Exhibit 99.1
MARTEN TRANSPORT, LTD. ANNOUNCES
THIRD QUARTER FINANCIAL RESULTS; NET INCOME RISES 39.2 PERCENT
MONDOVI, Wis., Oct. 20, 2004 – Marten Transport, Ltd. (Nasdaq/NMS:MRTN) announced today its financial results for the quarter and nine months ended Sept. 30, 2004.
For the quarter ended Sept. 30, 2004, operating revenue increased 14.0 percent, to $97.9 million from $85.9 million for the same quarter of 2003. For the nine months ended Sept. 30, 2004, operating revenue increased 10.0 percent, to $274.3 million from $249.4 million for the same period of 2003. Operating revenue included fuel surcharges of $6.8 million and $16.4 million for the quarter and nine months ended Sept. 30, 2004, compared with $3.1 million and $11.0 million for the quarter and nine months ended Sept. 30, 2003. Operating revenue also included revenue from MW Logistics, LLC, a 45 percent owned affiliate, of $2.5 million for the third quarter of 2004 and $4.6 million for the first nine months of 2004, compared with no revenue for the similar periods of 2003. The company’s freight revenue, which excludes fuel surcharge and MW Logistics revenue, increased 6.9 percent for the quarter and 6.2 percent for the nine-month period. The company measures revenue, before fuel surcharge and MW Logistics revenue, or “freight revenue,” in addition to operating revenue, because management believes removing these sources of revenue provides a more consistent basis for comparing results of operations from period to period.
For the quarter ended Sept. 30, 2004, net income increased 39.2 percent to $4.8 million from $3.4 million for the same quarter of 2003. For the nine months ended Sept. 30, 2004, net income increased 47.3 percent to $12.3 million from $8.4 million for the same period of 2003.
For the quarter ended Sept. 30, 2004, net income per diluted share increased to 33 cents from 29 cents for the same quarter of 2003 on a 20.8 percent increase in diluted shares outstanding resulting primarily from the company’s equity offering in the third quarter of 2003. For the nine months ended Sept. 30, 2004, net income per diluted share increased to 85 cents from 79 cents for the same period of 2003 on a 35.8 percent increase in diluted shares outstanding. Diluted earnings per share give retroactive effect in all periods to the company’s three-for-two stock splits in July and Dec. 2003.
Chairman and President Randolph L. Marten said, “We are pleased with our third quarter results, particularly the improvement in our operating ratio (operating expenses as a percentage of operating revenue) in a period of record-high fuel prices and intense competition for high-quality drivers. Our operating ratio improved to 92.0 percent for the quarter compared with 93.1 percent for the same quarter last year.
“Our sales and operations personnel did a great job of addressing rate and lane issues in an environment of strong freight demand and tight industry-wide trucking capacity. We achieved a 7.2 percent increase in average freight revenue per total mile, to $1.32 in the 2004 quarter from $1.23 in the 2003 quarter. Our average freight revenue per tractor per week, our main measure of asset productivity, improved 3.1 percent to $2,976 in the 2004 quarter from $2,886 in the 2003 quarter. Our average operating revenue per total mile and per tractor per week are reported in the accompanying operating statistics table.
“Fuel prices were high during the entire quarter, and the effect was compounded by a steep increase during the second half of the quarter. Our average cost per gallon for fuel increased 29.4 percent to $1.76 in the 2004 quarter, compared with $1.36 in the 2003 quarter, before considering the benefit of fuel surcharges in each period.
“Competition for high-quality drivers remains intense, and we expect this situation to continue for the foreseeable future. During the quarter we increased our driver incentives and continued to offer driver compensation that ranks near the top of the industry. This contributed to an improvement in our driver turnover
to an annualized rate of under 60 percent. Our number of unseated tractors has trended down over the last several months, although the percentage of our tractor fleet that was unseated for the quarter increased compared with the third quarter of 2003. As a result, our in-service tractor count slightly decreased causing a decrease in average miles per tractor, which we calculate using all of our tractors in service.
“Operating a late-model tractor and trailer fleet continued to be an important part of our cost-control and driver recruiting and retention efforts. During the quarter, we continued to upgrade our fleet by purchasing 206 tractors and 247 trailers, resulting in the newest fleet Marten has operated in years.
“At Sept. 30, our balance sheet reflected approximately $161 million in stockholders’ equity and $30 million of borrowed debt, which results in a debt-to-total capitalization ratio of approximately 16 percent. Marten does not have significant off-balance sheet financing.”
The accounts of MW Logistics, LLC were included in the company’s statements of operations beginning April 1, 2004 in accordance with FASB Interpretation No. 46, as revised. MW Logistics is a 45 percent owned affiliate that provides logistics services to the transportation industry. The company previously accounted for its investment in MW Logistics’ operating results using the equity method of accounting.
Marten Transport will host a conference call on Thursday, Oct. 21, at 2:00 p.m. Central Time. The public will be able to listen and participate in the call telephonically by dialing 877-576-2752 and entering the following code: 1220587. For additional information on accessing the call and to access any statistical and financial information that is discussed during the conference call, please visit our website at www.marten.com.
Marten Transport 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 National Market under the symbol MRTN.
CONTACT: Randy Marten, President of Marten Transport, Ltd., 715-926-4216.
MARTEN TRANSPORT, LTD.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
| | Three Months
Ended September 30, | | Nine Months
Ended September 30, | |
(In thousands, except per share information) | | 2004 | | 2003 | | 2004 | | 2003 | |
| | | | | | | | | |
OPERATING REVENUE | | $ | 97,892 | | $ | 85,903 | | $ | 274,329 | | $ | 249,430 | |
| | | | | | | | | |
OPERATING EXPENSES (INCOME): | | | | | | | | | |
Salaries, wages and benefits | | 27,527 | | 26,225 | | 78,224 | | 75,183 | |
Purchased transportation | | 20,314 | | 18,106 | | 57,963 | | 53,923 | |
Fuel and fuel taxes | | 18,789 | | 14,253 | | 50,261 | | 41,972 | |
Supplies and maintenance | | 6,579 | | 6,503 | | 18,681 | | 18,592 | |
Depreciation | | 8,256 | | 7,616 | | 24,180 | | 22,340 | |
Operating taxes and licenses | | 1,651 | | 1,406 | | 4,835 | | 4,177 | |
Insurance and claims | | 4,558 | | 3,782 | | 13,019 | | 11,200 | |
Communications and utilities | | 738 | | 825 | | 2,285 | | 2,419 | |
Gain on disposition of revenue equipment | | (544 | ) | (154 | ) | (1,722 | ) | (310 | ) |
Other | | 2,174 | | 1,450 | | 6,282 | | 5,344 | |
| | | | | | | | | |
Total operating expenses | | 90,042 | | 80,012 | | 254,008 | | 234,840 | |
| | | | | | | | | |
OPERATING INCOME | | 7,850 | | 5,891 | | 20,321 | | 14,590 | |
| | | | | | | | | |
OTHER EXPENSES (INCOME): | | | | | | | | | |
Interest expense | | 512 | | 679 | | 1,539 | | 2,211 | |
Interest income | | (379 | ) | (330 | ) | (1,106 | ) | (1,121 | ) |
| | | | | | | | | |
INCOME BEFORE INCOME TAXES | | 7,717 | | 5,542 | | 19,888 | | 13,500 | |
| | | | | | | | | |
PROVISION FOR INCOME TAXES | | 2,933 | | 2,106 | | 7,558 | | 5,130 | |
| | | | | | | | | |
NET INCOME | | $ | 4,784 | | $ | 3,436 | | $ | 12,330 | | $ | 8,370 | |
| | | | | | | | | |
BASIC EARNINGS PER COMMON SHARE (1) | | $ | 0.34 | | $ | 0.30 | | $ | 0.88 | | $ | 0.82 | |
| | | | | | | | | |
DILUTED EARNINGS PER COMMON SHARE (1) | | $ | 0.33 | | $ | 0.29 | | $ | 0.85 | | $ | 0.79 | |
(1) Basic and diluted earnings per share reflect the company’s three-for-two stock splits effected in the form of 50% stock dividends on July 24, 2003 and December 5, 2003.
MARTEN TRANSPORT, LTD.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
| | September 30, | | December 31, | |
(In thousands, except share information) | | 2004 | | 2003 | |
| | | | | |
ASSETS | | | | | |
Current assets: | | | | | |
Marketable securities | | $ | 108 | | $ | 19,219 | |
Receivables: | | | | | |
Trade, net | | 41,707 | | 34,582 | |
Other | | 9,617 | | 7,337 | |
Prepaid expenses and other | | 8,892 | | 10,034 | |
Deferred income taxes | | 4,453 | | 3,048 | |
| | | | | |
Total current assets | | 64,777 | | 74,220 | |
| | | | | |
Property and equipment: | | | | | |
Revenue equipment, buildings and land, office equipment, and other | | 291,322 | | 263,502 | |
Accumulated depreciation | | (85,584 | ) | (93,684 | ) |
| | | | | |
Net property and equipment | | 205,738 | | 169,818 | |
| | | | | |
Other assets | | 6,661 | | 5,557 | |
| | | | | |
TOTAL ASSETS | | $ | 277,176 | | $ | 249,595 | |
| | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | |
Current liabilities: | | | | | |
Checks issued in excess of cash balances | | $ | 1,172 | | $ | 549 | |
Accounts payable and accrued liabilities | | 21,615 | | 17,062 | |
Insurance and claims accruals | | 11,946 | | 12,052 | |
Current maturities of long-term debt | | 5,000 | | 5,000 | |
| | | | | |
Total current liabilities | | 39,733 | | 34,663 | |
| | | | | |
Long-term debt, less current maturities | | 25,129 | | 22,857 | |
Deferred income taxes | | 51,375 | | 47,541 | |
| | | | | |
Total liabilities | | 116,237 | | 105,061 | |
| | | | | |
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; 23,000,000 shares authorized; 14,146,264 shares, at September 30, 2004, and 13,759,776 shares, at December 31, 2003, issued and outstanding (1) | | 141 | | 138 | |
Additional paid-in capital | | 68,337 | | 64,265 | |
Retained earnings | | 92,461 | | 80,131 | |
| | | | | |
Total stockholders’ equity | | 160,939 | | 144,534 | |
| | | | | |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | | $ | 277,176 | | $ | 249,595 | |
(1) Shares outstanding reflect the company’s three-for-two stock splits effected in the form of 50% stock dividends on July 24, 2003 and December 5, 2003.
MARTEN TRANSPORT, LTD.
OPERATING STATISTICS
(Unaudited)
| | Three Months
Ended September 30, | | Nine Months
Ended September 30, | |
| | 2004 | | 2003 | | 2004 | | 2003 | |
| | | | | | | | | |
For period: | | | | | | | | | |
Average operating revenue per total mile | | $ | 1.457 | | $ | 1.276 | | $ | 1.395 | | $ | 1.275 | |
Average freight revenue per total mile (1) | | $ | 1.319 | | $ | 1.230 | | $ | 1.288 | | $ | 1.219 | |
Average miles per tractor (2) | | 29,663 | | 30,829 | | 88,380 | | 90,387 | |
Average operating revenue per tractor per week (2) | | $ | 3,289 | | $ | 2,993 | | $ | 3,161 | | $ | 2,955 | |
Average freight revenue per tractor per week (1) (2) | | $ | 2,976 | | $ | 2,886 | | $ | 2,918 | | $ | 2,825 | |
Average miles per trip | | 990 | | 1,009 | | 1,004 | | 1,003 | |
Non-revenue miles percentage (3) | | 6.9 | % | 6.8 | % | 6.7 | % | 6.7 | % |
Total miles – company employed drivers (in thousands) | | 47,354 | | 46,842 | | 137,201 | | 134,891 | |
Total miles – independent contractors (in thousands) | | 19,817 | | 20,477 | | 59,490 | | 60,717 | |
| | | | | | | | | |
At September 30, 2004, and September 30, 2003: | | | | | | | | | |
Total tractors (2) | | 2,263 | | 2,193 | | | | | |
Average age of company tractors (in years) | | 1.5 | | 2.2 | | | | | |
Total trailers | | 3,123 | | 2,800 | | | | | |
Average age of company trailers (in years) | | 3.3 | | 3.9 | | | | | |
Ratio of trailers to tractors (2) | | 1.4 | | 1.3 | | | | | |
Ratio of tractors to non-driver personnel (2) | | 5.6 | | 5.5 | | | | | |
| | Three Months
Ended September 30, | | Nine Months
Ended September 30, | |
(In thousands) | | 2004 | | 2003 | | 2004 | | 2003 | |
Net cash provided by operating activities | | $ | 8,446 | | $ | 10,106 | | $ | 35,225 | | $ | 34,613 | |
Net cash used for investing activities | | $ | 18,246 | | $ | 11,485 | | $ | 59,482 | | $ | 24,299 | |
Weighted average shares outstanding: | | | | | | | | | |
Basic | | 14,119 | | 11,441 | | 13,992 | | 10,208 | |
Diluted | | 14,529 | | 12,030 | | 14,478 | | 10,662 | |
(1) Excludes revenue from fuel surcharges and from MW Logistics, LLC, a 45% owned affiliate whose financial results were consolidated with the company’s effective April 1, 2004, in accordance with FASB Interpretation No. 46, as revised.
(2) Includes tractors driven by both company-employed drivers and independent contractors. Independent contractors provided 589 and 595 tractors as of September 30, 2004, and 2003, respectively.
(3) Represents the percentage of miles for which the company is not compensated.
