MONDOVI, Wis. April 20, 2005 - Marten Transport, Ltd (Nasdaq/NMS:MRTN) announced today its financial and operating results for the quarter ended March 31, 2005.
Operating revenue for the quarter increased 21.7%, to $102.9 million from $84.5 million for the same quarter of 2004. Operating revenue included fuel surcharges of $9.7 million, compared with $4.0 million for the same quarter of 2004. Operating revenue also included revenue from MW Logistics, LLC, a 45% owned affiliate, of $2.9 million for the 2005 quarter, compared with no revenue for the same quarter of 2004. The company's freight revenue, which excludes fuel surcharge and MW Logistics revenue, increased 12.2% over the first quarter of 2004. The Company measures revenue, before fuel surcharge and MW Logistics revenue, or "freight revenue," in addition to operating revenue, because management believes removing these sources of revenue provides a more consistent basis for comparing results of operations from period to period.
For the quarter ended March 31, 2005, net income increased 76.2% to $4.8 million from $2.7 million for the same quarter of 2004. Net income per diluted share increased to 33 cents from 19 cents for the same quarter of 2004.
Chairman and President Randolph L. Marten said, "We experienced solid revenue growth for the quarter, but as a profit-focused company, I'm especially pleased with our 76.2% increase in net income. For the quarter, our operating ratio (operating expenses as a percentage of operating income) improved to 92.0%, compared to 94.6% in the first quarter of 2004.
"Our results were driven by a 2.5% increase in average freight revenue per tractor per week, which improved to $2,915 in the 2005 quarter from $2,845 in the 2004 quarter. The improvement in asset productivity helped us overcome the continuing challenges of a tight driver market and high fuel prices. Pricing was strong as we increased our average freight revenue per total mile 7.4%, to $1.354 in the 2005 quarter from $1.261 in the same quarter of 2004.
"At March 31, our balance sheet reflected approximately $172.8 million in stockholders equity and $36.6 million of borrowed debt, for a debt-to-total capitalization ratio of approximately 17.5%.
We continue to feel good about Martens strategy and position in the marketplace. We expect fleet growth in the range of 5% to 10% and an operating ratio of between 91.0% and 91.5% for the full year of 2005. In addition, we are increasing our near term investment in the business by accelerating our tractor fleet replacement. During the quarter, we reduced the average age of our tractor fleet to 1.5 years from 1.7 years in the same quarter of 2004. Based on our current operating performance, the market for used trucks, our liquidity, and our expectations concerning new engines, we have decided to maintain a relatively new fleet during 2005 and 2006 to allow us significant flexibility in dealing with tractor purchasing in 2007 when the EPA's next round of diesel emissions reduction directives go into effect. By maintaining a newer fleet, we expect to save on expenses such as increased equipment costs, potential decreased fuel efficiency, and maintenance. As a result, we have revised our capital expenditures budget for the year to approximately $88.0 million, net of trades.
The accounts of MW Logistics, LLC were included in the company's statements of operations beginning April 1, 2004, in accordance with FASB Interpretation No. 46, as revised. MW Logistics is a 45% owned affiliate that provides logistics services to the transportation industry. The company previously accounted for its investment in MW Logistics' operating results using the equity method of accounting.