MRTN Marten Transport Ltd

Marten Transport, Ltd. (Nasdaq/GS:MRTN) today reported a 20.6% improvement in net income to $25.6 million, or 32 cents per diluted share, for the third quarter ended September 30, 2022, from $21.3 million, or 26 cents per diluted share, for the third quarter of 2021 – the Company’s fifteenth consecutive year-over-year increase in quarterly profitability. For the first nine months of 2022, net income improved 39.8% to $84.8 million, or $1.03 per diluted share, from $60.7 million, or 73 cents per diluted share, for the first nine months of 2021.

	Operating Results Comparison
		Percentage			Percentage			Percentage			Percentage			Percentage			Percentage
		Increase			Increase			Increase			Increase			Increase			Increase
		Three Months			Three Months			Three Months			Year			Year			Year
		Ended			Ended			Ended			Ended			Ended			Ended
		September 30,			June 30,			March 31,			December 31,			December 31,			December 31,
		2022 vs. 2021			2022 vs. 2021			2022 vs. 2021			2021 vs. 2020			2020 vs. 2019			2019 vs. 2018
	Operating revenue	29.1	%		41.8	%		28.8	%		11.4	%		3.7	%		7.1	%
	Operating revenue, net of fuel surcharges	21.8	%		32.1	%		23.8	%		8.3	%		6.8	%		8.6	%
	Operating income	18.5	%		43.5	%		49.4	%		19.8	%		21.9	%		8.7	%
	Net income	20.6	%		47.8	%		52.9	%		22.9	%		13.8	%		11.0	%

Operating revenue improved 29.1% to $324.4 million for the third quarter of 2022 from $251.3 million for the third quarter of 2021. Excluding fuel surcharges, operating revenue improved 21.8% to $269.3 million for the 2022 quarter from $221.2 million for the 2021 quarter. Fuel surcharge revenue increased to $55.1 million for the 2022 quarter from $30.1 million for the 2021 quarter due to significantly higher fuel prices.

Operating revenue improved 33.2% to $941.3 million for the first nine months of 2022 from $706.8 million for the first nine months of 2021. Excluding fuel surcharges, operating revenue improved 25.8% to $783.8 million for the 2022 period from $623.0 million for the 2021 period. Fuel surcharge revenue increased to $157.5 million for the 2022 period from $83.7 million for 2021 period.

Operating income improved 18.5% to $33.8 million for the third quarter of 2022 from $28.5 million for the third quarter of 2021, and also improved 36.5% to $110.6 million for the first nine months of 2022 from $81.0 million for the first nine months of 2021.

Operating expenses as a percentage of operating revenue were 89.6% for the third quarter of 2022 and 88.7% for the third quarter of 2021. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, were 87.5% for the 2022 quarter and 87.1% for the 2021 quarter.

Operating expenses as a percentage of operating revenue improved to 88.3% for the first nine months of 2022 from 88.5% for the first nine months of 2021. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, improved to 85.9% from 87.0%.

Executive Chairman Randolph L. Marten stated, “The smart, hard work of our talented people executing our unique business model has produced improvements of 29.1% in top-line and 20.6% in bottom-line results over the third quarter of 2021. These results overcame significantly less gain on disposition of our revenue equipment, the negative effect of Hurricane Ian on our sizable Southeast truckload and dedicated operations, and a decrease in our intermodal volumes and margins resulting from weakness in rail service aggravated by the threat of a rail labor strike in mid-September.”

“We continue to drive strong fleet growth with our approach to overcoming the national shortage of qualified drivers of applying a heightened emphasis on structurally improving our drivers’ jobs and work-life balance by collaborating with our customers, while also increasing our driver compensation. This growth provides momentum to the coming quarters as we began this year’s fourth quarter with 199 more of the industry’s top drivers than we employed at the beginning of the third quarter – and have now increased our number of drivers by 621, or 22.6%, since June 30, 2021.”

	Operating Results Since the Pandemic Began – Percentage Increase Over Same Quarter of Prior Year
			Q3 2022			Q2 2022			Q1 2022			Q4 2021			Q3 2021			Q2 2021			Q1 2021			Q4 2020			Q3 2020			Q2 2020
	Operating revenue		29.1	%		41.8	%		28.8	%		17.4	%		16.3	%		9.4	%		2.0	%		4.7	%		0.5	%		0.1		%
	Operating revenue, net of fuel surcharges		21.8	%		32.1	%		23.8	%		12.5	%		12.8	%		5.0	%		2.5	%		8.8	%		3.8	%		4.7		%
	Operating income		18.5	%		43.5	%		49.4	%		20.0	%		16.8	%		12.9	%		33.1	%		36.0	%		21.8	%		26.6		%
	Net income		20.6	%		47.8	%		52.9	%		26.1	%		17.9	%		18.1	%		31.3	%		24.5	%		8.8	%		19.4		%

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 the Company’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, 2021. 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, and Jim Hinnendael, Executive Vice President and Chief Financial Officer, of Marten Transport, Ltd., 715-926-4216.

MARTEN TRANSPORT, LTD.CONSOLIDATED CONDENSED BALANCE SHEETS

	September 30,				December 31,
(In thousands, except share information)	2022				2021
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	71,492			$	56,995
Receivables:
Trade, net		124,587				99,003
Other		4,443				6,971
Prepaid expenses and other		24,787				23,980
Total current assets		225,309				186,949
Property and equipment:
Revenue equipment, buildings and land, office equipment and other		1,046,476				956,476
Accumulated depreciation		(334,504	)			(274,199	)
Net property and equipment		711,972				682,277
Other noncurrent assets		1,421				1,464
Total assets	$	938,702			$	870,690
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	43,188			$	20,150
Insurance and claims accruals		45,664				42,014
Accrued and other current liabilities		36,605				31,395
Total current liabilities		125,457				93,559
Deferred income taxes		130,594				125,163
Noncurrent operating lease liabilities		214				291
Total liabilities		256,265				219,013
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; 81,096,632 shares at September 30, 2022, and 83,034,404 shares at December 31, 2021, issued and outstanding		811				830
Additional paid-in capital		46,366				85,718
Retained earnings		635,260				565,129
Total stockholders’ equity		682,437				651,677
Total liabilities and stockholders’ equity	$	938,702			$	870,690

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)	2022				2021				2022				2021
Operating revenue	$	324,448			$	251,280			$	941,294			$	706,768
Operating expenses (income):
Salaries, wages and benefits		99,773				81,091				285,582				229,385
Purchased transportation		64,403				52,861				189,193				138,629
Fuel and fuel taxes		57,299				33,909				163,004				94,853
Supplies and maintenance		14,855				11,685				40,520				33,867
Depreciation		28,381				25,371				81,389				76,598
Operating taxes and licenses		2,748				2,606				8,051				8,036
Insurance and claims		11,949				10,501				38,096				31,338
Communications and utilities		2,135				2,181				6,639				6,320
Gain on disposition of revenue equipment		(1,070	)			(4,536	)			(10,422	)			(11,859	)
Other		10,209				7,115				28,681				18,589
Total operating expenses		290,682				222,784				830,733				625,756
Operating income		33,766				28,496				110,561				81,012
Other		(264	)			(8	)			(307	)			(27	)
Income before income taxes		34,030				28,504				110,868				81,039
Income taxes expense		8,384				7,230				26,028				20,341
Net income	$	25,646			$	21,274			$	84,840			$	60,698
Basic earnings per common share	$	0.32			$	0.26			$	1.04			$	0.73
Diluted earnings per common share	$	0.32			$	0.26			$	1.03			$	0.73
Dividends paid per common share	$	0.06			$	-			$	0.18			$	0.08
Dividends declared per common share	$	0.06			$	0.54			$	0.18			$	0.62

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)	2022				2021				2022 vs. 2021				2022 vs. 2021
Operating revenue:
Truckload revenue, net of fuel surcharge revenue	$	105,905			$	86,889			$	19,016				21.9	%
Truckload fuel surcharge revenue		23,471				12,728				10,743				84.4
Total Truckload revenue		129,376				99,617				29,759				29.9
Dedicated revenue, net of fuel surcharge revenue		86,178				68,826				17,352				25.2
Dedicated fuel surcharge revenue		24,039				13,336				10,703				80.3
Total Dedicated revenue		110,217				82,162				28,055				34.1
Intermodal revenue, net of fuel surcharge revenue		24,303				22,716				1,587				7.0
Intermodal fuel surcharge revenue		7,600				4,031				3,569				88.5
Total Intermodal revenue		31,903				26,747				5,156				19.3
Brokerage revenue		52,952				42,754				10,198				23.9
Total operating revenue	$	324,448			$	251,280			$	73,168				29.1	%
Operating income:
Truckload	$	14,319			$	11,670			$	2,649				22.7	%
Dedicated		13,005				8,521				4,484				52.6
Intermodal		778				2,840				(2,062	)			(72.6	)
Brokerage		5,664				5,465				199				3.6
Total operating income	$	33,766			$	28,496			$	5,270				18.5	%
Operating ratio:
Truckload		88.9	%			88.3	%
Dedicated		88.2				89.6
Intermodal		97.6				89.4
Brokerage		89.3				87.2
Consolidated operating ratio		89.6	%			88.7	%
Operating ratio, net of fuel surcharges:
Truckload		86.5	%			86.6	%
Dedicated		84.9				87.6
Intermodal		96.8				87.5
Brokerage		89.3				87.2
Consolidated operating ratio, net of fuel surcharges		87.5	%			87.1	%

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)	2022				2021				2022 vs. 2021				2022 vs. 2021
Operating revenue:
Truckload revenue, net of fuel surcharge revenue	$	302,883			$	254,441			$	48,442				19.0	%
Truckload fuel surcharge revenue		66,255				36,032				30,223				83.9
Total Truckload revenue		369,138				290,473				78,665				27.1
Dedicated revenue, net of fuel surcharge revenue		248,988				202,955				46,033				22.7
Dedicated fuel surcharge revenue		68,344				37,565				30,779				81.9
Total Dedicated revenue		317,332				240,520				76,812				31.9
Intermodal revenue, net of fuel surcharge revenue		77,589				64,193				13,396				20.9
Intermodal fuel surcharge revenue		22,923				10,150				12,773				125.8
Total Intermodal revenue		100,512				74,343				26,169				35.2
Brokerage revenue		154,312				101,432				52,880				52.1
Total operating revenue	$	941,294			$	706,768			$	234,526				33.2	%
Operating income:
Truckload	$	45,978			$	36,282			$	9,696				26.7	%
Dedicated		37,689				28,074				9,615				34.2
Intermodal		9,911				6,151				3,760				61.1
Brokerage		16,983				10,505				6,478				61.7
Total operating income	$	110,561			$	81,012			$	29,549				36.5	%
Operating ratio:
Truckload		87.5	%			87.5	%
Dedicated		88.1				88.3
Intermodal		90.1				91.7
Brokerage		89.0				89.6
Consolidated operating ratio		88.3	%			88.5	%
Operating ratio, net of fuel surcharges:
Truckload		84.8	%			85.7	%
Dedicated		84.9				86.2
Intermodal		87.2				90.4
Brokerage		89.0				89.6
Consolidated operating ratio, net of fuel surcharges		85.9	%			87.0	%

MARTEN TRANSPORT, LTD. OPERATING STATISTICS (Unaudited)

	Three Months								Nine Months
	Ended September 30,								Ended September 30,
	2022				2021				2022				2021
Truckload Segment:
Revenue (in thousands)	$	129,376			$	99,617			$	369,138			$	290,473
Average revenue, net of fuel surcharges, per tractor per week(1)	$	4,889			$	4,411			$	4,980			$	4,202
Average tractors(1)		1,648				1,499				1,560				1,553
Average miles per trip		508				502				512				516
Non-revenue miles percentage(2)		11.3	%			10.1	%			10.8	%			10.0	%
Total miles (in thousands)		38,441				35,945				110,565				111,513
Dedicated Segment:
Revenue (in thousands)	$	110,217			$	82,162			$	317,332			$	240,520
Average revenue, net of fuel surcharges, per tractor per week(1)	$	4,006			$	3,438			$	3,977			$	3,305
Average tractors(1)		1,637				1,523				1,605				1,574
Average miles per trip		337				328				340				319
Non-revenue miles percentage(2)		1.2	%			1.1	%			1.1	%			1.0	%
Total miles (in thousands)		34,513				31,511				101,400				95,765
Intermodal Segment:
Revenue (in thousands)	$	31,903			$	26,747			$	100,512			$	74,343
Loads		7,610				8,257				24,607				24,885
Average tractors		182				139				173				140
Brokerage Segment:
Revenue (in thousands)	$	52,952			$	42,754			$	154,312			$	101,432
Loads		24,896				18,251				69,902				47,167
At September 30, 2022 and September 30, 2021:
Total tractors(1)		3,575				3,204
Average age of company tractors (in years)		1.7				1.4
Total trailers		5,679				5,291
Average age of company trailers (in years)		3.8				3.2
Ratio of trailers to tractors(1)		1.6				1.7
Total refrigerated containers		803				607

	Three Months								Nine Months
	Ended September 30,								Ended September 30,
(In thousands)	2022				2021				2022				2021
Net cash provided by operating activities	$	64,551			$	44,544			$	163,221			$	127,909
Net cash (used for) investing activities		(57,412	)			(40,704	)			(92,416	)			(102,142	)
Net cash (used for) financing activities		(4,021	)			(612	)			(56,308	)			(7,994	)
Weighted average shares outstanding:
Basic		81,061				82,907				81,889				82,835
Diluted		81,347				83,372				82,155				83,380

(1)	Includes tractors driven by both company-employed drivers and independent contractors. Independent contractors provided 90 and 101 tractors as of September 30, 2022 and 2021, respectively.
(2)	Represents the percentage of miles for which the company is not compensated.