8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

October 16, 2018

MARTEN TRANSPORT, LTD.

(Exact name of registrant as specified in its charter)

Delaware	0-15010	39-1140809
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)

129 Marten Street Mondovi, Wisconsin	54755
(Address of principal executive offices)	(Zip Code)

(715) 926-4216

(Registrant’s telephone number, including area code)

Not applicable.

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Section 2 – Financial Information

Item 2.02. Results of Operations and Financial Condition.

On October 16, 2018, the company issued a press release announcing financial results for the quarter ended September 30, 2018. Attached hereto as Exhibit 99.1 is a copy of the company’s press release dated October 16, 2018 announcing the company’s financial results for this period.

The press release also includes a discussion of operating revenue, net of fuel surcharge revenue; and operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharge revenue. The company provided these additional disclosures because management believes removing these items provide a more consistent basis for comparing results of operations from period to period. These financial measures in the press release have not been determined in accordance with generally accepted accounting principles (“GAAP”). Pursuant to Regulation G, the company has included a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures. For the discussion of operating revenue, net of fuel surcharge revenue; and operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharge revenue, the most directly comparable GAAP financial measures are operating revenue, and operating expenses divided by operating revenue, which are reconciled in the attached Exhibit 99.1.

The information contained in this report and the exhibit hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Section 9 – Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits.

(a)	Financial Statements of Businesses Acquired.
	Not Applicable.
(b)	Pro Forma Financial Information.
	Not Applicable.
(c)	Shell Company Transactions.
	Not Applicable.
(d)	Exhibits.

Exhibit No.	Description
99.1	Press Release dated October 16, 2018 (included herewith).

SIGNATURES

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 thereunto duly authorized.

	MARTEN TRANSPORT, LTD.
Dated: October 16, 2018	By:	/s/ James J. Hinnendael
		James J. Hinnendael
		Its: Executive Vice President and
		Chief Financial Officer

2

EX-99.1

Exhibit 99.1

      MARTEN TRANSPORT ANNOUNCES THIRD QUARTER RESULTS

Reports highest operating income and operating revenue for any quarter in Company history

MONDOVI, Wis., October 16, 2018 (GLOBE NEWSWIRE) -- Marten Transport, Ltd. (Nasdaq/GS:MRTN) today reported the highest operating income and operating revenue for any quarter in its history. For the third quarter ended September 30, 2018, net income improved 94.2% to $15.3 million, or 28 cents per diluted share, from $7.9 million, or 14 cents per diluted share, for the third quarter of 2017. For the first nine months of 2018, net income improved 55.9% to $39.3 million, or 71 cents per diluted share, from $25.2 million, or 46 cents per diluted share, for the first nine months of 2017. Earnings for the third quarter of 2018 include an additional income tax benefit of $493,000, or one cent per diluted share, net of related expenses.

Operating income improved 45.9% to a record $19.0 million for the third quarter of 2018 from $13.0 million for the third quarter of 2017, and improved 19.5% to $50.8 million for the first nine months of 2018 from $42.5 million for the 2017 nine-month period. The third quarter operating income also improved 4.2% sequentially from second quarter of 2018 operating income of $18.2 million.

Operating revenue improved 17.0% to a record $199.6 million for the third quarter of 2018 from $170.7 million for the third quarter of 2017, and improved 13.3% to $583.6 million for the first nine months of 2018 from $515.3 million for the 2017 nine-month period. Excluding fuel surcharges, operating revenue improved 10.8% to $171.8 million for the 2018 quarter from $155.0 million for the 2017 quarter, and improved 8.0% to $504.9 million for the first nine months of 2018 from $467.5 million for the 2017 nine-month period. Fuel surcharge revenue increased to $27.9 million for the 2018 quarter from $15.6 million for the 2017 quarter, and increased to $78.8 million for the first nine months of 2018 from $47.8 million for the 2017 nine-month period.

Operating expenses for the third quarter of 2018 improved to 90.5% of operating revenue from 92.4% for the third quarter of 2017. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, improved to 88.9% for the third quarter of 2018 from 91.6% for the third quarter of 2017.

Operating expenses for the first nine months of 2018 improved to 91.3% of operating revenue from 91.7% for the 2017 nine-month period. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, improved to 89.9% for the first nine months of 2018 from 90.9% for the 2017 nine-month period.

Chairman and Chief Executive Officer Randolph L. Marten said, “We are encouraged by our record operating income and operating revenue in this quarter, along with our best operating ratio, net of fuel surcharges, over the last 14 quarters. These top- and bottom-line results are a direct result of the continued disciplined execution of our unique multifaceted business model by our dedicated and experienced Marten workforce while capitalizing on the strengthened freight environment. We also improved our balance sheet position with $35.7 million in cash at September 30, 2018 compared with $15.8 million at the beginning of the year. We expect to drive continued growth across all of our operating platforms with increasing compensation for our premium services, additional freight with existing and new customers, and our emphasis on operating efficiencies and cost controls.”

“Our agreements with a number of customers included a shift beginning in this year’s first quarter from line haul to fuel surcharge revenue, which reduced our Dedicated and Truckload revenue, net of fuel surcharges, by $200 and $43 per tractor per week in the third quarter, and by $171 and $33 per tractor per week in the first nine months of this year. The change reduced our revenue excluding fuel surcharges by $3.8 million for the third quarter and by $9.3 million for this year’s first nine months, while increasing our fuel surcharge revenue by the same amounts.”

Marten Transport, with headquarters in Mondovi, Wis., is one of the leading temperature-sensitive truckload carriers in the United States, specializing in transporting and distributing food and other consumer packaged goods that require a temperature-controlled or insulated environment. Marten’s dry freight services are expanding, with 1,580 dry trailers operating as of September 30, 2018. Marten offers service in the United States, Canada and Mexico, 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 the Company’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 Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. 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, President, 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)	2018			2017
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	35,739		$	15,791
Receivables:
Trade, net		84,055			74,886
Other		6,993			6,131
Prepaid expenses and other		18,816			19,810
Total current assets		145,603			116,618
Property and equipment:
Revenue equipment, buildings and land, office equipment and other		820,523			783,648
Accumulated depreciation		(223,087	)		(211,728	)
Net property and equipment		597,436			571,920
Other assets		2,281			1,865
Total assets	$	745,320		$	690,403
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	48,259		$	38,100
Insurance and claims accruals		25,295			26,177
Total current liabilities		73,554			64,277
Deferred income taxes		107,696			100,626
Total liabilities		181,250			164,903
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; 54,662,924 shares at September 30, 2018, and 54,533,455 shares at December 31, 2017, issued and outstanding		547			545
Additional paid-in capital		79,304			76,413
Retained earnings		484,219			448,542
Total stockholders’ equity		564,070			525,500
Total liabilities and stockholders’ equity	$	745,320		$	690,403

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)	2018			2017			2018			2017
Operating revenue	$	199,649		$	170,679		$	583,633		$	515,349
Operating expenses (income):
Salaries, wages and benefits		64,051			53,594			186,123			166,709
Purchased transportation		35,867			28,668			105,941			85,546
Fuel and fuel taxes		31,658			26,143			92,444			77,106
Supplies and maintenance		10,574			10,381			31,261			31,912
Depreciation		22,272			21,186			66,280			63,875
Operating taxes and licenses		2,404			2,314			7,055			6,813
Insurance and claims		8,567			11,336			27,798			29,098
Communications and utilities		1,663			1,463			4,993			4,531
Gain on disposition of revenue equipment		(1,835	)		(1,908	)		(5,206	)		(4,882	)
Other		5,435			4,480			16,134			12,112
Total operating expenses		180,656			157,657			532,823			472,820
Operating income		18,993			13,022			50,810			42,529
Other		(120	)		14			(447	)		280
Income before income taxes		19,113			13,008			51,257			42,249
Income taxes expense		3,856			5,153			11,967			17,039
Net income	$	15,257		$	7,855		$	39,290		$	25,210
Basic earnings per common share	$	0.28		$	0.14		$	0.72		$	0.46
Diluted earnings per common share	$	0.28		$	0.14		$	0.71		$	0.46
Dividends declared per common share	$	0.025		$	0.025		$	0.075		$	0.055

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)	2018			2017			2018 vs. 2017			2018 vs. 2017
Operating revenue:
Truckload revenue, net of fuel surcharge revenue	$	80,563		$	81,836		$	(1,273	)		(1.6	)%
Truckload fuel surcharge revenue		13,357			10,172			3,185			31.3
Total Truckload revenue		93,920			92,008			1,912			2.1
Dedicated revenue, net of fuel surcharge revenue		48,500			39,154			9,346			23.9
Dedicated fuel surcharge revenue		10,291			2,995			7,296			243.6
Total Dedicated revenue		58,791			42,149			16,642			39.5
Intermodal revenue, net of fuel surcharge revenue		21,735			17,423			4,312			24.7
Intermodal fuel surcharge revenue		4,204			2,472			1,732			70.1
Total Intermodal revenue		25,939			19,895			6,044			30.4
Brokerage revenue		20,999			16,627			4,372			26.3
Total operating revenue	$	199,649		$	170,679		$	28,970			17.0	%
Operating income:
Truckload	$	10,026		$	5,764		$	4,262			73.9	%
Dedicated		5,249			4,514			735			16.3
Intermodal		2,507			1,588			919			57.9
Brokerage		1,211			1,156			55			4.8
Total operating income	$	18,993		$	13,022		$	5,971			45.9	%
Operating ratio:
Truckload		89.3	%		93.7	%
Dedicated		91.1			89.3
Intermodal		90.3			92.0
Brokerage		94.2			93.0
Consolidated operating ratio		90.5	%		92.4	%

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)	2018			2017			2018 vs. 2017			2018 vs. 2017
Operating revenue:
Truckload revenue, net of fuel surcharge revenue	$	241,304		$	251,127		$	(9,823	)		(3.9	)%
Truckload fuel surcharge revenue		40,037			31,453			8,584			27.3
Total Truckload revenue		281,341			282,580			(1,239	)		(0.4	)
Dedicated revenue, net of fuel surcharge revenue		138,096			114,654			23,442			20.4
Dedicated fuel surcharge revenue		26,499			9,274			17,225			185.7
Total Dedicated revenue		164,595			123,928			40,667			32.8
Intermodal revenue, net of fuel surcharge revenue		63,834			51,111			12,723			24.9
Intermodal fuel surcharge revenue		12,227			7,085			5,142			72.6
Total Intermodal revenue		76,061			58,196			17,865			30.7
Brokerage revenue		61,636			50,645			10,991			21.7
Total operating revenue	$	583,633		$	515,349		$	68,284			13.3	%
Operating income:
Truckload	$	25,530		$	19,249		$	6,281			32.6	%
Dedicated		13,321			14,075			(754	)		(5.4	)
Intermodal		7,997			5,777			2,220			38.4
Brokerage		3,962			3,428			534			15.6
Total operating income	$	50,810		$	42,529		$	8,281			19.5	%
Operating ratio:
Truckload		90.9	%		93.2	%
Dedicated		91.9			88.6
Intermodal		89.5			90.1
Brokerage		93.6			93.2
Consolidated operating ratio		91.3	%		91.7	%

MARTEN TRANSPORT, LTD.

OPERATING STATISTICS

(Unaudited)

	Three Months						Nine Months
	Ended September 30,						Ended September 30,
	2018			2017			2018			2017
Truckload Segment:
Revenue (in thousands)	$	93,920		$	92,008		$	281,341		$	282,580
Average revenue, net of fuel surcharges, per tractor per week(1)	$	3,925		$	3,484		$	3,797		$	3,455
Average tractors(1)		1,561			1,787			1,629			1,863
Average miles per trip		564			592			578			598
Non-revenue miles percentage(2)		10.4	%		8.1	%		8.9	%		8.9	%
Total miles (in thousands)		37,259			43,340			117,343			135,136
Dedicated Segment:
Revenue (in thousands)	$	58,791		$	42,149		$	164,595		$	123,928
Average revenue, net of fuel surcharges, per tractor per week(1)	$	3,287		$	3,441		$	3,279		$	3,463
Average tractors(1)		1,123			866			1,080			849
Average miles per trip		317			299			305			297
Non-revenue miles percentage(2)		0.6	%		0.6	%		0.8	%		0.7	%
Total miles (in thousands)		24,362			19,705			69,244			57,641
Intermodal Segment:
Revenue (in thousands)	$	25,939		$	19,895		$	76,061		$	58,196
Loads		10,573			10,265			31,932			29,642
Average tractors		89			78			87			79
Brokerage Segment:
Revenue (in thousands)	$	20,999		$	16,627		$	61,636		$	50,645
Loads		12,781			11,672			36,790			36,604
At September 30, 2018 and September 30, 2017:
Total tractors(1)		2,751			2,649
Average age of company tractors (in years)		1.6			1.4
Total trailers		5,397			4,915
Average age of company trailers (in years)		2.6			2.8
Ratio of trailers to tractors(1)		2.0			1.9

	Three Months						Nine Months
	Ended September 30,						Ended September 30,
(In thousands)	2018			2017			2018			2017
Net cash provided by operating activities	$	44,722		$	29,490		$	112,097		$	94,710
Net cash (used for) investing activities		(29,665	)		(37,050	)		(88,842	)		(84,015	)
Net cash (used for) financing activities		(1,321	)		(1,339	)		(3,307	)		(10,024	)
Weighted average shares outstanding:
Basic		54,661			54,517			54,615			54,479
Diluted		55,194			54,890			55,151			54,803

(1)	Includes tractors driven by both company-employed drivers and independent contractors. Independent contractors provided 50 and 63 tractors as of September 30, 2018 and 2017, respectively.
(2)	Represents the percentage of miles for which the company is not compensated.