<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
<TABLE>
<S> <C>
For the fiscal year ended: Commission file number:
DECEMBER 31, 1995 0-15010
</TABLE>
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MARTEN TRANSPORT, LTD.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 39-1140809
(State of Incorporation) (I.R.S. Employer Identification No.)
129 MARTEN STREET 54755
MONDOVI, WISCONSIN (Zip Code)
(Address of Principal Executive
Offices)
</TABLE>
Registrant's telephone number, including area code:
(715) 926-4216
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SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
COMMON STOCK, PAR VALUE $.01 PER SHARE
------------------------
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 / /
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /X/
As of March 7, 1996, 2,941,616 shares of Common Stock of the Registrant were
outstanding, and the aggregate market value of the Common Stock of the
Registrant (based upon the last reported sale price of the Common Stock at that
date by the Nasdaq National Market), excluding shares owned beneficially by
officers and directors was approximately $18,974,277.
Part II of this Annual Report on Form 10-K incorporates by reference
information (to the extent specific pages are referred to herein) from the
Registrant's Annual Report to Shareholders for the year ended December 31, 1995
(the "1995 Annual Report"). Part III of this Annual Report on Form 10-K
incorporates by reference information (to the extent specific sections are
referred to herein) from the Registrant's Proxy Statement for its annual meeting
to be held May 7, 1996 (the "1996 Proxy Statement").
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<PAGE>
PART I
ITEM 1. BUSINESS
(a) GENERAL DEVELOPMENT OF BUSINESS.
Marten Transport, Ltd. ("the Company") is a long-haul truckload carrier
providing protective service transportation, which is temperature controlled or
insulated carriage of temperature sensitive materials and general commodities
and carriage of time sensitive freight, pursuant to operating authority, both
contract and common, granted by the Interstate Commerce Commission ("ICC") and
currently regulated by the United States Department of Transportation ("DOT")
and the Federal Highway Administration ("FHWA").
As of December 31, 1995, the Company operated a fleet consisting of 1,097
tractors and 1,438 trailers (all of which are protective service trailers). Of
the total fleet, 955 tractors were Company-owned and 142 tractors and 3 trailers
were under contract with independent contractors who also provide the services
of a driver satisfactory to the Company. As of December 31, 1995, the Company
had 1,254 employees, including 979 drivers, none of whom is represented by a
collective bargaining unit.
The Company was organized under Wisconsin law in 1970 as a successor to a
sole proprietorship operated by Roger R. Marten since 1946. In 1988, the
Company reincorporated under Delaware law. The Company's executive offices are
located at 129 Marten Street, Mondovi, Wisconsin 54755, and its telephone number
is (715) 926-4216.
(b) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS.
Since its inception, the Company's revenue, operating profits and assets
have been attributable primarily to one business segment--long-haul truckload
carriage of temperature and time sensitive materials and general commodities.
(c) NARRATIVE DESCRIPTION OF BUSINESS.
The Company specializes in protective service transportation of foods,
chemicals and other products that require temperature controlled or insulated
carriage. The Company also provides carriage of dry freight for customers
requiring the special services the Company offers. In 1995, the Company derived
approximately 79% of its revenue from hauling products requiring protective
service and 21% of its revenue from hauling dry freight. Most of the Company's
dry freight loads require special services the Company offers or permit the
Company to position its equipment for hauling protective service loads. The
specialized transportation services offered by the Company include:
- dependable, late model tractors which allow timely deliveries
- late model temperature controlled trailers
- scheduled pickups and deliveries
- assistance in loading and unloading
- the availability of extra trailers that can be placed for the
convenience of customers
- sufficient equipment to respond promptly to customers' varying
requirements
- an on-line computer system which allows customers to obtain
information regarding the status of deliveries
<PAGE>
MARKETING AND CUSTOMERS
Senior management and marketing personnel seek customers whose products
require protective or other specialized services and who ship multiple
truckloads per week. To minimize empty miles, the Company places special
emphasis on soliciting customers whose shipping requirements allow the Company
to balance the number of load originations and terminations in any given area.
A key element of the Company's emphasis on service is its strong commitment
to accommodating the individualized requirements of its customers. The Company
has developed an electronic data interface ("EDI") system, through which the
Company can provide its customers with current information regarding the
location and status of shipments in transit. This system also allows customers
to place orders, and the Company to bill customers, electronically. The Company
also utilizes a satellite tracking system that enhances monitoring of truck and
shipment locations.
The Company maintains marketing offices in its Wisconsin headquarters, as
well as other selected locations throughout the United States. Marketing
personnel travel in their assigned regions to solicit new customers and maintain
contact with existing customers. Once a customer relationship is established,
the primary Company contact is one of the Company's customer service managers.
Working from the Company's terminal in Mondovi, Wisconsin, the customer service
managers regularly contact existing customers to solicit additional business on
a load-by-load basis, particularly when equipment will be available nearby
following a completed haul. Each customer service manager is assigned to
particular customers and is responsible for monitoring overall transportation
and service requirements as well as freight movements for each assigned
customer. These efforts to coordinate shipper needs with equipment availability
have been instrumental in maintaining an average empty mile factor of 7.1% in
1995.
The Company sets its own freight rates instead of using those published by
tariff publishing bureaus, which allows the Company to offer rates that are more
responsive to market conditions and the level of service required by a
particular customer. The Company's rate structure is designed to compensate the
Company for the cost of protective service revenue equipment as well as hauling
loads into areas that generate empty miles.
The Company derived approximately 11% of its revenue from a single
customer, The Pillsbury Company, in 1995. The Company derived approximately
12% of its revenue in 1994 and 14% of its revenue in 1993 from the Phillip
Morris group of companies, which included 11 different accounts in 1994.
OPERATIONS
The Company's operations are designed for efficient use of equipment while
maintaining the emphasis placed on providing individualized service to
customers. The Company's computer system provides real-time, on-line
information to track shipments and increase equipment utilization as well as to
assist management in long-range planning and trend analysis.
The Company maintains its dispatch operations in its Mondovi, Wisconsin,
headquarters. The customer service managers are assigned to particular
customers and regions and work closely with the Company's fleet managers,
marketing personnel and drivers. Loads are assigned to drivers by load
planners. Loads are then dispatched by fleet managers who are assigned a group
of drivers regardless of load destination. Once a load has been dispatched, a
fleet manager is responsible for its proper and efficient delivery and tracks
the status and location of that load through daily contact with drivers.
Customer service managers coordinate with the Company's marketing personnel to
match customer needs with Company capacity and location of revenue equipment.
Each driver is monitored daily on his/her location, load temperature and any
problems by the appropriate fleet
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<PAGE>
manager. This information, along with information concerning available
loads, is constantly updated on the Company's computer system.
Computer-generated information is used to meet delivery schedules, respond to
customer inquiries and match available equipment with loads.
The Company's primary traffic lanes are between the Midwest and the West
Coast, Pacific Northwest, Southwest, Southeast, East Coast and from
California to the Pacific Northwest. The average length of a trip (one-way)
was 1,145 miles during 1995, 1,132 miles during 1994 and 1,143 miles during
1993. The Company's loads generally move from origin directly to
destination, thus eliminating any need for freight terminals. The Company
operates maintenance facilities in Mondovi, Wisconsin; Ontario, California;
Wilsonville, Oregon; and Jonesboro, Georgia.
The Company has agreements with various fuel distributors which enable
drivers to purchase fuel at a discount while in transit. The Company also
purchases fuel in bulk in Mondovi and at its maintenance facilities.
DRIVERS
As of December 31, 1995, the Company employed 979 drivers and had
contracts with independent contractors for the services of 142 tractors that
provide both a tractor and a qualified driver for the Company's use. The
Company recruits drivers from throughout the United States. The ratio of
drivers to tractors as of December 31, 1995, was 1 to 1. None of the
Company's drivers is represented by a collective bargaining unit. The
Company's turnover of drivers was approximately 62% in 1995, which the
Company believes is in line with turnover rates in the industry, based on
industry surveys.
Drivers, including independent contractors, are selected in accordance
with specific Company guidelines relating to safety records, driving
experience and personal evaluations. A new driver is trained in all phases of
Company policies and operations as well as safety techniques and
fuel-efficient operation of the equipment. All new drivers must also pass a
road test prior to assignment to a vehicle. The Company maintains a
toll-free number, satellite tracking and a staff of fleet managers to provide
timely communication and support for drivers while on the road for extended
periods.
To retain qualified drivers and promote safe operations, the Company
purchases premium quality tractors and equips them with optional comfort and
safety features, including air ride suspension, air conditioning, high-quality
interiors, power steering, engine brakes and double sleeper cabs. The Company
maintains stringent screening, training and testing procedures for its drivers
to reduce the potential for accidents and the corresponding cost of insurance
and claims.
Company-employed drivers receive a fixed rate per mile which is increased
based on the driver's length of service. Drivers are also eligible for bonuses
based upon safe, efficient driving. The Company believes that its compensation
program provides an important incentive to attract and retain qualified drivers.
The Company compensates independent contractors on the basis of a fixed
rate per mile or a percentage of revenue from loads hauled. Independent
contractors pay their own fuel, insurance, maintenance and repairs and other
expenses. Independent contractors that have been under contract with the
Company for at least six months are also eligible to purchase shares of
Company Common Stock pursuant to a stock purchase plan sponsored by the
Company, which provides that the Company will pay the brokerage commissions
on purchases and the costs of administering the plan.
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<PAGE>
REVENUE EQUIPMENT
The trucking industry requires significant capital investment in revenue
equipment. The Company has elected to finance its revenue equipment purchases
using long-term debt with significant current maturities, causing a working
capital deficit. The Company has operated effectively with a working capital
deficit due to a combination of operating profits, short turnover in accounts
receivable and cash management.
The Company's policy is to purchase tractors and trailers manufactured to
Company specifications. The Company's tractors are generally manufactured by
Freightliner or Kenworth, a subsidiary of PACCAR, Inc. Most of the Company's
tractors are equipped with 365/400 horsepower Detroit Diesel or Cummins engines,
which are designed to enable the equipment to maintain constant speed with
optimum fuel economy under conditions often encountered by the Company's
equipment, such as mountainous terrain and maximum weight loads. Most of the
Company's single van trailers are manufactured by Utility or Great Dane and are
equipped with Thermo-King cooling and heating equipment. The current cost of a
temperature-controlled, protective service trailer is approximately $40,000.
Standardization of equipment enables the Company to simplify driver training,
control the cost of spare parts inventory, enhance its preventive maintenance
program and increase fuel economy.
The following table shows the type and age of equipment owned by the
Company as of December 31, 1995:
<TABLE>
<CAPTION>
MODEL YEAR TRACTORS SINGLE VAN TRAILERS
---------- -------- -------------------
<S> <C> <C>
1996 179 162
1995 259 263
1994 164 243
1993 285 278
1992 67 109
1991 1 143
1990 --- 6
1989 --- 201
1988 --- 30
___ _____
Total 955 1,435
___ _____
___ _____
</TABLE>
The single van refrigerated trailers are 48 feet long (1,337 trailers) or
53 feet long (98 trailers) by 102 inches wide with a minimum of 102 inches of
inside height.
The Company's policy is to replace its tractors and trailers based on
factors such as age, the market for used equipment and improvements in
technology and fuel efficiency. During 1995, 46 tractors and 185 trailers were
added, net of equipment trades. In 1996, the Company plans to purchase 369
tractors (for which 318 tractors will be traded) and 412 trailers (for which
162 trailers will be traded).
The Company has a comprehensive maintenance program for its Company-owned
tractors and trailers to minimize equipment downtime and enhance resale value.
Inspections, repairs and maintenance are performed regularly at the Company's
facilities in Mondovi, Wisconsin; Ontario, California; Jonesboro, Georgia; and
Wilsonville, Oregon, and at independent contract maintenance facilities in the
Company's service territory. The Company's tractors and trailers are washed
regularly to enhance appearance and prolong equipment life.
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<PAGE>
EMPLOYEES
As of December 31, 1995, the Company employed 1,254 people, of whom 979
were drivers, 111 were mechanics and maintenance personnel and 164 were support
personnel, including management and administration. None of the Company's
employees is represented by a collective bargaining unit, and the Company
considers relations with its employees to be good.
COMPETITION
The trucking industry is highly competitive. The Company competes
primarily with other protective service truckload carriers and with private
carriage fleets. For freight that does not require protective service trailers,
the Company also competes with dry freight truckload carriers and to a lesser
extent with railroads. The Company competes primarily on the basis of its
quality of service and its ability to provide protective service and other
specialized services. Several other truckload carriers offering protective
service have substantially greater financial resources than the Company, own
more equipment and carry a larger volume of freight than the Company.
REGULATION
The Company is a motor common and contract carrier regulated by the DOT and
the FHWA along with various state agencies. These regulatory authorities have
broad powers, generally governing activities such as authority to engage in
motor carrier operations, rates and charges, and certain mergers, consolidations
and acquisitions. The Motor Carrier Act of 1980 (the "MCA") substantially
increased competition among motor carriers and limited the level of regulation
in the industry. The MCA enabled applicants to obtain ICC operating authority
more easily and allowed interstate motor carriers such as the Company to change
their rates without ICC approval. The law also allowed for the removal of many
route and commodity restrictions on the transportation of freight. The Trucking
Industry Regulatory Reform Act of 1994 (the "TIRRA") has further increased
industry competition and limited industry regulation. The TIRRA repealed tariff
filing for individually determined rates; simplified the granting of ICC
operating authority; and pre-empted price, route and service regulation by the
states. Effective January 1, 1996, the ICC Termination Act of 1995 abolished
the ICC and transferred its regulatory authority to the DOT and the FHWA.
Motor carrier operations are subject to safety requirements prescribed by
the DOT governing interstate operations. Such matters as weight and dimensions
of equipment are also subject to federal and state regulations.
The Company also has operating authority in the Canadian Provinces of
Alberta, British Columbia, Manitoba, Ontario, Quebec and Saskatchewan.
ITEM 2. PROPERTIES
The Company's executive offices and principal terminal are located on
approximately seven acres in Mondovi, Wisconsin, which currently consists of
approximately 28,000 square feet of office space and approximately 21,000 square
feet of equipment repair and maintenance space. It was originally constructed
in 1965 and was expanded in 1971, 1980, 1987 and 1993.
The Company also maintains a maintenance facility in Ontario, California.
This facility is currently leased from R & R Properties, a sole-proprietorship
owned by Randolph L. Marten, for a period of 5 years terminating December 31,
1999. The current lease provides for rent of $126,000 per year from 1995
through 1999. This rent is based on the debt service of R & R Properties to
finance this facility. The Company is required to bear the cost of insurance,
maintenance and repairs, taxes, special assessments and utilities. In 1993, the
Company remodeled this facility. This
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facility includes approximately 2,700 square feet of office space and 8,000
square feet of equipment repair and maintenance space. The parking lot
measures 150,000 square feet.
The Company purchased a maintenance facility in Jonesboro, Georgia in 1993.
The building at this facility measures approximately 12,500 square feet and
consists of office space and a two and one-half bay service and repair space.
This facility also has parking for up to forty tractors and trailers.
The Company purchased a maintenance facility in Wilsonville, Oregon in
1995. The building at this facility, which is approximately 20,000 square feet,
consists of office space and an eight-bay service and repair space. This
facility also has an eight acre paved and fenced yard area.
ITEM 3. LEGAL PROCEEDINGS
The Company is a party to routine litigation incidental to its business,
primarily involving claims for personal injury and property damage incurred in
the transport of freight. The Company self-insures for property damage and
cargo claims. The Company partially self-insures for losses related to
automobile liability, general liability, workers' compensation claims and
employees' group health benefits. The Company also maintains an insurance
policy that limits annual aggregate Company losses to $9 million for automobile
liability, workers' compensation and general liability claims. The Company
believes that its current liability limit is reasonable under the circumstances.
It is possible, however, that the Company could incur liability in excess of its
policy limits, in which case its financial condition could be adversely
affected.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this Report.
ITEM 4A. EXECUTIVE OFFICERS OF THE REGISTRANT
The Company's executive officers and their ages along with the offices held
as of March 1, 1996, are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Randolph L. Marten 43 Chairman of the Board,
President, Chief Operating
Officer and Director
Darrell D. Rubel 50 Executive Vice President,
Chief Financial Officer,
Treasurer, Assistant Secretary
and Director
Timothy P. Nash 44 Vice President of Sales
Franklin J. Foster 40 Vice President of Finance
Robert G. Smith 52 Vice President of Operations
</TABLE>
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<PAGE>
Randolph L. Marten has been a full time employee of the Company since
1974. Mr. Marten has been a Director of the Company since October 1980, its
President and Chief Operating Officer since June 1986 and its Chairman of the
Board since August 1993. Mr. Marten was Vice President of the Company from
October 1980 to June 1986.
Darrell D. Rubel has been a Director of the Company since February 1983,
its Chief Financial Officer since January 1986, its Treasurer since June 1986
and its Executive Vice President since May 1993. Mr. Rubel was also Secretary
of the Company from June 1986 until August 1987 and Vice President from January
1986 until May 1993, and has been Assistant Secretary since August 1987.
Timothy P. Nash has been Vice President of Sales since November 1990 and
was Regional Sales Manager from July 1987 to November 1990. Mr. Nash was a
regional sales manager for Overland Express, Inc., a long-haul truckload
carrier, from August 1986 to July 1987.
Franklin J. Foster has been Vice President of Finance since December 1991
and was Director of Finance from January 1991 to December 1991. Mr. Foster was
a vice president in commercial banking for First Bank National Association from
October 1985 to January 1991.
Robert G. Smith has been Vice President of Operations since June 1993 and
was Director of Operations from September 1989 to June 1993. Mr. Smith was
director of operations for Transport Corporation of America, an irregular-route
truckload carrier, from January 1985 to September 1989.
Executive Officers of the Company are elected by the Board of Directors for
one-year terms, commencing with their election at the first meeting of the Board
of Directors immediately following the annual meeting of shareholders and
continuing until the next such meeting of the Board of Directors.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The information under the caption "Common Stock Data" on page 20 of the
Company's 1995 Annual Report is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
The financial information under the caption "Five-Year Financial Summary"
on page 9 of the Company's 1995 Annual Report is incorporated herein by
reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information under the caption "Management's Discussion and Analysis of
Financial Condition and Results of Operations" on pages 10 and 11 of the
Company's 1995 Annual Report is incorporated herein by reference.
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<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Company's Financial Statements and the report of its independent public
accountants on pages 12 through 19 of the Company's 1995 Annual Report are
incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
A. DIRECTORS OF THE REGISTRANT.
The information under the captions "Election of Directors--Information
About Nominees" and "Election of Directors--Other Information About Nominees" in
the Company's 1996 Proxy Statement is incorporated herein by reference.
B. EXECUTIVE OFFICERS OF THE REGISTRANT.
Information concerning Executive Officers of the Company is included in
this Report under Item 4A, "Executive Officers of the Registrant."
C. COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
The information contained under the caption "Section 16 Compliance" in the
Company's 1996 Proxy Statement is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
The information under the captions "Election of Directors--Director
Compensation" and "Compensation and Other Benefits" in the Company's 1996 Proxy
Statement is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information under the caption "Principal Stockholders and Beneficial
Ownership of Management" in the Company's 1996 Proxy Statement is incorporated
herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information under the caption "Certain Transactions" in the Company's
1996 Proxy Statement is incorporated herein by reference.
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<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) 1. Financial Statements:
The following Financial Statements are incorporated herein by reference
from the pages indicated in the Company's 1995 Annual Report:
Report of Independent Public Accountants - page 19
Balance Sheets as of December 31, 1995 and 1994 - page 12
Statements of Operations for the years ended December 31, 1995, 1994
and 1993 - page 13
Statements of Changes in Shareholders' Investment for the years ended
December 31, 1995, 1994 and 1993 - page 13
Statements of Cash Flows for the years ended December 31, 1995, 1994
and 1993 -page 14
Notes to Financial Statements - pages 15 - 19
2. Financial Statement Schedules:
None.
3. Exhibits:
The exhibits to this Report are listed in the Exhibit Index on pages 11 -
14 of this Annual Report on Form 10-K. A copy of any of the exhibits
listed or referred to above will be furnished at a reasonable cost to any
person who was a shareholder of the Company as of March 28, 1996, upon
receipt from any such person of a written request for any such exhibit.
Such request should be sent to Darrell D. Rubel, Executive Vice President
and Chief Financial Officer, Marten Transport, Ltd., 129 Marten Street,
Mondovi, Wisconsin 54755.
The following is a list of each management contract or compensatory plan or
arrangement required to be filed as an Exhibit to this Annual Report on
Form 10-K pursuant to Item 14(c):
(1) Marten Transport, Ltd. 1986 Incentive Stock Option Plan, as amended.
(2) Marten Transport, Ltd. 1986 Non-Statutory Stock Option Plan, as
amended.
(3) Employment Agreement, dated May 1, 1993, between the Company and
Darrell D. Rubel.
(4) Marten Transport, Ltd. 1995 Stock Incentive Plan.
(b) Reports on Form 8-K: None during the fourth quarter of the fiscal year
ended December 31, 1995.
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<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Dated: March 28, 1996 MARTEN TRANSPORT, LTD.
By /s/ RANDOLPH L. MARTEN
------------------------------
Randolph L. Marten
Chairman of the Board,
President and Chief
Operating Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below on March 28, 1996 by the following persons on
behalf of the Registrant and in the capacities indicated.
SIGNATURE TITLE
--------- -----
/S/ RANDOLPH L. MARTEN Chairman of the Board,
- ----------------------------------- President, Chief Operating
Randolph L. Marten Officer (Principal Executive
Officer) and Director
/S/ DARRELL D. RUBEL Executive Vice President, Chief
- ----------------------------------- Financial Officer, Treasurer,
Darrell D. Rubel Assistant Secretary (Principal
Financial and Accounting Officer)
and Director
/S/ ARNOLD P. SCHULTZ Director
- -----------------------------------
Arnold P. Schultz
/S/ LARRY B. HAGNESS Director
- -----------------------------------
Larry B. Hagness
/S/ THOMAS J. WINKEL Director
- -----------------------------------
Thomas J. Winkel
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<PAGE>
MARTEN TRANSPORT, LTD.
EXHIBIT INDEX TO ANNUAL REPORT
ON FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
ITEM NO. ITEM METHOD OF FILING
- -------- ---- ----------------
<C> <S> <C>
3.1 Certificate of Incorporation
of the Company . . . . . . . . . . . Incorporated by reference to Exhibit 4.1 to
the Company's Registration Statement on
Form S-8 (File No. 33-75648).
3.2 Bylaws of the Company. . . . . . . . Incorporated by reference to Exhibit 4.2 to
the Company's Registration Statement on
Form S-8 (File No. 33-75648).
4.1 Specimen form of the
Company's Common Stock
Certificate. . . . . . . . . . . . . Incorporated by reference to Exhibit 4.1 to
the Company's Registration Statement on
Form S-1 (File No. 33-8108).
4.2 Certificate of Incorporation of
the Company. . . . . . . . . . . . . See Exhibit 3.1
4.3 Bylaws of the Company. . . . . . . . See Exhibit 3.2
9.1 Voting Trust Agreement
dated February 14, 1983,
as amended . . . . . . . . . . . . . Incorporated by reference to Exhibit 9.1 to
the Company's Registration Statement on
Form S-1 (File No. 33-8108).
9.2 Agreement regarding Voting Trust
Agreement, dated May 4, 1993 . . . . Incorporated by reference to Exhibit 19.2 to
the Company's Quarterly Report on Form
10-Q for the quarter ended June 30, 1993 (File
No. 0-15010).
10.1 Marten Transport, Ltd.
1986 Incentive Stock Option
Plan, as amended . . . . . . . . . . Incorporated by reference to Exhibit 10.1 to
the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1986 (File
No. 0-15010).
</TABLE>
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<PAGE>
<TABLE>
<C> <S> <C>
10.2 Marten Transport, Ltd.
1986 Non-Statutory Stock
Option Plan, as amended. . . . . . . Incorporated by reference to Exhibit 10.2 to
the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1987 (File
No. 0-15010).
10.3 Real Estate Lease dated
November 29, 1994 between
the Company, as Lessee,
and R & R Properties and
Randolph L. Marten, as Lessor. . . . Incorporated by reference to Exhibit 10.3 to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1994 (File No. 0-15010).
10.4 Stock Restriction Agreement
among Roger R. Marten,
Randolph L. Marten and
Darrell D. Rubel . . . . . . . . . . Incorporated by reference to Exhibit 10.5 to the
Company's Registration Statement on Form S-1 (File
No. 33-8108).
10.5 Agreement on Credit Terms
dated as of January 5, 1990
between the Company and
First Bank National
Association. . . . . . . . . . . . . Incorporated by reference to Exhibit 10.10 to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1989 (File No. 0-15010).
10.6 Amendment to Agreement
on Credit Terms dated as of
July 31, 1990 between the
Company and First Bank
National Association . . . . . . . . Incorporated by reference to Exhibit 10.10 to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1990 (File No. 0-15010).
10.7 Lease Agreement and Supplement
No. 1 to Lease Agreement
dated April 1, 1990 between
the Company and Barclays Leasing,
Inc. . . . . . . . . . . . . . . . . Incorporated by reference to Exhibit 10.12 to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1990 (File No. 0-15010).
10.8 Lease Agreement dated
September 12, 1990
between the Company and
Truck Country of WI, Inc.. . . . . . Incorporated by reference to Exhibit 10.13 to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1991 (File No. 0-15010).
</TABLE>
-12-
<PAGE>
<TABLE>
<C> <S> <C>
10.9 Security Agreement dated
January 12, 1990, as
amended, between the
Company and First Bank
National Association . . . . . . . . Incorporated by reference to Exhibit 10.15 to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1992 (File No. 0-15010).
10.10 Second Amendment to
Agreement on Credit
Terms dated May 31, 1991
between the Company and
First Bank National
Association. . . . . . . . . . . . . Incorporated by reference to Exhibit 10.16 to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1992 (File No. 0-15010).
10.11 Amendment No. 3 to Agreement on
Credit Terms dated May 17, 1993
between the Company and First Bank
National Association . . . . . . . . Incorporated by reference to Exhibit 19.3 to the
Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1993 (File No. 0-15010).
10.12 Employment Agreement dated
May 1, 1993 between the
Company and Darrell D.
Rubel. . . . . . . . . . . . . . . . Incorporated by reference to Exhibit 19.1 to the
Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1993 (File No. 0-15010).
10.13 Stock Redemption Agreement dated
June 21, 1994 between the Company
and Darrell D. Rubel, as Personal
Representative of the Estate of
Roger R. Marten. . . . . . . . . . . Incorporated by reference to Exhibit 10.16 to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1994 (File No. 0-15010).
10.14 Marten Transport, Ltd. 1995 Stock
Incentive Plan . . . . . . . . . . . Incorporated by reference to Exhibit 10.18 to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1994 (File No. 0-15010).
</TABLE>
-13-
<PAGE>
<TABLE>
<C> <S> <C>
13.1 1995 Annual Report to
Shareholders - pages 9-21. . . . . . Filed herewith.
23.1 Consent of Arthur
Andersen LLP . . . . . . . . . . . . Filed herewith.
27.1 Financial Data Schedule. . . . . . . Filed herewith.
</TABLE>
-14-
<PAGE>
FIVE-YEAR FINANCIAL SUMMARY
<TABLE>
<CAPTION>
Years ended December 31,
(DOLLARS IN THOUSANDS, EXCEPT PER-SHARE AMOUNTS) 1995 1994 1993 1992 1991
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FOR THE YEAR
Operating revenue. . . . . . . . . . . . . . . . . $ 137,704 $ 122,730 $ 112,180 $ 98,194 $ 87,763
Operating income . . . . . . . . . . . . . . . . . 11,378 13,015 11,359 7,678 5,846
Income before extraordinary item and cumulative
effect of change in accounting principle. . . . 5,009 6,375 5,462 3,434 2,108
Net income . . . . . . . . . . . . . . . . . . . . 5,009 6,375 6,345(1) 3,434 1,965(2)
PER-SHARE DATA
Income before extraordinary item and cumulative
effect of change in accounting principle. . . . $ 1.69 $ 2.00 $ 1.58 $ 1.00 $ .62
Net income . . . . . . . . . . . . . . . . . . . . 1.69 2.00 1.84(1) 1.00 .57(2)
AT YEAR END
Total assets . . . . . . . . . . . . . . . . . . . $ 123,141 $ 105,648 $ 96,776 $ 81,434 $ 69,973
Long-term obligations. . . . . . . . . . . . . . . 27,079 24,917 21,117 20,523 17,734
Shareholders' investment . . . . . . . . . . . . . 38,242 33,104 34,729 28,384 24,835
</TABLE>
(1) Includes extraordinary item, proceeds of $883,000 ($.26 per share) from
life insurance policy on Roger Marten, founder of Marten Transport.
(2) Includes charge of $143,000 for the cumulative effect of change in
accounting principle related to revenue recognition.
MARTEN 1995 ANNUAL REPORT 9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Operating revenue for the year ended December 31, 1995, increased 12 percent
over 1994, compared with increases of 9 percent in 1994 and 14 percent in 1993.
The primary reason for these increases was the transportation of additional
freight associated with moderate additions to the company's fleet each of the
last three years. Marten's average freight rates also increased in 1995 and 1994
after remaining level in 1993. Operating revenue in 1995 was adversely impacted
by lower-than-expected customer demand, causing average miles traveled per
tractor to decline from 1994 and 1993 levels. Management anticipates that
customer demand will remain at 1995 levels during 1996.
Operating expenses were 91.7 percent of operating revenue in 1995, compared
with 89.4 percent in 1994 and 89.9 percent in 1993. This ratio increased in
1995 primarily due to reduced equipment utilization and less-than-expected
revenue growth. Operating expenses increased 15 percent in 1995, 9 percent in
1994 and 11 percent in 1993.
All expense categories increased during the three years ended December 31,
1995, due to the transportation of additional freight and expansion of the
company's fleet. Purchased transportation expense also increased due to a
higher number of independent contractor-owned vehicles. Use of independent
contractors reduces salaries, wages and benefits expense and fuel and fuel tax
expense relative to revenue, since these expenses are assumed by the independent
contractor. Additionally, the increase in fuel and fuel tax expense was
partially offset the last three years by the replacement of the company's fleet
with new, more fuel-efficient revenue equipment. The average price of diesel
fuel remained relatively stable during this period. Insurance and claims expense
in 1995 represented 4.8 percent of revenue, which is comparable to 5.0 percent
in 1994 and 4.7 percent in 1993.
Total depreciation expense has increased the last three years due to the
continued expansion of the company's fleet. The increase in 1995 was partially
offset by a $290,000 reduction in depreciation expense due to a change in the
estimated useful life of the company's satellite tracking equipment, effective
July 1, 1995. In 1994, Marten also changed the estimated salvage value of other
revenue equipment, resulting in a decrease to depreciation expense of $554,000
in 1994. The 1994 depreciation adjustment was made due to a change in market
value realized for used equipment and the resulting gains on the disposition of
revenue equipment.
Management anticipates that 1996 operating expenses, as a percentage of
revenue, will remain at current levels. Interest expense in 1995 represented
2.3 percent of revenue, compared with 2.1 percent in 1994 and 2.2 percent in
1993.
Interest expense increased in 1995 due to additional long-term debt
associated with equipment purchases and the June 1994 repurchase of 500,000
shares of the company's common stock. Interest expense in 1996 is expected to
exceed 1995 levels due to additional long-term debt associated with new
revenue equipment purchases.
The company's effective tax rate for the last three years was 40 percent.
10 [LOGO]
<PAGE>
Management expects that the effective tax rate will remain at 40 percent
during 1996.
In 1995, the Financial Accounting Standards Board issued Statement No. 123,
"Accounting for Stock-Based Compensation," as discussed in Note 1 to the
financial statements. This statement, effective in 1996, is expected to have no
impact on the company's results of operations or financial position.
Inflation can be expected to affect most of the company's operating
expenses. The impact of inflation, however, was minimal during the three years
ended December 31, 1995.
CAPITAL RESOURCES AND LIQUIDITY
The company's business requires significant capital expenditures to replace and
expand its fleet with new, more efficient revenue equipment. In addition, the
company purchased a maintenance facility in Oregon for approximately $1.6
million in July 1995. During 1994, the company repurchased 500,000 shares of its
common stock from the estate of its former chairman and chief executive officer,
Roger R. Marten, for $16 per share. The company has retired these shares,
reducing shareholders' investment by $8 million. These expenditures were funded
using cash flow from operations and long-term debt collateralized by equipment.
Long-term debt at December 31, 1995, increased $5.1 million from December 31,
1994, compared with an increase of $3.6 million in 1994. Marten has committed
to purchase an additional $31 million of new revenue equipment, net of trade-in
allowances, during 1996. Management expects to fund these acquisitions with
additional long-term debt and cash flow from operations.
Historically, Marten has operated effectively with a working capital
deficit. This deficit is primarily caused by current maturities of long-term
debt related to the acquisitions of revenue equipment. Working capital
requirements have been funded by cash flow provided by the company's operating
profits, short turnover in accounts receivable and cash management practices.
The working capital deficit at December 31, 1995, increased to $10.8 million,
compared with $6.9 million at December 31, 1994. This increase is primarily the
result of additional insurance and claims reserves and an increase in current
maturities of long-term debt. The company has not used short-term borrowings to
meet working capital needs, and does not anticipate the use of short-term
borrowings in 1996. Management believes the company's liquidity is adequate to
meet expected near-term operating requirements.
SEASONALITY
Marten experiences seasonal fluctuations in revenue and expenses, particularly
after the winter holiday season as customers reduce shipments. Operating
expenses temporarily increase in the winter due to reduced fuel efficiency and
additional maintenance costs. These patterns are consistent with the trucking
industry in general.
MARTEN 1995 ANNUAL REPORT 11
<PAGE>
BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
(IN THOUSANDS, EXCEPT SHARE INFORMATION) 1995 1994
------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents (Notes 1 and 7). . . . . . . . . $ 3,330 $ 3,129
Receivables:
Trade, less allowances of $438 and $600. . . . . . . . . 13,718 13,281
Other. . . . . . . . . . . . . . . . . . . . . . . . . . 3,745 3,216
Prepaid expenses (Note 1). . . . . . . . . . . . . . . . . 5,949 5,057
Deferred income taxes (Note 5) . . . . . . . . . . . . . . 2,766 2,260
------------------------
Total current assets . . . . . . . . . . . . . . . . 29,508 26,943
------------------------
PROPERTY AND EQUIPMENT (Notes 1, 2, 3 and 4):
Revenue equipment. . . . . . . . . . . . . . . . . . . . . 123,722 110,724
Building and land. . . . . . . . . . . . . . . . . . . . . 4,934 3,249
Office equipment and other . . . . . . . . . . . . . . . . 4,238 3,539
Less accumulated depreciation and amortization . . . . . . (39,261) (38,807)
------------------------
Net property and equipment . . . . . . . . . . . . . 93,633 78,705
------------------------
$ 123,141 $ 105,648
------------------------
------------------------
LIABILITIES AND SHAREHOLDERS' INVESTMENT
CURRENT LIABILITIES:
Accounts payable . . . . . . . . . . . . . . . . . . . . . $ 3,225 $ 3,106
Insurance and claims accruals (Note 1) . . . . . . . . . . 11,794 9,639
Accrued liabilities. . . . . . . . . . . . . . . . . . . . 7,412 6,103
Current maturities of long-term debt (Notes 2 and 7) . . . 17,914 14,963
------------------------
Total current liabilities. . . . . . . . . . . . . . 40,345 33,811
LONG-TERM DEBT, less current maturities (Notes 2 and 7). . . 27,079 24,917
DEFERRED INCOME TAXES (Note 5) . . . . . . . . . . . . . . . 17,475 13,816
------------------------
Total liabilities. . . . . . . . . . . . . . . . . . 84,899 72,544
------------------------
COMMITMENTS (Notes 1, 3 and 10)
SHAREHOLDERS' INVESTMENT (Notes 1, 4 and 6):
Common stock, $.01 par value per share, 10,000,000
shares authorized, 2,941,616 and 2,929,950 shares
issued and outstanding . . . . . . . . . . . . . . . . . 29 29
Additional paid-in capital . . . . . . . . . . . . . . . . 9,410 9,281
Retained earnings. . . . . . . . . . . . . . . . . . . . . 28,803 23,794
------------------------
Total shareholders' investment . . . . . . . . . . . 38,242 33,104
------------------------
$ 123,141 $ 105,648
------------------------
------------------------
</TABLE>
The accompanying notes are an integral part of these balance sheets.
12 [LOGO]
<PAGE>
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the years ended December 31,
(IN THOUSANDS, EXCEPT SHARE INFORMATION) 1995 1994 1993
----------------------------------------
<S> <C> <C> <C>
OPERATING REVENUE. . . . . . . . . . . . . . $ 137,704 $ 122,730 $ 112,180
----------------------------------------
OPERATING EXPENSES:
Salaries, wages and benefits . . . . . . . 50,040 44,900 40,873
Purchased transportation . . . . . . . . . 10,402 5,431 3,963
Fuel and fuel taxes. . . . . . . . . . . . 24,332 22,462 20,765
Supplies and maintenance . . . . . . . . . 14,042 11,826 10,889
Depreciation and amortization. . . . . . . 14,458 12,660 12,530
Operating taxes and licenses . . . . . . . 3,192 2,781 2,517
Insurance and claims . . . . . . . . . . . 6,550 6,081 5,246
Communications and utilities . . . . . . . 1,650 1,550 1,137
Gain on disposition of revenue equipment . (2,927) (2,220) (1,208)
Other. . . . . . . . . . . . . . . . . . . 4,587 4,244 4,109
----------------------------------------
126,326 109,715 100,821
----------------------------------------
OPERATING INCOME . . . . . . . . . . . . . . 11,378 13,015 11,359
----------------------------------------
OTHER EXPENSES (INCOME):
Interest expense . . . . . . . . . . . . . 3,219 2,516 2,447
Interest income and other. . . . . . . . . (189) (126) (186)
----------------------------------------
3,030 2,390 2,261
----------------------------------------
INCOME BEFORE ITEMS BELOW. . . . . . . . . . 8,348 10,625 9,098
PROVISION FOR INCOME TAXES (Note 5). . . . . 3,339 4,250 3,636
----------------------------------------
INCOME BEFORE EXTRAORDINARY ITEM . . . . . . 5,009 6,375 5,462
EXTRAORDINARY ITEM - PROCEEDS OF LIFE
INSURANCE POLICY (Note 9). . . . . . . . . - - 883
----------------------------------------
NET INCOME . . . . . . . . . . . . . . . . $ 5,009 $ 6,375 $ 6,345
----------------------------------------
----------------------------------------
EARNINGS PER COMMON AND COMMON EQUIVALENT
SHARE DATA:
Income before extraordinary item . . . . . $ 1.69 $ 2.00 $ 1.58
Extraordinary item . . . . . . . . . . . . - - .26
----------------------------------------
Net income . . . . . . . . . . . . . . . . $ 1.69 $ 2.00 $ 1.84
----------------------------------------
----------------------------------------
</TABLE>
The accompanying notes are an integral part of these statements.
STATEMENTS OF CHANGES IN SHAREHOLDERS' INVESTMENT
<TABLE>
<CAPTION>
Common Stock Additional Retained
(IN THOUSANDS, EXCEPT SHARE INFORMATION) Shares Amount Paid-In Capital Earnings Total
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1993 . . . . . . . . . 3,429,950 $ 34 $ 10,865 $ 17,485 $ 28,384
Net income . . . . . . . . . . . . . . . . - - - 6,345 6,345
--------------------------------------------------------------------------
Balance at December 31, 1993 . . . . . . . . 3,429,950 $ 34 $ 10,865 $ 23,830 $ 34,729
Net income . . . . . . . . . . . . . . . . - - - 6,375 6,375
Repurchase of common stock (Note 4). . . . (500,000) (5) (1,584) (6,411) (8,000)
--------------------------------------------------------------------------
Balance at December 31, 1994 . . . . . . . . 2,929,950 $ 29 $ 9,281 $ 23,794 $ 33,104
Net income . . . . . . . . . . . . . . . . - - - 5,009 5,009
Issuance of common stock . . . . . . . . . 11,666 - 129 - 129
--------------------------------------------------------------------------
Balance at December 31, 1995 . . . . . . . . 2,941,616 $ 29 $ 9,410 $ 28,803 $ 38,242
--------------------------------------------------------------------------
--------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these statements.
MARTEN 1995 ANNUAL REPORT 13
<PAGE>
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For the years ended December 31,
(IN THOUSANDS) 1995 1994 1993
--------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Operations:
Income before extraordinary item . . . . . . . . . . . . . . . . . . $ 5,009 $ 6,375 $ 5,462
Adjustments to reconcile income before extraordinary item
to net cash flows from operating activities:
Depreciation and amortization. . . . . . . . . . . . . . . . . . . 14,458 12,660 12,530
Gain on disposition of revenue equipment . . . . . . . . . . . . . (2,927) (2,220) (1,208)
Deferred tax provision . . . . . . . . . . . . . . . . . . . . . . 3,153 3,325 2,321
Changes in other current operating items:
Receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . (966) (1,284) (3,838)
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . (892) (306) (1,621)
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . 119 480 728
Other current liabilities. . . . . . . . . . . . . . . . . . . . 3,464 2,732 1,319
--------------------------------------
Net cash provided by operating activities
before extraordinary item. . . . . . . . . . . . . . . . . . 21,418 21,762 15,693
Extraordinary item . . . . . . . . . . . . . . . . . . . . . . . . . - - 883
--------------------------------------
Net cash provided by operating activities. . . . . . . . . . . 21,418 21,762 16,576
--------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Revenue equipment additions. . . . . . . . . . . . . . . . . . . . . . (37,320) (27,168) (27,648)
Revenue equipment dispositions . . . . . . . . . . . . . . . . . . . . 13,309 8,435 7,893
Building and land, office equipment and other additions, net . . . . . (2,448) (849) (1,901)
--------------------------------------
Net cash used for investing activities . . . . . . . . . . . . (26,459) (19,582) (21,656)
--------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock . . . . . . . . . . . . . . . . . . . . . . . 129 - -
Common stock repurchased . . . . . . . . . . . . . . . . . . . . . . . - (8,000) -
Long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . 22,559 21,139 19,236
Repayment of long-term borrowings. . . . . . . . . . . . . . . . . . . (17,446) (17,529) (14,692)
--------------------------------------
Net cash provided by (used for) financing activities . . . . . 5,242 (4,390) 4,544
--------------------------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS . . . . . . . . . . . 201 (2,210) (536)
CASH AND CASH EQUIVALENTS:
Beginning of year. . . . . . . . . . . . . . . . . . . . . . . . . . . 3,129 5,339 5,875
--------------------------------------
End of year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,330 $ 3,129 $ 5,339
--------------------------------------
--------------------------------------
CASH PAID (RECEIVED) FOR:
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,144 $ 2,552 $ 2,423
--------------------------------------
--------------------------------------
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (135) $ 820 $ 2,257
--------------------------------------
--------------------------------------
</TABLE>
The accompanying notes are an integral part of these statements.
14 [LOGO]
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF BUSINESS: Marten Transport, Ltd. (the company) is a long-haul
truckload carrier providing protective service transportation of
temperature-sensitive materials and general commodities pursuant to operating
authority, both contract and common, granted by the Interstate Commerce
Commission (ICC). Effective January 1, 1996, the ICC was abolished and its
regulatory authority was transferred to the United States Department of
Transportation and the Federal Highway Administration. The company derived
approximately 11 percent of its revenue from a single customer in 1995, 12
percent in 1994 and 14 percent in 1993.
CASH EQUIVALENTS: The company invests available funds in short-term cash
equivalents, principally mutual funds containing U.S. government-backed
securities which have an original maturity of three months or less. These
investments are stated at cost, which approximates market value.
PREPAID EXPENSES: As of December 31, prepaid expenses consisted of the
following:
<TABLE>
<CAPTION>
(IN THOUSANDS) 1995 1994
-----------------------
<S> <C> <C>
License fees . . . . . . . . . . $ 1,912 $ 1,612
Tires in service . . . . . . . . 1,708 1,418
Parts and tires inventory. . . . 1,457 1,135
Insurance. . . . . . . . . . . . 232 301
Other. . . . . . . . . . . . . . 640 591
-----------------------
$ 5,949 $ 5,057
-----------------------
-----------------------
</TABLE>
PROPERTY AND EQUIPMENT: Additions and improvements to property and equipment are
capitalized at cost, while maintenance and repair expenditures are charged to
operations as incurred. Gains and losses on revenue equipment dispositions are
included in operations. Certain facilities are leased from an entity owned by
the company's chairman of the board (see Notes 3 and 4).
Depreciation is computed based on the cost of the asset, reduced by its
estimated salvage value, using the straight-line method for financial reporting
purposes and accelerated methods for income tax reporting purposes. Following
is a summary of estimated useful lives:
<TABLE>
<CAPTION>
YEARS
-----
<S> <C>
Revenue equipment:
Tractors . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Trailers . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Satellite tracking . . . . . . . . . . . . . . . . . . . . . . 7
Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Office equipment and other . . . . . . . . . . . . . . . . . . . 3-15
-----
</TABLE>
The company changed the estimated useful life of satellite tracking equipment as
of July 1, 1995. The change resulted in a decrease in depreciation expense of
$290,000 and an increase in net income of $174,000, or $.06 per share, in 1995.
The company changed the estimated salvage value of certain revenue equipment
effective January 1, 1994, to reflect a change in the market value realized for
used equipment. The change resulted in a decrease in depreciation expense of
$554,000 and an increase in net income of $333,000, or $.10 per share, in 1994.
TIRES IN SERVICE: The cost of original equipment and replacement tires placed in
service is capitalized. Amortization is computed based on cost, less estimated
salvage value, using the straight-line method over a period of 24 months. The
current portion of tires in service is included in prepaid expenses in the
accompanying balance sheets. The cost of tires amortized beyond one year, along
with the estimated salvage value of tires in service, are included in revenue
equipment in the accompanying balance sheets. The cost of recapping tires is
charged to expense as incurred.
INSURANCE AND CLAIMS: The company self-insures for property damage and cargo and
self-insures, in part, for losses related to workers' compensation claims, auto
liability, general liability and employees' group health benefits. Insurance
coverage is maintained for per-incident and cumulative liability losses in
amounts the company considers sufficient based upon ongoing review and
historical experience. The company provides currently for estimated self-insured
and partially self-insured losses. Under arrangements with its insurance
carriers and regulatory authorities, the company has arranged for approximately
$6.4 million in letters of credit to guarantee settlement of claims.
REVENUE RECOGNITION: The company recognizes revenue and related expenses on the
date shipment of freight is completed.
EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE: Earnings per share have been
computed based on the weighted average number of shares outstanding during each
period as adjusted for the effect of the issuance of stock options to certain
employees and directors. Weighted average common and common equivalent shares
outstanding were 2,964,947 in 1995, 3,192,140 in 1994 and 3,451,932 in 1993.
MARTEN 1995 ANNUAL REPORT 15
<PAGE>
NOTES TO FINANCIAL STATEMENTS
ACCOUNTING FOR STOCK-BASED COMPENSATION: Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation" (Statement No.
123), issued in October 1995 and effective for fiscal years beginning after
December 15, 1995, encourages, but does not require, a fair value based method
of accounting for employee stock options or similar equity instruments. It also
allows an entity to elect to continue to measure compensation cost under
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees" (APB No. 25), but requires pro forma disclosures of net income and
earnings per share as if the fair value based method of accounting had been
applied. The company expects to adopt Statement No. 123 in 1996. While the
company is still evaluating Statement No. 123, it currently expects to elect to
continue to measure compensation cost under APB No. 25 and comply with the pro
forma disclosure requirements. If the company makes this election, this
statement will have no impact on the company's results of operations or
financial position because the company's plans are fixed stock option plans
which have no intrinsic value at the grant date under APB No. 25.
USE OF ESTIMATES: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. These estimates are primarily related to insurance and claims accruals
and depreciation. Actual results could differ from those estimates.
RECLASSIFICATIONS: Certain amounts in the 1994 and 1993 financial statements
have been reclassified to conform to the 1995 presentation. These
reclassifications had no effect on previously reported net income or
shareholders' investment.
2. LONG-TERM DEBT
Long-term debt consists of notes payable collateralized by specific revenue
equipment. The notes are payable in monthly principal and interest installments.
Interest rates range from 6 percent to 9.1 percent.
The debt agreements contain various restrictive covenants which, among other
matters, require the company to maintain certain
financial ratios. The company was in compliance with all debt covenants at
December 31, 1995.
Maturities of long-term debt at December 31, 1995, are as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS) Amount
-----------
<S> <C>
1996 $ 17,914
1997 13,702
1998 9,781
1999 3,596
-----------
$ 44,993
-----------
-----------
</TABLE>
3. LEASES
The company acquired certain revenue equipment in 1990 under the terms of
capital leases which were included within long-term debt and capital leases.
Payments made under these leases amounted to $1,382,000 in 1994 and $2,488,000
in 1993. The payments made in 1994 satisfied remaining capital lease
obligations.
The company leases facilities and office equipment under operating leases with
terms ranging from one to five years (see Note 4). Under most of these
arrangements, the company pays maintenance and other expenses related to the
leased property.
Minimum future obligations under operating leases in effect at December 31,
1995, are as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS) Amount
------
<S> <C>
1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 270
1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225
1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191
1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
------
$ 813
------
------
</TABLE>
Lease-related expenses were as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS) 1995 1994 1993
--------------------------
<S> <C> <C> <C>
Operating lease rentals. . . . . . . . $ 458 $ 436 $ 493
Capital lease amortization . . . . . . - 81 867
Capital lease interest expense . . . . - 20 288
--------------------------
</TABLE>
4. RELATED PARTY TRANSACTIONS
During the three years ended December 31, 1995, the company engaged in the
following related party transactions:
(a) The company repurchased 500,000 shares of its common stock from the estate
of its former chairman and chief executive officer, Roger R. Marten, in 1994 for
$16 per share.
16 [LOGO]
<PAGE>
(b) The company leases equipment, office and terminal facilities under a
non-cancelable operating lease with an entity owned by its chairman of the board
and previously with a partnership in which its current and former chairmen of
the board were partners. Total rental expense charged to operations relating to
this lease was $126,000 during 1995, $175,000 during 1994 and $175,000 during
1993. Future minimum rental payments under the lease are $126,000 per year from
1996 through 1999.
(c) During 1993, the company made payments of $629,000 to a construction company
owned by a director of Marten Transport for additions to the Mondovi, Wisconsin,
headquarters and a maintenance facility in Ontario, California.
(d) During the three years ended December 31, 1995, the company has maintained
checking, savings and investment accounts at banks controlled by its former
chairman of the board and a non-shareholder/officer of the company.
5. INCOME TAXES
The company utilizes the liability method of accounting for income taxes whereby
deferred taxes are determined based on the estimated future tax effects of
differences between the financial statement and tax bases of assets and
liabilities given the provisions of enacted tax laws.
The components of the provision for income taxes consisted of the following:
<TABLE>
<CAPTION>
(IN THOUSANDS) 1995 1994 1993
--------------------------
<S> <C> <C> <C>
Current:
Federal. . . . . . . . . . . . . . . $ 150 $ 765 $1,150
State. . . . . . . . . . . . . . . . 36 160 165
--------------------------
186 925 1,315
--------------------------
Deferred:
Federal. . . . . . . . . . . . . . . 2,552 2,708 1,909
State. . . . . . . . . . . . . . . . 601 617 412
--------------------------
3,153 3,325 2,321
--------------------------
Total provision. . . . . . . . . . . $3,339 $4,250 $3,636
--------------------------
--------------------------
</TABLE>
The statutory federal income tax rate is reconciled to the effective income tax
rate as follows:
<TABLE>
<CAPTION>
1995 1994 1993
------------------------
<S> <C> <C> <C>
Statutory federal
income tax rate. . . . . . . . . . . 34% 34% 34%
Increase in taxes arising from:
State income taxes, net of
federal income tax benefit . . . . 5 4 4
Permanent differences . . . . . . . - 2 2
Other, net . . . . . . . . . . . . . 1 - -
------------------------
Effective tax rate . . . . . . . . . . 40% 40% 40%
------------------------
------------------------
</TABLE>
As of December 31, the net deferred tax liability consisted of the following:
<TABLE>
<CAPTION>
(IN THOUSANDS) 1995 1994
----------------------
<S> <C> <C>
Deferred tax assets:
Reserves and accrued liabilities for
financial reporting in excess of tax . . . . . . $ 5,404 $ 4,463
State income tax deduction for
financial reporting in excess of tax . . . . . . 879 644
Alternative minimum tax credit . . . . . . . . . . 41 104
----------------------
6,324 5,211
----------------------
Deferred tax liabilities:
Tax depreciation in excess of
depreciation for financial reporting . . . . . . 18,354 14,459
Prepaid tires, licenses and use tax
expensed for income tax purposes and
capitalized for financial reporting. . . . . . . 2,505 2,134
Other . . . . . . . . . . . . . . . . . . . . . . 174 174
----------------------
21,033 16,767
----------------------
Net deferred tax liability . . . . . . . . . . . $14,709 $11,556
----------------------
----------------------
</TABLE>
6. SHAREHOLDERS' INVESTMENT
Under the company's Stock Incentive Plan adopted in 1995, officers, directors
and key employees may be granted incentive stock options at prices not less than
the fair market value on the date of grant and non-statutory stock options at
prices not less than 85 percent of the fair market value on the date the option
is granted. Incentive stock options expire within 10 years after the date of
grant. The Stock Incentive Plan also provides for the issuance of stock
appreciation rights, restricted stock awards, performance units and stock
bonuses, none of which have been awarded as of December 31, 1995. The maximum
number of shares of common stock available for issuance under the Stock
Incentive Plan is 500,000 shares.
The company adopted in 1986 an Incentive Stock Option Plan and a Non-Statutory
Stock Option Plan providing for the grant of options to purchase, at prices not
less than the fair market value on the date of grant, up to an aggregate of
250,000 shares of common stock to officers, directors and key employees. Options
under the Incentive Stock Option Plan expire within 10 years after the date of
grant while options under the Non-Statutory Stock Option Plan expire within 10
years and one month after the date of grant.
MARTEN 1995 ANNUAL REPORT 17
<PAGE>
NOTES TO FINANCIAL STATEMENTS
As of December 31, incentive stock option activity under the Stock Incentive
Plan and the Incentive Stock Option Plan was as follows:
<TABLE>
<CAPTION>
1995 1994 1993
---------------------------------
<S> <C> <C> <C>
Outstanding, beginning of year . . . . 59,500 47,500 41,500
Granted:
$13.25/share . . . . . . . . . . . . - - 15,000
$17.50/share . . . . . . . . . . . . - 15,000 -
$20.50/share . . . . . . . . . . . . 80,000 - -
Exercised:
$3.75/share. . . . . . . . . . . . . - (3,000) (9,000)
$6.75/share. . . . . . . . . . . . . (5,000) - -
Terminated:
$17.50/share . . . . . . . . . . . . (15,000) - -
$20.50/share . . . . . . . . . . . . (20,000) - -
---------------------------------
Outstanding, end of year . . . . . . . 99,500 59,500 47,500
---------------------------------
---------------------------------
Exercisable, end of year:
$3.75-$20.50/share . . . . . . . . . 27,500 23,500 17,500
---------------------------------
---------------------------------
</TABLE>
The company also has granted non-statutory stock options under the Stock
Incentive Plan and the Non-Statutory Stock Option Plan to purchase 118,500
shares of common stock. During 1995 and 1993, options were exercised for 6,666
shares at $5.87 per share and 10,000 shares at $5.00 per share, respectively. At
December 31, 1995, options for 98,500 shares were outstanding, including 16,833
shares exercisable at $7.00 to $20.50 per share.
An Employee Stock Purchase Plan and an Independent Contractor Stock Purchase
Plan (the Purchase Plans) were adopted in 1995 as a means to encourage employee
and independent contractor ownership of company common stock. Eligible
participants designate the amount of regular payroll or contract payment
deductions and voluntary cash contributions that are used to purchase shares of
the company's common stock at the market price on the open market. The broker's
commissions and administrative charges related to purchases of common stock
under the Purchase Plans are paid by the company.
The company repurchased 500,000 shares of its common stock on June 21, 1994, for
$16 per share (see Note 4). The shares have been retired, reducing shareholders'
investment by $8 million. The company repurchased, at fair market value, the
3,000 shares of stock issued in 1994 and the 19,000 shares issued in 1993 upon
exercise of the options noted above.
7. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following methods and assumptions were used to estimate the fair value of
each class of financial instruments:
CASH AND CASH EQUIVALENTS: The carrying amount approximates fair value due to
the short maturity of these instruments.
LONG-TERM DEBT: The fair value of the company's long-term debt is estimated to
be $45,266,000 at December 31, 1995, using discounted cash flow analysis, based
on the company's current incremental borrowing rates for similar arrangements.
8. RETIREMENT SAVINGS PLAN
Effective January 1, 1993, the company adopted a defined contribution retirement
savings plan, in accordance with Section 401(k) of the Internal Revenue Code,
covering all employees who meet a minimum service requirement. Each participant
can make contributions of up to 15 percent of compensation. The company's
contribution of 25 percent of each participant's contribution to the plan for up
to 4 percent of compensation vests at the rate of 20 percent per year from the
second through sixth years of service. In addition, the company may make
elective contributions which are determined by resolution of the board of
directors. No elective contributions were made in 1995, 1994 or 1993. Total
expense recorded in connection with the plan was $182,000 in 1995, $167,000 in
1994 and $166,000 in 1993.
9. EXTRAORDINARY ITEM
On August 9, 1993, the company's former chairman and chief executive officer,
Roger R. Marten, passed away. The company was the beneficiary of a $1 million
life insurance policy on Mr. Marten. These proceeds, net of previously recorded
cash surrender value of $117,000, were recorded in 1993 as an extraordinary
credit with no income tax effect.
10. COMMITMENTS
The company has commitments to purchase approximately $31 million of additional
revenue equipment, net of trade-in allowances, in 1996.
18 [LOGO]
<PAGE>
11. QUARTERLY FINANCIAL DATA (UNAUDITED)
The following is a summary of the quarterly results of operations for 1995 and
1994:
<TABLE>
<CAPTION>
1995 QUARTERS (IN THOUSANDS, EXCEPT PER-SHARE AMOUNTS) FIRST SECOND THIRD FOURTH TOTAL
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Operating revenue. . . . . . . . . . . . . . . . $31,961 $34,827 $35,889 $35,027 $137,704
Operating income . . . . . . . . . . . . . . . . 3,310 2,683 3,023 2,362 11,378
Net income . . . . . . . . . . . . . . . . . . . 1,531 1,198 1,339 941 5,009
Net income per share . . . . . . . . . . . . . . .52 .40 .45 .32 1.69
---------------------------------------------------------------------
<CAPTION>
1994 Quarters (IN THOUSANDS, EXCEPT PER-SHARE AMOUNTS) First Second Third Fourth Total
---------------------------------------------------------------------
Operating revenue. . . . . . . . . . . . . . . . $29,220 $30,483 $31,443 $31,584 $122,730
Operating income . . . . . . . . . . . . . . . . 2,566 3,434 3,644 3,371 13,015
Net income . . . . . . . . . . . . . . . . . . . 1,200 1,742 1,788 1,645 6,375
Net income per share . . . . . . . . . . . . . . .35 .51 .60 .56 2.00
---------------------------------------------------------------------
</TABLE>
The company changed the estimated useful life of satellite tracking equipment as
of July 1, 1995 (see Note 1). The change resulted in a decrease in depreciation
expense of $144,000 and an increase in net income of $86,000, or $.03 per share,
for the third quarter of 1995.
The company changed the estimated salvage value of certain revenue equipment
effective January 1, 1994 (see Note 1). The change resulted in a decrease in
depreciation expense of $405,000 through the third quarter of 1994. The effect
of this change in estimate was recorded in the third quarter of 1994, which
increased net income by $243,000, or $.08 per share, of which $.05 per share
related to the first and second quarters of 1994.
The net income per share for the 1994 quarters exceeded the net income per share
for the year due to changes in the weighted average number of shares outstanding
during the year.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Marten Transport, Ltd.:
We have audited the accompanying balance sheets of Marten Transport, Ltd. (a
Delaware corporation) as of December 31, 1995 and 1994, and the related
statements of operations, changes in shareholders' investment and cash flows for
each of the three years in the period ended December 31, 1995. These financial
statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Marten Transport, Ltd. as of
December 31, 1995 and 1994, and the results of its operations and its cash flows
for each of the three years in the period ended December 31, 1995, in conformity
with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
Minneapolis, Minnesota
January 24, 1996
MARTEN 1995 ANNUAL REPORT 19
<PAGE>
CORPORATE INFORMATION
CORPORATE HEADQUARTERS
129 Marten Street
Mondovi, Wisconsin 54755
Telephone: (715) 926-4216
Fax: (715) 926-4530
SHAREHOLDER INFORMATION
A copy of the company's 1995 Annual Report on Form 10-K as filed with the
Securities and Exchange Commission is available by writing to:
Darrell D. Rubel, executive vice president and chief financial officer, at
Marten's corporate headquarters.
ANNUAL MEETING
Shareholders, employees and friends are invited to attend Marten Transport's
annual meeting on Tuesday, May 7, 1996, at 4:00 p.m. at the Roger Marten
Community Center, 120 S. Franklin Street, Mondovi, Wisconsin.
STOCK LISTING
Nasdaq National Market symbol: MRTN
LEGAL COUNSEL
Oppenheimer Wolff & Donnelly
45 South Seventh Street
Suite 3400
Minneapolis, Minnesota 55402
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP
45 South Seventh Street
Minneapolis, Minnesota 55402
TRANSFER AGENT AND REGISTRAR
Chemical Mellon Shareholder Services, L.L.C.
85 Challenger Road
Overpeck Centre
Ridgefield Park, New Jersey 07660
Telephone: (800) 288-9541
TDD: (800) 231-5469
Communications concerning change of address or stock certificates should be
directed to the transfer agent.
PUBLIC/FINANCIAL RELATIONS COUNSEL
Padilla Speer Beardsley Inc.
224 Franklin Avenue West
Minneapolis, Minnesota 55404
COMMON STOCK DATA
The company's quarterly stock price data, as reported by the Nasdaq National
Market, were as follows:
<TABLE>
<CAPTION>
1995 1994
Quarter HIGH LOW High Low
--------------------------------------------------------
<S> <C> <C> <C> <C>
First. . . . . . . $ 20 1/2 $ 18 1/2 $ 18 3/4 $ 16 3/4
Second . . . . . . 21 19 1/2 19 17
Third. . . . . . . 20 16 15/16 19 1/2 17 1/2
Fourth . . . . . . 17 1/2 15 20 18
</TABLE>
The foregoing prices do not include adjustments for retail mark-ups, mark-downs
or commissions. On December 31, 1995, there were 311 shareholders of record, as
well as approximately 325 beneficial shareholders. The company has not paid any
cash dividends on its common stock since it became publicly held in September
1986, and management does not anticipate cash dividend payments in the
foreseeable future.
20 [LOGO]
<PAGE>
EXECUTIVE OFFICERS AND DIRECTORS
Randolph L. Marten
Chairman of the Board,
President, Chief
Operating Officer and Director
Darrell D. Rubel
Executive Vice President,
Chief Financial Officer,
Treasurer, Assistant
Secretary and Director
Timothy P. Nash
Vice President of Sales
Franklin J. Foster
Vice President of Finance
Robert G. Smith
Vice President of
Operations
Arnold P. Schultz
Director
Retired Superintendent
of Schools,
Goodhue, Minnesota
Larry B. Hagness
Director
President, Durand Builders
Service, Inc.,
Durand, Wisconsin
Thomas J. Winkel
Director
Management Consultant,
Eagan, Minnesota
Mark A. Kimball
Secretary
Partner, Oppenheimer
Wolff & Donnelly,
Minneapolis, Minnesota
"MARTEN HAS BEEN
A GOOD PARTNER.
THEY'VE COME THROUGH
FOR US.
AND, IN TIMES OF
CRUNCH AND CRISIS, THEY
STEP IN AND HELP;
YOU CAN'T ASK FOR MORE
THAN THAT."
Stan Hirshman,
Director of Transportation Pricing
KRAFT FOODS, INC.
[RECYCLE LOGO]
This document is recyclable.
The paper is manufactured using 100%
Elemental Chlorine Free (ecf) pulp.
Design: Eaton & Associates
<PAGE>
[LOGO]
129 Marten Street
Mondovi, Wisconsin 54755
Telephone: (715) 926-4216
Fax: (715) 926-4530
<PAGE>
CONSENT OF ARTHUR ANDERSEN LLP
As independent public accountants, we hereby consent to the incorporation by
reference of our report dated January 24, 1996 included or incorporated by
reference in this Form 10-K into Marten Transport, Ltd.'s previously filed
Form S-8 dated February 23, 1994.
/s/ Arthur Andersen LLP
Minneapolis, Minnesota
March 28, 1996
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENTS OF OPERATIONS AND THE BALANCE SHEETS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 3,330,000
<SECURITIES> 0
<RECEIVABLES> 17,463,000
<ALLOWANCES> 438,000
<INVENTORY> 0
<CURRENT-ASSETS> 29,508,000
<PP&E> 132,894,000
<DEPRECIATION> 39,261,000
<TOTAL-ASSETS> 123,141,000
<CURRENT-LIABILITIES> 40,345,000
<BONDS> 27,079,000
0
0
<COMMON> 29,000
<OTHER-SE> 38,213,000
<TOTAL-LIABILITY-AND-EQUITY> 123,141,000
<SALES> 137,704,000
<TOTAL-REVENUES> 137,704,000
<CGS> 0
<TOTAL-COSTS> 126,326,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,219,000
<INCOME-PRETAX> 8,348,000
<INCOME-TAX> 3,339,000
<INCOME-CONTINUING> 5,009,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,009,000
<EPS-PRIMARY> 1.69
<EPS-DILUTED> 1.69
</TABLE>
