Marten’s metrics and bottom line improved in 4th quarter of 2021

Dedicated division’s performance lags other sectors; brokerage strong again

Photo: Jim Allen/FreightWaves

Marten rode a significant increase in total fourth-quarter revenue to offset higher salaries and purchased transportation costs, resulting in a 20% increase in operating income and a 26.1% improvement in net income compared to the corresponding quarter of 2020.

After relatively constrained increases in operating income in the second and third quarters, compared to the corresponding quarters of the prior year, the fourth-quarter performance marked a bounce back. Operating income at Marten (NASDAQ: MRTN)  was up 12.9% in the second quarter and 16.8% in the third quarter compared to the prior year’s corresponding quarter, less than the 20% recorded in the fourth quarter.

However, a chart in Marten’s earnings of the prior seven quarters shows that the 20% is still the third lowest in that stretch, with year-on-year gains ranging from 21.8% to 36% in the final three quarters of 2020 and the first quarter of 2021.

Still, the revenue gain for the fourth quarter was enough to offset increases in the two biggest cost components at Marten. Salares, wages and benefits rose to $88.57 million from $79.1 million, an increase of $9.45 million or 11.9%. Purchased transportation costs of $54.59 million were up $13.66 million. 


But with overall operating income up $39.5 million, and other nonfuel cost centers, like insurance, flat or slightly down, the end result was an increase in operating income to $30.67 million from $25.55 million a year ago. 

That resulted in net income of $24.7 million after income taxes, compared to $19.6 million a year ago. That was good for 30 cents per share, up from 24 cents per share. According to SeekingAlpha, the net income per share was 4 cents more than consensus estimates. Revenue of $266.87 million was $3.68 million above consensus.

The improved financial performance compared to the fourth quarter of 2020 can be seen in Marten’s operating metrics, which were mostly better. The company’s truckload segment operating ratio improved to 86.1% from 88.3%, as average revenue net of fuel per tractor per week rose to $4,663 from $4,116, a 13.29% increase.

That improvement contrasted with Marten’s dedicated division, which saw its OR deteriorate to 90.6% from 87.8%, though its average revenue net of fuel per tractor per week rose 7.2%, to $3,592.


The truckload segment at Marten recorded 35.68 million miles; dedicated drove 32.49 million. Both numbers were down from the fourth quarter of 2020, in line with what Marten has said previously: that it wants to focus on more profitable lanes and is not necessarily concerned with racking up as many miles as possible. The truckload total miles was down 11.2%, while dedicated was down 4.5%.

The dedicated group also showed bottom-line weakness. While truckload’s net income was up 30.9%, intermodal was up 53.6% and brokerage was up 92.5% from the fourth quarter of 2020, dedicated’s operating income of $8.32 million was down 15.9% from a year ago. The full-year OR for dedicated deteriorated to 89%, weakening from 86.8%. Of the four segments at Marten, it was the only one to have a weaker OR in 2021 than in the prior year. 

Marten’s brokerage segment, which was a key contributor to the bottom line in the third quarter, had another strong three months. Revenue, which almost doubled year-on-year in the third quarter, wasn’t up by that sort of percentage in the fourth quarter but still turned in a solid  performance.

Brokerage revenue of $43.85 million was up 60% year-on-year while recording the previously mentioned operating income gain of 92.5%. But whereas the growth in operating revenue in the third quarter accounted for more than 95% of Marten’s growth in overall revenue during that period, the $16.55 million gain for the fourth quarter was less than half of the company’s overall $39.54 million increase in total operating revenue. 

Brokerage had a strong 12 months. Revenue increased just over 50%, to $145.29 million, while operating income was up 112% to $9.48 million. The full-year OR for the brokerage division was 89.8%, improved from 92.8%.

Marten’s stock has traded in a tight range in the past year, with a low of $14.72 and a high of $18.10. For the year, the stock is down 10% at Tuesday’s closing price of $16.18.

Marten paid a special dividend of 50 cents per share in August. At the end of the second quarter, its cash stockpile was $80.67 million. The payment contributed to pushing down the company’s year-end cash to $57 million, down from $66.1 million a year ago. But the overall balance sheet rose to $870.6 million from $831.6 million a year ago.

Marten’s executives do not hold an earnings call with analysts. Its earnings release generally has several quotes from top officials. But the statement for this quarter only had a quote from executive chairman Randolph Marten: “Marten’s bright and determined people consistently produce strong profitable growth, to be continued…”


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