Marten Transport Announces Second Quarter Results

Rhea-AI Summary

Marten Transport (MRTN) reported a significant decline in financial performance for Q2 2024. Net income dropped to $7.9 million ($0.10 per diluted share) from $21.9 million ($0.27 per diluted share) in Q2 2023. Operating revenue decreased to $246.2 million from $285.7 million year-over-year. Excluding fuel surcharges, revenue fell to $213.5 million from $248.6 million.

The company attributed the downturn to the freight market recession, characterized by oversupply, weak demand, inflationary operating costs, and freight rate reductions. Despite challenges, Marten's dedicated, brokerage, and MRTN de Mexico operations showed resilience. The company is focusing on minimizing market impact while positioning for future growth opportunities.

Positive

• Added new multi-year dedicated programs for 133 drivers starting in Q3 2024
• Dedicated, brokerage, and MRTN de Mexico operations showed resilience in H1 2024
• Maintained rate stability since August 2023, refusing further reductions

Negative

• Net income decreased 63.9% to $7.9 million in Q2 2024 from $21.9 million in Q2 2023
• Operating revenue declined 13.8% to $246.2 million in Q2 2024 from $285.7 million in Q2 2023
• Operating income fell 64.5% to $10.0 million in Q2 2024 from $28.2 million in Q2 2023
• Operating expenses as a percentage of revenue increased to 95.9% in Q2 2024 from 90.1% in Q2 2023

Insights

Financial Analyst

Marten Transport's second quarter results show a significant decrease in net income and operating revenue compared to the same period last year. The net income fell from $21.9 million in Q2 2023 to $7.9 million in Q2 2024 and operating revenue dropped from $285.7 million to $246.2 million in the same period. This sharp decline is indicative of broader challenges in the freight market.

The operating income also fell dramatically from $28.2 million to $10.0 million. The operating expenses as a percentage of operating revenue increased, highlighting rising costs and lower efficiency. This is concerning because it indicates that Marten Transport's profitability is being squeezed from both the revenue and cost sides.

Despite these results, the company is attempting to offset the downturn by not agreeing to further rate reductions and increasing dedicated capacity. However, from an investor standpoint, the immediate financials appear challenging.

Investors might need to be cautious and watch for signs of stabilization or further strategic plans to manage these pressures effectively in the upcoming quarters.

MONDOVI, Wis., July 18, 2024 (GLOBE NEWSWIRE) -- Marten Transport, Ltd. (Nasdaq/GS:MRTN) today reported net income of $7.9 million, or 10 cents per diluted share, for the second quarter ended June 30, 2024, compared with $21.9 million, or 27 cents per diluted share, for the second quarter of 2023. For the six-month period ended June 30, 2024, net income was $17.5 million, or 22 cents per diluted share, compared with $44.4 million, or 55 cents per diluted share, for the 2023 six-month period.

Operating revenue was $246.2 million for the second quarter of 2024 compared with $285.7 million for the second quarter of 2023. Excluding fuel surcharges, operating revenue was $213.5 million for the 2024 quarter compared with $248.6 million for the 2023 quarter. Fuel surcharge revenue decreased to $32.7 million for the 2024 quarter from $37.0 million for the 2023 quarter.

Operating revenue was $495.9 million for the first six months of 2024 compared with $583.7 million for the first six months of 2023. Excluding fuel surcharges, operating revenue was $429.3 million for the 2024 period compared with $503.6 million for the 2023 period. Fuel surcharge revenue decreased to $66.6 million for the 2024 period compared with $80.1 million for the 2023 period.

Operating income was $10.0 million for the second quarter of 2024 compared with $28.2 million for the second quarter of 2023.

Operating income was $22.2 million for the first six months of 2024 compared with $57.2 million for the first six months of 2023.

Operating expenses as a percentage of operating revenue were 95.9% for the 2024 quarter and 90.1% for the 2023 quarter. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, were 95.3% for the 2024 quarter and 88.7% for the 2023 quarter.

Operating expenses as a percentage of operating revenue were 95.5% for the first six months of 2024 and 90.2% for the first six months of 2023. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, were 94.8% for the 2024 period and 88.6% for the 2023 period.

Executive Chairman Randolph L. Marten stated, “Our earnings were heavily pressured by the freight market recession’s oversupply and weak demand, inflationary operating costs, and cumulative impact of freight rate reductions leading to freight network disruptions. Our unique multifaceted business model’s value is highlighted by the operating results for our dedicated, brokerage and MRTN de Mexico operations through the first half of this year.”

“We are focused on minimizing the freight market’s impact on our operations while investing in and positioning our operations to capitalize on profitable organic growth opportunities, with fair compensation for our premium services, across each of our business operations for what comes next in the freight cycle as the market moves toward equilibrium from its current recessionary late stages. Accordingly, we have not agreed to rate reductions since last August.”

“We are seeing increased interest by our customers to secure dedicated capacity and have recently added new multi-year dedicated programs for an additional 133 drivers starting in the third quarter.”

Current Investor Presentation

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, 2023. 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
		June 30,			December 31,
(In thousands, except share information)		2024			2023
			(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	77,199		$	53,213
Receivables:
Trade, net			99,926			105,501
Other			11,450			10,356
Prepaid expenses and other			30,995			27,512
Total current assets			219,570			196,582
Property and equipment:
Revenue equipment, buildings and land, office equipment and other			1,149,771			1,162,336
Accumulated depreciation			(360,974)			(370,103)
Net property and equipment			788,797			792,233
Other noncurrent assets			1,520			1,524
Total assets		$	1,009,887		$	990,339
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable		$	47,214		$	36,516
Insurance and claims accruals			44,296			47,017
Accrued and other current liabilities			27,466			26,709
Total current liabilities			118,976			110,242
Deferred income taxes			123,938			122,462
Noncurrent operating lease liabilities			220			249
Total liabilities			243,134			232,953
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; 81,414,959 shares at June 30, 2024, and 81,312,168 shares at December 31, 2023, issued and outstanding			814			813
Additional paid-in capital			51,385			49,789
Retained earnings			714,554			706,784
Total stockholders’ equity			766,753			757,386
Total liabilities and stockholders’ equity		$	1,009,887		$	990,339

MARTEN TRANSPORT, LTD. CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
		Three Months								Six Months
		Ended June 30,								Ended June 30,
(In thousands, except per share information)		2024				2023				2024				2023
Operating revenue		$	246,238			$	285,672			$	495,910			$	583,695
Operating expenses (income):
Salaries, wages and benefits			86,519				96,332				175,281				194,848
Purchased transportation			43,235				48,299				85,049				102,402
Fuel and fuel taxes			38,809				42,215				78,370				89,011
Supplies and maintenance			16,472				17,408				32,542				33,395
Depreciation			28,206				29,427				56,733				58,957
Operating taxes and licenses			2,539				2,756				5,114				5,524
Insurance and claims			12,559				12,481				24,216				27,551
Communications and utilities			2,297				2,510				4,668				5,041
Gain on disposition of revenue equipment			(2,532	)			(3,550	)			(3,703	)			(8,796	)
Other			8,160				9,581				15,416				18,539
Total operating expenses			236,264				257,459				473,686				526,472
Operating income			9,974				28,213				22,224				57,223
Other			(1,014	)			(1,077	)			(1,810	)			(1,921	)
Income before income taxes			10,988				29,290				24,034				59,144
Income taxes expense			3,099				7,416				6,499				14,768
Net income		$	7,889			$	21,874			$	17,535			$	44,376
Basic earnings per common share		$	0.10			$	0.27			$	0.22			$	0.55
Diluted earnings per common share		$	0.10			$	0.27			$	0.22			$	0.55
Dividends declared per common share		$	0.06			$	0.06			$	0.12			$	0.12

        

MARTEN TRANSPORT, LTD. SEGMENT INFORMATION (Unaudited)
										Dollar				Percentage
										Change				Change
		Three Months								Three Months				Three Months
		Ended								Ended				Ended
		June 30,								June 30,				June 30,
(Dollars in thousands)		2024				2023				2024 vs. 2023				2024 vs. 2023
Operating revenue:
Truckload revenue, net of fuel surcharge revenue		$	96,046			$	101,268			$	(5,222	)			(5.2	)%
Truckload fuel surcharge revenue			16,477				15,870				607				3.8
Total Truckload revenue			112,523				117,138				(4,615	)			(3.9	)
Dedicated revenue, net of fuel surcharge revenue			67,444				87,437				(19,993	)			(22.9	)
Dedicated fuel surcharge revenue			13,822				17,548				(3,726	)			(21.2	)
Total Dedicated revenue			81,266				104,985				(23,719	)			(22.6	)
Intermodal revenue, net of fuel surcharge revenue			12,660				18,754				(6,094	)			(32.5	)
Intermodal fuel surcharge revenue			2,404				3,611				(1,207	)			(33.4	)
Total Intermodal revenue			15,064				22,365				(7,301	)			(32.6	)
Brokerage revenue			37,385				41,184				(3,799	)			(9.2	)
Total operating revenue		$	246,238			$	285,672			$	(39,434	)			(13.8	)%
Operating income/(loss):
Truckload		$	1,115			$	9,569			$	(8,454	)			(88.3	)%
Dedicated			6,650				14,173				(7,523	)			(53.1	)
Intermodal			(684	)			(165	)			(519	)			(314.5	)
Brokerage			2,893				4,636				(1,743	)			(37.6	)
Total operating income		$	9,974			$	28,213			$	(18,239	)			(64.6	)%
Operating ratio:
Truckload			99.0	%			91.8	%
Dedicated			91.8				86.5
Intermodal			104.5				100.7
Brokerage			92.3				88.7
Consolidated operating ratio			95.9	%			90.1	%
Operating ratio, net of fuel surcharges:
Truckload			98.8	%			90.6	%
Dedicated			90.1				83.8
Intermodal			105.4				100.9
Brokerage			92.3				88.7
Consolidated operating ratio, net of fuel surcharges			95.3	%			88.7	%

MARTEN TRANSPORT, LTD. SEGMENT INFORMATION (Unaudited)
										Dollar				Percentage
										Change				Change
		Six Months								Six Months				Six Months
		Ended								Ended				Ended
		June 30,								June 30,				June 30,
(Dollars in thousands)		2024				2023				2024 vs. 2023				2024 vs. 2023
Operating revenue:
Truckload revenue, net of fuel surcharge revenue		$	191,068			$	203,588			$	(12,520	)			(6.1	)%
Truckload fuel surcharge revenue			33,006				34,176				(1,170	)			(3.4	)
Total Truckload revenue			224,074				237,764				(13,690	)			(5.8	)
Dedicated revenue, net of fuel surcharge revenue			139,182				174,268				(35,086	)			(20.1	)
Dedicated fuel surcharge revenue			28,544				37,166				(8,622	)			(23.2	)
Total Dedicated revenue			167,726				211,434				(43,708	)			(20.7	)
Intermodal revenue, net of fuel surcharge revenue			25,941				42,155				(16,214	)			(38.5	)
Intermodal fuel surcharge revenue			5,095				8,799				(3,704	)			(42.1	)
Total Intermodal revenue			31,036				50,954				(19,918	)			(39.1	)
Brokerage revenue			73,074				83,543				(10,469	)			(12.5	)
Total operating revenue		$	495,910			$	583,695			$	(87,785	)			(15.0	)%
Operating income/(loss):
Truckload		$	1,604			$	19,610			$	(18,006	)			(91.8	)%
Dedicated			15,908				27,857				(11,949	)			(42.9	)
Intermodal			(878	)			622				(1,500	)			(241.2	)
Brokerage			5,590				9,134				(3,544	)			(38.8	)
Total operating income		$	22,224			$	57,223			$	(34,999	)			(61.2	)%
Operating ratio:
Truckload			99.3	%			91.8	%
Dedicated			90.5				86.8
Intermodal			102.8				98.8
Brokerage			92.4				89.1
Consolidated operating ratio			95.5	%			90.2	%
Operating ratio, net of fuel surcharges:
Truckload			99.2	%			90.4	%
Dedicated			88.6				84.0
Intermodal			103.4				98.5
Brokerage			92.4				89.1
Consolidated operating ratio, net of fuel surcharges			94.8	%			88.6	%

       

MARTEN TRANSPORT, LTD. OPERATING STATISTICS (Unaudited)
		Three Months								Six Months
		Ended June 30,								Ended June 30,
		2024				2023				2024				2023
Truckload Segment:
Revenue (in thousands)		$	112,523			$	117,138			$	224,074			$	237,764
Average revenue, net of fuel surcharges, per tractor per week(1)		$	4,093			$	4,472			$	4,044			$	4,521
Average tractors(1)			1,805				1,742				1,817				1,742
Average miles per trip			528				505				533				507
Non-revenue miles percentage(2)			11.6	%			12.4	%			12.1	%			12.5	%
Total miles (in thousands)			40,847				39,321				80,550				77,558
Dedicated Segment:
Revenue (in thousands)		$	81,266			$	104,985			$	167,726			$	211,434
Average revenue, net of fuel surcharges, per tractor per week(1)		$	3,754			$	3,986			$	3,768			$	3,973
Average tractors(1)			1,382				1,687				1,421				1,696
Average miles per trip			323				332				326				332
Non-revenue miles percentage(2)			1.1	%			1.3	%			1.1	%			1.2	%
Total miles (in thousands)			28,231				34,833				57,311				68,909
Intermodal Segment:
Revenue (in thousands)		$	15,064			$	22,365			$	31,036			$	50,954
Loads			4,464				6,267				9,053				13,544
Average tractors			121				170				123				175
Brokerage Segment:
Revenue (in thousands)		$	37,385			$	41,184			$	73,074			$	83,543
Loads			22,700				22,718				42,761				43,406
At June 30, 2024 and June 30, 2023:
Total tractors(1)			3,126				3,516
Average age of company tractors (in years)			1.8				1.7
Total trailers			5,539				5,786
Average age of company trailers (in years)			5.0				4.2
Ratio of trailers to tractors(1)			1.8				1.6
Total refrigerated containers			787				791

		Three Months								Six Months
		Ended June 30,								Ended June 30,
(In thousands)		2024				2023				2024				2023
Net cash provided by operating activities		$	35,821			$	48,969			$	81,543			$	98,201
Net cash used for investing activities			(27,776	)			(60,359	)			(48,025	)			(88,639	)
Net cash used for financing activities			(4,576	)			(4,370	)			(9,532	)			(9,634	)
Weighted average shares outstanding:
Basic			81,381				81,263				81,365				81,236
Diluted			81,446				81,412				81,442				81,394

(1	)	Includes tractors driven by both company-employed drivers and independent contractors. Independent contractors provided 90 and 98 tractors as of June 30, 2024 and 2023, respectively.
(2	)	Represents the percentage of miles for which the company is not compensated.

FAQ

What was Marten Transport's (MRTN) earnings per share for Q2 2024?

Marten Transport reported earnings of $0.10 per diluted share for Q2 2024, compared to $0.27 per diluted share in Q2 2023.

How did Marten Transport's (MRTN) revenue change in Q2 2024 compared to Q2 2023?

Marten Transport's operating revenue decreased to $246.2 million in Q2 2024 from $285.7 million in Q2 2023, a 13.8% decline.

What factors affected Marten Transport's (MRTN) financial performance in Q2 2024?

Marten Transport's performance was negatively impacted by the freight market recession, oversupply, weak demand, inflationary operating costs, and freight rate reductions.

Has Marten Transport (MRTN) implemented any strategies to address the challenging market conditions?

Yes, Marten Transport is focusing on minimizing market impact, positioning for future growth opportunities, and has added new multi-year dedicated programs for 133 drivers starting in Q3 2024.