Marten Transport says 4Q revenue up, profit down

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Marten Transport on Thursday, Jan. 25, announced its financial and operating results for the quarter and year ended Dec. 31.

For the fourth quarter of 2006, operating revenue increased 5.0 percent to $131.7 million from $125.4 million for the same quarter of 2005. For 2006, operating revenue increased 12.8 percent to $518.9 million from $460.2 million for 2005. Operating revenue included fuel surcharges of $17.8 million and $77.3 million for the quarter and year ended Dec. 31, compared with $19.1 million and $57.2 million for the quarter and year ended Dec. 31.

Operating revenue also included nonfreight revenue principally from Marten’s logistics and intermodal operations. Nonfreight revenue increased 143.4 percent to $12.4 million for the quarter and 132.9 percent to $39.3 million for the year ended Dec. 31, compared with $5.1 million and $16.9 million for the quarter and year ended Dec. 31, respectively.

For the fourth quarter, net income decreased 27.0 percent to $5.2 million from $7.1 million for the same quarter of 2005. For the year ended Dec. 31, net income decreased 2.2 percent to $24.5 million from $25.1 million for 2005. Net income for the fourth quarter of 2006 included an income tax benefit of about $425,000 due to a decrease to deferred income tax liability. The decrease was due primarily to a change in the company’s income apportionment for several states, said Randolph L. Marten, chairman, president and chief executive officer of Mondovi, Wis.-based Marten Transport.

“We continued to grow with our customers during the fourth quarter, though a more challenging freight environment and an increase in driver-related expenses impacted our profitability for the period,” Marten said. “We believe the freight market in the fourth quarter was characterized by less robust shipping demand and greater truck capacity than in the fourth quarter of 2005, with the amount of ‘surge’ freight significantly lower than in the last two years. This freight is highly profitable, and the lack of it made a difference.”

Marten said the primary changes in the company’s expenses related to the increase in company-owned equipment and the corresponding decrease in independent contractor equipment. “Our operating ratio was 93.4 percent for the fourth quarter and 92.1 percent for the year of 2006 compared with 90.4 percent for the fourth quarter and 90.7 percent for the year of 2005. Netting fuel surcharges against fuel expense, as many of our peers do, would have produced an operating ratio of 92.4 percent for the fourth quarter of 2006 compared with 88.7 percent for the fourth quarter of 2005 and 90.7 percent for the year of 2006 compared with 89.4 percent for the year of 2005.”

Looking forward, Marten said that over the past four years, the company’s operating revenue, net of fuel surcharge, has grown 37.8 percent. “This represents compounded annual growth of 8.3 percent in operating revenue,” he said. “For 2007, we expect to remain consistent with our long-term plan, which is for approximately 10 percent annual growth in operating revenue, before fuel surcharge. However, if our expectation of an improving freight market during the second half of 2007 is realized, our goal would be to improve our operating ratio on a full-year basis. Based on tough comparisons from the first half of 2006, we would expect any improvement in operating ratio to come in the second half of the year.”

Marten also announced that John Turner has returned to the company as vice president of sales. Turner left in early 2005 to pursue a career outside trucking. “We’re very pleased to have John back and know that he will be a strong addition to our sales team,” Marten said.