EX-99.1 2 a06-3629_1ex99d1.htm EXHIBIT 99

Exhibit 99.1

 

MARTEN TRANSPORT 4th QUARTER

NET INCOME INCREASES NEARLY 37%

 

MONDOVI, Wis., Jan. 25, 2006 – Marten Transport, Ltd. (Nasdaq/NMS:MRTN) announced today its financial and operating results for the quarter and year ended Dec. 31, 2005.

 

For the fourth quarter ended Dec. 31, 2005, net income increased 36.6% to $7.1 million, or 32 cents per diluted share, from $5.2 million, or 24 cents per diluted share, for the same quarter of 2004.  Earnings per share amounts give retroactive effect in all periods to the company’s three-for-two stock split in Dec. 2005.  Operating revenue for the quarter ended Dec. 31, 2005 increased 18.6% to $125.4 million from $105.7 million for the same quarter of 2004.

 

For the year ended Dec. 31, 2005, net income increased 42.9% to $25.1 million, or $1.14 per diluted share, from $17.5 million, or 81 cents per diluted share, for 2004.  Operating revenue for 2005 increased 21.1% to $460.2 million from $380.0 million for 2004.  Operating revenue included fuel surcharges of $19.1 million and $57.1 million for the quarter and year ended Dec. 31, 2005, compared with $10.5 million and $26.9 million for the quarter and year ended Dec. 31, 2004.  Operating revenue also included non-freight revenue principally from Marten’s logistics operations.  Non-freight revenue was $5.2 million and $16.9 million for the quarter and year ended Dec. 31, 2005, compared with $2.3 million and $7.0 million for the quarter and year ended Dec. 31, 2004.

 

Freight revenue, which excludes fuel surcharge and non-freight revenue, increased 9.0% to $101.2 million and 11.5% to $386.1 million for the quarter and year ended Dec. 31, 2005, compared with $92.9 million and $346.2 million for the quarter and year ended Dec. 31, 2004.

 

Chairman and President Randolph L. Marten said, “I would like to thank everyone at Marten Transport, especially our drivers, for turning another year of hard work and operating discipline into solid growth and record profits. Despite the challenges of high fuel prices and fierce competition for drivers, 2005 was a year of significant accomplishments.  During 2005, we expanded our fleet of company tractors by 469 units, or 27%, which contributed to nearly 15% fleet growth and helped us overcome the attrition of owner-operators from our industry.  This highlights the importance of our annualized driver turnover rate that has remained near 70% in comparison to an industry average that is estimated at 135% by the American Trucking Associations.

 

“Even more important, we improved the bottom line.  Marten’s operating ratio (operating expenses as a percentage of operating revenue) improved by 110 basis points, to 90.7% for the year.  Netting fuel surcharges against fuel expense, as many of our peers do, would have produced an operating ratio of 89.4% for 2005.  Our margin improvement was attributable to higher rates and a continued focus on cost control and efficiency.  Our ratio of tractors to non-drivers, our ratio of trailers to tractors, and the average age of our tractors and trailers all improved versus 2004.  In October, our success in operating the company was recognized by Forbes Magazine, which named Marten Transport one of the 200 Best Small Companies in America.

 

“For the most part our results for the fourth quarter reflected a favorable operating environment and sound execution of our operating strategy.  Customer demand for our services continued to be strong,” Marten said.  “The combination of solid freight demand with limited industry-wide capacity and strong freight selection by our sales and operations team contributed to a 6.6% increase in average freight revenue per total mile, to $1.49 for the quarter ended Dec. 31, 2005, from $1.40 in the 2004 quarter.

 



 

“We made one decision during the quarter that negatively impacted our mileage utilization, but that we expect to provide benefits in the future.  After evaluating our expectations for customer demand, the continued attrition of owner-operators from our industry, tractor delivery schedules, our desire for a relatively new fleet prior to introduction of the 2007 engines, and our ability to attract and retain company drivers, we decided to take delivery of a large number of tractors during the fourth quarter.  We increased our company fleet by 246 tractors during the quarter, more than half of the increase for the entire year, which increased our number of unseated tractors.  This increase in unseated tractors, offset by the increase in average freight revenue per total mile, caused our average freight revenue per tractor per week to remain essentially flat compared with the fourth quarter of 2004.

 

“Based on our historical recruiting and retention experience, we expect our percentage of unseated tractors to return to the level we experienced throughout most of 2005. We believe that continuing to increase our capacity is important to major customers, and we wanted to make sure that we were prepared to grow with our customers in 2006.  We were able to produce a strong quarter and we continue to believe it was the right decision for Marten.

 

“At Dec. 31, our balance sheet reflected approximately $193.9 million in stockholders’ equity and $48.3 million of borrowed debt, which results in a debt-to-total capitalization ratio of approximately 19.9%.”

 

Marten Transport will host a conference call on Thursday, Jan. 26, 2006, 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: 4169829.  For additional information on accessing the call and to access any statistical and financial information regarding us that is expected to be discussed during the conference call, please visit www.marten.com.

 

To see the balance sheets, statements of operations, and operating statistics for the quarter click here.

 

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 National Market under the symbol MRTN.

 

CONTACT:  Randy Marten, President of Marten Transport, Ltd., 715-926-4216.

 

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.  The following factors, among others, could cause actual results to differ materially from those in forward-looking statements: the risk that our perception of industry fundamentals is incorrect; excess tractor or trailer capacity in the trucking industry; decreased demand for our services or loss of one or more of our major customers; surplus inventories; recessionary economic cycles and downturns in customers’ business cycles; 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; increases in the prices paid for new revenue equipment and changes in the resale value of our used equipment; 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; the risk that the benefits associated with a newer fleet may not materialize, including the risk that our operating statistics may not improve; and regulatory requirements that increase costs or decrease efficiency, including revised hours-of-service requirements for drivers and new emissions standards for engines. 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 Balance Sheets

 

 

 

December 31,

 

(In thousands, except share information)

 

2005

 

2004

 

 

 

(unaudited)

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Marketable securities

 

$

494

 

$

62

 

Receivables:

 

 

 

 

 

Trade, less allowances of $928 and $909, respectively

 

47,383

 

39,090

 

Other

 

6,975

 

8,372

 

Prepaid expenses and other

 

13,264

 

11,869

 

Deferred income taxes

 

3,873

 

5,856

 

Total current assets

 

71,989

 

65,249

 

Property and equipment:

 

 

 

 

 

Revenue equipment

 

339,606

 

283,245

 

Buildings and land

 

10,877

 

10,467

 

Office equipment and other

 

11,797

 

9,053

 

Less accumulated depreciation

 

(92,342

)

(87,067

)

Net property and equipment

 

269,938

 

215,698

 

Other assets

 

6,726

 

7,127

 

 

 

$

348,653

 

$

288,074

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Checks issued in excess of cash balances

 

$

366

 

$

2,849

 

Accounts payable

 

7,646

 

4,579

 

Insurance and claims accruals

 

13,126

 

13,654

 

Accrued liabilities

 

18,557

 

12,292

 

Current maturities of long-term debt

 

5,000

 

5,000

 

Total current liabilities

 

44,695

 

38,374

 

Long-term debt, less current maturities

 

43,300

 

25,257

 

Deferred income taxes

 

66,310

 

56,522

 

Total liabilities

 

154,305

 

120,153

 

Commitments and contingencies Minority interest

 

431

 

 

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; 21,573,220 shares, at December 31, 2005, and 21,460,541 shares, at December 31, 2004, issued and outstanding

 

216

 

215

 

Additional paid-in capital

 

71,045

 

70,111

 

Retained earnings

 

122,656

 

97,595

 

Total stockholders’ equity

 

193,917

 

167,921

 

 

 

$

348,653

 

$

288,074

 

 



 

MARTEN TRANSPORT, LTD.

Consolidated Statements of Operations

 

 

 

Three Months
Ended December 31,

 

For the Years
Ended December 31,

 

(In thousands, except per share information)

 

2005

 

2004

 

2005

 

2004

 

 

 

(unaudited)

 

(unaudited)

 

(unaudited)

 

 

 

OPERATING REVENUE

 

$

125,415

 

$

105,719

 

$

460,202

 

$

380,048

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES (INCOME):

 

 

 

 

 

 

 

 

 

Salaries, wages and benefits

 

33,971

 

29,083

 

126,577

 

107,307

 

Purchased transportation

 

19,881

 

19,895

 

81,897

 

77,858

 

Fuel and fuel taxes

 

31,458

 

20,651

 

107,722

 

70,912

 

Supplies and maintenance

 

7,396

 

6,421

 

28,192

 

25,102

 

Depreciation

 

10,447

 

8,577

 

38,229

 

32,757

 

Operating taxes and licenses

 

1,769

 

1,468

 

7,051

 

6,303

 

Insurance and claims

 

5,607

 

5,585

 

18,914

 

18,604

 

Communications and utilities

 

910

 

883

 

3,398

 

3,168

 

Gain on disposition of revenue equipment

 

(651

)

(499

)

(3,943

)

(2,221

)

Other

 

2,638

 

2,739

 

9,298

 

8,913

 

 

 

 

 

 

 

 

 

 

 

Total operating expenses

 

113,426

 

94,803

 

417,335

 

348,703

 

 

 

 

 

 

 

 

 

 

 

OPERATING INCOME

 

11,989

 

10,916

 

42,867

 

31,345

 

 

 

 

 

 

 

 

 

 

 

OTHER EXPENSES (INCOME):

 

 

 

 

 

 

 

 

 

Interest expense

 

671

 

535

 

2,361

 

2,074

 

Interest income and other

 

(506

)

(387

)

(1,722

)

(1,493

)

Minority interest

 

150

 

(57

)

741

 

51

 

 

 

315

 

91

 

1,380

 

632

 

 

 

 

 

 

 

 

 

 

 

INCOME BEFORE INCOME TAXES

 

11,674

 

10,825

 

41,487

 

30,713

 

 

 

 

 

 

 

 

 

 

 

PROVISION FOR INCOME TAXES

 

4,565

 

5,619

 

16,426

 

13,177

 

 

 

 

 

 

 

 

 

 

 

NET INCOME

 

$

7,109

 

$

5,206

 

$

25,061

 

$

17,536

 

 

 

 

 

 

 

 

 

 

 

BASIC EARNINGS PER COMMON SHARE

 

$

0.33

 

$

0.24

 

$

1.16

 

$

0.83

 

 

 

 

 

 

 

 

 

 

 

DILUTED EARNINGS PER COMMON SHARE

 

$

0.32

 

$

0.24

 

$

1.14

 

$

0.81

 

 



 

MARTEN TRANSPORT, LTD.

Operating Statistics

(Unaudited)

 

 

 

Three Months
Ended December 31,

 

Year
Ended December 31,

 

 

 

2005

 

2004

 

2005

 

2004

 

 

 

 

 

 

 

 

 

 

 

For period:

 

 

 

 

 

 

 

 

 

Average operating revenue per total mile

 

$

1.849

 

$

1.593

 

$

1.689

 

$

1.445

 

Average freight revenue per total mile (1)

 

$

1.492

 

$

1.399

 

$

1.417

 

$

1.316

 

Average miles per tractor(2)

 

26,473

 

28,343

 

111,823

 

116,668

 

Average operating revenue per tractor per week(2)

 

$

3,725

 

$

3,435

 

$

3,622

 

$

3,232

 

Average freight revenue per tractor per week(1) (2)

 

$

3,006

 

$

3,017

 

$

3,039

 

$

2,944

 

Average miles per trip

 

944

 

1,011

 

947

 

1,005

 

Non-revenue miles percentage(3)

 

7.0

%

6.7

%

7.2

%

6.7

%

Total miles – company-employed drivers (in thousands)

 

53,607

 

47,818

 

206,205

 

185,019

 

Total miles – independent contractors (in thousands)

 

14,213

 

18,564

 

66,293

 

78,054

 

 

 

 

 

 

 

 

 

 

 

At December 31, 2005, and December 31, 2004:

 

 

 

 

 

 

 

 

 

Total tractors(2)

 

2,618

 

2,283

 

 

 

 

 

Average age of company tractors (in years)

 

1.2

 

1.4

 

 

 

 

 

Total trailers

 

3,438

 

3,152

 

 

 

 

 

Average age of company trailers (in years)

 

2.9

 

3.3

 

 

 

 

 

Ratio of trailers to tractors(2)

 

1.3

 

1.4

 

 

 

 

 

Ratio of tractors to non-driver personnel(2)

 

5.7

 

5.6

 

 

 

 

 

 

 

 

Three Months
Ended December 31,

 

Year
Ended December 31,

 

(In thousands)

 

2005

 

2004

 

2005

 

2004

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

 

$

26,933

 

$

15,665

 

$

72,472

 

$

50,890

 

Net cash used for investing activities

 

40,146

 

18,458

 

88,557

 

58,829

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

21,566

 

21,384

 

21,518

 

21,088

 

Diluted

 

21,994

 

21,891

 

21,962

 

21,765

 

 


(1)

Excludes revenue from fuel surcharges and non-freight revenue.

 

 

(2)

Includes tractors driven by both company-employed drivers and independent contractors. Independent contractors provided 423 and 557 tractors as of December 31, 2005, and 2004, respectively.

 

 

(3)

Represents the percentage of miles for which the company is not compensated.