MONDOVI, Wis., July 23 /PRNewswire-FirstCall/ -- Marten Transport, Ltd. (Nasdaq: MRTN) announced today its financial and operating results for the quarter ended June 30, 2007 .
Operating revenue, consisting of revenue from truckload and logistics operations, increased 5.3% to $138.8 million in the second quarter of 2007 from $131.9 million in the 2006 quarter. For the six-month period of 2007, operating revenue increased 7.5% to $270.2 million from $251.4 million for the 2006 period. Truckload revenue increased 1.2% to $123.7 million from $122.2 million in the 2006 quarter. For the six-month period of 2007, truckload revenue increased 2.9% to $241.9 million from $235.1 million for the 2006 period. Logistics revenue, which consists of revenue from brokerage and intermodal operations, increased 57% to $15.1 million from $9.6 million in the 2006 quarter. For the six-month period of 2007, logistics revenue increased 74% to $28.4 million from $16.3 million for the 2006 period.
Operating revenue included fuel surcharges of $21.1 million and $38.5 million for the second quarter and six-month period of 2007, compared with $20.9 million and $36.9 million for the second quarter and six-month period of 2006. Operating revenue, net of fuel surcharges, increased 6.1% to $117.7 million in the 2007 quarter and 8.0% to $231.7 million in the 2007 six-month period.
For the second quarter ended June 30, 2007 , net income decreased to $4.3 million , or 20 cents per diluted share, from $7.5 million , or 34 cents per diluted share, for the same quarter of 2006. For the six-month period of 2007, net income decreased to $8.9 million , or 41 cents per diluted share, from $12.6 million , or 57 cents per diluted share, for the 2006 period. The second quarter and six-month period of 2006 included a one-time tax benefit of approximately $875,000 , or 4 cents per diluted share.
Chairman, President and Chief Executive Officer Randolph L. Marten said, 'During the quarter we continued to execute our program of providing excellent service to our customers with moderate fleet growth. The freight environment was challenging, however, which caused downward pressure on freight rates, fewer miles per tractor and increased non-revenue miles. As a result, average truckload revenue per tractor per week, net of fuel surcharges, decreased 3.4% to $3,108 from $3,216 in the second quarter of 2006. Average truckload revenue, net of fuel surcharges, per total mile decreased slightly to $1.470 from $1.472 in the second quarter of 2006 while average miles per tractor decreased 3.2%.
'From a growth perspective, our average truckload tractor fleet increased 5.1% over the 2006 quarter. Logistics revenue increased $5.5 million , or 57%, on a relatively small base. 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.
'We continued to closely scrutinize our costs during the quarter. Even with an increase in revenue, we were able to improve our tractor to non-driver personnel ratio to 5.2 from 5.0 in the second quarter of 2006. Despite increased personnel efficiency, our overall cost structure increased. The two main items contributing to the increase were reduced tractor productivity, which less effectively covered fixed costs, and an increase in net fuel expense.
'Our average cost of fuel during the second quarter of 2007 was $2.73 compared with $2.75 in the second quarter of 2006. Our net fuel expense increased, however, primarily due to increased non-revenue miles, which we are accustomed to seeing in times of challenging freight demand.
'As in recent quarters, the percentage of independent contractors in our fleet declined and our truckload costs continued a shift toward wages, fuel, maintenance, and other expenses associated with company-owned equipment. The increase in salaries, wages and benefits was primarily due to a 4.2% increase in the number of miles driven by company drivers and an increase in health insurance costs of $517,000 versus the second quarter of 2006. Purchased transportation increased as the impact of fewer independent contractors was more than offset by increases associated with the growth in our logistics operations.
'As expected, our gain on sale of revenue equipment was lower in the second quarter of 2007 than in the second quarter of 2006 given our planned decrease in the number of revenue equipment dispositions. Increases in supplies and maintenance as well as insurance and claims also contributed to increased operating expenses in the second quarter.
'Our operating ratio (operating expenses as a percentage of operating revenue) was 94.2% for the second quarter of 2007 compared with 91.0% for the second quarter of 2006. Netting fuel surcharges against fuel expense, as many of our peers discuss, would have produced an operating ratio of 93.2% for the second quarter of 2007 compared with 89.4% for the second quarter of 2006.
'At June 30, 2007 , our balance sheet reflected approximately $230.7 million in stockholders' equity and $62.8 million in borrowed debt, for a debt-to-capitalization ratio of approximately 21.4%.'
Looking forward at the balance of 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 our management and are inherently subject to 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 expected growth in revenue and earnings per share. 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 maintaining a new 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; 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. 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.
MARTEN TRANSPORT, LTD.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
June 30, December 31,
(In thousands, except share information) 2007 2006
ASSETS
Current assets:
Cash $4,058 $2,988
Marketable securities 300 300
Receivables:
Trade, net 54,779 48,005
Other 6,442 6,458
Prepaid expenses and other 12,270 14,227
Deferred income taxes 5,126 4,532
Total current assets 82,975 76,510
Property and equipment:
Revenue equipment, buildings and land,
office equipment and other 438,996 428,729
Accumulated depreciation (109,895) (98,841)
Net property and equipment 329,101 329,888
Other assets 3,185 4,424
TOTAL ASSETS $415,261 $410,822
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Checks issued in excess of cash balances $92 $804
Accounts payable and accrued
liabilities 26,869 37,545
Insurance and claims accruals 16,281 16,073
Current maturities of long-term debt 5,000 5,000
Total current liabilities 48,242 59,422
Long-term debt, less current maturities 57,823 53,659
Deferred income taxes 77,421 75,835
Total liabilities 183,486 188,916
Minority interest 1,052 913
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 June 30, 2007,
and 21,764,773 shares at December 31,
2006, issued and outstanding 218 218
Additional paid-in capital 74,393 73,601
Retained earnings 156,112 147,174
Total stockholders' equity 230,723 220,993
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $415,261 $410,822
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) 2007 2006 2007 2006
OPERATING REVENUE $138,821 $131,862 $270,237 $251,417
OPERATING EXPENSES (INCOME):
Salaries, wages and benefits 38,565 35,820 76,978 70,239
Purchased transportation 24,679 21,712 46,499 40,880
Fuel and fuel taxes 37,126 35,350 69,938 64,934
Supplies and maintenance 8,966 8,131 17,916 16,006
Depreciation 11,727 10,892 23,450 21,566
Operating taxes and licenses 1,726 1,832 3,425 3,651
Insurance and claims 5,376 4,665 10,846 9,972
Communications and utilities 970 857 1,910 1,738
Gain on disposition of revenue
equipment (1,268) (1,699) (2,448) (3,740)
Other 2,913 2,490 5,292 5,370
Total operating expenses 130,780 120,050 253,806 230,616
OPERATING INCOME 8,041 11,812 16,431 20,801
OTHER EXPENSES (INCOME):
Interest expense 1,042 913 2,121 1,755
Interest income and other (126) (303) (345) (601)
Minority interest 79 242 229 350
995 852 2,005 1,504
INCOME BEFORE INCOME TAXES 7,046 10,960 14,426 19,297
PROVISION FOR INCOME TAXES 2,702 3,420 5,488 6,704
NET INCOME $4,344 $7,540 $8,938 $12,593
BASIC EARNINGS PER COMMON SHARE $0.20 $0.35 $0.41 $0.58
DILUTED EARNINGS PER COMMON SHARE $0.20 $0.34 $0.41 $0.57
MARTEN TRANSPORT, LTD.
SEGMENT INFORMATION
(Dollars in thousands)
Dollar Percentage
Change Change
Three Months Three Months Three Months
Ended Ended Ended
June 30, June 30, June 30,
2007 2006 2007 vs. 2007 vs.
2006 2006
Operating revenue:
Truckload revenue, net
of fuel surcharge
revenue $103,354 $101,823 $1,531 1.5%
Truckload fuel surcharge
revenue 20,357 20,415 (58) (0.3)
Total Truckload revenue 123,711 122,238 1,473 1.2
Logistics revenue, net of
intermodal fuel surcharge
revenue 14,388 9,167 5,221 57.0
Intermodal fuel surcharge
revenue 722 457 265 58.0
Total Logistics revenue 15,110 9,624 5,486 57.0
Total operating revenue $138,821 $131,862 $6,959 5.3%
Operating income:
Truckload $7,065 $10,921 $(3,856) (35.3)%
Logistics 976 891 85 9.5
Total operating income $8,041 $11,812 $(3,771) (31.9)%
Operating ratio:
Truckload 94.3% 91.1% (3.5)%
Logistics 93.5 90.7 (3.1)
Consolidated operating
ratio 94.2% 91.0% (3.5)%
MARTEN TRANSPORT, LTD.
SEGMENT INFORMATION
(Dollars in thousands)
Dollar Percentage
Change Change
Six Months Six Months Six Months
Ended Ended Ended
June 30, June 30, June 30,
2007 2006 2007 vs. 2007 vs.
2006 2006
Operating revenue:
Truckload revenue, net
of fuel surcharge
revenue $204,631 $198,896 $5,735 2.9%
Truckload fuel surcharge
revenue 37,227 36,208 1,019 2.8
Total Truckload revenue 241,858 235,104 6,754 2.9
Logistics revenue, net
of intermodal fuel
surcharge revenue 27,100 15,602 11,498 73.7
Intermodal fuel surcharge
revenue 1,279 711 568 80.0
Total Logistics revenue 28,379 16,313 12,066 74.0
Total operating revenue $270,237 $251,417 $18,820 7.5%
Operating income:
Truckload $14,412 $19,343 $(4,931) (25.5)%
Logistics 2,019 1,458 561 38.5
Total operating income $16,431 $20,801 $(4,370) (21.0)%
Operating ratio:
Truckload 94.0% 91.8% (2.4)%
Logistics 92.9 91.1 (2.0)
Consolidated operating
ratio 93.9% 91.7% (2.4)%
MARTEN TRANSPORT, LTD.
OPERATING STATISTICS
(Unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
2007 2006 2007 2006
Truckload Segment:
Average truckload revenue,
net of fuel surcharges, per
total mile $1.470 $1.472 $1.474 $1.460
Average miles per tractor(1) 27,494 28,407 54,081 54,631
Average truckload revenue,
net of fuel surcharges, per
tractor per week(1) $3,108 $3,216 $3,083 $3,085
Average tractors (1) 2,558 2,435 2,567 2,493
Average miles per trip 911 927 926 940
Non-revenue miles percentage(2) 7.8% 7.4% 7.7% 7.5%
Total miles - company-employed
drivers (in thousands) 58,361 56,016 115,529 109,460
Total miles - independent
contractors (in thousands) 11,968 13,164 23,297 26,742
`
Logistics Segment:
Brokerage:
Revenue (in thousands) $10,376 $6,632 $19,425 $11,694
Loads 5,657 4,007 10,405 7,125
Intermodal:
Revenue (in thousands) $4,734 $2,992 $8,954 $4,619
Loads 1,528 994 2,914 1,531
Average tractors 26 20 25 15
At June 30, 2007, and June 30, 2006:
Total tractors(1) 2,552 2,501
Average age of company
tractors (in years) 1.7 1.4
Total trailers 3,934 3,708
Average age of company
trailers (in years) 2.3 2.3
Ratio of trailers to tractors(1) 1.5 1.5
Ratio of tractors to non-driver 5.2 5.0
personnel(1)
Three Months Six Months
Ended June 30, Ended June 30,
(In thousands) 2007 2006 2007 2006
Net cash provided by operating
activities $12,656 $18,298 $29,494 $30,730
Net cash used for investing
activities 4,447 12,429 32,347 37,856
Weighted average shares outstanding:
Basic 21,789 21,747 21,778 21,711
Diluted 21,971 21,963 21,962 21,958
(1) Includes tractors driven by both company-employed drivers and
independent contractors. Independent contractors provided 368 and 388
tractors as of June 30, 2007, and 2006, respectively.
(2) Represents the percentage of miles for which the company is not
compensated.
SOURCE Marten Transport, Ltd.
