<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, 1997
Commission File Number: 0-15010
MARTEN TRANSPORT, LTD.
(Exact name of registrant as specified in its charter)
Delaware 39-1140809
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
129 Marten Street, Mondovi, Wisconsin 54755
- ------------------------------------- -----
(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 2,959,616 as of March 31, 1997.
<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,
1997 1996
----------- ------------
ASSETS
Current assets:
Cash and cash equivalents . . . . . . . . . . . $ 2,867 $ 3,028
Receivables . . . . . . . . . . . . . . . . . . 18,352 19,433
Prepaid expenses. . . . . . . . . . . . . . . . 6,620 6,339
Deferred income taxes . . . . . . . . . . . . . 3,222 3,456
-------- --------
Total current assets. . . . . . . . . . . . 31,061 32,256
Property and equipment:
Revenue equipment, building and land,
office equipment, and other . . . . . . . . . 145,144 140,824
Accumulated depreciation . . . . . . . . . . . (36,688) (34,945)
-------- --------
Net property and equipment. . . . . . . . . 108,456 105,879
-------- --------
TOTAL ASSETS. . . . . . . . . . . . . $139,517 $138,135
-------- --------
-------- --------
LIABILITIES AND SHAREHOLDERS' INVESTMENT
Current liabilities:
Accounts payable and accrued liabilities. . . . $ 10,240 $ 11,024
Insurance and claims accruals . . . . . . . . . 12,881 13,558
Current maturities of long-term debt. . . . . . 21,179 20,100
-------- --------
Total current liabilities . . . . . . . . . 44,300 44,682
Long-term debt, less current maturities . . . . . 34,598 33,505
Deferred income taxes. . . . . . . . . . . . . . . 20,125 19,904
-------- --------
Total liabilities . . . . . . . . . . . . . 99,023 98,091
Shareholders' investment:
Common stock, $.01 par value per
share, 10,000,000 shares authorized,
2,959,616 shares issued
and outstanding . . . . . . . . . . . . . . . 30 30
Additional paid-in capital. . . . . . . . . . . 9,581 9,581
Retained earnings . . . . . . . . . . . . . . . 30,883 30,433
-------- --------
Total shareholders'
investment. . . . . . . . . . . . . . . . . 40,494 40,044
-------- --------
TOTAL LIABILITIES AND
SHAREHOLDERS' INVESTMENT. . . . . . . $139,517 $138,135
-------- --------
-------- --------
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,
1997 1996
---- ----
OPERATING REVENUE. . . . . . . . . . . . . . . . . . $38,553 $34,609
OPERATING EXPENSES:
Salaries, wages and benefits . . . . . . . . . . . 12,465 12,383
Purchased transportation . . . . . . . . . . . . . 6,854 4,003
Fuel and fuel taxes. . . . . . . . . . . . . . . . 6,472 6,125
Supplies and maintenance . . . . . . . . . . . . . 3,260 3,708
Depreciation . . . . . . . . . . . . . . . . . . . 4,202 3,837
Operating taxes and licenses . . . . . . . . . . . 803 784
Insurance and claims . . . . . . . . . . . . . . . 1,100 2,013
Communications and utilities . . . . . . . . . . . 521 446
Gain on disposition of revenue
equipment. . . . . . . . . . . . . . . . . . . . (63) (1,128)
Other. . . . . . . . . . . . . . . . . . . . . . . 1,180 1,116
------- -------
Total operating expenses . . . . . . . . . . 36,794 33,287
------- -------
OPERATING INCOME . . . . . . . . . . . . . . . . . . 1,759 1,322
OTHER EXPENSES (INCOME):
Interest expense . . . . . . . . . . . . . . . . . 1,028 845
Interest income and other. . . . . . . . . . . . . (20) (24)
------- -------
INCOME BEFORE INCOME TAXES . . . . . . . . . . . . . 751 501
PROVISION FOR INCOME TAXES . . . . . . . . . . . . . 301 200
------- -------
NET INCOME . . . . . . . . . . . . . . . . . . . . . $ 450 $ 301
------- -------
------- -------
NET INCOME PER COMMON AND COMMON
EQUIVALENT SHARE . . . . . . . . . . . . . . . . . $ 0.15 $ 0.10
------- -------
------- -------
Weighted average common and common
equivalent shares outstanding. . . . . . . . . . . 2,967 2,962
------- -------
------- -------
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,
1997 1996
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Operations:
Net income . . . . . . . . . . . . . . . . . . . $ 450 $ 301
Adjustments to reconcile net
income to net cash flows
from operating activities:
Depreciation . . . . . . . . . . . . . . . 4,202 3,837
Gain on disposition of revenue
equipment . . . . . . . . . . . . . . . . (63) (1,128)
Deferred tax provision. . . . . . . . . . . 455 446
Changes in other current
operating items . . . . . . . . . . . . . (661) (1,853)
------- -------
Net cash provided by
operating activities. . . . . . . . . 4,383 1,603
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions:
Revenue equipment, net . . . . . . . . . . . . . (6,611) (5,246)
Building and land, office equipment,
and other additions, net . . . . . . . . . . . (105) (191)
------- -------
Net cash used for investing
activities. . . . . . . . . . . . . . (6,716) (5,437)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Long-term borrowings . . . . . . . . . . . . . . . 7,795 9,054
Repayment of long-term borrowings. . . . . . . . . (5,623) (5,639)
------- -------
Net cash provided by
financing activities. . . . . . . . . 2,172 3,415
------- -------
DECREASE IN CASH AND CASH EQUIVALENTS. . . . . . . . (161) (419)
CASH AND CASH EQUIVALENTS:
Beginning of period. . . . . . . . . . . . . . . . 3,028 3,330
------- -------
End of period. . . . . . . . . . . . . . . . . . . $2,867 $2,911
------- -------
------- -------
CASH PAID (RECEIVED) FOR:
Interest . . . . . . . . . . . . . . . . . . . . . $1,012 $ 860
------- -------
------- -------
Income taxes . . . . . . . . . . . . . . . . . . . $ (23) $ (348)
------- -------
------- -------
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 (consisting of normal recurring accruals)
considered necessary for a fair presentation of the Company's financial
condition, results of operations, and cash flows as of March 31, 1997. 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, 1996.
<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 1997 increased 11.4 percent over the
first quarter of 1996. This increase was primarily the result of transporting
additional freight associated with moderate additions to the Company's fleet.
Additionally, fuel surcharges implemented to partially offset an increase in the
cost of diesel fuel represented 1.7 percent of revenue in the first quarter of
1997.
Operating expenses for the first quarter of 1997 were 95.4 percent of operating
revenue, versus 96.2 percent for the same period in 1996. Most expense
categories increased in 1997 due to the transportation of additional freight and
an increase in the Company's fleet. Purchased transportation expense also
increased due to a higher number of independent contractor-owned vehicles.
Marten's use of independent contractor-owned vehicles reduces the following
expenses relative to revenue: salaries, wages and benefits expense, fuel and
fuel taxes expense, and supplies and maintenance expense. The independent
contractors assume these expenses. Fuel and fuel tax expense increased due to
higher average diesel fuel prices in the first quarter of 1997 compared with the
same period in 1996. Insurance and claims expense decreased due to continued
favorable accident experience combined with adequate loss reserves. The
significant decrease in gains on disposition of revenue equipment was primarily
caused by a decrease in the market value realized for used equipment.
Interest expense for the three months ended March 31, 1997, increased over the
same period in 1996 primarily due to additional long-term debt associated with
revenue equipment purchases.
Marten recorded net income of $450,000, or 15 cents per share, for the first
quarter of 1997. This compares with net income of $301,000, or 10 cents per
share, for the first quarter of 1996. The improvement in net income resulted
from continued growth of revenue and management's control of expenses.
CAPITAL RESOURCES AND LIQUIDITY
Marten continued to replace its fleet with new, more efficient revenue equipment
in 1997. These purchases were funded using cash flow from operations and long-
term debt collateralized by the new equipment. The Company has committed to
purchase an additional $12 million of new revenue equipment, net of trade-in
allowances, during the remainder of 1997. Management expects to fund these
expenditures using cash flow from operations and additional long-term debt.
The working capital deficit at March 31, 1997, increased to $13.2 million from
$12.4 million at December 31, 1996. This change was due primarily to an
increase in long-term debt causing a corresponding increase in current
maturities. Marten has historically operated with a working capital deficit
caused primarily by current maturities of long-term debt related to the
acquisition of revenue equipment. The Company's operating profits, short
turnover in accounts receivable and cash management practices have adequately
funded working capital requirements. Marten has not used short-term borrowings
to meet working capital needs and does not anticipate the use of such borrowings
in 1997. Management believes the Company's liquidity is adequate to meet
expected near-term operating requirements.
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings.
There are no material pending legal, governmental, administrative
or other proceedings to which the Company is a party or of which
any of its property is subject.
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) Exhibit 27.1 Financial Data Schedule.
b) No reports on Form 8-K have been filed during the quarter
ended March 31, 1997.
<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 12, 1997 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, 1997
Item No. Item Method of Filing
-------- ---- ----------------
27.1 Financial Data
Schedule . . . . . . . . Filed herewith electronically.
<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-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 2,867,000
<SECURITIES> 0
<RECEIVABLES> 18,352,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 31,061,000
<PP&E> 145,144,000
<DEPRECIATION> 36,688,000
<TOTAL-ASSETS> 139,517,000
<CURRENT-LIABILITIES> 44,300,000
<BONDS> 34,598,000
0
0
<COMMON> 30,000
<OTHER-SE> 40,464,000
<TOTAL-LIABILITY-AND-EQUITY> 139,517,000
<SALES> 38,553,000
<TOTAL-REVENUES> 38,553,000
<CGS> 0
<TOTAL-COSTS> 36,794,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,028,000
<INCOME-PRETAX> 751,000
<INCOME-TAX> 301,000
<INCOME-CONTINUING> 450,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 450,000
<EPS-PRIMARY> 0.15
<EPS-DILUTED> 0.15
</TABLE>
