<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended: March 31, 1996
Commission File Number: 0-15010
MARTEN TRANSPORT, LTD.
(Exact name of registrant as specified in its charter)
Delaware 39-1140809
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
129 Marten Street, Mondovi, Wisconsin 54755
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 715-926-4216
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
--- ---
The number of shares outstanding of the registrant's Common Stock, par value
$.01 per share, was 2,941,616 as of March 31, 1996.
<PAGE>
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements
MARTEN TRANSPORT, LTD.
CONDENSED BALANCE SHEETS
(In thousands, except share information)
(Unaudited)
March 31, December 31,
1996 1995
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ASSETS
Current assets:
Cash and cash equivalents . . . . . . . . $ 2,911 $ 3,330
Receivables . . . . . . . . . . . . . . . 19,800 17,463
Prepaid expenses. . . . . . . . . . . . . 6,408 5,949
Deferred income taxes. . . . . . . . . . 3,724 2,766
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Total current assets . . . . . . . . . 32,843 29,508
Property and equipment:
Revenue equipment, building and land,
office equipment, and other . . . . . . 131,510 132,894
Accumulated depreciation . . . . . . . . (35,149) (39,261)
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Net property and equipment . . . . . . 96,361 93,633
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TOTAL ASSETS. . . . . . . . . . . $129,204 $123,141
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-------- --------
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current liabilities:
Accounts payable and accrued liabilities. $ 10,347 $ 10,637
Insurance and claims accruals . . . . . . 13,027 11,794
Current maturities of long-term debt. . . 18,348 17,914
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Total current liabilities. . . . . . . 41,722 40,345
Long-term debt, less current maturities . . 30,060 27,079
Deferred income taxes . . . . . . . . . . . 18,879 17,475
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Total liabilities. . . . . . . . . . . 90,661 84,899
Shareholders' investment:
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 9,410
Retained earnings. . . . . . . . . . . . . 29,104 28,803
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Total shareholders'
investment . . . . . . . . . . . . . . 38,543 38,242
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TOTAL LIABILITIES AND
SHAREHOLDERS' INVESTMENT. . . . . . $129,204 $123,141
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-------- --------
The accompanying notes are an integral part of these balance sheets.
<PAGE>
MARTEN TRANSPORT, LTD.
CONDENSED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months
Ended March 31,
1996 1995
---- ----
OPERATING REVENUE . . . . . . . . . . . . $34,609 $31,961
OPERATING EXPENSES:
Salaries, wages and benefits . . . . . 12,383 11,770
Purchased transportation . . . . . . . 4,003 1,603
Fuel and fuel taxes. . . . . . . . . . 6,125 5,724
Supplies and maintenance . . . . . . . 3,708 3,178
Depreciation . . . . . . . . . . . . . 3,837 3,518
Operating taxes and licenses . . . . . 784 714
Insurance and claims . . . . . . . . . 2,013 1,571
Communications and utilities . . . . . 446 396
Gain on disposition of revenue
equipment . . . . . . . . . . . . . . (1,128) (1,041)
Other. . . . . . . . . . . . . . . . . 1,116 1,218
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Total operating expenses . . . . 33,287 28,651
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OPERATING INCOME. . . . . . . . . . . . . 1,322 3,310
OTHER EXPENSES (INCOME):
Interest expense. . . . . . . . . . . . 845 778
Interest income and other . . . . . . . (24) (19)
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INCOME BEFORE INCOME TAXES. . . . . . . . 501 2,551
PROVISION FOR INCOME TAXES. . . . . . . . 200 1,020
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NET INCOME. . . . . . . . . . . . . . . . $ 301 $ 1,531
------- -------
------- -------
NET INCOME PER COMMON AND COMMON
EQUIVALENT SHARE . . . . . . . . . . . $ 0.10 $ 0.52
------- -------
------- -------
Weighted average common and common
equivalent shares outstanding . . . . . 2,962 2,964
------- -------
------- -------
The accompanying notes are an integral part of these statements.
<PAGE>
MARTEN TRANSPORT, LTD.
CONDENSED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months
Ended March 31,
1996 1995
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Operations:
Net income . . . . . . . . . . . . . . . $ 301 $1,531
Adjustments to reconcile net
income to net cash flows
from operating activities:
Depreciation . . . . . . . . . . . . 3,837 3,518
Gain on disposition of revenue
equipment. . . . . . . . . . . . . (1,128) (1,041)
Deferred tax provision . . . . . . . 446 756
Changes in other current
operating items . . . . . . . . . (1,853) 2,279
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Net cash provided by
operating activities . . . . . 1,603 7,043
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CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions:
Revenue equipment, net . . . . . . . . (5,246) (7,432)
Building and land, office equipment,
and other additions, net . . . . . . (191) (139)
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Net cash used for investing
activities . . . . . . . . . . (5,437) (7,571)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Long-term borrowings. . . . . . . . . . . 9,054 4,451
Repayment of long-term borrowings . . . . (5,639) (4,152)
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Net cash provided by
financing activities . . . . . 3,415 299
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DECREASE IN CASH AND CASH EQUIVALENTS. . . . (419) (229)
CASH AND CASH EQUIVALENTS:
Beginning of period . . . . . . . . . . . 3,330 3,129
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End of period . . . . . . . . . . . . . . $2,911 $2,900
------ ------
------ ------
CASH PAID (RECEIVED) FOR:
Interest. . . . . . . . . . . . . . . . . $ 860 $ 764
------ ------
------ ------
Income taxes. . . . . . . . . . . . . . . $ (348) $ (644)
------ ------
------ ------
The accompanying notes are an integral part of these statements.
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
(1) Financial Statements
The accompanying unaudited condensed financial statements reflect, in the
opinion of management, all adjustments considered necessary for a fair
presentation of the Company's financial condition, results of operations, and
cash flows as of March 31, 1996. The results of operations for any interim
period are not necessarily indicative of results for the full year. The
unaudited interim financial statements should be read in conjunction with the
financial statements and notes thereto included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1995.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
RESULTS OF OPERATIONS
Operating revenue for the first quarter of 1996 increased 8.3 percent over
the first quarter of 1995. This increase was due to the transportation of
additional freight associated with a moderate increase in the size of the
Company's fleet. Customer demand in 1996 was lower-than-expected, causing
freight rates and average miles traveled per tractor to decline slightly from
1995 levels. Management anticipates that customer demand will remain at
current levels during 1996.
Operating expenses for the first quarter of 1996 represented 96.2 percent of
operating revenue, compared with 89.6 percent for the same period in 1995.
This ratio increased in 1996 due primarily to reduced equipment utilization
and less-than-expected revenue growth. Operating expenses in the first
quarter of 1996 increased 16.2 percent over the same period in 1995. Most
expense categories increased in 1996 due to the transportation of additional
freight. Marten continued to increase the number of independent
contractor-owned vehicles in 1996, causing an increase in purchased
transportation expense. The Company's use of independent contractor-owned
vehicles reduces salaries, wages and benefits expense and fuel and fuel tax
expense relative to revenue, as these expenses are assumed by the independent
contractors. Fuel and fuel tax expense was negatively impacted in the first
quarter of 1996 by higher diesel fuel prices. Gains on disposition of
revenue equipment increased in the first quarter of 1996 due to the Company's
planned equipment replacement program. Insurance and claims expense
represented 5.8 percent of revenue during the first quarter of 1996, compared
with 4.9 percent in the same period of 1995. This increase resulted in
additional reserves for possible future claims.
Interest expense for the three months ended March 31, 1996, increased 8.6
percent over the same period of 1995 due to additional long-term debt
associated with revenue equipment purchases.
The Company recorded net income of $301,000, or 10 cents per share for the
first quarter of 1996, compared with net income of $1,531,000, or 52 cents
per share in 1995. This decline can be attributed to reduced customer demand
causing less-than-expected revenue growth.
CAPITAL RESOURCES AND LIQUIDITY
The Company continued to replace its fleet with new, more efficient equipment
during the first quarter of 1996. These purchases were funded using cash
flow from operations and long-term debt collateralized by the new equipment.
Marten has been able to operate effectively with a working capital deficit
due to the Company's operating profits, short turnover in accounts receivable
and cash management practices. The working capital deficit is caused
primarily by current maturities of long-term debt related to the acquisition
of revenue equipment. Marten's working capital deficit at March 31, 1996,
decreased to $8.9 million from $10.8 million at December 31, 1995. This
decrease was due primarily to additional receivables at March 31, 1996,
associated with the planned replacement of revenue equipment. Marten 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 anticipated near-term operating
requirements.
The Company is committed to purchase an additional $25 million of new revenue
equipment, net of trade-in allowances, during the remainder of 1996.
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings:
None
ITEM 2. Change in Securities:
None
ITEM 3. Defaults Upon Senior Securities:
None
ITEM 4. Submission of Matters to a Vote of Security Holders:
None
ITEM 5. Other Information:
None
ITEM 6. Exhibits and Reports on Form 8-K:
a) Exhibits:
Item No. Item Method of Filing
-------- ---- ----------------
27.1 Financial Data
Schedule . . . . Filed herewith.
b) Reports on Form 8-K:
No reports on Form 8-K have been filed during the quarter
ended March 31, 1996.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
MARTEN TRANSPORT, LTD.
(Registrant)
Dated: May 14, 1996 By: /s/ Darrell D. Rubel
--------------------------------------
Darrell D. Rubel
Executive Vice President and Treasurer
(Chief Financial Officer)
<PAGE>
MARTEN TRANSPORT, LTD.
EXHIBIT INDEX TO QUARTERLY REPORT
ON FORM 10-Q
For the Fiscal Quarter Ended March 31, 1996
Item No. Item Method of Filing
- -------- ---- ----------------
27.1 Financial Data
Schedule . . . . Filed herewith.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED STATEMENTS OF INCOME AND THE CONDENSED BALANCE SHEETS, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 2,911,000
<SECURITIES> 0
<RECEIVABLES> 19,800,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 32,843,000
<PP&E> 131,510,000
<DEPRECIATION> 35,149,000
<TOTAL-ASSETS> 129,204,000
<CURRENT-LIABILITIES> 41,722,000
<BONDS> 30,060,000
0
0
<COMMON> 29,000
<OTHER-SE> 38,514,000
<TOTAL-LIABILITY-AND-EQUITY> 129,204,000
<SALES> 34,609,000
<TOTAL-REVENUES> 34,609,000
<CGS> 0
<TOTAL-COSTS> 33,287,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 845,000
<INCOME-PRETAX> 501,000
<INCOME-TAX> 200,000
<INCOME-CONTINUING> 301,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 301,000
<EPS-PRIMARY> 0.10
<EPS-DILUTED> 0.10
</TABLE>
