REVENUE $144,811 $131,661 $560,017 $518,890
OPERATING EXPENSES (INCOME):
Salaries, wages and benefits 37,988 37,918 153,774 144,373
Purchased transportation 29,386 21,478 103,776 84,409
Fuel and fuel taxes 39,497 32,401 149,021 135,079
Supplies and maintenance 10,257 8,763 38,621 33,155
Depreciation 11,692 11,537 47,009 44,360
Operating taxes and licenses 1,662 1,979 6,823 7,514
Insurance and claims 5,561 6,581 22,353 21,183
Communications and utilities 1,021 935 3,869 3,635
Gain on disposition of revenue
equipment (503) (1,267) (3,386) (6,990)
Other 2,576 2,681 10,356 11,003
-------------------------------------
Total operating expenses 139,137 123,006 532,216 477,721
-------------------------------------
OPERATING INCOME 5,674 8,655 27,801 41,169
-------------------------------------
OTHER EXPENSES (INCOME):
Interest expense 759 881 3,823 3,564
Interest income and other (162) (245) (693) (1,106)
Minority interest 272 157 802 768
-------------------------------------
869 793 3,932 3,226
-------------------------------------
INCOME BEFORE INCOME TAXES 4,805 7,862 23,869 37,943
PROVISION FOR INCOME TAXES 1,840 2,673 8,901 13,425
-------------------------------------
NET INCOME $ 2,965 $ 5,189 $ 14,968 $ 24,518
=====================================
BASIC EARNINGS PER COMMON SHARE $ 0.14 $ 0.24 $ 0.69 $ 1.13
=====================================
DILUTED EARNINGS PER COMMON
SHARE $ 0.14 $ 0.24 $ 0.68 $ 1.12
=====================================
MARTEN TRANSPORT, LTD.
SEGMENT INFORMATION
(Dollars in thousands)
Dollar Percentage
Change Change
Three Three
Three Months Months Months
Ended Ended Ended
Dec. 31, Dec. 31, Dec. 31,
---------------- 2007 2007
2007 2006 vs. vs.
2006 2006
----------------------------------------
Operating revenue:
Truckload revenue,
net of fuel
surcharge
revenue $ 98,292 $101,491 $ (3,199) (3.2)%
Truckload fuel
surcharge revenue 24,893 17,268 7,625 44.2
----------------------------------------
Total
Truckload revenue 123,185 118,759 4,426 3.7
----------------------------------------
Logistics revenue,
net of intermodal fuel
surcharge revenue 20,483 12,362 8,121 65.7
Intermodal fuel
surcharge revenue 1,143 540 603 111.7
----------------------------------------
Total
Logistics revenue 21,626 12,902 8,724 67.6
----------------------------------------
Total
operating revenue $144,811 $131,661 $ 13,150 10.0%
========================================
Operating income:
Truckload $ 4,169 $7,664 $ (3,495) (45.6)%
Logistics 1,505 991 514 51.9
---------------------------------------
Total operating income $ 5,674 $ 8,655 $ (2,981) (34.4)%
========================================
Operating ratio:
Truckload 96.6% 93.5% (3.3)%
Logistics 93.0 92.3 (0.8)
------------------- ---------
Consolidated
operating ratio 96.1% 93.4% (2.9)%
=================== =========
MARTEN TRANSPORT, LTD.
SEGMENT INFORMATION
(Dollars in thousands)
Dollar Percentage
Change Change
Year Year Year
Ended Ended Ended
Dec. 31, Dec. 31, Dec. 31,
-------------- 2007 2007
2007 2006 vs. vs.
2006 2006
-------------------------------------------
Operating revenue:
Truckload revenue,
net of fuel surcharge
revenue $406,754 $402,327 $4,427 1.1%
Truckload fuel surcharge
revenue 83,786 75,323 8,463 11.2
---------------------------------------------
Total Truckload
revenue 490,540 477,650 12,890 2.7
---------------------------------------------
Logistics revenue, net
of intermodal fuel
surcharge revenue 66,163 39,298 26,865 68.4
Intermodal fuel surcharge
revenue 3,314 1,942 1,372 70.6
---------------------------------------------
Total Logistics revenue 69,477 41,240 28,237 68.5
---------------------------------------------
Total operating
revenue $560,017 $518,890 $ 41,127 7.9%
=============================================
Operating income:
Truckload $ 22,689 $ 37,500 $(14,811) (39.5)%
Logistics 5,112 3,669 1,443 39.3
---------------------------------------------
Total operating
income $ 27,801 $ 41,169 $(13,368) (32.5)%
=============================================
Operating ratio:
Truckload 95.4% 92.1% (3.6)%
Logistics 92.6 91.1 (1.6)
--------------------- ---------
Consolidated operating
ratio 95.0% 92.1% (3.1)%
===================== =========
MARTEN TRANSPORT, LTD.
OPERATING STATISTICS
(Unaudited)
Three Months Year
Ended December 31, Ended December 31,
---------------------------------------
2007 2006 2007 2006
---------------------------------------
Truckload Segment:
Average truckload revenue,
net of fuel surcharges,
per total mile $ 1.490 $ 1.496 $ 1.480 $ 1.477
Average miles
per tractor(1) 27,303 26,683 109,269 108,781
Average truckload
revenue, net of fuel
surcharges, per
tractor per week(1) $ 3,095 $ 3,037 $ 3,101 $ 3,081
Average tractors (1) 2,416 2,543 2,516 2,504
Average miles per trip 891 942 911 937
Non-revenue
miles percentage(2) 7.7% 7.5% 7.6% 7.5%
Total miles -
company-employed
drivers
(in thousands) 55,059 56,816 228,776 222,579
Total miles - independent
contractors
(in thousands) 10,908 11,039 46,096 49,810
Logistics Segment:
Brokerage:
Revenue (in thousands) $ 15,328 $ 8,954 $ 48,640 $ 28,636
Loads 7,588 4,497 25,246 16,083
Intermodal:
Revenue (in thousands) $ 6,298 $ 3,948 $ 20,837 $ 12,604
Loads 2,031 1,289 6,793 4,073
Average tractors 39 24 31 19
At December 31, 2007,
and December 31, 2006:
Total tractors(1) 2,416 2,602
Average age of company
tractors (in years) 2.0 1.5
Total trailers 3,989 3,774
Average age of company
trailers (in years) 2.7 2.2
Ratio of trailers
to tractors(1) 1.7 1.5
Ratio of tractors to
non-driver personnel(1) 5.2 5.6
Three Months Year
Ended December 31, Ended December 31,
---------------------------------------
(In thousands) 2007 2006 2007 2006
---------------------------------------
Net cash provided by
operating activities $ 17,406 $ 32,253 $ 61,807 $ 77,070
Net cash used for
investing activities 4,591 31,368 46,826 86,848
Weighted average
shares outstanding:
Basic 21,812 21,761 21,795 21,735
Diluted 21,951 21,953 21,961 21,955
(1) Includes tractors driven by both company-employed drivers and
independent contractors. Independent contractors provided 339
and 365 tractors as of December 31, 2007, and 2006, respectively.
(2) Represents the percentage of miles for which the company
is not compensated.