Marten Transport Announces Fourth Quarter and Year End Results
- Net income of $12.4 million for the fourth quarter of 2023
- Operating revenue of $268.2 million for the fourth quarter of 2023
- Operating income was $15.7 million for the fourth quarter of 2023
- Marten Transport is one of the leading temperature-sensitive truckload carriers in the United States
- The company's common stock is traded on the Nasdaq Global Select Market under the symbol MRTN
- Net income decline from $25.5 million in Q4 2022 to $12.4 million in Q4 2023
- Operating revenue decline from $322.6 million in Q4 2022 to $268.2 million in Q4 2023
- Operating income decline from $32.8 million in Q4 2022 to $15.7 million in Q4 2023
- Operating expenses as a percentage of operating revenue increased from 89.8% in Q4 2022 to 94.2% in Q4 2023
Insights
The reported financials of Marten Transport indicate a significant decrease in net income and operating revenue for both the fourth quarter and the full year of 2023 compared to the previous year. The reduction in net income from $25.5 million to $12.4 million in Q4 and from $110.4 million to $70.4 million annually, represents a substantial decline in profitability. A key factor contributing to this downturn is the freight market recession characterized by weak demand and oversupply, which has exerted downward pressure on freight rates and disrupted the freight network.
Operating expenses as a percentage of operating revenue have risen, suggesting a decrease in operational efficiency or an increase in costs that have not been offset by revenue growth. This is further exacerbated by inflationary pressures and higher expenses in insurance and claims, as well as health insurance. The company's strategy to avoid rate reductions since the previous August reflects an attempt to maintain margin integrity in the face of market adversity.
Investors should closely monitor the company's ability to navigate the current economic environment and its success in leveraging its diversified business platforms to mitigate the impact of the freight market downturn. The emphasis on fair compensation for premium services may support margin recovery once the market moves towards equilibrium.
Marten Transport's position as a leading temperature-sensitive truckload carrier in the United States is challenged by the current freight market recession. The company's reliance on refrigerated and dry truck-based transportation, which is critical for food, beverages and consumer packaged goods, makes it susceptible to fluctuations in these markets. The reported decrease in fuel surcharge revenue from $52.9 million to $38.8 million in Q4 and from $210.4 million to $159.4 million annually, is indicative of lower fuel costs or reduced transportation volumes, both of which can impact overall profitability.
The company's strategic focus on its five distinct business platforms may provide resilience through diversification, yet the effectiveness of this strategy in offsetting the downturn in the freight market remains to be seen. The transportation industry's cyclical nature means that Marten's performance can serve as an indicator of broader economic trends, which stakeholders should consider when evaluating the company's future prospects.
The financial results of Marten Transport reflect broader economic conditions, including the impact of a freight market recession on the transportation sector. The company's experience of weak demand and oversupply is consistent with the late stages of an economic cycle where consumer spending may be contracting and inventory levels are high. The decrease in operating revenue, excluding fuel surcharges, suggests that the core business activities are facing headwinds beyond just variable fuel costs.
The increase in operating expenses as a percentage of operating revenue points to inflationary pressures affecting the industry, which could be due to higher labor costs, increased maintenance expenses, or other operational challenges. The company's strategic decision to not agree to rate reductions since last August could be an attempt to maintain pricing power in a deflationary rate environment, though this strategy may risk volume loss if competitors choose to compete on price.
Long-term, the company's focus on investing in operations to capture organic growth opportunities could position it well for recovery post-recession. However, the timing and strength of this recovery will depend on macroeconomic factors, including consumer demand and inflationary trends.
MONDOVI, Wis., Jan. 25, 2024 (GLOBE NEWSWIRE) -- Marten Transport, Ltd. (Nasdaq/GS:MRTN) today reported net income of
Operating revenue was
Operating revenue was
Operating income was
Operating expenses as a percentage of operating revenue were
Operating expenses as a percentage of operating revenue were
Executive Chairman Randolph L. Marten stated, “This quarter’s earnings were heavily pressured by the freight market recession’s weak demand and oversupply, inflationary operating costs, and cumulative impact of decreased freight rates leading to freight network disruptions. Additionally, our higher insurance and claims and health insurance expense and less revenue equipment gains reduced our operating income by
“We remain focused on both minimizing the freight market’s impact on our operations, and investing in and positioning our operations to capitalize on profitable organic growth opportunities as the market moves toward equilibrium from its current recessionary late stages - with fair compensation for our premium services. Accordingly, we have not agreed to any rate reductions since last August.”
Marten Transport, with headquarters in Mondovi, Wis., is a multifaceted business offering a network of refrigerated and dry truck-based transportation capabilities across Marten’s five distinct business platforms - Truckload, Dedicated, Intermodal, Brokerage and MRTN de Mexico. Marten is one of the leading temperature-sensitive truckload carriers in the United States, specializing in transporting and distributing food, beverages and other consumer packaged goods that require a temperature-controlled or insulated environment. The Company offers service in the United States, Mexico and Canada, 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 Marten’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 Part I, Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. 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, Chief Executive Officer, Doug Petit, 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 | |||||||
| December 31, | December 31, | ||||||
| (In thousands, except share information) | 2023 | 2022 | |||||
| (Unaudited) | |||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 53,213 | $ | 80,600 | |||
| Receivables: | |||||||
| Trade, net | 105,501 | 120,702 | |||||
| Other | 10,356 | 7,218 | |||||
| Prepaid expenses and other | 27,512 | 27,320 | |||||
| Total current assets | 196,582 | 235,840 | |||||
| Property and equipment: | |||||||
| Revenue equipment, buildings and land, office equipment and other | 1,162,336 | 1,074,832 | |||||
| Accumulated depreciation | (370,103 | ) | (346,665 | ) | |||
| Net property and equipment | 792,233 | 728,167 | |||||
| Other noncurrent assets | 1,524 | 1,672 | |||||
| Total assets | $ | 990,339 | $ | 965,679 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 36,516 | $ | 37,299 | |||
| Insurance and claims accruals | 47,017 | 45,747 | |||||
| Accrued and other current liabilities | 26,709 | 41,264 | |||||
| Total current liabilities | 110,242 | 124,310 | |||||
| Deferred income taxes | 122,462 | 137,041 | |||||
| Noncurrent operating lease liabilities | 249 | 409 | |||||
| Total liabilities | 232,953 | 261,760 | |||||
| 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; 81,312,168 shares at December 31, 2023, and 81,115,132 shares at December 31, 2022, issued and outstanding | 813 | 811 | |||||
| Additional paid-in capital | 49,789 | 47,188 | |||||
| Retained earnings | 706,784 | 655,920 | |||||
| Total stockholders’ equity | 757,386 | 703,919 | |||||
| Total liabilities and stockholders’ equity | $ | 990,339 | $ | 965,679 | |||
| MARTEN TRANSPORT, LTD. | |||||||||||||||
| CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Three Months | Year | ||||||||||||||
| Ended December 31, | Ended December 31, | ||||||||||||||
| (In thousands, except per share information) | 2023 | 2022 | 2023 | 2022 | |||||||||||
| Operating revenue | $ | 268,222 | $ | 322,584 | $ | 1,131,455 | $ | 1,263,878 | |||||||
| Operating expenses (income): | |||||||||||||||
| Salaries, wages and benefits | 91,350 | 104,722 | 378,818 | 390,304 | |||||||||||
| Purchased transportation | 47,259 | 60,599 | 199,334 | 249,792 | |||||||||||
| Fuel and fuel taxes | 42,731 | 55,567 | 180,437 | 218,571 | |||||||||||
| Supplies and maintenance | 16,120 | 15,180 | 67,411 | 55,700 | |||||||||||
| Depreciation | 28,748 | 29,625 | 116,722 | 111,014 | |||||||||||
| Operating taxes and licenses | 2,708 | 2,712 | 11,053 | 10,763 | |||||||||||
| Insurance and claims | 15,209 | 12,417 | 56,014 | 50,513 | |||||||||||
| Communications and utilities | 2,524 | 2,538 | 10,149 | 9,177 | |||||||||||
| Gain on disposition of revenue equipment | (1,802 | ) | (2,957 | ) | (13,612 | ) | (13,379 | ) | |||||||
| Other | 7,718 | 9,398 | 35,019 | 38,079 | |||||||||||
| Total operating expenses | 252,565 | 289,801 | 1,041,345 | 1,120,534 | |||||||||||
| Operating income | 15,657 | 32,783 | 90,110 | 143,344 | |||||||||||
| Other | (868 | ) | (520 | ) | (3,806 | ) | (827 | ) | |||||||
| Income before income taxes | 16,525 | 33,303 | 93,916 | 144,171 | |||||||||||
| Income taxes expense | 4,126 | 7,789 | 23,543 | 33,817 | |||||||||||
| Net income | $ | 12,399 | $ | 25,514 | $ | 70,373 | $ | 110,354 | |||||||
| Basic earnings per common share | $ | 0.15 | $ | 0.31 | $ | 0.87 | $ | 1.35 | |||||||
| Diluted earnings per common share | $ | 0.15 | $ | 0.31 | $ | 0.86 | $ | 1.35 | |||||||
| Dividends declared per common share | $ | 0.06 | $ | 0.06 | $ | 0.24 | $ | 0.24 | |||||||
| MARTEN TRANSPORT, LTD. | |||||||||||||||
| SEGMENT INFORMATION | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Dollar | Percentage | ||||||||||||||
| Change | Change | ||||||||||||||
| Three Months | Three Months | Three Months | |||||||||||||
| Ended | Ended | Ended | |||||||||||||
| December 31, | December 31, | December 31, | |||||||||||||
| (Dollars in thousands) | 2023 | 2022 | 2023 vs. 2022 | 2023 vs. 2022 | |||||||||||
| Operating revenue: | |||||||||||||||
| Truckload revenue, net of fuel surcharge revenue | $ | 95,461 | $ | 108,565 | $ | (13,104 | ) | (12.1 | )% | ||||||
| Truckload fuel surcharge revenue | 18,023 | 22,759 | (4,736 | ) | (20.8 | ) | |||||||||
| Total Truckload revenue | 113,484 | 131,324 | (17,840 | ) | (13.6 | ) | |||||||||
| Dedicated revenue, net of fuel surcharge revenue | 77,731 | 87,985 | (10,254 | ) | (11.7 | ) | |||||||||
| Dedicated fuel surcharge revenue | 17,310 | 23,775 | (6,465 | ) | (27.2 | ) | |||||||||
| Total Dedicated revenue | 95,041 | 111,760 | (16,719 | ) | (15.0 | ) | |||||||||
| Intermodal revenue, net of fuel surcharge revenue | 15,610 | 22,863 | (7,253 | ) | (31.7 | ) | |||||||||
| Intermodal fuel surcharge revenue | 3,467 | 6,390 | (2,923 | ) | (45.7 | ) | |||||||||
| Total Intermodal revenue | 19,077 | 29,253 | (10,176 | ) | (34.8 | ) | |||||||||
| Brokerage revenue | 40,620 | 50,247 | (9,627 | ) | (19.2 | ) | |||||||||
| Total operating revenue | $ | 268,222 | $ | 322,584 | $ | (54,362 | ) | (16.9 | )% | ||||||
| Operating income: | |||||||||||||||
| Truckload | $ | 2,487 | $ | 13,414 | $ | (10,927 | ) | (81.5 | )% | ||||||
| Dedicated | 9,234 | 12,877 | (3,643 | ) | (28.3 | ) | |||||||||
| Intermodal | 296 | 728 | (432 | ) | (59.3 | ) | |||||||||
| Brokerage | 3,640 | 5,764 | (2,124 | ) | (36.8 | ) | |||||||||
| Total operating income | $ | 15,657 | $ | 32,783 | $ | (17,126 | ) | (52.2 | )% | ||||||
| Operating ratio: | |||||||||||||||
| Truckload | 97.8 | % | 89.8 | % | |||||||||||
| Dedicated | 90.3 | 88.5 | |||||||||||||
| Intermodal | 98.4 | 97.5 | |||||||||||||
| Brokerage | 91.0 | 88.5 | |||||||||||||
| Consolidated operating ratio | 94.2 | % | 89.8 | % | |||||||||||
| Operating ratio, net of fuel surcharges: | |||||||||||||||
| Truckload | 97.4 | % | 87.6 | % | |||||||||||
| Dedicated | 88.1 | 85.4 | |||||||||||||
| Intermodal | 98.1 | 96.8 | |||||||||||||
| Brokerage | 91.0 | 88.5 | |||||||||||||
| Consolidated operating ratio, net of fuel surcharges | 93.2 | % | 87.8 | % | |||||||||||
| MARTEN TRANSPORT, LTD. | |||||||||||||||
| SEGMENT INFORMATION | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Dollar | Percentage | ||||||||||||||
| Change | Change | ||||||||||||||
| Year | Year | Year | |||||||||||||
| Ended | Ended | Ended | |||||||||||||
| December 31, | December 31, | December 31, | |||||||||||||
| (Dollars in thousands) | 2023 | 2022 | 2023 vs. 2022 | 2023 vs. 2022 | |||||||||||
| Operating revenue: | |||||||||||||||
| Truckload revenue, net of fuel surcharge revenue | $ | 395,565 | $ | 411,448 | $ | (15,883 | ) | (3.9 | )% | ||||||
| Truckload fuel surcharge revenue | 69,910 | 89,014 | (19,104 | ) | (21.5 | ) | |||||||||
| Total Truckload revenue | 465,475 | 500,462 | (34,987 | ) | (7.0 | ) | |||||||||
| Dedicated revenue, net of fuel surcharge revenue | 334,962 | 336,973 | (2,011 | ) | (0.6 | ) | |||||||||
| Dedicated fuel surcharge revenue | 73,310 | 92,119 | (18,809 | ) | (20.4 | ) | |||||||||
| Total Dedicated revenue | 408,272 | 429,092 | (20,820 | ) | (4.9 | ) | |||||||||
| Intermodal revenue, net of fuel surcharge revenue | 75,887 | 100,452 | (24,565 | ) | (24.5 | ) | |||||||||
| Intermodal fuel surcharge revenue | 16,191 | 29,313 | (13,122 | ) | (44.8 | ) | |||||||||
| Total Intermodal revenue | 92,078 | 129,765 | (37,687 | ) | (29.0 | ) | |||||||||
| Brokerage revenue | 165,630 | 204,559 | (38,929 | ) | (19.0 | ) | |||||||||
| Total operating revenue | $ | 1,131,455 | $ | 1,263,878 | $ | (132,423 | ) | (10.5 | )% | ||||||
| Operating income/(loss): | |||||||||||||||
| Truckload | $ | 24,835 | $ | 59,392 | $ | (34,557 | ) | (58.2 | )% | ||||||
| Dedicated | 48,377 | 50,566 | (2,189 | ) | (4.3 | ) | |||||||||
| Intermodal | (156 | ) | 10,639 | (10,795 | ) | (101.5 | ) | ||||||||
| Brokerage | 17,054 | 22,747 | (5,693 | ) | (25.0 | ) | |||||||||
| Total operating income | $ | 90,110 | $ | 143,344 | $ | (53,234 | ) | (37.1 | )% | ||||||
| Operating ratio: | |||||||||||||||
| Truckload | 94.7 | % | 88.1 | % | |||||||||||
| Dedicated | 88.2 | 88.2 | |||||||||||||
| Intermodal | 100.2 | 91.8 | |||||||||||||
| Brokerage | 89.7 | 88.9 | |||||||||||||
| Consolidated operating ratio | 92.0 | % | 88.7 | % | |||||||||||
| Operating ratio, net of fuel surcharges: | |||||||||||||||
| Truckload | 93.7 | % | 85.6 | % | |||||||||||
| Dedicated | 85.6 | 85.0 | |||||||||||||
| Intermodal | 100.2 | 89.4 | |||||||||||||
| Brokerage | 89.7 | 88.9 | |||||||||||||
| Consolidated operating ratio, net of fuel surcharges | 90.7 | % | 86.4 | % | |||||||||||
| MARTEN TRANSPORT, LTD. | |||||||||||||||
| OPERATING STATISTICS | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Three Months | Year | ||||||||||||||
| Ended December 31, | Ended December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Truckload Segment: | |||||||||||||||
| Revenue (in thousands) | $ | 113,484 | $ | 131,324 | $ | 465,475 | $ | 500,462 | |||||||
| Average revenue, net of fuel surcharges, per tractor per week(1) | $ | 4,183 | $ | 4,683 | $ | 4,377 | $ | 4,898 | |||||||
| Average tractors(1) | 1,737 | 1,763 | 1,733 | 1,611 | |||||||||||
| Average miles per trip | 533 | 504 | 519 | 510 | |||||||||||
| Non-revenue miles percentage(2) | 12.4 | % | 11.9 | % | 12.4 | % | 11.1 | % | |||||||
| Total miles (in thousands) | 39,278 | 39,303 | 155,929 | 149,868 | |||||||||||
| Dedicated Segment: | |||||||||||||||
| Revenue (in thousands) | $ | 95,041 | $ | 111,760 | $ | 408,272 | $ | 429,092 | |||||||
| Average revenue, net of fuel surcharges, per tractor per week(1) | $ | 3,895 | $ | 3,925 | $ | 3,936 | $ | 3,963 | |||||||
| Average tractors(1) | 1,518 | 1,706 | 1,632 | 1,631 | |||||||||||
| Average miles per trip | 335 | 345 | 335 | 341 | |||||||||||
| Non-revenue miles percentage(2) | 1.2 | % | 1.1 | % | 1.2 | % | 1.1 | % | |||||||
| Total miles (in thousands) | 31,215 | 34,910 | 133,163 | 136,310 | |||||||||||
| Intermodal Segment: | |||||||||||||||
| Revenue (in thousands) | $ | 19,077 | $ | 29,253 | $ | 92,078 | $ | 129,765 | |||||||
| Loads | 5,289 | 7,255 | 25,160 | 31,862 | |||||||||||
| Average tractors | 133 | 181 | 159 | 175 | |||||||||||
| Brokerage Segment: | |||||||||||||||
| Revenue (in thousands) | $ | 40,620 | $ | 50,247 | $ | 165,630 | $ | 204,559 | |||||||
| Loads | 23,594 | 25,713 | 91,077 | 95,615 | |||||||||||
| At December 31, 2023 and December 31, 2022: | |||||||||||||||
| Total tractors(1) | 3,349 | 3,660 | |||||||||||||
| Average age of company tractors (in years) | 1.9 | 1.7 | |||||||||||||
| Total trailers | 5,653 | 5,753 | |||||||||||||
| Average age of company trailers (in years) | 4.6 | 3.9 | |||||||||||||
| Ratio of trailers to tractors(1) | 1.7 | 1.6 | |||||||||||||
| Total refrigerated containers | 787 | 802 | |||||||||||||
| Three Months | Year | ||||||||||||||
| Ended December 31, | Ended December 31, | ||||||||||||||
| (In thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||
| Net cash provided by operating activities | $ | 38,045 | $ | 56,268 | $ | 164,378 | $ | 219,489 | |||||||
| Net cash (used for) investing activities | (48,070 | ) | (42,542 | ) | (172,540 | ) | (134,958 | ) | |||||||
| Net cash (used for) financing activities | (4,829 | ) | (4,618 | ) | (19,225 | ) | (60,926 | ) | |||||||
| Weighted average shares outstanding: | |||||||||||||||
| Basic | 81,309 | 81,105 | 81,272 | 81,692 | |||||||||||
| Diluted | 81,418 | 81,391 | 81,413 | 81,959 | |||||||||||
| (1 | ) | Includes tractors driven by both company-employed drivers and independent contractors. Independent contractors provided 94 and 96 tractors as of December 31, 2023 and 2022, respectively. |
| (2 | ) | Represents the percentage of miles for which the company is not compensated. |
FAQ
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