-----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, DMZLJJEQm3zWEzD9iWZI3vbH1BehT8evrkTvDjNLusUSX7ln9rcgNMU9WuWuVBVE O8M5QYNiApMyIIgTuTcC/Q== 0001047469-97-003894.txt : 19971114 0001047469-97-003894.hdr.sgml : 19971114 ACCESSION NUMBER: 0001047469-97-003894 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971112 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-Q SEC ACT: SEC FILE NUMBER: 000-15010 FILM NUMBER: 97713539 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-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 10-Q Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended: September 30, 1997 Commission File Number: 0-15010 MARTEN TRANSPORT, LTD. (Exact name of registrant as specified in its charter) Delaware 39-1140809 -------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 129 Marten Street, Mondovi, Wisconsin 54755 - ------------------------------------- ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 715-926-4216 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 ------ ------ The number of shares outstanding of the registrant's Common Stock, par value $.01 per share, was 2,960,616 as of September 30, 1997. PART I: FINANCIAL INFORMATION Item 1. Financial Statements. MARTEN TRANSPORT, LTD. CONDENSED BALANCE SHEETS (In thousands, except share information) September 30, December 31, 1997 1996 -------------- ------------ (Unaudited) (Audited) ASSETS Current assets: Cash and cash equivalents . . . . . . . . . $ 2,433 $ 3,028 Receivables . . . . . . . . . . . . . . . . 20,549 19,433 Prepaid expenses. . . . . . . . . . . . . . 5,658 6,339 Deferred income taxes . . . . . . . . . . . 4,914 3,456 -------- -------- Total current assets. . . . . . . . . . 33,554 32,256 Property and equipment: Revenue equipment, building and land, office equipment, and other . . . . . . . 149,377 140,824 Accumulated depreciation. . . . . . . . . . (40,362) (34,945) -------- -------- Net property and equipment. . . . . . . 109,015 105,879 Other assets . . . . . . . . . . . . . . . . . 605 -- -------- -------- TOTAL ASSETS. . . . . . . . . . . . . $143,174 $138,135 -------- -------- -------- -------- LIABILITIES AND SHAREHOLDERS' INVESTMENT Current liabilities: Accounts payable and accrued liabilities. . $ 11,788 $ 11,024 Insurance and claims accruals . . . . . . . 12,366 13,558 Current maturities of long-term debt. . . . 21,376 20,100 -------- -------- Total current liabilities . . . . . . . 45,530 44,682 Long-term debt, less current maturities. . . . 31,540 33,505 Deferred income taxes. . . . . . . . . . . . . 21,806 19,904 -------- -------- Total liabilities . . . . . . . . . . . 98,876 98,091 Shareholders' investment: Common stock, $.01 par value per share, 10,000,000 shares authorized, 2,960,616 and 2,959,616 shares issued and outstanding. . . . . . . . . . . . . . 30 30 Additional paid-in capital. . . . . . . . . 9,596 9,581 Retained earnings. . . . .. . . . . . . . . 34,672 30,433 -------- -------- Total shareholders' investment. . . . . 44,298 40,044 -------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' INVESTMENT. . . . . . . $143,174 $138,135 -------- -------- -------- -------- The accompanying notes are an integral part of these balance sheets. MARTEN TRANSPORT, LTD. CONDENSED STATEMENTS OF INCOME (In thousands, except per share amounts) (Unaudited)
Three Months Nine Months Ended September 30, Ended September 30, 1997 1996 1997 1996 ---- ---- ---- ---- OPERATING REVENUE. . . . . . . . . . . $44,676 $37,593 $127,046 $108,181 OPERATING EXPENSES: Salaries, wages and benefits . . . . 13,086 12,756 38,294 37,659 Purchased transportation . . . . . . 9,746 5,111 25,765 13,731 Fuel and fuel taxes. . . . . . . . . 6,385 6,273 19,219 19,060 Supplies and maintenance . . . . . . 3,593 3,496 10,681 10,467 Depreciation . . . . . . . . . . . . 4,338 4,069 12,818 11,851 Operating taxes and licenses . . . . 928 917 2,585 2,527 Insurance and claims . . . . . . . . 779 1,676 2,746 5,521 Communications and utilities . . . . 547 391 1,589 1,259 Gain on disposition of revenue equipment. . . . . . . . . . . . . (54) (416) (163) (2,009) Other. . . . . . . . . . . . . . . . 1,155 1,011 3,462 3,122 -------- -------- -------- -------- Total operating expenses . . . . . 40,503 35,284 116,996 103,188 -------- -------- -------- -------- OPERATING INCOME . . . . . . . . . . . 4,173 2,309 10,050 4,993 OTHER EXPENSES (INCOME): Interest expense . . . . . . . . . . 1,039 908 3,118 2,623 Interest income and other. . . . . . (72) (30) (133) (82) -------- -------- -------- -------- INCOME BEFORE INCOME TAXES . . . . . . 3,206 1,431 7,065 2,452 PROVISION FOR INCOME TAXES . . . . . . 1,282 573 2,826 981 -------- -------- -------- -------- NET INCOME . . . . . . . . . . . . . . $ 1,924 $ 858 $ 4,239 $ 1,471 -------- -------- -------- -------- -------- -------- -------- -------- NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE . . . . . . . . . . $ 0.65 $ 0.29 $ 1.43 $ 0.50 -------- -------- -------- -------- -------- -------- -------- -------- Weighted average common and common equivalent shares outstanding. . . . 2,976 2,964 2,971 2,963 -------- -------- -------- -------- -------- -------- -------- --------
The accompanying notes are an integral part of these statements. MARTEN TRANSPORT, LTD. CONDENSED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Nine Months Ended September 30, 1997 1996 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES: Operations: Net income . . . . . . . . . . . . . . . . . $ 4,239 $ 1,471 Adjustments to reconcile net income to net cash flows from operating activities: Depreciation . . . . . . . . . . . . . . 12,818 11,851 Gain on disposition of revenue equipment. . . . . . . . . . . . . . . (163) (2,009) Deferred tax provision.. . . . . . . . . 444 1,168 Changes in other current operating items . . . . . . . . . . . (863) 2,051 -------- -------- Net cash provided by operating activities . . . . . . . . 16,475 14,532 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Property additions: Revenue equipment, net . . . . . . . . . . . (15,504) (19,810) Building and land, office equipment, and other additions, net . . . . . . . . . (287) (369) Net change in other assets . . . . . . . . . . (605) -- ------- -------- Net cash used for investing activities . . . . . . . . . . . . . (16,396) (20,179) ------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Issuance of common stock . . . . . . . . . . . 15 172 Long-term borrowings . . . . . . . . . . . . . 17,244 21,191 Repayment of long-term borrowings. . . . . . . (17,933) (15,970) ------- -------- Net cash provided by (used for) financing activities.. . . . . . . . (674) 5,393 ------- -------- DECREASE IN CASH AND CASH EQUIVALENTS. . . . . . (595) (254) CASH AND CASH EQUIVALENTS: Beginning of period. . . . . . . . . . . . . . 3,028 3,330 ------- -------- End of period. . . . . . . . . . . . . . . . . $ 2,433 $ 3,076 ------- -------- ------- -------- CASH PAID (RECEIVED) FOR: Interest . . . . . . . . . . . . . . . . . . . $ 3,117 $ 2,636 ------- -------- ------- -------- Income taxes . . . . . . . . . . . . . . . . . $ (135) $ (554) ------- -------- ------- -------- The accompanying notes are an integral part of these statements. NOTES TO FINANCIAL STATEMENTS (Unaudited) (1) Financial Statements The accompanying unaudited condensed financial statements reflect, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation of the Company's financial condition, results of operations, and cash flows as of and for the three and nine month periods ended September 30, 1997. The results of operations for any interim period are not necessarily indicative of results for the full year. The unaudited interim financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 1996. (2) Stock Option Exercises Options were exercised for 1,000 shares and 18,000 shares of Company Common Stock, par value $.01 per share, under the Company's stock option plans during the nine months ended September 30, 1997, and September 30, 1996, respectively. (3) Earnings Per Share Statement of Financial Accounting Standards No. 128, "Earnings Per Share" (Statement No. 128), was issued in February 1997. Statement No. 128 requires disclosure of basic earnings per share (EPS) and diluted EPS, which replace the existing primary EPS and fully diluted EPS. Basic EPS is computed by dividing net income by the weighted average number of shares of common stock outstanding during the period. Diluted EPS is computed similarly to fully diluted EPS with differences in the calculation of dilutive potential common shares. The Company is required to adopt Statement No. 128 in the fourth quarter of 1997, at which time all prior period EPS are to be restated. No differences exist between basic EPS, diluted EPS or EPS as currently reported for the three months and nine months ended September 30, 1997, and September 30, 1996. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. RESULTS OF OPERATIONS Operating revenue for the third quarter of 1997 increased 18.8 percent over the same period of 1996. Operating revenue increased 17.4 percent for the first nine months of 1997 over the same period last year. The primary reason for these increases was the transportation of additional freight associated with improved customer demand and a moderate increase in Marten's fleet. The Company's average miles per tractor and average freight rates increased in 1997. Additionally, fuel surcharges represented 0.9 percent of revenue for the first nine months of 1997 compared with 0.6 percent for the same period of 1996. Operating expenses for the third quarter of 1997 represented 90.7 percent of operating revenue, compared with 93.9 percent for the third quarter of 1996. Operating expenses for the first nine months of 1997 were 92.1 percent of operating revenue, compared with 95.4 percent in 1996. The transportation of additional freight and expansion of Marten's fleet caused most of the expense categories to increase. Purchased transportation expense increased in 1997 due to an increase in the number of independent contractor-owned vehicles. Marten's use of independent contractor-owned vehicles reduced the following expenses relative to revenue: salaries, wages and benefits expense, fuel and fuel taxes expense, and supplies and maintenance expense. Independent contractors assume these expenses. Fuel and fuel taxes expense was also favorably impacted by a decrease in the price of diesel fuel for the third quarter of 1997 compared with the third quarter of 1996. Insurance and claims expense in 1997 decreased due to continued favorable accident experience. The significant decrease in the gain on disposition of revenue equipment was primarily caused by a decrease in the market value realized for used revenue equipment. Interest expense as a percentage of revenue for the three months and nine months ended September 30, 1997, was consistent with 1996 levels. The Company recorded net income of $1,924,000, or 65 cents per share, for the third quarter of 1997. This compares with net income in the 1996 third quarter of $858,000, or 29 cents per share. For the nine months ended September 30, 1997, Marten recorded net income of $4,239,000, or $1.43 per share, compared with $1,471,000, or 50 cents per share, in the same period of 1996. The improvement in net income resulted from continued increases in revenue and management's control of expenses. In 1997, the Financial Accounting Standards Board issued Statement No. 128, "Earnings Per Share," as discussed in Note 3 to the financial statements. This statement, effective in the fourth quarter of 1997, is expected to have minimal impact on Marten's earnings per share computation. CAPITAL RESOURCES AND LIQUIDITY Marten continued to invest in new, more efficient revenue equipment in 1997. The Company has committed to purchase an additional $3 million of new revenue equipment, net of trade-in allowances, through the end of 1997. These expenditures have been, and are expected to continue to be, funded using cash flow from operations and long-term debt collateralized by the new equipment. Additionally, the Company has committed to purchase $1.1 million of diesel fuel at a fixed price through mid-1998, which is expected to be funded using cash flow from operations. The Company has historically operated with a working capital deficit primarily caused by current maturities of long-term debt related to revenue equipment purchases. Marten's operating profits, short turnover in accounts receivable and cash management practices have adequately funded working capital needs. Short-term borrowings have not been and are not expected to be used to meet working capital requirements. The Company's working capital deficit at September 30, 1997, decreased to $12.0 million from $12.4 million at December 31, 1996. This change was due primarily to an increase in the deferred income tax asset which was partially offset by an increase in current maturities of long-term debt. Management believes the Company's liquidity is adequate to meet expected near-term operating requirements. Item 3. Quantitative and Qualitative Disclosures About Market Risk. Not applicable. PART II. OTHER INFORMATION ITEM 1. Legal Proceedings. There are no material pending legal, governmental, administrative or other proceedings to which the Company is a party or of which any of its property is subject. ITEM 2. Change in Securities. None ITEM 3. Defaults Upon Senior Securities. None ITEM 4. Submission of Matters to a Vote of Security Holders. None ITEM 5. Other Information. None ITEM 6. Exhibits and Reports on Form 8-K. a) Exhibit 27.1 Financial Data Schedule. b) No reports on Form 8-K have been filed during the quarter ended September 30, 1997. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereto duly authorized. MARTEN TRANSPORT, LTD. (Registrant) Dated: November 12, 1997 By: /s/ Darrell D. Rubel --------------------------------- Darrell D. Rubel Executive Vice President and Treasurer (Chief Financial Officer) MARTEN TRANSPORT, LTD. EXHIBIT INDEX TO QUARTERLY REPORT ON FORM 10-Q For the Fiscal Quarter Ended September 30, 1997 Item No. Item Method of Filing -------- ---- ---------------- 27.1 Financial Data Schedule. . . . . . Filed herewith electronically. EX-27.1 2 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED STATEMENTS OF INCOME AND THE CONDENSED BALANCE SHEETS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS DEC-31-1997 JAN-01-1997 SEP-30-1997 2,433,000 0 20,549,000 0 0 33,554,000 149,377,000 40,362,000 143,174,000 45,530,000 31,540,000 0 0 30,000 44,268,000 143,174,000 127,046,000 127,046,000 0 116,996,000 0 0 3,118,000 7,065,000 2,826,000 4,239,000 0 0 0 4,239,000 1.43 1.43
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