-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, N0d9GSDIhKkyCu2biyjwcm7/qlieCEi/+a313fWXZensSRw4LW8Ju4CK7iVJB76r x0n2AsqSfuhZEMVYkYgHUQ== 0000912057-95-008949.txt : 19951027 0000912057-95-008949.hdr.sgml : 19951027 ACCESSION NUMBER: 0000912057-95-008949 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19941231 FILED AS OF DATE: 19951026 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARTEN TRANSPORT LTD CENTRAL INDEX KEY: 0000799167 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 391140809 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-15010 FILM NUMBER: 95584460 BUSINESS ADDRESS: STREET 1: 129 MARTEN ST CITY: MONDOVI STATE: WI ZIP: 54755 BUSINESS PHONE: 7159264216 MAIL ADDRESS: STREET 1: 3400 PLAZA VII STREET 2: 45 SOUTH SEVENTH ST CITY: MINNEAPOLIS STATE: MN ZIP: 55402 10-K/A 1 FORM 10-K/A-1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------- FORM 10-K/A-1 Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended: Commission file number: DECEMBER 31, 1994 0-15010 ------------- MARTEN TRANSPORT, LTD. (Exact name of Registrant as specified in its charter) DELAWARE 39-1140809 (State of Incorporation) (I.R.S. Employer Identification No.) 129 MARTEN STREET 54755 MONDOVI, WISCONSIN (Zip Code) (Address of Principal Executive Offices) Registrant's telephone number, including area code: (715) 926-4216 -------------------- Securities registered pursuant to Section 12(b) of the Act: NONE Securities registered pursuant to Section 12(g) of the Act: COMMON STOCK, PAR VALUE $.01 PER SHARE Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934, during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ---- As of March 1, 1995, 2,929,950 shares of Common Stock of the Registrant were outstanding, and the aggregate market value of the Common Stock of the Registrant (based upon the last reported sale price of the Common Stock at that date by the Nasdaq National Market), excluding shares owned beneficially by officers and directors was approximately $21,810,975. Part II of this Annual Report on Form 10-K incorporates by reference information (to the extent specific pages are referred to herein) from the Registrant's Annual Report to Shareholders for the year ended December 31, 1994 (the "1994 Annual Report"). Part III of this Annual Report on Form 10-K incorporates by reference information (to the extent specific sections are referred to herein) from the Registrant's Proxy Statement for its annual meeting to be held May 2, 1995 (the "1995 Proxy Statement"). PART I ITEM 1. BUSINESS (a) GENERAL DEVELOPMENT OF BUSINESS. Marten Transport, Ltd. ("the Company") is a long-haul truckload carrier providing protective service transportation, which is temperature controlled or insulated carriage of temperature sensitive materials and general commodities and carriage of time sensitive freight, pursuant to operating authority, both contract and common, granted by the Interstate Commerce Commission ("ICC"). The Company believes that the common carrier truckload market continues to expand as shippers increasingly utilize common carriage to gain cost efficiencies and more effectively use resources. Shippers are also consolidating their distribution facilities which has led to consolidation in the number of carriers used. As of December 31, 1994, the Company operated a fleet consisting of 965 tractors and 1,253 trailers (all of which are protective service trailers). Of the total fleet, 909 tractors were Company-owned and 56 tractors and 3 trailers were leased from independent contractors who also provide the services of a driver satisfactory to the Company. As of December 31, 1994, the Company had 1,206 employees, including 976 drivers, none of whom is represented by a collective bargaining unit. The Company was organized under Wisconsin law in 1970 as a successor to a sole proprietorship operated by Roger R. Marten since 1946. In 1988, the Company reincorporated under Delaware law. The Company's executive offices are located at 129 Marten Street, Mondovi, Wisconsin 54755, and its telephone number is (715) 926-4216. (b) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS. Since its inception, the Company's revenue, operating profits and assets have been attributable primarily to one business segment--long-haul truckload carriage of temperature and time sensitive materials and general commodities. (c) NARRATIVE DESCRIPTION OF BUSINESS. The Company specializes in protective service transportation of foods, chemicals and other products that require temperature controlled or insulated carriage. The Company also provides carriage of dry freight for customers requiring the special services the Company offers. In 1994, the Company derived approximately 78% of its revenue from hauling products requiring protective service and 22% of its revenue from hauling dry freight. Most of the Company's dry freight loads require special services the Company offers or permit the Company to position its equipment for hauling protective service loads. The specialized transportation services offered by the Company include: - dependable, late model tractors which allow timely deliveries - late model temperature controlled trailers - scheduled pickups and deliveries - assistance in loading and unloading - the availability of extra trailers that can be placed for the convenience of customers - sufficient equipment to respond promptly to customers' varying requirements - an on-line computer system which allows customers to obtain information regarding the status of deliveries. MARKETING AND CUSTOMERS Senior management and marketing personnel seek customers whose products require protective or other specialized services and who ship multiple truckloads per week. To minimize empty miles, the Company places special emphasis on soliciting customers whose shipping requirements allow the Company to balance the number of load originations and terminations in any given area. A key element of the Company's emphasis on service is its strong commitment to accommodating the individualized requirements of its customers. The Company has developed an electronic data interface ("EDI") system, through which the Company can provide its customers with current information regarding the location and status of shipments in transit. This system also allows customers to place orders for their transportation needs and allows the Company to bill customers directly. In 1993, the Company implemented a satellite tracking system that enhances monitoring of truck and shipment locations. The Company maintains marketing offices in its Wisconsin headquarters, as well as other selected locations throughout the United States. Marketing personnel travel in their assigned regions to solicit new customers and maintain contact with existing customers. Once a customer relationship is established, the primary Company contact is one of the Company's customer service managers. Working from the Company's terminal in Mondovi, Wisconsin, the customer service managers regularly contact existing customers to solicit additional business on a load-by-load basis, particularly when equipment will be available nearby following a completed haul. Each customer service manager is assigned to particular customers and is responsible for monitoring overall transportation and service requirements as well as freight movements for each assigned customer. These efforts to coordinate shipper needs with equipment availability have been instrumental in maintaining a low average empty mile factor of 6.7% in 1994. The Company's Vice President of Sales is responsible for the development of new business, particularly in the area of protective service transportation. To further this goal, the Company maintains an incentive program for the sales force. The program rewards salespeople for meeting or exceeding defined objectives within their respective regions. The Company sets its own freight rates instead of using those published by tariff publishing bureaus. This allows the Company to offer rates that are more responsive to market conditions and the level of service required by a particular customer. The Company's rate structure is designed to compensate the Company for the cost of protective service revenue equipment as well as hauling loads into areas that generate empty miles. The Company derived approximately 12 percent of its revenue from a single customer in 1994, 14 percent in 1993 and 13 percent in 1992. This customer is the Phillip Morris group of companies, which included 11 different accounts in 1994. OPERATIONS The Company's operations are designed for efficient use of equipment while maintaining the emphasis placed on providing individualized service to customers. The Company's computer system provides real-time, on-line information to track shipments and increase equipment utilization as well as to assist management in long-range planning and trend analysis. - 2 - The Company maintains its dispatch operations in its Mondovi, Wisconsin, headquarters. The customer service managers are assigned to particular customers and regions and work closely with the Company's fleet managers, marketing personnel and drivers. Loads are assigned to drivers by load planners. Loads are then dispatched by fleet managers who are assigned a group of drivers regardless of load destination. Once a load has been dispatched, a fleet manager is responsible for its proper and efficient delivery and tracks the status and location of that load through daily contact with drivers. Customer service managers coordinate with the Company's marketing personnel to match customer needs with Company capacity and location of revenue equipment. Each driver is monitored daily on his/her location, load temperature and any problems by the appropriate fleet manager. This information, along with information concerning available loads, is constantly updated on the Company's computer system. Computer-generated information is used to meet delivery schedules, respond to customer inquiries and match available equipment with loads. The Company's primary traffic lanes are between the Midwest and the West Coast, Pacific Northwest, Southwest, Southeast, East Coast and within California. The average length of a trip (one-way) was 1,132 miles during 1994, 1,143 miles during 1993 and 1,162 miles during 1992. The Company's loads generally move from origin directly to destination, thus eliminating any need for freight terminals. Due to the significant number of loads originating in the Los Angeles area and the size of the Company's western operations, the Company operates a maintenance facility in Ontario, California. The Company also maintains smaller maintenance facilities in Jonesboro, Georgia, and Aurora, Oregon. In order to reduce fuel costs, the Company has agreements with various fuel distributors which enable drivers to purchase fuel at a discount while in transit. The Company also purchases fuel in bulk at its Mondovi and Ontario facilities. DRIVERS As of December 31, 1994, the Company employed 976 drivers and had contracts with independent contractors for the services of 56 tractors that provide both a tractor and a qualified driver for the Company's exclusive use. The Company recruits drivers from throughout the United States. The ratio of drivers to tractors as of December 31, 1994, was 1 to 1. None of the Company's drivers is represented by a collective bargaining unit. The Company's turnover of drivers was approximately 59% in 1994, which the Company believes is in line with turnover rates in the industry. Drivers, including independent contractors, are selected in accordance with specific Company guidelines relating to safety records, driving experience and personal evaluations. Once selected, a driver is trained in all phases of Company policies and operations as well as safety techniques and fuel-efficient operation of the equipment. In addition, all new drivers must pass a road test prior to assignment to a vehicle. Recognizing the importance of driver contact while on the road for extended periods, the Company maintains a toll-free number and a staff of fleet managers to provide timely communication and driver support. To enhance this communication and support, the Company implemented a satellite tracking system in 1993. To retain qualified drivers and promote safe operations, the Company purchases premium quality tractors and equips them with optional comfort and safety features, including air ride suspension, air conditioning, high-quality interiors, power steering, engine brakes and double sleeper cabs. The Company maintains stringent screening, training and testing procedures for its drivers to reduce the potential for accidents and the corresponding cost of insurance and claims. - 3 - Company-employed drivers receive a fixed rate per mile which is increased based on the driver's length of service. Drivers are also eligible for bonuses based upon safe, efficient driving. The Company believes that its compensation program provides an important incentive to attract and retain qualified drivers. The Company compensates independent contractors on the basis of a fixed rate per mile or a percentage of revenue from loads hauled. Independent contractors pay their own fuel, insurance, maintenance and repairs and other expenses. REVENUE EQUIPMENT The trucking industry requires significant capital investment in revenue equipment. The Company has elected to finance these purchases using long-term debt with significant current maturities, causing a working capital deficit. The Company has operated effectively with a working capital deficit due to a combination of operating profits, short turnover in accounts receivable and cash management. The Company's policy is to purchase tractors and trailers manufactured to Company specifications. The Company's tractors are generally manufactured by Kenworth, a subsidiary of PACCAR, Inc., and Freightliner. Most of the Company's tractors are equipped with 365-horsepower Detroit Diesel engines, which are designed to enable the equipment to maintain constant speed with optimum fuel economy under conditions often encountered by the Company's equipment, such as mountainous terrain and maximum weight loads. Most of the Company's single van trailers are manufactured by Utility or Great Dane and are equipped with Thermo- King cooling and heating equipment. The current cost of a temperature- controlled, protective service trailer is approximately $38,000. Standardization of equipment enables the Company to simplify driver training, control the cost of spare parts inventory, enhance its preventive maintenance program and increase fuel economy. The following table shows the type and age of equipment owned by the Company as of December 31, 1994:
MODEL YEAR TRACTORS SINGLE VAN TRAILERS ---------- -------- ------------------- 1995 120 94 1994 185 245 1993 293 280 1992 131 109 1991 179 145 1990 1 4 1989 --- 241 1988 --- 132 ___ ___ Total 909 1,250 ___ _____ ___ _____
The 1,250 single van refrigerated trailers are 48 feet long by 102 inches wide with a minimum of 102 inches of inside height. The Company's policy is to replace its tractors and trailers based on factors such as age, the market for used equipment and improvements in technology and fuel efficiency. During 1994, 87 tractors and 78 trailers were added, net of equipment trades. In 1995, the Company plans to purchase 304 additional tractors (for which 208 tractors will be traded) and 300 additional trailers (for which 158 trailers will be traded). - 4 - The Company has a comprehensive maintenance program for its Company-owned tractors and trailers to minimize equipment downtime and enhance resale value. Inspections, repairs and maintenance are performed regularly at the Company's facilities in Mondovi, Wisconsin; Ontario, California; Jonesboro, Georgia; and Aurora, Oregon; and at independent contract maintenance facilities in the Company's service territory. The Company's tractors and trailers are washed regularly to enhance appearance and prolong equipment life. EMPLOYEES As of December 31, 1994, the Company employed 1,206 people, of whom 976 were drivers, 83 were mechanics and maintenance personnel and 147 were support personnel, including management and administration. None of the Company's employees is represented by a collective bargaining unit, and the Company considers relations with its employees to be good. COMPETITION The trucking industry is highly competitive. The Company competes primarily with other protective service truckload carriers and with private carriage fleets. For freight that does not require protective service trailers, the Company also competes with dry freight truckload carriers and to a lesser extent with railroads. The Company competes primarily on the basis of its quality of service and its ability to provide protective service and other specialized services. Several other truckload carriers offering protective service have substantially greater financial resources than the Company, own more equipment and carry a larger volume of freight than the Company. REGULATION The Company is a motor common and contract carrier regulated by the ICC and various state agencies. These regulatory authorities have broad powers, generally governing activities such as authority to engage in motor carrier operations, rates and charges, and certain mergers, consolidations and acquisitions. The Motor Carrier Act of 1980 (the "MCA") substantially increased competition among motor carriers and limited the level of regulation in the industry. The MCA enables applicants to obtain ICC operating authority more easily and allows interstate motor carriers such as the Company to change their rates without ICC approval. The law also allows for the removal of many route and commodity restrictions on the transportation of freight. The Trucking Industry Regulatory Reform Act of 1994 (the "TIRRA") has further increased industry competition and limited industry regulation. The TIRRA repeals tariff filing for individually determined rates; simplifies the granting of ICC operating authority; and pre-empts price, route, and service regulation by the states. Motor carrier operations are subject to safety requirements prescribed by the United States Department of Transportation governing interstate operations. Such matters as weight and dimensions of equipment are also subject to federal and state regulations. The Company also has operating authority in the Canadian Provinces of Alberta, British Columbia, Manitoba, Ontario, Quebec and Saskatchewan. - 5 - SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: October 18, 1995 MARTEN TRANSPORT, LTD. By \s\ Darrell D. Rubel -------------------------- Darrell D. Rubel Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----