Marten s Financial Results

Transcription

1 Q2 Q3 2018

2 Disclosure This presentation and discussion will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of Words such as expects, anticipates, intends, estimates, or similar expressions are intended to identify these forward-looking statements. These statements are based on Marten s current plans and expectations and involve risks and uncertainties that could cause future activities and results of operations to be materially different from those set forth in the forward-looking statements. For further information, please refer to Marten s reports and filings with the Securities and Exchange Commission.

3 Marten s Financial Results Record Operating Income and Operating Revenue in Q3 18 Q2 18 Q2 17 Q3 18 Q3 17 Q3 YTD 18 Q3 YTD 17 Operating revenue $197.0 $171.5 $199.6 $170.7 $583.6 $515.3 Operating income $18.2 $15.6 $19.0 $13.0 $50.8 $42.5 Net income $13.7 $9.1 $15.3 $7.9 $39.3 $25.2 Diluted EPS $0.25 $0.17 $0.28 $0.14 $0.71 $0.46 Diluted EPS growth 49.0% % % Operating revenue $698.1 $671.1 $665.0 $672.9 $659.2 $638.5 $603.7 $516.9 $505.9 Operating income $56.9 $58.3 $57.0 (3) $51.0 $52.0 $45.9 $43.0 $35.3 $29.4 Net income $33.8 (2) $33.5 $33.3 (3) $29.8 $30.1 $27.3 $24.3 $19.7 $16.3 Diluted EPS (1) $0.62 (2) $0.61 $0.59 (3) $0.53 $0.54 $0.49 $0.44 $0.36 $0.30 Diluted EPS growth 0.3% (2) 3.6% (3) 11.6% (3) (1.8)% 9.9% 11.9% 22.8% 21.1% - Sept. 30, 2018 Dec. 31, 2017 Cash and cash equivalents $35.7 $15.8 Total assets $745.3 $690.4 Stockholders' equity $564.1 $525.5 Long-term debt $ - $ - (1) Restated to reflect the five-for-three stock split on July 7, 2017 and the three-for-two stock split on June 14, 2013 (2) Excluding the deferred income taxes benefit related to the federal Tax Cuts and Jobs Act in 2017 (3) Excluding a gain on disposition of two facilities in 2015 (All amounts in millions except per share amounts)

4 Marten s Driver Culture It s the Job, Stupid! The guy was old, like a lot of drivers. Maybe it had gotten too hard. Reacher thought the last of the frontier would die with it. Those guys were the final generation. The end of the DNA. Now people wanted to be home every night. Jack Reacher The Midnight Line November 2017 By Lee Child 2018 has seen the start of the new ELD driver era. The past several years we ve also seen the transition to a new generation of drivers. Marten is positioned like no other carrier for both the new generation of drivers and the ELD eras with our unique driver pay package and business model.

5 Marten s Strategic Vision Transportation Service Solutions for Today and into the Future Truckload Business regional and OTR operating from 15 regional service centers including dry van operations out of our Kansas City, Atlanta and Phoenix facilities - $93.9 million Q3 18 revenue (47%) Dedicated Business customized solutions tailored to individual customers requirements utilizing refrigerated trailers, dry vans and other specialized equipment - $58.8 million Q3 18 revenue (29%) Intermodal Business refrigerated TOFC with extended dray service from Marten s truck network - $25.9 million Q3 18 revenue (13%) Brokerage Business surge flexibility to service our customer needs beyond Marten s assets - $21.0 million Q3 18 revenue (11%) MRTN de Mexico Business - door-to-door Mexican business service with our Mexican partner carriers - $17.4 million Q3 18 revenue (within truckload and brokerage segments) A growing business platform network designed to provide the best, mostefficient service for Marten s customers

6 Marten s Vision and Plan Regional Operating Centers Network THE FOUNDATION of Marten s service and growth A $100 million expansion since 09 paid for through challenging times - All locations acquired, replaced or updated since 09 - McAllen is the only leased facility - $35.7 million in cash and no debt at September 30, 2018 Mondovi, WI Corporate Office Portland, OR Mondovi, WI Carlisle, PA Indianapolis, IN Jurupa Valley, CA Kansas City, KS Richmond, VA Otay Mesa, CA Phoenix, AZ Dallas, TX Memphis, TN Atlanta, GA Laredo, TX Tampa, FL McAllen, TX

7 Marten s Vision and Plan Continued Growth All Segments Load Growth Truckload and Dedicated Loads/Tractor/Week Growth 700, , , ,000 17% 19% 3% 3% % 4% 2% 3% 300, ,000 5% % 100, Q3 Q Q3 Q3 You can t build a reputation on what you were going to do. Henry Ford

8 Marten s Vision and Plan for Future Dedicated Growth Revenue, excluding fuel surcharges, has increased 422% from Q3 13 to Q3 18 Load Growth Revenue Growth (excluding fuel surcharges) In millions 300, , , , ,000 77% 51% $175 4% 5% 37% $150 17% $125 89% $100 $75 17% $50 24% 20% 50,000 $ Q3 Q3 $ Q3 Q3

9 Marten s Vision and Plan for Future TOFC Intermodal Growth Initiated temperature-controlled TOFC in 05 Marten is the largest truckload intermodal temperature-controlled carrier with BNSF Expanded intermodal growth with longer drayage supported by Marten s regional business platform 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5, % 1% Load Growth $80 12% 14% - % 9% 8% $70 25% $60 3% Q3 Q3 $50 $40 $30 $20 $10 $0 Revenue Growth (excluding fuel surcharges) In millions 25% Q3 Q3

10 Marten s Vision and Plan Brokerage Growth Provides capacity to surge and cover all of Marten s customers freight needs 60,000 50,000 40,000 31% 3% Load Growth (3%) 1% $80 $70 $60 $50 25% Revenue Growth (including fuel surcharges) In millions (7%) 6% 22% 30,000 $40 20,000 10,000 10% $30 $20 $10 26% Q3 Q3 $ Q3 Q3 Decentralization of brokerage operations for customer capacity solutions Focus on maintaining growth and margins in volatile market environment

11 Increasing Revenue Equipment Costs Average Monthly Depreciation $1,650 $1,600 $1,550 $1,528 Tractors $1,570 $1,599 $1,628 $470 $450 $430 $424 Trailers $433 $456 $463 $1,500 $1,450 $1,462 $410 $390 $387 $1,400 $370 $1,350 $350 $1,300 Dec. '14 Dec. '15 Dec. '16 Dec. Sept. $330 Dec. '14 Dec. '15 Dec. '16 Dec. Sept. The monthly depreciation of tractors and trailers added in Q3 18 was 11% and 19% higher than the depreciation of tractors and trailers traded in Q3 18. Trailer depreciation cost increased as fleet transitioned to new, more-costly CARB refrigeration units all trailers now have new evergreen CARB refrigeration units. Tractor depreciation cost increases as fleet transitions to automatic transmissions. Potential tariff increases to the cost of steel and aluminum may increase the price of tractors and trailers. Tractor and trailer depreciation cost increases will be at a reduced rate in Our trailer fleet has fully converted to the CARB units and our tractor fleet will fully convert by June 2019 to the automatic transmissions.

12 Net Capital Expenditures In millions $140 $120 $118.6 $125.0 $115.8 $100 $97.2 $95.3 $80 $60 $40 $20 $ Estimate

13 Marten s Vision and Plan Initiatives Marten People Data-Driven Measurement and Management Marten people initiate and implement our strategic vision and key strategic initiatives Marten people make real-time data-driven decisions for improved supply chain productivity The more they know, the more they ll understand. The more they understand, the more they ll care. Once they care, there s no stopping them. Sam Walton Marten s culture: visible costs and operating data to improve and add value daily we measure and manage as a team Great things in business are never done by one person. They re done by a team of people. Steve Jobs

14 Consistent Growth in Quarterly Operating Income within each of our Dedicated, Intermodal and Brokerage Businesses Since 2014 $6,000 $5,000 88% Dedicated Operating Income In thousands 290% 157% 28% $3,300 $2, % Intermodal Operating Income In thousands 420% 175% $4,000 $3,000 $2,300 $1,800 >100% $2,000 $1,300 $800 $1,000 $300 $0 Q1 Q2 Q3 Q4 ($200) Q1 Q2 Q3 Q4 $2,000 $1,800 Brokerage Operating Income In thousands 148% Key: $1,600 $1,400 $1,200 $1,000 $800 $600 $ % 137% 75% % increases are from 14 to 18 for Q1 through Q3 and from 14 to 17 for Q4 $200 $0 Q1 Q2 Q3 Q4

15 Improvement in Marten s Operating Income Record Operating Income in Q3 18 In millions $70 $60 12% (1) 2% (1) (2)% $50 22% 7% 13% (2)% 19% $40 20% $30 $20 17% 46% $10 $ Q2 Q2 Q3 Q3 (1) Excluding a gain on disposition of two facilities in 2015

16 Marten s Operating Ratio, Net of Fuel Surcharges Q3 18 Produced our Best Operating Ratio, Net of Fuel Surcharges, Over the Last 14 Quarters 94% 93.5% 93% 92% 92.0% 91.6% 91% 91.2% 91.1% 91.0% 90.7% 90.6% 90.4%* 90.9% 90% 89% 90.2% 90.0% 89.2% 88.9% 89.9% 88% 87% Q2 Q2 Q3 Q3 *Excluding a gain on disposition of two facilities in 2015

17 Improvement in Marten s Earnings Cents Per Diluted Share (1) $0.80 $ % $0.60 $ % 12% 10% (2)% 12% (2) 4% (2) -% (3) $ % $ % 93% $0.20 $0.10 $ Q2 Q2 Q3 Q3 (1) Restated to reflect the five-for-three stock split on July 7, 2017 and the three-for-two stock split on June 14, 2013 (2) Excluding a gain on disposition of two facilities in 2015 (3) Excluding the deferred income taxes benefit related to the federal Tax Cuts and Jobs Act in % increase from Q3 09 to Q3 18

18 Marten s Culture Marten s Vision Marten s Plan Marten s People Sufficient urgency around a strategically rational and emotionally exciting opportunity is the bedrock upon which all else is built. Accelerate! Harvard Business Review November 2012 By John P. Kotter Konosuke Matsushita Professor of Leadership, Emeritus Harvard Business School Marten s people have built a strong, growing and increasingly profitable business platform for now and the future based on our truckload, dedicated, intermodal, brokerage and MRTN de Mexico solutions in turbulent times. Capacity is now tight with a severe driver shortage which will continue to be a challenge and an opportunity in 2019 and beyond in the new generation of drivers and ELD eras. Our expectations are for a bright, more profitable growth outlook over the next several years. admit that the waters around you have grown then you better start swimmin or you ll sink like a stone for the times they are a changin Dylan, Bob. Like a Rolling Stone; Gates of Eden. Columbia, 1965