Marten Transport Ltd 10-K for FY2025
Marten Transport Ltd (MRTN)
About this 10-K
Marten Transport Ltd filed this 10-K on February 27, 2026, covering the fiscal year ended December 31, 2025 (FY2025).
Headline figures
Fiscal year ended December 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $883.65M
- down 8.3% from $963.71M a year earlier
- Net income
- $17.44M
- down 35.2% from net income of $26.92M a year earlier
- Diluted EPS
- $0.21
- down 36.4% from $0.33 a year earlier
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended
OR
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number
(Exact name of registrant as specified in its charter)
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Securities registered pursuant to Section 12(b) of the Act:
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(NASDAQ GLOBAL SELECT MARKET) |
Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes ☐
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.
Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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| Non-accelerated filer ☐ | Smaller reporting company |
Emerging growth company |
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the Registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the Registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the Registrant’s executive officers during the relevant recovery period pursuant to Section 240.10D-1(b). ☐
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
As of June 30, 2025 (the last business day of the Registrant’s most recently completed second fiscal quarter), the aggregate market value of the Common Stock of the Registrant (based upon the closing price of the Common Stock at that date as reported by the NASDAQ Global Select Market), excluding outstanding shares beneficially owned by affiliates, was $
As of February 13, 2026,
DOCUMENTS INCORPORATED BY REFERENCE
Part III of this Annual Report on Form 10-K incorporates by reference information (to the extent specific sections are referred to in this Report) from the Registrant’s Proxy Statement for the annual meeting to be held May 5, 2026, or 2026 Proxy Statement.
TABLE OF CONTENTS
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PART I |
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ITEM 1. |
BUSINESS |
1 |
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ITEM 1A. |
RISK FACTORS |
6 |
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ITEM 1B. |
UNRESOLVED STAFF COMMENTS |
12 |
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ITEM 1C. |
CYBERSECURITY |
13 |
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ITEM 2. |
PROPERTIES |
14 |
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ITEM 3. |
LEGAL PROCEEDINGS |
14 |
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ITEM 4. |
MINE SAFETY DISCLOSURES |
15 |
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ITEM 4A. |
INFORMATION ABOUT OUR EXECUTIVE OFFICERS |
15 |
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PART II |
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ITEM 5. |
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
16 |
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ITEM 6. |
[RESERVED] |
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ITEM 7. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
18 |
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ITEM 7A. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
30 |
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ITEM 8. |
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
31 |
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ITEM 9. |
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
55 |
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ITEM 9A. |
CONTROLS AND PROCEDURES |
55 |
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ITEM 9B. |
OTHER INFORMATION |
55 |
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ITEM 9C. |
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS |
55 |
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PART III |
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ITEM 10. |
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
56 |
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ITEM 11. |
EXECUTIVE COMPENSATION |
56 |
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ITEM 12. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
56 |
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ITEM 13. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
57 |
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ITEM 14. |
PRINCIPAL ACCOUNTANT FEES AND SERVICES |
57 |
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PART IV |
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ITEM 15. |
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |
57 |
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ITEM 16. |
FORM 10-K SUMMARY |
61 |
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Signature Page |
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FORWARD-LOOKING INFORMATION
This Annual Report on Form 10-K contains certain forward-looking statements. Such statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements not of historical fact may be considered forward-looking statements. Written words such as “may” “expect,” “believe,” “anticipate,” “plan,” “goal,” or “estimate,” or other variations of these or similar words, identify such statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially from those expressed in such forward-looking statements. Important factors known to us that could cause such material differences are identified in this Annual Report on Form 10-K under the heading “Risk Factors” beginning on page 6. We undertake no obligation to correct or update any forward-looking statements, whether as a result of new information, future events, or otherwise. You are advised, however, to consult any future disclosures we make on related subjects in future filings with the Securities and Exchange Commission, or SEC.
References in this Annual Report to “we,” “us,” “our,” or the “Company” or similar terms refer to Marten Transport, Ltd. and its consolidated subsidiaries unless the context otherwise requires.
PART I
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ITEM 1. |
BUSINESS |
Overview
We have strategically transitioned from a refrigerated long-haul carrier to a multifaceted business offering a network of time and temperature-sensitive and dry truck-based transportation and distribution capabilities across our current five distinct business platforms – Temperature-Sensitive and Dry Truckload, Dedicated, Brokerage and MRTN de Mexico. Our Intermodal operations were sold effective September 30, 2025. We are one of the leading temperature-sensitive truckload carriers in the United States, specializing in transporting and distributing food and other consumer packaged goods that require a temperature-controlled or insulated environment. In 2025, we generated $883.7 million in operating revenue. Approximately 59% of our Truckload and Dedicated revenue in 2025 resulted from hauling temperature-sensitive products and 41% from hauling dry freight. We operate throughout the United States and in parts of Mexico and Canada, with our revenue primarily generated from within the United States. We provide regional truckload carrier services in the Southeast, West Coast, Midwest, South Central and Northeast regions. Our primary medium-to-long-haul traffic lanes are between the Midwest and the West Coast, Southwest, Southeast, and the East Coast, as well as from California to the Pacific Northwest. In 2025, our average length of haul was 405 miles.
Our growth strategy is to expand our business organically by offering shippers a high level of service and significant freight capacity. We market primarily to shippers that offer consistent volumes of freight in the lanes we prefer and are willing to compensate us for a high level of service. With our fleet of 2,654 company and independent contractor tractors, we offer service levels that include up to 99% on-time performance and delivery within the narrow time windows often required when shipping perishable commodities.
We have four reporting segments – Truckload, Dedicated and Brokerage, along with our Intermodal operations which were sold effective September 30, 2025. Financial information regarding these segments can be found in Footnote 14 to the Notes to Consolidated Financial Statements under Item 8 of this Form 10-K.
Our Truckload segment provides a combination of regional short-haul and medium-to-long-haul full-load transportation services. We transport food and other consumer packaged goods that require a temperature-controlled or insulated environment, along with dry freight, across the United States and into and out of Mexico and Canada. Our agreements with customers are typically for one year.
Our Dedicated segment provides customized transportation solutions tailored to meet each individual customer’s requirements, utilizing temperature-controlled trailers, dry vans and other specialized equipment within the United States. Our agreements with customers range from three to five years and are subject to annual rate reviews.
Our Brokerage segment develops contractual relationships with and arranges for third-party carriers to transport freight for our customers in temperature-controlled trailers and dry vans within the United States and into and out of Mexico through Marten Transport Logistics, LLC, which was established in 2007 and operates pursuant to brokerage authority granted by the United States Department of Transportation, or DOT. We retain the billing, collection and customer management responsibilities.
Operating results of our MRTN de Mexico business, which offers our customers door-to-door service between the United States and Mexico with our Mexican partner carriers, is reported within our Truckload and Brokerage segments.
Our Intermodal segment transported our customers’ freight within the United States utilizing our refrigerated containers on railroad flatcars for portions of trips, with the balance of the trips using our tractors or, to a lesser extent, contracted carriers. Our Intermodal operations were sold effective September 30, 2025.
Organized under Wisconsin law in 1970, we are a successor to a sole proprietorship Roger R. Marten founded in 1946. In 1988, we reincorporated under Delaware law. Our executive offices are located at 129 Marten Street, Mondovi, Wisconsin 54755. Our telephone number is (715) 926-4216.
We maintain a website at www.marten.com. We are not including the information contained on our website as a part of, nor incorporating it by reference into, this Annual Report on Form 10-K. We post on our website, free of charge, documents that we file with or furnish to the SEC, including our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and proxy statements, as soon as reasonably practicable after we electronically file such material with, or furnish such material to, the SEC. We also provide a link on our website to Forms 3, 4 and 5 that our officers, directors and 10% stockholders file with the SEC pursuant to Section 16(a) of the Securities Exchange Act of 1934.
Marketing and Operations
We approach our business as an integrated effort of marketing and operations. We target food and consumer packaged goods companies whose products require temperature-sensitive services and who ship multiple truckloads per week. By emphasizing high-quality service, we seek to become a core carrier for our customers. In 2025, our largest customer was Walmart.
Our marketing efforts are conducted by a staff of 315 sales, customer service and support personnel under the supervision of our senior management team. Marketing personnel travel within their regions to solicit new customers and maintain contact with existing customers. Customer service managers regularly contact customers to solicit additional business on a load-by-load basis.
Our operations and sales personnel strive to improve our asset productivity by seeking freight that allows for rapid turnaround times, minimizes non-revenue miles between loads and carries a favorable rate structure. Once we have established a customer relationship, customer service managers work closely with our fleet managers to match customer needs with our capacity and the location of revenue equipment. Fleet managers use our optimization system to assign loads to satisfy customer and operational requirements, as well as to meet the routing needs of our drivers. We attempt to route most of our trucks over selected operating lanes, which we believe assists us in meeting customer requirements, balancing traffic, reducing non-revenue miles, and improving the reliability of delivery schedules.
We employ technology in our operations when we believe that it will allow us to operate more efficiently and the investment is cost-justified. Examples of the technologies we employ include:
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Terrestrial-based tracking and messaging that allows us to communicate with our drivers, obtain load position updates, provide our customers with freight visibility, and download operating information such as fuel mileage and idling time for the tractor engines and temperature setting and run time for the temperature-control units on our trailers. |
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Electronic data interchange and internet communication with customers concerning freight tendering, invoices, shipment status and other information. |
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Electronic logging devices in our tractors to monitor drivers’ hours of service. |
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Auxiliary power units installed on our company-owned tractors that allow us to decrease fuel costs associated with idling our tractors. |
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Fuel-routing software that optimizes the fuel stops for each trip to take advantage of volume discounts available in our fuel network. |
We believe this integrated approach to our marketing and operations, coupled with our use of technology, has allowed us to provide our customers with a high level of service and support our revenue growth in an efficient manner. For example, we produced a non-revenue mile percentage of 7.3% during 2025, which points to the efficiency of our operations and we believe compares favorably to other temperature-sensitive and dry van trucking companies.
Major Customers
A significant portion of our revenue is generated from our major customers. In 2025, our top 30 customers accounted for approximately 71% of our revenue excluding fuel surcharges, and our top ten customers accounted for 50% of our revenue. We have emphasized increasing our customer diversity which is shown by the decrease in the portion of our revenue with our top customers. In 2010, our top 30 customers accounted for approximately 78% of our revenue. Nine of our top ten customers have been significant customers of ours for the last ten years. We believe we are the largest or second largest temperature-sensitive carrier for eight of our top ten customers. We believe our relationships with these key customers are sound, but we are dependent upon them and the loss of some or all of their business could have a materially adverse effect on our results.
Seasonality
Our tractor productivity generally decreases during the winter season because inclement weather impedes operations and some shippers reduce their shipments. At the same time, operating expenses generally increase, with harsh weather creating higher accident frequency, increased claims, lower fuel efficiency and more equipment repairs.
Human Capital
As of December 31, 2025, we had 3,502 employees. This total consists of 2,660 drivers, 275 mechanics and maintenance personnel, and 567 support personnel, which includes management and administration. As of that date, we also contracted with 77 independent contractors. None of our employees are represented by a collective bargaining unit. We consider relations with our employees to be good.
We believe our employees are a critical part to the continued success of our operations. Our business model depends on the efforts of our support personnel to efficiently and effectively coordinate transportation services for our customers and on the efforts of our drivers to timely and safely execute the delivery of our customers’ cargo. Competition in the trucking industry for qualified drivers is normally intense and has increased. Our operations have been impacted by, and from time-to-time we have experienced under-utilization and increased expense relating to, a shortage of qualified drivers. As such, we dedicate significant attention to hiring and retaining talented employees to manage, support and execute our operations and place a high priority on the recruitment and retention of an adequate supply of qualified drivers, and on minimizing turnover of our company-employed drivers and independent contractors.
We believe we provide our employees with compensation and benefits that are competitive with or exceed our industry peers. We primarily pay company-employed drivers a fixed rate per mile. The rate increases based on length of service. We also compensate drivers for all detention time, for inclement weather and for road service delays. Total weekly compensation is also subject to a guaranteed minimum amount. We pay independent contractors a fixed rate per mile. Independent contractors pay for their own fuel, insurance, maintenance and repairs.
The health and well-being of our employees is paramount to our success. We sponsor a wellness program designed to enhance the well-being of each of our employees. We believe that maintaining a healthy, safe and productive professional driver group is essential to providing excellent customer service and achieving profitability. We select drivers, including independent contractors, using our specific guidelines for safety records, including drivers’ Compliance, Safety, Accountability, or CSA, scores, driving experience and personal evaluations. We maintain stringent screening, training and testing procedures for our drivers to reduce the potential for accidents and the corresponding costs of insurance and claims. We train new drivers at a number of our terminals in all phases of our policies and operations, as well as in safety techniques and fuel-efficient operation of the equipment. All new drivers also must pass DOT required tests prior to assignment to a vehicle.
Revenue Equipment
Our revenue equipment programs are an important part of our overall goal of profitable growth. We evaluate our equipment decisions based on factors such as initial cost, useful life, warranty terms, expected maintenance costs, fuel economy, driver comfort, customer needs, manufacturer support and resale value. We generally operate newer, well-maintained equipment with uniform specifications to minimize our spare parts inventory, streamline our maintenance program and simplify driver training.
As of December 31, 2025, we operated a fleet of 2,654 tractors, including 2,577 company-owned tractors and 77 tractors supplied by independent contractors. The average age of our company-owned tractor fleet at December 31, 2025 was approximately 2.3 years. In 2025, we replaced our company-owned tractors within an average of 4.2 years after purchase.
Kenworth and Freightliner manufacture most of our company-owned tractors. Maintaining a relatively new and standardized fleet allows us to operate most miles while the tractors are under warranty to minimize repair and maintenance costs. It also enhances our ability to attract drivers, increases fuel economy and improves customer acceptance by minimizing service interruptions caused by breakdowns. We adhere to a comprehensive maintenance program during the life of our equipment. We perform most routine servicing and repairs at our terminal facilities to reduce costly on-road repairs and out-of-route trips. We do not have any agreements with tractor manufacturers pursuant to which they agree to repurchase the tractors or guarantee a residual value, and we therefore could incur losses upon disposition if resale values of used tractors decline.
We historically have contracted with independent contractors to provide and operate a portion of our tractor fleet. Independent contractors own their own tractors and are responsible for all associated expenses, including financing costs, fuel, maintenance, insurance and taxes. The percentage of our fleet provided by independent contractors was 2.9% at each of December 31, 2025 and December 31, 2024, and 2.8% at December 31, 2023.
As of December 31, 2025, we operated a fleet of 5,107 trailers, consisting of 2,863 refrigerated trailers and 2,244 dry vans. Most of our refrigerated trailers are equipped with Thermo-King refrigeration units, air ride suspensions and anti-lock brakes. The average age of our trailer fleet at December 31, 2025 was approximately 4.9 years. In 2025, we replaced our company-owned trailers within an average of 8.1 years after purchase.
As of December 31, 2024, we operated a fleet of 786 refrigerated containers for use on railroad flatcars. All of our Intermodal Operations, including our fleet of refrigerated containers, were sold effective September 30, 2025.
Insurance and Claims
We self-insure for a portion of our claims exposure resulting from workers’ compensation, auto liability, general liability, cargo and property damage claims, as well as employees’ health insurance. We are responsible for our proportionate share of the legal expenses relating to such claims as well. We reserve currently for anticipated losses and expenses. We periodically evaluate and adjust our insurance and claims reserves to reflect our experience. We have $24.1 million in standby letters of credit to guarantee settlement of claims under agreements with our insurance carriers and regulatory authorities. We maintain insurance coverage with licensed insurance carriers for per-incident and total losses in excess of the amounts for which we self-insure up to specified policy limits and outside of certain liability tiers for which we retain liability. Insurance carriers have significantly raised premiums for trucking companies, which increases our insurance and claims expense, along with other factors. We believe that our policy of self-insuring up to set limits, together with our safety and loss prevention programs, are effective means of managing insurance costs.
Fuel
Our operations are heavily dependent upon the use of diesel fuel. The price and availability of diesel fuel can vary and are subject to political, economic and market factors that are beyond our control. Fuel prices fluctuated dramatically and quickly at various times during the last three years. We actively manage our fuel costs by purchasing fuel in bulk at a number of our facilities throughout the country and have volume purchasing arrangements with national fuel centers that allow our drivers to purchase fuel at a discount while in transit. During 2025, nearly 100% of our fuel purchases were made at these designated locations. To help further reduce fuel consumption, we have equipped our company-owned tractors with auxiliary power units since 2007. These units reduce fuel consumption by providing quiet climate control and electrical power for our drivers without idling the tractor engine. We have also invested in terrestrial-based tracking equipment for the temperature-control units on our trailers that has improved fuel usage through management of required temperature settings and run time of the units.
We further manage our exposure to changes in fuel prices through fuel surcharge programs with our customers and other measures that we have implemented. We have historically been able to pass through a significant portion of long-term increases in fuel prices and related taxes to customers in the form of fuel surcharges. These fuel surcharges, which adjust with the cost of fuel, enable us to recover a substantial portion of the higher cost of fuel as prices increase, except for non-revenue miles, out-of-route miles or fuel used while the tractor is idling. As of December 31, 2025, we had no derivative financial instruments to reduce our exposure to fuel price fluctuations.
Competition
We are one of the leading carriers operating in the temperature-sensitive segment of the truckload market, and our dry freight services are expanding. These markets are highly competitive, and we compete with many other truckload carriers of varying sizes and, to a lesser extent, with less-than-truckload carriers, railroads, and other transportation companies, many of which have more equipment, a wider range of services and greater capital resources than we do or have other competitive advantages. We also compete with other motor carriers for the services of drivers, independent contractors and management employees. We believe that the principal competitive factors in our business are service, freight rates, capacity, use of technology and financial stability, which positions us well to compete in these segments.
Regulation
The DOT and various state and local agencies exercise broad powers over our business, generally governing such activities as authorization to engage in motor carrier operations, safety and insurance requirements. Our company drivers and independent contractors also must comply with the safety and fitness regulations promulgated by the DOT, including those relating to drug and alcohol testing, medical and continuous training qualification and hours-of-service.
The DOT, through the Federal Motor Carrier Safety Administration, or FMCSA, imposes safety and fitness regulations on us and our drivers. In December 2010, the FMCSA introduced the Compliance, Safety, Accountability, or CSA, system to measure and evaluate the on-road safety performance of commercial carriers and individual drivers. CSA’s Motor Carrier Safety Measurement System replaced the former SafeStat system and has removed a number of drivers from the industry as carriers are less willing to hire and retain drivers with marginal ratings, which has increased competition for qualified drivers. The FMCSA is currently putting in place changes to generally simplify the agency’s safety and fitness regulations using an enhanced safety prioritization methodology.
The FMCSA issued final revisions to the hours-of-service requirements for drivers in September 2020. The revisions allow drivers more flexibility with their 30-minute rest breaks and with dividing their time in the sleeper berth. Additionally, the new regulations increase by two hours the duty time for drivers encountering adverse weather and expand the short haul exemption radius from 100 to 150 miles.
In January 2011, the FMCSA issued a regulatory proposal requiring commercial carriers to track compliance with hours-of-service regulations using electronic logging devices, or ELD’s, which was vacated and sent back to the FMCSA for further analysis and review in September 2011 by the 7th U.S. Circuit Court of Appeals. The Moving Ahead for Progress in the 21st Century Act, or MAP-21 Act, included a provision directing the FMCSA to develop a final ELD rule in 2013, which was delayed until its issuance in December 2015. The final rule required compliance beginning in December 2017 which was strictly enforced beginning in April 2018. Carriers using automatic on-board recording devices, or AOBRD’s, which were installed and in use prior to December 2017 were allowed until December 2019 to convert to ELD’s. Our entire fleet was equipped with AOBRD’s since early 2011 and converted to ELD’s prior to December 2019.
The FMCSA has established a Commercial Driver’s License Drug and Alcohol Clearinghouse, which is a database of drivers who have violations including failed or refused drug and alcohol tests. Beginning in January 2020, all carriers are required to run queries in the clearinghouse for all prospective drivers and annually for all drivers currently employed. All testing violations must also be reported to the clearinghouse. Additionally, effective November 2024, all states are required to check the clearinghouse for any prohibitions before issuing, renewing, transferring or upgrading any commercial drivers’ licenses. Also effective in January 2020, all carriers must perform random drug tests at a rate of at least 50% of the average number of driver positions. The rate was at least 25% previously. We have been testing at a rate in excess of 50%, including when the requirement was at least 25%, and tested 67% in 2023, 74% in 2024 and 76% in 2025. The impact of the clearinghouse has been significant, with a total of approximately 202,000 drivers removed from the trucking industry from January 2020 through December 2025.
Additionally, the Trump administration’s recent immigration enforcement efforts including stricter standards for non-domiciled commercial driver’s licenses and entry-level driver training programs, along with increased enforcement of English Language Proficiency and B-1 visa regulations, are expected to decrease industry capacity.
We are also subject to various environmental laws and regulations dealing with vehicle emissions and idling, the handling of hazardous materials, fuel storage tanks, air emissions from our facilities and discharge and retention of storm water. These regulations did not have a significant impact on our operations or financial results in 2023 through 2025.
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ITEM 1A. |
RISK FACTORS |
The following factors are important and should be considered carefully in connection with any evaluation of our business, financial condition, results of operations, prospects or an investment in our common stock. The risks and uncertainties described below are those that we currently believe may materially affect our Company or our financial results. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business operations or affect our financial results.
Risks Related to Our Industry and Operations
Our business is subject to general economic and business factors that are largely beyond our control, any of which could have a materially adverse effect on our operating results. Our business is dependent on a number of general economic and business factors that may have a materially adverse effect on our results of operations, many of which are beyond our control. These factors include excess capacity in the trucking industry, strikes or other work stoppages, and significant increases or fluctuations in interest rates, fuel taxes, fuel prices and license and registration fees. We are affected by recessionary economic cycles and downturns in customers’ business cycles, particularly in market segments and industries where we have a significant concentration of customers. Economic conditions may adversely affect our customers and their ability to pay for our services.
During 2025, the Trump administration has imposed new and increased tariff rates on imported goods from a number of countries. Although it is difficult to forecast the depth and duration of the resulting impact since the tariff policies have rapidly evolved and changed, such trade policies and tariff implementations, and any related retaliatory trade policies and tariff implementations by foreign governments, may result in decreased shipping volumes and have an adverse impact on our revenue and results of operations. In addition, the imposition of additional tariffs or quotas or changes to certain trade agreements, or retaliatory trade policies could, among other things, increase the cost of the materials used by our suppliers to produce new revenue equipment, limit the availability of new revenue equipment, or increase the price of fuel. Such cost increases for our revenue equipment suppliers would likely be passed on to us, and to the extent fuel prices increase, we may not be able to fully recover such increases through rate increases or our fuel surcharge programs, either of which could have an adverse effect on our business.
Lastly, it is not possible to predict the effects of actual or threatened armed conflicts or terrorist attacks, efforts to combat terrorism, military action against any foreign state, heightened security requirements or other related events and the subsequent effects on the economy or on consumer confidence in the United States, or the impact, if any, on our future results of operations.
We operate in a highly competitive and fragmented industry, and numerous competitive factors could impair our ability to maintain our current profitability. We compete with many other truckload carriers that provide temperature-sensitive service and dry freight of varying sizes and, to a lesser extent, with less-than-truckload carriers, railroads and other transportation companies, many of which have more equipment, a wider range of services and greater capital resources than we do or have other competitive advantages. Many of our competitors periodically reduce their freight rates to gain business, especially during times of reduced growth rates in the economy, which may limit our ability to maintain or increase freight rates or maintain significant growth in our business. In addition, many customers reduce the number of carriers they use by selecting so-called “core carriers” as approved service providers or conduct bids from multiple carriers for their shipping needs, and in some instances, we may not be selected as a core carrier or to provide service under such bids.
In addition, the trend toward consolidation in the trucking industry may create other large carriers with greater financial resources and other competitive advantages relating to their size. Competition from freight logistics and brokerage companies may negatively impact our customer relationships and freight rates. Furthermore, economies of scale that may be passed on to smaller carriers by procurement aggregation providers may improve such carriers’ ability to compete with us.
If the growth in our regional operations declines, or if we expand into a market with insufficient economic activity, our results of operations could be adversely affected. We operate regional service centers which are located in a number of cities within the United States. In order to support future growth, these regional operations require the commitment of additional capital, revenue equipment and facilities along with qualified management, drivers and other personnel. Should the growth in our regional operations decline, the results of our operations could be adversely affected. It may become more difficult to identify additional cities that can support service centers, and we may expand into cities where there is insufficient economic activity, reduced capacity for growth or less driver and non-driver personnel to support our operations. We may encounter operating conditions in these new markets that materially differ from our current operations and customer relationships may be difficult to obtain at appropriate freight rates. Also, we may not be able to apply our regional operating strategy successfully in additional cities, and it might take longer than expected or require a more substantial financial commitment than anticipated to establish our operations in the additional cities.
Increased prices and restricted availability of new revenue equipment could cause our financial condition, results of operations and cash flows to suffer. We have experienced higher prices for new tractors and trailers over the past few years, primarily as a result of higher commodity prices and government regulations applicable to newly manufactured tractors and trailers. We expect to continue to pay increased prices for revenue equipment for the foreseeable future. Our business could be harmed if we are unable to continue to obtain an adequate supply of new tractors and trailers or if we are required to pay increased prices for new revenue equipment.
We derive a significant portion of our revenue from our major customers, the loss of one or more of which could have a materially adverse effect on our business. A significant portion of our revenue is generated from our major customers. For 2025, our top 30 customers, based on revenue excluding fuel surcharges, accounted for approximately 71% of our revenue; our top ten customers accounted for approximately 50% of our revenue; our top five customers accounted for approximately 38% of our revenue; our top two customers accounted for approximately 28% of our revenue; and our largest customer accounted for approximately 20% of our revenue. Generally, other than for our Dedicated operations, we enter into one-year contracts with our major customers, the majority of which do not contain any firm obligations to ship with us. We cannot ensure that, upon expiration of existing contracts, these customers will continue to use our services or that, if they do, they will continue at the same levels. Many of our customers periodically solicit bids from multiple carriers for their shipping needs, and this process may depress freight rates or result in loss of business to our competitors. Some of our customers also operate their own private trucking fleets, and they may decide to transport more of their own freight. A reduction in or termination of our services by one or more of our major customers could have a materially adverse effect on our business and operating results.
Ongoing insurance and claims expenses could significantly affect our earnings. Our future insurance and claims expense might exceed historical levels, which could reduce our earnings. We self-insure for a portion of our claims exposure resulting from workers’ compensation, auto liability, general liability, cargo and property damage claims, as well as employees’ health insurance. We also are responsible for our legal expenses relating to such claims. We reserve currently for anticipated losses and expenses. We periodically evaluate and adjust our claims reserves to reflect our experience. However, ultimate results may differ from our estimates, which could result in losses over our reserved amounts. For a detailed discussion of our self-insurance programs, including self-insurance retention limits, please refer to Note 1 to the consolidated financial statements, included in Part II, Item 8 of this Annual Report.
We maintain insurance with licensed insurance carriers above the amounts for which we self-insure and outside of certain liability tiers for which we retain liability. Although we believe the aggregate insurance limits should be sufficient to cover reasonably expected claims, it is possible that one or more claims could exceed our aggregate coverage limits. Insurance carriers have significantly raised premiums for trucking companies due, in part, to the increase in the number of nuclear verdicts in trucking accident cases. As a result, our insurance and claims expense has increased. If these expenses increase, or if we experience a claim in excess of our coverage limits, or we experience a claim for which coverage is not provided, results of our operations and financial condition could be materially and adversely affected.
If demand declines for our used revenue equipment, it could result in decreased equipment sales, resale values and gains on sales of assets. The market for used revenue equipment is subject to a number of factors, including fluctuations in demand and prices. We do not have any agreements with tractor manufacturers pursuant to which they agree to repurchase our tractors or guarantee a residual value. As such, we are sensitive to changes in used equipment prices and demand, especially with respect to tractors. Reduced demand for used equipment could result in a lower volume of sales or lower sales prices, either of which could negatively affect our gains on sales of assets. We have seen a softening of the used equipment market, which could lead to a lower gain on sale.
We depend on the stability, availability and security of the technology related to our management information and communication systems, which are subject to certain cyber risks and other events beyond our control. We depend upon our management information and communication systems for the efficient operation of our business. Our systems are used for receiving, planning and optimizing loads, communicating with and monitoring our drivers, tractors and trailers, billing customers and financial reporting. In addition, some of our key software has been developed internally by our programmers or by adapting purchased software to our needs and this software may not be easily modified or integrated with other software and systems. Our operations are potentially vulnerable to interruption by natural disasters, power loss, telecommunications failure, terrorist attacks, internet failures, computer viruses, malware, hacking and other events beyond our control. Although we have taken steps to prevent and mitigate service interruptions and data security threats, the operational and security risks associated with information technology systems have increased in recent years because of the complexity of the systems and the sophistication and increasing volume of cyberattacks. We have been subject to cyberattacks, which have yet to have a material impact on our business or results of operations, but this might not always be the case in the future. For example, as previously reported, in October 2021, we detected a cyberattack that accessed and encrypted files utilized by us in the operation of our business. The incident did not have a material impact on our business, operations or financial results. Nonetheless, certain employee data was at risk during the event. Our business could be materially and adversely affected if our management information and communication systems are materially compromised or disrupted by a failure or security breach, or if we are unable to improve, upgrade, integrate or expand our systems as we continue to execute our growth strategy. In addition, there has also been heightened regulatory focus on data protection, and failure to comply with applicable data protection regulations or other data protection standards may expose us to litigation, fines, sanctions or other penalties, which could harm our reputation and adversely impact our business, results of operations and financial condition.
Fluctuations in the price or availability of fuel may increase our cost of operation, which could materially and adversely affect our profitability. We require large amounts of diesel fuel to operate our tractors and to power the temperature-control units on our trailers. Fuel is one of our largest operating expenses. Fuel prices tend to fluctuate, and prices and availability of all petroleum products are subject to political, economic and market factors that are beyond our control. We depend primarily on fuel surcharges, auxiliary power units for our tractors, terrestrial-based tracking equipment for the temperature-control units on our trailers, volume purchasing arrangements with truck stop chains and bulk purchases of fuel at our terminals to control and recover our fuel expenses. There can be no assurance that we will be able to collect fuel surcharges, enter into volume purchase agreements or execute successful hedges in the future. Additionally, we may encounter decreases in productivity that may offset or eliminate savings from auxiliary power units or terrestrial-based tracking equipment, or we may incur unexpected maintenance or other costs associated with such units. The absence of meaningful fuel price protection through these measures, fluctuations in fuel prices or a shortage of diesel fuel could materially and adversely affect our results of operations.
We may be adversely affected by the physical effects of climate change as well as legal, regulatory or market responses to climate change concerns. Risks associated with climate change are subject to increasing societal, regulatory and political focus. Shifts in weather patterns caused by climate change may lead to an increase in the frequency, severity or duration of certain adverse weather conditions and natural disasters, such as hurricanes, tornadoes, earthquakes, wildfires, droughts, extreme temperatures or flooding, which could cause more significant business interruptions, damage to our revenue equipment and facilities, reduced workforce availability, increased costs, increased liabilities and decreased revenue than what we have experienced in the past from such events. For example, severe sustained heat in multiple regions of the United States during recent years has resulted in increased fuel expense due to decreased engine fuel efficiency and increased idling, along with additional damage and wear on tires. In addition, increased public and political concern over climate change could result in new legal or regulatory requirements designed to mitigate the effects of climate change and greenhouse gas emissions such as carbon dioxide, a by-product of burning fossil fuels such as those used in our tractors and in the refrigeration units on our trailers and formerly on our containers, which could include the adoption of more stringent environmental laws and regulations or stricter enforcement of existing laws and regulations. Due to such increased concerns, there could be an increase in regulation from federal, state and local governments related to our carbon footprint, including with respect to vehicle engine emissions. This increase in regulation could result in increased direct costs, such as taxes, fees, fuel, or capital costs, or changes to our operations in order to comply. There is also a focus from regulators and our customers on sustainability issues. This focus may result in new legislation or customer requirements, such as limits on vehicle weight and size or energy source. In October 2023, the State of California passed the Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act that will impose broad climate-related disclosure obligations on certain companies doing business in California, including us. Following legal challenges and due to a high volume of public comments, the California Air Resources Board, has delayed issuing draft regulations pursuant to these laws until the first quarter of 2026. Additionally, on March 6, 2024, the SEC adopted climate-related disclosure rules which became the subject of a number of legal challenges. On March 27, 2025 the SEC voted to end its defense of the proposed rules, though the rules have not been formally withdrawn. While we are continuing to monitor the evolution of these rules, it is difficult to predict when and to what extent they may impact us. Costs associated with future climate change concerns or environmental laws and regulations and sustainability requirements could have a material adverse effect on our operations and operating results.
Seasonality and the impact of weather can affect our profitability. Our tractor productivity generally decreases during the winter season because inclement weather impedes operations and some shippers reduce their shipments. At the same time, operating expenses generally increase, with harsh weather creating higher accident frequency, increased claims and more equipment repairs. We can also suffer short-term impacts from weather-related events such as hurricanes, blizzards, ice-storms and floods that could harm our results or make our results more volatile.
We are subject to risks associated with public health crises, such as pandemics and epidemics, which could negatively impact our business and results of operations. Our operations are subject to risks related to pandemics, epidemics or other infectious disease outbreaks and government responses thereto. The COVID-19 pandemic, for example, negatively affected economic conditions, supply chains, labor markets and demand for certain shipped goods.
The extent to which our business, results of operations and financial condition may be negatively affected by pandemics, epidemics or other outbreaks of infectious diseases is highly uncertain and will depend on numerous evolving factors that we cannot predict, including, but not limited to (i) the duration and severity of the infectious disease outbreak; (ii) the imposition of restrictive measures to combat the outbreak and slow disease transmission; (iii) the introduction of financial support measures to reduce the impact of the outbreak on the economy; (iv) volatility in the demand for and price of oil and gas; (v) shortages or reductions in the supply of essential goods, services or labor; and (vi) fluctuations in general economic or financial conditions tied to the outbreak, such as a sharp increase in interest rates or reduction in the availability of credit. We cannot predict the effect that an outbreak of any future infectious disease outbreak, pandemic or epidemic may have on our business, results of operations and financial condition, which could be material and adverse.
The conflict between Russia and Ukraine, conflicts in the Middle East, potential conflict between China and Taiwan and the expansion of such conflicts to other areas or countries or similar conflicts could adversely impact our business and financial results. Although we do not have any operations outside of North America, we may be affected by the broader consequences of the ongoing international conflicts or expansion of such conflicts to other areas or countries or similar conflicts elsewhere, such as, increased inflation, supply chain issues, including access to parts for our revenue equipment, embargoes, geopolitical shift, access to diesel fuel, higher energy prices, potential retaliatory action by the Russian or other governments and the extent of the conflict’s effect on the global economy. The magnitude of these risks cannot be predicted, including the extent to which these conflicts may heighten other risks disclosed herein. Any of the above-mentioned factors could materially adversely affect our business and financial results.
Risks Related to Our Capital Requirements and Financing
We have significant ongoing capital requirements that could harm our financial condition, results of operations and cash flows if we are unable to generate sufficient cash from our operations. The truckload industry is capital intensive, and our policy of operating newer equipment requires us to expend significant amounts annually. If we elect to expand our fleet in future periods, our capital needs would increase. We expect to pay for projected capital expenditures with cash flows from operations and borrowings under our revolving credit facility. Significant increases or fluctuations in interest rates could have a materially adverse effect on such borrowings and our operating results. If we are unable to generate sufficient cash from operations and obtain financing on favorable terms in the future, we may have to limit our growth, enter into less favorable financing arrangements, or operate our revenue equipment for longer periods, any of which could have a materially adverse effect on our profitability.
Instability of the credit markets and the resulting effects on the economy could have a material adverse effect on our operating results. If the credit markets and the economy weaken, our business, financial results and results of operations could be materially and adversely affected, especially if consumer confidence declines and domestic spending decreases. We may need to incur indebtedness, which may include drawing on our credit facility, or issue debt securities in the future to fund working capital requirements, make investments or for general corporate purposes. Additionally, stresses in the credit market causes uncertainty in the equity markets, which may result in volatility of the market price for our securities.
Risks Related to Regulation of Our Operations
We operate in a highly regulated industry and increased costs of compliance with, or liability for violation of, existing or future regulations could have a materially adverse effect on our business. The DOT and various state and local agencies exercise broad powers over our business, generally governing such activities as authorization to engage in motor carrier operations, safety and insurance requirements. Our company drivers and independent contractors also must comply with the safety and fitness regulations promulgated by the DOT, including those relating to drug and alcohol testing, medical and continuous training qualification and hours-of-service. We also may become subject to new or more restrictive regulations relating to vehicle emissions, ergonomics or other matters affecting safety or operating methods. Other agencies, such as the United States Environmental Protection Agency, or EPA, and the United States Department of Homeland Security, or DHS, also regulate our equipment, operations and drivers. Future laws and regulations may be more stringent and require changes in our operating practices, influence the demand for transportation services or require us to incur significant additional costs. Higher costs incurred by us or by our suppliers who pass the costs onto us through higher prices could adversely affect our results of operations.
The DOT, through the Federal Motor Carrier Safety Administration, or FMCSA, imposes safety and fitness regulations on us and our drivers. In December 2010, the FMCSA introduced the Compliance, Safety, Accountability, or CSA, system to measure and evaluate the on-road safety performance of commercial carriers and individual drivers. CSA’s Motor Carrier Safety Measurement System replaced the former SafeStat system and has removed a number of drivers from the industry as carriers are less willing to hire and retain drivers with marginal ratings, which has increased competition for qualified drivers. The FMCSA is currently putting in place changes to generally simplify the agency’s safety and fitness regulations using an enhanced safety prioritization methodology.
The FMCSA issued final revisions to the hours-of-service requirements for drivers in September 2020. The revisions allow drivers more flexibility with their 30-minute rest breaks and with dividing their time in the sleeper berth. Additionally, the new regulations increase by two hours the duty time for drivers encountering adverse weather and expand the short haul exemption radius from 100 to 150 miles.
In January 2011, the FMCSA issued a regulatory proposal requiring commercial carriers to track compliance with hours-of-service regulations using electronic logging devices, or ELD’s, which was vacated and sent back to the FMCSA for further analysis and review in September 2011 by the 7th U.S. Circuit Court of Appeals. The Moving Ahead for Progress in the 21st Century Act, or MAP-21 Act, included a provision directing the FMCSA to develop a final ELD rule in 2013, which was delayed until its issuance in December 2015. The final rule required compliance beginning in December 2017 which was strictly enforced beginning in April 2018. Carriers using automatic on-board recording devices, or AOBRD’s, which were installed and in use prior to December 2017 were allowed until December 2019 to convert to ELD’s. Our entire fleet was equipped with AOBRD’s since early 2011 and converted to ELD’s prior to December 2019.
The FMCSA has established a Commercial Driver’s License Drug and Alcohol Clearinghouse, which is a database of drivers who have violations including failed or refused drug and alcohol tests. Beginning in January 2020, all carriers are required to run queries in the clearinghouse for all prospective drivers and annually for all drivers currently employed. All testing violations must also be reported to the clearinghouse. Additionally, effective November 2024, all states are required to check the clearinghouse for any prohibitions before issuing, renewing, transferring or upgrading any commercial drivers’ licenses. Also effective in January 2020, all carriers must perform random drug tests at a rate of at least 50% of the average number of driver positions. The rate was at least 25% previously. We have been testing at a rate in excess of 50%, including when the requirement was at least 25%, and tested 67% in 2023, 74% in 2024 and 76% in 2025. The impact of the clearinghouse has been significant, with a total of approximately 202,000 drivers removed from the trucking industry from January 2020 through December 2025.
Additionally, the Trump administration’s recent immigration enforcement efforts including stricter standards for non-domiciled commercial driver’s licenses and entry-level driver training programs, along with increased enforcement of English Language Proficiency and B-1 visa regulations, are expected to decrease industry capacity.
From time to time, various federal, state or local taxes are increased, including taxes on fuels. We cannot predict whether, or in what form, any such increase applicable to us will be enacted, but such an increase could adversely affect our profitability.
Our operations are subject to various environmental laws and regulations, the violation of which could result in substantial fines or penalties. We are subject to various environmental laws and regulations dealing with vehicle emissions and idling, the handling of hazardous materials, fuel storage tanks, air emissions from our facilities and discharge and retention of storm water. We operate in industrial areas, where truck terminals and other industrial activities are located, and where groundwater or other forms of environmental contamination have occurred. Our operations involve the risks of fuel spillage or seepage, environmental damage and hazardous waste disposal, among others. Although we have instituted programs to monitor and control environmental risks and promote compliance with applicable environmental laws and regulations, if we are involved in a spill or other accident involving hazardous substances, or if we are found to be in violation of applicable laws or regulations, we could be subject to liabilities, including substantial fines or penalties or civil and criminal liability, any of which could have a materially adverse effect on our business and operating results.
Our business is subject to the risk of litigation, which may adversely affect our business and operating results. We are subject to litigation resulting from trucking accidents. These lawsuits have resulted, and may result in the future, in the payment of substantial settlements or damages and could impact our insurance costs. In particular, the trucking industry has seen a trend of nuclear verdicts, resulting in the payment of substantial damages for claims related to trucking accidents. Additionally, a number of trucking companies, including us, have been subject to lawsuits, including class action lawsuits, alleging violations of various federal and state wage and hour laws. A number of these lawsuits have resulted in the payment of substantial settlements or damages by the defendants.
The outcome of litigation, particularly class action lawsuits, is difficult to assess or quantify, and the magnitude of the potential loss relating to such lawsuits may remain unknown for substantial periods of time. The cost to defend litigation may also be significant. Not all claims are covered by our insurance, and there can be no assurance that our coverage limits will be adequate to cover all amounts in dispute. To the extent we experience claims that are uninsured, exceed our coverage limits, involve significant aggregate use of our self-insured retention amounts or cause increases in future premiums, the resulting expense could have a materially adverse effect on our business and operating results.
Risks Related to Our Human Capital
Increases in compensation or difficulty in attracting drivers could affect our profitability and ability to grow. The transportation industry has historically experienced substantial difficulty in attracting and retaining qualified drivers, including independent contractors. With the current increased competition for drivers, including the impact that regulatory changes have had on the number of drivers in the transportation industry, we could experience greater difficulty in attracting sufficient numbers of qualified drivers. In addition, the available pool of independent contractor drivers is smaller than it has been historically. Accordingly, we may face difficulty in attracting and retaining drivers for all of our current tractors and for those we may add. Additionally, we may face difficulty in increasing the number of our independent contractor drivers. In addition, our industry suffers from high turnover rates of drivers. Our turnover rate requires us to recruit a substantial number of drivers. Moreover, our turnover rate could increase. If we are unable to continue to attract drivers and contract with independent contractors, we could be required to continue adjusting our driver compensation package or let trucks sit idle. An increase in our expenses or in the number of tractors without drivers could materially and adversely affect our growth and profitability.
If we are unable to retain our executive officers and key management employees, our business, financial condition and results of operations could be adversely affected. We are highly dependent upon the services of our executive officers and key management employees, including our Chairman of the Board and Chief Executive Officer. Currently, we do not have employment agreements with these employees and the loss of their services for any reason could have a materially adverse effect on our operations and future profitability. We have entered into agreements with our executive officers that require us to provide compensation to them in the event of termination of their employment without cause in connection with or within a certain period of time after a “change in control” of our Company. In addition, we must continue to develop and retain a core group of managers if we are to realize our goal of expanding our operations and continuing our growth. While our Board regularly engages in succession planning for our Chairman of the Board and Chief Executive Officer and executive leadership team, there is no guarantee that a candidate or plan will be successful. Although we strive to reduce the potential negative impact of any such changes, the loss of any executive officers or key management employees could result in disruptions to our operations. In addition, hiring, training and successfully integrating replacement personnel, whether internal or external, could be time consuming, may cause additional disruptions to our operations and may be unsuccessful, which could negatively impact our business, financial condition and results of operations.
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ITEM 1B. |
UNRESOLVED STAFF COMMENTS |
None.
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ITEM 1C. |
CYBERSECURITY |
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ITEM 2. |
PROPERTIES |
Our executive offices and principal terminal are located on approximately seven acres in Mondovi, Wisconsin. This facility consists of 39,000 square feet of office space and 21,000 square feet of equipment repair and maintenance space. We added additional equipment repair and maintenance facilities in 2007 and in 2009 in Mondovi, Wisconsin which consist of 15,000 square feet of space located on approximately 11 acres and 50,000 square feet of space located on approximately three acres, respectively. We own and operate facilities in or near the following cities at which we primarily perform operations and maintenance activities:
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● Mondovi, Wisconsin |
● Atlanta, Georgia |
● Memphis, Tennessee |
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● Phoenix, Arizona |
● Indianapolis, Indiana |
● Desoto, Texas |
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● Jurupa Valley, California |
● Kansas City, Kansas |
● Laredo, Texas |
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● Otay Mesa, California |
● Portland, Oregon |
● Colonial Heights, Virginia |
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● Tampa, Florida |
● Carlisle, Pennsylvania |
● Rio Grande Valley, Texas |
Our Truckload, Dedicated and Brokerage segments operate out of a majority of our facilities while our Intermodal segment operated out of a small number of our locations. We believe the nature, size and location of our properties are suitable and adequate for our current business needs.
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ITEM 3. |
LEGAL PROCEEDINGS |
We are involved in ordinary routine litigation incidental to our operations. These lawsuits primarily involve claims for workers’ compensation, wage and hour law violations, personal injury or property damage incurred in the transportation of freight. Based on our present knowledge of the facts and, in certain cases, advice of outside counsel, management believes the resolution of open claims and pending litigation, taking into account existing reserves, is not likely or probable to have a materially adverse effect on our consolidated financial statements; however, the final disposition of these matters and the impact of such final dispositions cannot be determined at this time. As such, future liability claims or adverse developments in existing claims could have a materially adverse effect on our consolidated financial statements. Information is provided below for such existing claims, with the eventual outcome for each claim dependent on the results of additional discovery, future court rulings, and potentially trial and appeal. Marten intends to continue to vigorously defend itself in each matter.
On July 8, 2020, a lawsuit was filed against Marten Transport, Ltd. on behalf of Raul Martinez, individually and all others similarly situated. The lawsuit, which was filed in and is currently pending in the Superior Court of the State of California for the County of San Diego, alleges that Marten did not properly compensate drivers for sleeper berth time, layover time, meal breaks, rest periods, and personal cell phone usage, did not provide drivers with proper wage statements or final pay in violation of California law, and violated California’s Unfair Competition Law and Labor Code.
On May 9, 2024, a lawsuit was filed against Marten Transport, Ltd. on behalf of Malik Wallace, Duane Partridge and Anthony Rogers, individually and all others similarly situated. The lawsuit, which was filed in Washington State Court and removed to the United States District Court, Western District of Washington in Seattle, alleges that Marten violated Washington’s wage transparency law.
On August 21, 2024, a lawsuit was filed against Marten Transport, Ltd. on behalf of Alexander W. Jackson, individually and all others similarly situated. The lawsuit, which was filed in the Superior Court of the State of California for the County of Riverside and removed to the United States District Court, Central District of California in Riverside, alleges that Marten failed to properly compensate drivers relating to minimum wages, meal periods and rest breaks, failed to provide proper wage statements, and violated California’s Unfair Competition Law and Labor Code.
On January 16, 2026, a lawsuit was filed against Marten Transport, Ltd. on behalf of Harley Courtney, individually and all others similarly situated. The lawsuit, which was filed in the Superior Court for the State of Washington in and for the County of King County, alleges that Marten did not properly compensate drivers for overtime wages in violation of Washington law.
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ITEM 4. |
MINE SAFETY DISCLOSURES |
Not Applicable.
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ITEM 4A. |
INFORMATION ABOUT OUR EXECUTIVE OFFICERS |
Our executive officers, with their ages and the offices held as of February 13, 2026, are as follows:
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Name |
Age |
Position |
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Randolph L. Marten |
73 |
Chairman of the Board, Chief Executive Officer and Director |
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|
|
|
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Douglas P. Petit |
59 |
President |
|
|
|
|
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James J. Hinnendael |
62 |
Executive Vice President and Chief Financial Officer |
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Adam D. Phillips |
48 |
Executive Vice President and Chief Operating Officer |
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|
|
|
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Randall J. Baier |
55 |
Executive Vice President and Chief Technology Officer |
Randolph L. Marten has been a full-time employee of ours since 1974. Mr. Marten has been a Director since October 1980 and our Chairman of the Board and Chief Executive Officer since October 1, 2025. Mr. Marten also served as our Executive Chairman of the Board from May 2021 to September 30, 2025, our Chairman of the Board from August 1993 to May 2021, our Chief Executive Officer from January 2005 to May 2021, our President from June 1986 to June 2008, our Chief Operating Officer from June 1986 to August 1998 and as a Vice President from October 1980 to June 1986.
Douglas P. Petit has been our President since August 2021. Mr. Petit also served as our Chief Operating Officer from August 2019 to August 2021, our Senior Vice President of Operations from January 2014 to August 2019 and our Vice President of Operations from December 2011 to January 2014. Mr. Petit advanced through various professional capacities in our operations area from June 1992 to December 2011 and from February 1990 to June 1991. From June 1991 to June 1992, Mr. Petit served as a fleet manager for Transport America, Inc.
James J. Hinnendael has been our Executive Vice President since May 2015 and our Chief Financial Officer since January 2006, and served as our Controller from January 1992 to December 2005. Mr. Hinnendael served in various professional capacities with Ernst & Young LLP, a public accounting firm, from January 1987 to December 1991. Mr. Hinnendael is a certified public accountant.
Adam D Phillips has been our Executive Vice President and Chief Operating Officer since December 2023. Mr. Phillips also served as our Chief Operating Officer from March 2023 to December 2023, our President of Western Operations and MRTN de Mexico from August 2019 to March 2023, our Vice President of Regional and Mexico Operations from January 2014 to August 2019, our Senior Director of Regional Operations from April 2010 to January 2014 and our Director of Regional Operations from January 2008 to April 2010. Mr. Phillips served in various operational and management capacities for Knight Transportation Inc. from 2001 to 2008.
Randall J. Baier has been our Executive Vice President and Chief Technology Officer since August 2023. Mr. Baier also served as our Senior Vice President of Information Systems from December 2019 to August 2023, our Vice President of Information Systems from January 2014 to December 2019 and our Senior Director of Information Systems from April 2011 to January 2014. Mr. Baier advanced through various professional capacities in our information technology area including Developer, System Administrator and Database Administrator from April 1993 to April 2011.
PART II
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ITEM 5. |
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
Our common stock is listed on the NASDAQ Global Select Market under the symbol “MRTN.” On February 13, 2026, we had 146 record stockholders and approximately 20,929 beneficial stockholders of our common stock.
Dividend Policy
In 2010, we announced a regular cash dividend program to our stockholders, subject to approval each quarter. Quarterly cash dividends of $0.06 per share of common stock were paid in each quarter of 2025 which totaled $19.6 million, and in each quarter of 2024 and 2023 which totaled $19.5 million in each year. We currently expect to continue to pay quarterly cash dividends in the future. The payment of cash dividends in the future, and the amount of any such dividends, will depend upon our financial condition, results of operations, cash requirements and certain corporate law requirements, as well as other factors deemed relevant by our Board of Directors.
Our credit agreement effective in August 2022 prohibits us from paying, in any fiscal year, stock redemptions and dividends in excess of $150 million. The current credit agreement also contains restrictive covenants which, among other matters, require us to maintain compliance with cash flow leverage and fixed charge coverage ratios. We were in compliance with all covenants at December 31, 2025 and December 31, 2024.
Share Repurchase Program
Our existing share repurchase program, which was initially announced in December 2007, currently provides for the repurchase of up to $50.0 million, or approximately 3.1 million shares of our common stock. The share repurchase program allows purchases on the open market or through private transactions in accordance with Rule 10b-18 of the Securities Exchange Act of 1934, as amended. The timing and extent to which we repurchase shares depends on market conditions and other corporate considerations. The repurchase program does not have an expiration date.
We have not repurchased any shares under this program since the second quarter of 2022. As of December 31, 2025, future repurchases of up to $33.2 million, or approximately 2.2 million shares, were available in the share repurchase program.
Comparative Stock Performance
The graph below compares the cumulative total stockholder return on our common stock with the NASDAQ Market index and the SIC code 4213 (trucking, except local) line-of-business index for the last five years. Research Data Group, Inc. prepared the line-of-business index. The graph assumes $100 is invested in our common stock, the NASDAQ Stock Market index and the line-of-business index on December 31, 2020, with reinvestment of dividends. The comparisons in the graph below are based on historical data and are not intended to forecast the possible future performance of our common stock. The information in the graph below shall be deemed “furnished” and not “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section.
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ITEM 7. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
The following discussion and analysis of our financial condition and results of operations should be read together with the selected consolidated financial data and our consolidated financial statements and the related notes appearing elsewhere in this report. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including but not limited to those under the heading “Risk Factors” beginning on page 6. We do not assume, and specifically disclaim, any obligation to update any forward-looking statement contained in this report.
Overview
We have strategically transitioned from a refrigerated long-haul carrier to a multifaceted business offering a network of time and temperature-sensitive and dry truck-based transportation and distribution capabilities across our current five distinct business platforms – Temperature-Sensitive and Dry Truckload, Dedicated, Brokerage and MRTN de Mexico. As discussed in Note 13, our Intermodal operations were sold effective September 30, 2025.
Our Truckload segment provides a combination of regional short-haul and medium-to-long-haul full-load transportation services. We transport food and other consumer packaged goods that require a temperature-controlled or insulated environment, along with dry freight, across the United States and into and out of Mexico and Canada. Our agreements with customers are typically for one year.
Our Dedicated segment provides customized transportation solutions tailored to meet each individual customer’s requirements, utilizing temperature-controlled trailers, dry vans and other specialized equipment within the United States. Our agreements with customers range from three to five years and are subject to annual rate reviews.
Generally, we are paid by the mile for our Truckload and Dedicated services. We also derive Truckload and Dedicated revenue from fuel surcharges, loading and unloading activities, equipment detention and other accessorial services. The main factors that affect our Truckload and Dedicated revenue are the rate per mile we receive from our customers, the percentage of miles for which we are compensated, the number of miles we generate with our equipment and changes in fuel prices. We monitor our revenue production primarily through average Truckload and Dedicated revenue, net of fuel surcharges, per tractor per week. We also analyze our average Truckload and Dedicated revenue, net of fuel surcharges, per total mile, non-revenue miles percentage, the miles per tractor we generate, our fuel surcharge revenue, our accessorial revenue and our other sources of operating revenue.
Our Brokerage segment develops contractual relationships with and arranges for third-party carriers to transport freight for our customers in temperature-controlled trailers and dry vans within the United States and into and out of Mexico through Marten Transport Logistics, LLC, which was established in 2007 and operates pursuant to brokerage authority granted by the DOT. We retain the billing, collection and customer management responsibilities. The main factors that affect our Brokerage revenue are the rate per mile and other charges that we receive from our customers.
Operating results of our MRTN de Mexico business, which offers our customers door-to-door service between the United States and Mexico with our Mexican partner carriers, is reported within our Truckload and Brokerage segments.
Our Intermodal segment transported our customers’ freight within the United States utilizing our refrigerated containers on railroad flatcars for portions of trips, with the balance of the trips using our tractors or, to a lesser extent, contracted carriers. The main factors that affected our Intermodal revenue were the rate per mile and other charges we received from our customers. As discussed in Note 13, our Intermodal operations were sold effective September 30, 2025.
In addition to the factors discussed above, our operating revenue is also affected by, among other things, the United States economy, inventory levels, the level of truck and rail capacity in the transportation market, a contracting driver market, severe weather conditions and specific customer demand.
Our operating revenue decreased $80.1 million, or 8.3%, in 2025 from 2024. Our operating revenue, net of fuel surcharges, decreased $61.0 million, or 7.3%, compared with 2024. Truckload segment revenue, net of fuel surcharges, decreased 3.6% from 2024, primarily due to a decrease in our average fleet size, partially offset by an increase in our average revenue per tractor. Dedicated segment revenue, net of fuel surcharges, decreased 11.4% from 2024, primarily due to a decrease in our average fleet size, partially offset by an increase in our average revenue per tractor. Intermodal segment revenue, net of fuel surcharges, decreased 41.9% from 2024, primarily due to a decrease in our number of loads. Brokerage segment revenue increased 2.6% from 2024, primarily due to an increase in our number of loads, partially offset by a decrease in our revenue per load. Fuel surcharge revenue decreased to $104.7 million in 2025 from $123.7 million in 2024.
Our profitability is impacted by the variable costs of transporting freight for our customers, fixed costs, and expenses containing both fixed and variable components. The variable costs include fuel expense, driver-related expenses, such as wages, benefits, training and recruitment, and independent contractor costs, which are recorded under purchased transportation. Expenses that have both fixed and variable components include maintenance and tire expense and our cost of insurance and claims. These expenses generally vary with the miles we travel, but also have a controllable component based on safety, fleet age, efficiency and other factors. Our main fixed costs relate to the acquisition and subsequent depreciation of long-term assets, such as revenue equipment and operating terminals. We expect our annual cost of tractor and trailer ownership will increase in future periods as a result of higher prices of new equipment, along with any increases in fleet size. Although certain factors affecting our expenses are beyond our control, we monitor them closely and attempt to anticipate changes in these factors in managing our business. For example, fuel prices have significantly fluctuated over the past several years. We manage our exposure to changes in fuel prices primarily through fuel surcharge programs with our customers, as well as through volume fuel purchasing arrangements with national fuel centers and bulk purchases of fuel at our terminals. To help further reduce fuel expense, we have installed and tightly manage the use of auxiliary power units in our tractors to provide climate control and electrical power for our drivers without idling the tractor engine, and also have improved the fuel usage in the temperature-control units on our trailers. For our Brokerage segment and formerly our Intermodal segment, our profitability is impacted by the percentage of revenue which is payable to the providers of the transportation services we arrange. This expense is included within purchased transportation in our consolidated statements of operations.
Our operating income declined 31.0% to $22.9 million in 2025 from $33.2 million in 2024. Our operating expenses as a percentage of operating revenue, or “operating ratio,” was 97.4% in 2025 and 96.6% in 2024. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, increased to 97.1% in 2025 from 96.0% in 2024. Our net income declined 35.2% to $17.4 million, or $0.21 per diluted share, in 2025 from $26.9 million, or $0.33 per diluted share, in 2024.
Our business requires substantial ongoing capital investments, particularly for new tractors and trailers. At December 31, 2025, we had $48.3 million of cash and cash equivalents and an escrow deposit, $767.6 million in stockholders’ equity and no long-term debt outstanding. In 2025, net cash flows provided by operating activities of $93.5 million were primarily used to purchase new revenue equipment, net of proceeds from dispositions, in the amount of $40.0 million, to pay cash dividends of $19.6 million and to purchase other assets in the amount of $2.9 million, resulting in a $31.0 million increase in cash and cash equivalents and an escrow deposit. We estimate that capital expenditures, net of proceeds from dispositions, will be approximately $92 million in 2026. Quarterly cash dividends of $0.06 per share of common stock were paid in each quarter of 2025 which totaled $19.6 million. We believe our sources of liquidity are adequate to meet our current and anticipated needs for at least the next twelve months. Based upon anticipated cash flows, existing cash and cash equivalents balances, current borrowing availability and other sources of financing we expect to be available to us, we do not anticipate any significant liquidity constraints in the foreseeable future.
We continue to invest considerable time and capital resources to actively implement and promote long-term environmentally sustainable solutions that drive reductions in our fuel and electricity consumption and decrease our carbon footprint. These initiatives include (i) reducing idle time for our tractors by installing and tightly managing the use of auxiliary power units, which are powered by solar panels and provide climate control and electrical power for our drivers without idling the tractor engine, (ii) improving the energy efficiency of our newer, more aerodynamic and well-maintained tractor and trailer fleets by optimizing the equipment’s specifications, weight and tractor speed, equipping our tractors with automatic transmissions, converting the refrigeration units in our refrigerated trailers to the new, more-efficient CARB refrigeration units along with increasing the insulation in the trailer walls and installing trailer skirts, and using ultra-fuel efficient and wide-based tires, and (iii) upgrading all of our facilities to indoor and outdoor LED lighting along with converting all of our facilities to solar power. Additionally, we are an active participant in the United States Environmental Protection Agency, or EPA, SmartWay Transport Partnership, in which freight shippers, carriers, logistics companies and other voluntary stakeholders partner with the EPA to measure, benchmark and improve logistics operations to reduce their environmental footprint.
This Management’s Discussion and Analysis of Financial Condition and Results of Operations includes discussions of operating revenue, net of fuel surcharge revenue; Truckload, Dedicated and Intermodal revenue, net of fuel surcharge revenue; operating expenses as a percentage of operating revenue, each net of fuel surcharge revenue; and net fuel expense (fuel and fuel taxes net of fuel surcharge revenue and surcharges passed through to independent contractors, outside drayage carriers and railroads). We provide these additional disclosures because management believes these measures provide a more consistent basis for comparing results of operations from period to period. These financial measures in this report have not been determined in accordance with U.S. generally accepted accounting principles (GAAP). Pursuant to Item 10(e) of Regulation S-K, we have included the amounts necessary to reconcile these non-GAAP financial measures to the most directly comparable GAAP financial measures of operating revenue, operating expenses divided by operating revenue, and fuel and fuel taxes.
Results of Operations
The following table sets forth for the years indicated certain operating statistics regarding our revenue and operations:
|
2025 |
2024 |
2023 |
||||||||||
|
Truckload Segment: |
||||||||||||
|
Revenue (in thousands) |
$ | 421,729 | $ | 439,792 | $ | 465,475 | ||||||
|
Average revenue, net of fuel surcharges, per tractor per week(1) |
$ | 4,184 | $ | 4,123 | $ | 4,377 | ||||||
|
Average tractors(1) |
1,668 | 1,751 | 1,733 | |||||||||
|
Average miles per trip |
520 | 533 | 519 | |||||||||
|
Total miles (in thousands) |
153,699 | 158,985 | 155,929 | |||||||||
|
Dedicated Segment: |
||||||||||||
|
Revenue (in thousands) |
$ | 278,426 | $ | 319,135 | $ | 408,272 | ||||||
|
Average revenue, net of fuel surcharges, per tractor per week(1) |
$ | 3,825 | $ | 3,767 | $ | 3,936 | ||||||
|
Average tractors(1) |
1,186 | 1,356 | 1,632 | |||||||||
|
Average miles per trip |
299 | 319 | 335 | |||||||||
|
Total miles (in thousands) |
96,356 | 110,681 | 133,163 | |||||||||
|
Intermodal Segment:(2) |
||||||||||||
|
Revenue (in thousands) |
$ | 33,671 | $ | 58,754 | $ | 92,078 | ||||||
|
Loads |
10,168 | 16,975 | 25,160 | |||||||||
|
Average tractors |
56 | 110 | 159 | |||||||||
|
Brokerage Segment: |
||||||||||||
|
Revenue (in thousands) |
$ | 149,826 | $ | 146,027 | $ | 165,630 | ||||||
|
Loads |
95,951 | 89,138 | 91,077 | |||||||||
|
(1) |
Includes tractors driven by both company-employed drivers and independent contractors. Independent contractors provided 77, 88 and 94 tractors as of December 31, 2025, 2024 and 2023, respectively. |
|
(2) |
Our Intermodal operations were sold effective September 30, 2025. |
Comparison of Year Ended December 31, 2025 to Year Ended December 31, 2024
The following table sets forth for the years indicated our operating revenue, operating income and operating ratio by segment, along with the change for each component:
|
Dollar Change |
Percentage Change |
|||||||||||||||
|
(Dollars in thousands) |
2025 |
2024 |
2025 vs. 2024 |
2025 vs. 2024 |
||||||||||||
|
Operating revenue: |
||||||||||||||||
|
Truckload revenue, net of fuel surcharge revenue |
$ | 363,929 | $ | 377,452 | $ | (13,523 | ) | (3.6 | )% | |||||||
|
Truckload fuel surcharge revenue |
57,800 | 62,340 | (4,540 | ) | (7.3 | ) | ||||||||||
|
Total Truckload revenue |
421,729 | 439,792 | (18,063 | ) | (4.1 | ) | ||||||||||
|
Dedicated revenue, net of fuel surcharge revenue |
236,504 | 267,077 | (30,573 | ) | (11.4 | ) | ||||||||||
|
Dedicated fuel surcharge revenue |
41,922 | 52,058 | (10,136 | ) | (19.5 | ) | ||||||||||
|
Total Dedicated revenue |
278,426 | 319,135 | (40,709 | ) | (12.8 | ) | ||||||||||
|
Intermodal revenue, net of fuel surcharge revenue |
28,730 | 49,468 | (20,738 | ) | (41.9 | ) | ||||||||||
|
Intermodal fuel surcharge revenue |
4,941 | 9,286 | (4,345 | ) | (46.8 | ) | ||||||||||
|
Total Intermodal revenue |
33,671 | 58,754 | (25,083 | ) | (42.7 | ) | ||||||||||
|
Brokerage revenue |
149,826 | 146,027 | 3,799 | 2.6 | ||||||||||||
|
Total operating revenue |
$ | 883,652 | $ | 963,708 | $ | (80,056 | ) | (8.3 | )% | |||||||
|
Operating income/(loss): |
||||||||||||||||
|
Truckload |
$ | 825 | $ | 3,283 | $ | (2,458 | ) | (74.9 | )% | |||||||
|
Dedicated |
16,734 | 23,037 | (6,303 | ) | (27.4 | ) | ||||||||||
|
Intermodal |
(1,883 | ) | (3,922 | ) | 2,039 | 52.0 | ||||||||||
|
Brokerage |
7,237 | 10,822 | (3,585 | ) | (33.1 | ) | ||||||||||
|
Total operating income |
$ | 22,913 | $ | 33,220 | $ | (10,307 | ) | (31.0 | )% | |||||||
|
Operating ratio: |
||||||||||||||||
|
Truckload |
99.8 | % | 99.3 | % | ||||||||||||
|
Dedicated |
94.0 | 92.8 | ||||||||||||||
|
Intermodal |
105.6 | 106.7 | ||||||||||||||
|
Brokerage |
95.2 | 92.6 | ||||||||||||||
|
Consolidated operating ratio |
97.4 | % | 96.6 | % | ||||||||||||
|
Operating ratio, net of fuel surcharges: |
||||||||||||||||
|
Truckload |
99.8 | % | 99.1 | % | ||||||||||||
|
Dedicated |
92.9 | 91.4 | ||||||||||||||
|
Intermodal |
106.6 | 107.9 | ||||||||||||||
|
Brokerage |
95.2 | 92.6 | ||||||||||||||
|
Consolidated operating ratio, net of fuel surcharges |
97.1 | % | 96.0 | % | ||||||||||||
Our operating revenue decreased $80.1 million, or 8.3%, to $883.7 million in 2025 from $963.7 million in 2024. Our operating revenue, net of fuel surcharges, decreased $61.0 million, or 7.3%, to $779.0 million in 2025 from $840.0 million in 2024. This decrease in 2025 was primarily due to a $30.6 million decrease in Dedicated revenue, net of fuel surcharges, a $20.7 million decrease in Intermodal revenue, net of fuel surcharges, and a $13.5 million decrease in Truckload revenue, net of fuel surcharges, along with a $3.8 million increase in Brokerage revenue. Fuel surcharge revenue decreased to $104.7 million in 2025 from $123.7 million in 2024.
In addition to the factors discussed below, our profitability across each segment in 2025 was impacted by a weaker freight market.
Truckload segment revenue decreased $18.1 million, or 4.1%, to $421.7 million in 2025 from $439.8 million in 2024. Truckload segment revenue, net of fuel surcharges, decreased $13.5 million, or 3.6%, to $363.9 million in 2025 from $377.5 million in 2024, primarily due to a decrease in our average fleet size, partially offset by an increase in our average revenue per tractor. The operating ratio was 99.8% in 2025 and 99.3% in 2024. Impacting the 2025 operating ratio was higher insurance and claims costs, partially offset by lower company driver compensation and increased gain on disposition of revenue equipment, all as a percentage of revenue, along with improved average revenue per tractor.
Dedicated segment revenue decreased $40.7 million, or 12.8%, to $278.4 million in 2025 from $319.1 million in 2024. Dedicated segment revenue, net of fuel surcharges, decreased 11.4%, primarily due to a decrease in our average fleet size, partially offset by an increase in our average revenue per tractor. The operating ratio increased to 94.0% in 2025 from 92.8% in 2024. Impacting the 2025 operating ratio was higher insurance and claims costs, as a percentage of revenue, partially offset by increased gain on disposition of revenue equipment, as a percentage of revenue, and increased average revenue per tractor.
Intermodal segment revenue decreased $25.1 million, or 42.7%, to $33.7 million in 2025 from $58.8 million in 2024. Intermodal segment revenue, net of fuel surcharges, decreased 41.9% from 2024, primarily due to a decrease in our number of loads. The operating ratio in 2025 improved to 105.6% from 106.7% in 2024. Impacting the 2025 operating ratio was lower depreciation and salaries and wages expense, partially offset by higher purchased transportation costs, all as a percentage of revenue. Our Intermodal operations were sold effective September 30, 2025.
Brokerage segment revenue increased $3.8 million, or 2.6%, to $149.8 million in 2025 from $146.0 million in 2024, primarily due to an increase in our number of loads, partially offset by a decrease in our revenue per load. The operating ratio in 2025 of 95.2% was up from 92.6% in 2024. This increase was primarily due to higher insurance and claims costs and an increase in the amounts payable to carriers for transportation services which we arranged, both as a percentage of revenue.
The following table sets forth for the years indicated the dollar and percentage increase or decrease of the items in our consolidated statements of operations, and those items as a percentage of operating revenue:
|
Dollar Change |
Percentage Change |
Percentage of Operating Revenue |
||||||||||||||
|
(Dollars in thousands) |
2025 vs. 2024 |
2025 vs. 2024 |
2025 |
2024 |
||||||||||||
|
Operating revenue |
$ | (80,056 | ) | (8.3 | )% | 100.0 | % | 100.0 | % | |||||||
|
Operating expenses (income): |
||||||||||||||||
|
Salaries, wages and benefits |
(29,662 | ) | (8.7 | ) | 35.3 | 35.5 | ||||||||||
|
Purchased transportation |
(10,029 | ) | (5.9 | ) | 18.0 | 17.6 | ||||||||||
|
Fuel and fuel taxes |
(17,144 | ) | (11.7 | ) | 14.7 | 15.3 | ||||||||||
|
Supplies and maintenance |
(2,129 | ) | (3.4 | ) | 6.9 | 6.6 | ||||||||||
|
Depreciation |
(6,261 | ) | (5.6 | ) | 11.9 | 11.6 | ||||||||||
|
Operating taxes and licenses |
(565 | ) | (5.5 | ) | 1.1 | 1.1 | ||||||||||
|
Insurance and claims |
2,536 | 4.8 | 6.3 | 5.5 | ||||||||||||
|
Communications and utilities |
(276 | ) | (3.1 | ) | 1.0 | 0.9 | ||||||||||
|
Gain on disposition of revenue equipment |
(7,096 | ) | (142.7 | ) | (1.4 | ) | (0.5 | ) | ||||||||
|
Other |
877 | 2.9 | 3.5 | 3.1 | ||||||||||||
|
Total operating expenses |
(69,749 | ) | (7.5 | ) | 97.4 | 96.6 | ||||||||||
|
Operating income |
(10,307 | ) | (31.0 | ) | 2.6 | 3.4 | ||||||||||
|
Other |
1,662 | 53.2 | (0.2 | ) | (0.3 | ) | ||||||||||
|
Income before income taxes |
(11,969 | ) | (32.9 | ) | 2.8 | 3.8 | ||||||||||
|
Income taxes expense |
(2,491 | ) | (26.4 | ) | 0.8 | 1.0 | ||||||||||
|
Net income |
$ | (9,478 | ) | (35.2 | )% | 2.0 | % | 2.8 | % | |||||||
Salaries, wages and benefits consist of compensation for our employees, including both driver and non-driver employees, employees’ health insurance, 401(k) plan contributions and other fringe benefits. These expenses vary depending upon the size of our Truckload, Dedicated and formerly our Intermodal tractor fleets, the ratio of company drivers to independent contractors, our efficiency, our experience with employees’ health insurance claims, changes in health care premiums and other factors. Salaries, wages and benefits expense decreased $29.7 million, or 8.7%, in 2025 from 2024. This decrease resulted primarily from reductions in company driver compensation expense of $23.8 million and employees’ health insurance expense due to lower self-insured medical claims of $2.8 million.
Purchased transportation consists of amounts payable to carriers and railroads for transportation services we arrange in connection with our Brokerage and formerly our Intermodal operations, and to independent contractor providers of revenue equipment. This category will vary depending upon the amount and rates, including fuel surcharges, we pay to motor carriers and third-party railroads, the ratio of company drivers versus independent contractors and the amount of fuel surcharges passed through to independent contractors. Purchased transportation expense decreased $10.0 million in total, or 5.9%, in 2025 from 2024. Amounts payable to carriers for transportation services we arranged in our Brokerage segment increased $4.9 million to $127.3 million in 2025 from $122.4 million in 2024, primarily due to an increase in our number of loads. Amounts payable to railroads and drayage carriers for transportation services within our Intermodal segment decreased to $18.8 million in 2025 from $31.6 million in 2024, primarily due to a decrease in our number of loads. The portion of purchased transportation expense related to independent contractors within our Truckload and Dedicated segments, including fuel surcharges, decreased by $2.1 million in 2025.
Fuel and fuel taxes decreased by $17.1 million, or 11.7%, in 2025 from 2024. Net fuel expense (fuel and fuel taxes net of fuel surcharge revenue and surcharges passed through to independent contractors, outside drayage carriers and railroads) decreased $2.0 million, or 6.0%, to $31.4 million in 2025 from $33.5 million in 2024. Fuel surcharges passed through to independent contractors, outside drayage carriers and railroads decreased to $6.1 million from $10.0 million in 2024. The United States Department of Energy, or DOE, national average cost of fuel decreased to $3.66 per gallon from $3.76 per gallon in 2024. Despite this price decrease, our net fuel expense was up slightly to 5.0% of Truckload, Dedicated and Intermodal segment revenue, net of fuel surcharges, in 2025 from 4.8% in 2024. We have worked diligently to control fuel usage and costs by improving our volume purchasing arrangements and optimizing our drivers’ fuel purchases with national fuel centers, focusing on shorter lengths of haul, installing and tightly managing the use of auxiliary power units in our tractors to minimize engine idling and improving fuel usage in the temperature-control units on our trailers. Auxiliary power units, which we have installed in our company-owned tractors, provide climate control and electrical power for our drivers without idling the tractor engine.
Supplies and maintenance consist of repairs, maintenance, tires, parts, oil and engine fluids, along with load-specific expenses including loading/unloading, tolls, pallets and trailer hostling. Our supplies and maintenance expense decreased $2.1 million, or 3.4%, from 2024 primarily due to lower tire, tolls and loading/unloading costs.
Depreciation relates to owned tractors, trailers, auxiliary power units, communication units, terminal facilities, other assets and formerly containers. The $6.3 million, or 5.6%, decrease in depreciation in 2025 was primarily due to a decrease in our average tractor, trailer and refrigerated container fleet size, partially offset by higher prices of new equipment. We expect our annual cost of tractor and trailer ownership will increase in future periods as a result of continued higher prices of new equipment, which will result in greater depreciation over the useful life.
Insurance and claims consist of the costs of insurance premiums and accruals we make for claims within our self-insured retention amounts, primarily for personal injury, property damage, physical damage to our equipment, cargo claims and workers’ compensation claims. These expenses will vary primarily based upon the frequency and severity of our accident experience, our self-insured retention levels and the market for insurance. The $2.5 million, or 4.8%, increase in insurance and claims in 2025 was primarily due to increases in both our self-insured auto liability and brokerage claim costs, partially offset by lower self-insured costs of physical damage claims related to our revenue equipment and workers’ compensation claims. Our significant self-insured retention exposes us to the possibility of significant fluctuations in claims expense between periods which could materially impact our financial results depending on the frequency, severity and timing of claims.
Gain on disposition of revenue equipment increased to $12.1 million in 2025 from $5.0 million in 2024 due to increases in the average gain for our tractor and trailer sales and in the number of units sold. Future gains or losses on dispositions of revenue equipment will be impacted by the market for used revenue equipment, which is beyond our control.
Our operating income declined 31.0% to $22.9 million in 2025 from $33.2 million in 2024 as a result of the foregoing factors. Our operating expenses as a percentage of operating revenue, or “operating ratio,” was 97.4% in 2025 and 96.6% in 2024. The operating ratio for our Truckload segment was 99.8% in 2025 and 99.3% in 2024, for our Dedicated segment was 94.0% in 2025 and 92.8% in 2024, for our Intermodal segment was 105.6% in 2025 and 106.7% in 2024, and for our Brokerage segment was 95.2% in 2025 and 92.6% in 2024. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, was 97.1% in 2025 and 96.0% in 2024.
Other non-operating income decreased to $1.5 million from $3.1 million in 2024 due to decreased interest income earned on our cash and cash equivalents.
Our effective income tax rate increased to 28.4% in 2025 from 25.9% in 2024 primarily due to increases in per diem and other non-deductible expenses as a percentage of earnings.
As a result of the factors described above, net income declined 35.2% to $17.4 million, or $0.21 per diluted share, in 2025 from $26.9 million, or $0.33 per diluted share, in 2024.
Comparison of Year Ended December 31, 2024 to Year Ended December 31, 2023
The following table sets forth for the years indicated our operating revenue, operating income and operating ratio by segment, along with the change for each component:
|
Dollar Change |
Percentage Change |
|||||||||||||||
|
(Dollars in thousands) |
2024 |
2023 |
2024 vs. 2023 |
2024 vs. 2023 |
||||||||||||
|
Operating revenue: |
||||||||||||||||
|
Truckload revenue, net of fuel surcharge revenue |
$ | 377,452 | $ | 395,565 | $ | (18,113 | ) | (4.6 | )% | |||||||
|
Truckload fuel surcharge revenue |
62,340 | 69,910 | (7,570 | ) | (10.8 | ) | ||||||||||
|
Total Truckload revenue |
439,792 | 465,475 | (25,683 | ) | (5.5 | ) | ||||||||||
|
Dedicated revenue, net of fuel surcharge revenue |
267,077 | 334,962 | (67,885 | ) | (20.3 | ) | ||||||||||
|
Dedicated fuel surcharge revenue |
52,058 | 73,310 | (21,252 | ) | (29.0 | ) | ||||||||||
|
Total Dedicated revenue |
319,135 | 408,272 | (89,137 | ) | (21.8 | ) | ||||||||||
|
Intermodal revenue, net of fuel surcharge revenue |
49,468 | 75,887 | (26,419 | ) | (34.8 | ) | ||||||||||
|
Intermodal fuel surcharge revenue |
9,286 | 16,191 | (6,905 | ) | (42.6 | ) | ||||||||||
|
Total Intermodal revenue |
58,754 | 92,078 | (33,324 | ) | (36.2 | ) | ||||||||||
|
Brokerage revenue |
146,027 | 165,630 | (19,603 | ) | (11.8 | ) | ||||||||||
|
Total operating revenue |
$ | 963,708 | $ | 1,131,455 | $ | (167,747 | ) | (14.8 | )% | |||||||
|
Operating income/(loss): |
||||||||||||||||
|
Truckload |
$ | 3,283 | $ | 24,835 | $ | (21,552 | ) | (86.8 | )% | |||||||
|
Dedicated |
23,037 | 48,377 | (25,340 | ) | (52.4 | ) | ||||||||||
|
Intermodal |
(3,922 | ) | (156 | ) | (3,766 | ) | (2,414.1 | ) | ||||||||
|
Brokerage |
10,822 | 17,054 | (6,232 | ) | (36.5 | ) | ||||||||||
|
Total operating income |
$ | 33,220 | $ | 90,110 | $ | (56,890 | ) | (63.1 | )% | |||||||
|
Operating ratio: |
||||||||||||||||
|
Truckload |
99.3 | % | 94.7 | % | ||||||||||||
|
Dedicated |
92.8 | 88.2 | ||||||||||||||
|
Intermodal |
106.7 | 100.2 | ||||||||||||||
|
Brokerage |
92.6 | 89.7 | ||||||||||||||
|
Consolidated operating ratio |
96.6 | % | 92.0 | % | ||||||||||||
|
Operating ratio, net of fuel surcharges: |
||||||||||||||||
|
Truckload |
99.1 | % | 93.7 | % | ||||||||||||
|
Dedicated |
91.4 | 85.6 | ||||||||||||||
|
Intermodal |
107.9 | 100.2 | ||||||||||||||
|
Brokerage |
92.6 | 89.7 | ||||||||||||||
|
Consolidated operating ratio, net of fuel surcharges |
96.0 | % | 90.7 | % | ||||||||||||
Our operating revenue decreased $167.7 million, or 14.8%, to $963.7 million in 2024 from $1.131 billion in 2023. Our operating revenue, net of fuel surcharges, decreased $132.0 million, or 13.6%, to $840.0 million in 2024 from $972.0 million in 2023. This decrease in 2024 was due to a $67.9 million decrease in Dedicated revenue, net of fuel surcharges, a $26.4 million decrease in Intermodal revenue, net of fuel surcharges, a $19.6 million decrease in Brokerage revenue and an $18.1 million decrease in Truckload revenue, net of fuel surcharges. Fuel surcharge revenue decreased to $123.7 million in 2024 from $159.4 million in 2023.
In addition to the factors discussed below, our profitability across each segment in 2024 was impacted by a freight market which has considerably softened from the conditions during 2023.
Truckload segment revenue decreased $25.7 million, or 5.5%, to $439.8 million in 2024 from $465.5 million in 2023. Truckload segment revenue, net of fuel surcharges, decreased $18.1 million, or 4.6%, to $377.5 million in 2024 from $395.6 million in 2023, primarily due to a decrease in our average revenue per tractor, despite an increase in our average fleet size. The operating ratio increased to 99.3% in 2024 from 94.7% in 2023. Impacting the 2024 operating ratio was the decrease in our average revenue per tractor along with higher company driver compensation, depreciation, maintenance and a lower gain on disposition of revenue equipment, as a percentage of revenue.
Dedicated segment revenue decreased $89.1 million, or 21.8%, to $319.1 million in 2024 from $408.3 million in 2023. Dedicated segment revenue, net of fuel surcharges, decreased 20.3%, primarily due to decreases in both our average fleet size and our average revenue per tractor. The operating ratio increased to 92.8% in 2024 from 88.2% in 2023. Impacting the 2024 operating ratio was the decrease in our average revenue per tractor along with higher company driver compensation, depreciation and a lower gain on disposition of revenue equipment, as a percentage of revenue.
Intermodal segment revenue decreased $33.3 million, or 36.2%, to $58.8 million in 2024 from $92.1 million in 2023. Intermodal segment revenue, net of fuel surcharges, decreased 34.8% from 2023, primarily due to decreases in both our number of loads and our revenue per load. The operating ratio in 2024 increased to 106.7% from 100.2% in 2023. Impacting the 2024 operating ratio was the decrease in our revenue per load along with higher depreciation, maintenance and purchased transportation costs, as a percentage of revenue.
Brokerage segment revenue decreased $19.6 million, or 11.8%, to $146.0 million in 2024 from $165.6 million in 2023, primarily due to a decrease in our revenue per load. The operating ratio in 2024 of 92.6% was up from 89.7% in 2023. This increase was primarily due to an increase in amounts payable to carriers for transportation services which we arranged as a percentage of our Brokerage revenue.
The following table sets forth for the years indicated the dollar and percentage increase or decrease of the items in our consolidated statements of operations, and those items as a percentage of operating revenue:
|
Dollar Change |
Percentage Change |
Percentage of Operating Revenue |
||||||||||||||
|
(Dollars in thousands) |
2024 vs. 2023 |
2024 vs. 2023 |
2024 |
2023 |
||||||||||||
|
Operating revenue |
$ | (167,747 | ) | (14.8 | )% | 100.0 | % | 100.0 | % | |||||||
|
Operating expenses (income): |
||||||||||||||||
|
Salaries, wages and benefits |
(37,086 | ) | (9.8 | ) | 35.5 | 33.5 | ||||||||||
|
Purchased transportation |
(30,192 | ) | (15.1 | ) | 17.6 | 17.6 | ||||||||||
|
Fuel and fuel taxes |
(33,294 | ) | (18.5 | ) | 15.3 | 15.9 | ||||||||||
|
Supplies and maintenance |
(4,074 | ) | (6.0 | ) | 6.6 | 6.0 | ||||||||||
|
Depreciation |
(5,069 | ) | (4.3 | ) | 11.6 | 10.3 | ||||||||||
|
Operating taxes and licenses |
(751 | ) | (6.8 | ) | 1.1 | 1.0 | ||||||||||
|
Insurance and claims |
(2,905 | ) | (5.2 | ) | 5.5 | 5.0 | ||||||||||
|
Communications and utilities |
(1,120 | ) | (11.0 | ) | 0.9 | 0.9 | ||||||||||
|
Gain on disposition of revenue equipment |
8,641 | 63.5 | (0.5 | ) | (1.2 | ) | ||||||||||
|
Other |
(5,007 | ) | (14.3 | ) | 3.1 | 3.1 | ||||||||||
|
Total operating expenses |
(110,857 | ) | (10.6 | ) | 96.6 | 92.0 | ||||||||||
|
Operating income |
(56,890 | ) | (63.1 | ) | 3.4 | 8.0 | ||||||||||
|
Other |
680 | 17.9 | (0.3 | ) | (0.3 | ) | ||||||||||
|
Income before income taxes |
(57,570 | ) | (61.3 | ) | 3.8 | 8.3 | ||||||||||
|
Income taxes expense |
(14,119 | ) | (60.0 | ) | 1.0 | 2.1 | ||||||||||
|
Net income |
$ | (43,451 | ) | (61.7 | )% | 2.8 | % | 6.2 | % | |||||||
Salaries, wages and benefits expense decreased $37.1 million, or 9.8%, in 2024 from 2023. This decrease resulted primarily from both lower company driver compensation expense of $29.5 million and non-driver compensation expense of $3.6 million.
Purchased transportation expense decreased $30.2 million in total, or 15.1%, in 2024 from 2023. Amounts payable to carriers for transportation services we arranged in our Brokerage segment decreased $13.7 million to $122.4 million in 2024 from $136.1 million in 2023, primarily due to a decrease in our cost per load. Amounts payable to railroads and drayage carriers for transportation services within our Intermodal segment decreased to $31.6 million in 2024 from $47.5 million in 2023, primarily due to a decrease in the number of loads. The portion of purchased transportation expense related to independent contractors within our Truckload and Dedicated segments, including fuel surcharges, decreased $649,000 in 2024.
Fuel and fuel taxes decreased by $33.3 million, or 18.5%, in 2024 from 2023. Net fuel expense (fuel and fuel taxes net of fuel surcharge revenue and surcharges passed through to independent contractors, outside drayage carriers and railroads) decreased $3.6 million, or 9.7%, to $33.5 million in 2024 from $37.1 million in 2023. Fuel surcharges passed through to independent contractors, outside drayage carriers and railroads decreased to $10.0 million from $16.0 million in 2023. The DOE national average cost of fuel decreased to $3.76 per gallon from $4.21 per gallon in 2023. Despite this price decrease, our net fuel expense increased to 4.8% of Truckload, Dedicated and Intermodal segment revenue, net of fuel surcharges, in 2024 from 4.6% in 2023. We have worked diligently to control fuel usage and costs by improving our volume purchasing arrangements and optimizing our drivers’ fuel purchases with national fuel centers, focusing on shorter lengths of haul, installing and tightly managing the use of auxiliary power units in our tractors to minimize engine idling and improving fuel usage in the temperature-control units on our trailers.
Our supplies and maintenance expense decreased $4.1 million, or 6.0%, from 2023 primarily due to lower outside repair and loading/unloading costs.
The $5.1 million, or 4.3%, decrease in depreciation in 2024 was primarily due to a decrease in our average tractor fleet size, partially offset by higher prices of new equipment.
The $2.9 million, or 5.2%, decrease in insurance and claims in 2024 was primarily due to decreases in our self-insured auto liability and workers’ compensation claim costs and in our self-insured cost of physical damage claims related to our revenue equipment, partially offset by higher insurance premiums.
Gain on disposition of revenue equipment was $5.0 million in 2024, down from $13.6 million in 2023 due to decreases in the average gain for our tractor and trailer sales, despite an increase in the number of units sold.
Our operating income declined 63.1% to $33.2 million in 2024 from $90.1 million in 2023 as a result of the foregoing factors. Our operating expenses as a percentage of operating revenue, or “operating ratio,” was 96.6% in 2024 and 92.0% in 2023. The operating ratio for our Truckload segment was 99.3% in 2024 and 94.7% in 2023, for our Dedicated segment was 92.8% in 2024 and 88.2% in 2023, for our Intermodal segment was 106.7% in 2024 and 100.2% in 2023, and for our Brokerage segment was 92.6% in 2024 and 89.7% in 2023. Operating expenses as a percentage of operating revenue, with both amounts net of fuel surcharges, was 96.0% in 2024 and 90.7% in 2023.
Our effective income tax rate increased to 25.9% in 2024 from 25.1% in 2023 primarily due to increases in per diem and other non-deductible expenses.
As a result of the factors described above, net income declined 61.7% to $26.9 million, or $0.33 per diluted share, in 2024 from $70.4 million, or $0.86 per diluted share, in 2023.
Liquidity and Capital Resources
Our business requires substantial ongoing capital investments, particularly for new tractors and trailers. Our primary sources of liquidity are funds provided by operations and our revolving credit facility. A portion of our tractor fleet is provided by independent contractors who own and operate their own equipment. We have no capital expenditure requirements relating to those drivers who own their tractors or obtain financing through third parties.
The table below reflects our net cash flows provided by operating activities, net cash flows used for investing activities and net cash flows used for financing activities for the years indicated.
|
(In thousands) |
2025 |
2024 |
2023 |
|||||||||
|
Net cash flows provided by operating activities |
$ | 93,488 | $ | 134,814 | $ | 164,378 | ||||||
|
Net cash flows used for investing activities |
(42,877 | ) | (152,138 | ) | (172,540 | ) | ||||||
|
Net cash flows used for financing activities |
(19,600 | ) | (18,622 | ) | (19,225 | ) | ||||||
Our existing share repurchase program, which was initially announced in December 2007, currently provides for the repurchase of up to $50.0 million, or approximately 3.1 million shares of our common stock. The share repurchase program allows purchases on the open market or through private transactions in accordance with Rule 10b-18 of the Securities Exchange Act of 1934, as amended. The timing and extent to which we repurchase shares depends on market conditions and other corporate considerations. The repurchase program does not have an expiration date.
We have not repurchased any shares under this program since the second quarter of 2022. As of December 31, 2025, future repurchases of up to $33.2 million, or approximately 2.2 million shares, were available in the share repurchase program.
In 2025, net cash flows provided by operating activities of $93.5 million were primarily used to purchase new revenue equipment, net of proceeds from dispositions, in the amount of $40.0 million, to pay cash dividends of $19.6 million and to purchase other assets in the amount of $2.9 million, resulting in a $31.0 million increase in cash and cash equivalents and an escrow deposit. In 2024, net cash flows provided by operating activities of $134.8 million were primarily used to purchase new revenue equipment, net of proceeds from dispositions, in the amount of $146.8 million, to pay cash dividends of $19.5 million and to construct and upgrade regional operating facilities in the amount of $4.3 million, resulting in a $35.9 million decrease in cash and cash equivalents. In 2023, net cash flows provided by operating activities of $164.4 million were primarily used to purchase new revenue equipment, net of proceeds from dispositions, in the amount of $163.9 million, to pay cash dividends of $19.5 million and to construct and upgrade regional operating facilities in the amount of $8.6 million, resulting in a $27.4 million decrease in cash and cash equivalents.
We estimate that capital expenditures, net of proceeds from dispositions, will be approximately $92 million in 2026. This amount includes commitments to purchase $31.1 million of new revenue equipment, prior to considering proceeds from dispositions. Additionally, operating lease obligations total $510,000 through 2028. Quarterly cash dividends of $0.06 per share of common stock were paid in each quarter of 2025 which totaled $19.6 million, and in each quarter of 2024 and 2023 which totaled $19.5 million in each year. We currently expect to continue to pay quarterly cash dividends in the future. The payment of cash dividends in the future, and the amount of any such dividends, will depend upon our financial condition, results of operations, cash requirements and certain corporate law requirements, as well as other factors deemed relevant by our Board of Directors. We believe our sources of liquidity are adequate to meet our current and anticipated needs for at least the next twelve months. Based upon anticipated cash flows, existing cash and cash equivalents balances, current borrowing availability and other sources of financing we expect to be available to us, we do not anticipate any significant liquidity constraints in the foreseeable future.
In August 2022, we entered into a credit agreement that provides for an unsecured committed credit facility with an aggregate principal amount of $30.0 million which matures in August 2027. The credit agreement amends, restates and continues in its entirety our previous credit agreement, as amended. At December 31, 2025, there was no outstanding principal balance on the facility. As of that date, we had outstanding standby letters of credit to guarantee settlement of self-insurance claims of $24.1 million and remaining borrowing availability of $5.9 million. At December 31, 2024, there was also no outstanding principal balance on the facility. As of that date, we had outstanding standby letters of credit of $23.1 million on the facility. This facility bears interest at a variable rate based on the Term SOFR Rate plus applicable margins. The interest rate for the facility that would apply to outstanding principal balances was 6.75% at December 31, 2025.
Our credit agreement effective in August 2022 prohibits us from paying, in any fiscal year, stock redemptions and dividends in excess of $150 million. The current credit agreement also contains restrictive covenants which, among other matters, require us to maintain compliance with cash flow leverage and fixed charge coverage ratios. We were in compliance with all covenants at December 31, 2025 and December 31, 2024.
Other than our obligations for revenue equipment and operating lease expenditures, along with our outstanding standby letters of credit to guarantee settlement of self-insurance claims, which are each mentioned above, we did not have any material off-balance sheet arrangements at December 31, 2025.
Seasonality
Our tractor productivity generally decreases during the winter season because inclement weather impedes operations and some shippers reduce their shipments. At the same time, operating expenses generally increase, with harsh weather creating higher accident frequency, increased claims, lower fuel efficiency and more equipment repairs.
Critical Accounting Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions about future events and apply judgments that affect the reported amounts of assets, liabilities, revenue and expenses in our consolidated financial statements and related notes. We base our estimates, assumptions and judgments on historical experience, current trends and other factors believed to be relevant at the time our consolidated financial statements are prepared. However, because future events and their effects cannot be determined with certainty, actual results could differ from our estimates and assumptions, and such differences could be material. We believe that the following area involves critical accounting estimates due to the levels of subjectivity and judgment that are necessary to account for its highly uncertain matters, the susceptibility of such matters to change and the potentially material impact these estimates and assumptions could have to our financial condition and operating performance.
Auto Liability and Workers’ Compensation Claims Reserves. We self-insure for our portion of claims exposure resulting from auto liability and workers’ compensation claims. We renewed our liability insurance policies effective June 1, 2025, and are responsible for the first $3.0 million on each auto liability claim. For the policy year effective June 1, 2024, we are responsible for the first $2.0 million on each auto liability claim. For both policy years, we are also responsible for an annual $5.0 million aggregate for claims between $10.0 million and $20.0 million. For the policy years effective June 1, 2022 and June 1, 2023, we are responsible for the first $1.0 million on each auto liability claim with no aggregates. We continue to be responsible for the first $750,000 on each workers’ compensation claim. Additionally, we have $24.1 million in standby letters of credit to guarantee settlement of claims under agreements with our insurance carriers and regulatory authorities. We maintain insurance coverage with licensed insurance carriers for per-incident and total losses in excess of the amounts for which we self-insure up to specified policy limits and outside of certain liability tiers for which we retain liability. The level of our insurance coverage is in amounts we consider adequate based upon historical experience and our ongoing review. However, we could suffer a series of losses within our self-insured retention limits or losses over our policy limits which could negatively affect our financial condition and operating results. Our auto liability and workers’ compensation claims expense and the related claims reserves will vary primarily based upon the frequency and severity of our accident experience. The total auto liability and workers’ compensation claims reserves within the insurance and claims accruals in our consolidated balance sheets were $35.9 million and $37.5 million as of December 31, 2025 and 2024, respectively. The excess of the insurance and claims accruals over these amounts relates to general liability, cargo and property damage claims, along with reserves for physical damage to our equipment and outstanding employees’ health insurance claims.
We reserve for the estimated cost of the uninsured portion of pending auto liability and workers’ compensation claims, including legal costs. These case reserves are periodically evaluated and adjusted based on our continuing evaluation of the nature and severity of each individual claim. Claims development factors are applied to the total amount of the individual claims’ case reserves by year incurred to estimate future claims development based on our historical experience. Our claims development factors phase down each year over nine years for auto liability claims and eleven years for workers’ compensation claims from the year incurred. We also ensure that our total recorded auto liability and workers’ compensation claims reserves are within a range of reasonable amounts determined in an independent actuarial analysis. There were no changes to our methodology used to estimate our ultimate claims losses in 2025 or 2024. Projection of losses is subject to a high level of estimation uncertainty and actual results could differ from these current estimates. Our estimates require judgments concerning the nature and severity of each claim, historical trends, consultation with actuarial experts, settlement patterns, jury awards, litigation trends and legal interpretations, which are difficult to predict.
|
ITEM 7A. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
We are exposed to a variety of market risks, most importantly the effects of the price and availability of diesel fuel. We require substantial amounts of diesel fuel to operate our tractors and power the temperature-control units on our trailers. The price and availability of diesel fuel can vary, and are subject to political, economic and market factors that are beyond our control. Significant increases in diesel fuel costs could materially and adversely affect our results of operations and financial condition. Based upon our fuel consumption in 2024, a 5% increase in the average cost of diesel fuel would have increased our fuel expense by $7.2 million. Based upon our fuel consumption in 2025, a 5% increase in the average cost of diesel fuel would have increased our fuel expense by $6.3 million. There were no material quantitative changes in market risk since 2024.
We have historically been able to pass through a significant portion of long-term increases in diesel fuel prices and related taxes to customers in the form of fuel surcharges. Fuel surcharge programs are widely accepted among our customers, though they can vary somewhat from customer-to-customer. These fuel surcharges, which adjust weekly with the cost of fuel, enable us to recover a substantial portion of the higher cost of fuel as prices increase. These fuel surcharge provisions are not effective in mitigating the fuel price increases related to non-revenue miles or fuel used while the tractor is idling. In addition, we have worked diligently to control fuel usage and costs by improving our volume purchasing arrangements and optimizing our drivers’ fuel purchases with national fuel centers, focusing on shorter lengths of haul, installing and tightly managing the use of auxiliary power units in our tractors to minimize engine idling and improving fuel usage in our trailers’ refrigeration units.
While we do not currently have any outstanding hedging instruments to mitigate this market risk, we may enter into derivatives or other financial instruments to hedge a portion of our fuel costs in the future.
|
ITEM 8. |
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
Management’s Annual Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining an adequate system of internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended, for Marten Transport, Ltd. and subsidiaries (the “Company”). This system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.
The Company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements, and even when determined to be effective, can only provide reasonable assurance with respect to financial statement preparation and presentation. Also, projection of any evaluation of the effectiveness of internal control over financial reporting to future periods is subject to the risk that controls may become inadequate because of changes in conditions, or that the degree or compliance with the policies or procedures may deteriorate.
Management, with the participation of the Company’s Chairman of the Board and Chief Executive Officer and Executive Vice President and Chief Financial Officer, evaluated the effectiveness of the Company’s internal control over financial reporting as of December 31, 2025. In making this evaluation, management used the criteria established in the 2013 Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management concluded that the Company’s internal control over financial reporting was effective as of December 31, 2025. Further, the Company’s independent registered public accounting firm, Grant Thornton LLP, has issued a report on the Company’s internal controls over financial reporting on page 32 of this Report.
February 27, 2026
Report of Independent Registered Public Accounting Firm
Board of Directors and Stockholders
Marten Transport, Ltd.
Opinion on internal control over financial reporting
We have audited the internal control over financial reporting of Marten Transport, Ltd. (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2025, and our report dated February 27, 2026 expressed an unqualified opinion on those financial statements.
Basis for opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and limitations of internal control over financial reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ GRANT THORNTON LLP
Minneapolis, Minnesota
February 27, 2026
Report of Independent Registered Public Accounting Firm
Board of Directors and Stockholders
Marten Transport, Ltd.
Opinion on the financial statements
We have audited the accompanying consolidated balance sheets of Marten Transport, Ltd. (a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedule included under Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 27, 2026 expressed an unqualified opinion.
Basis for opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical audit matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Auto and workers’ compensation self-insurance reserves
As described further in Note 1 and Note 12 to the consolidated financial statements, the Company self-insures for a portion of their claims exposure resulting from workers’ compensation claims and auto liability claims. The Company maintains insurance coverage for per incident and total losses in excess of their risk retention levels in amounts they consider adequate based upon historical experience and their ongoing review. The Company reserves for the estimated cost of the uninsured portion of pending claims, including legal costs. These reserves are periodically evaluated and adjusted based on the Company’s evaluation of the nature and severity of outstanding individual claims and an estimate of future claims development based on historical development. Insurance and claims expenses, including the related insurance and claims reserves, will vary primarily based upon the frequency and severity of the Company’s accident experience.
We identified the estimation of auto and workers’ compensation claims reserves as a critical audit matter. Auto and workers’ compensation unpaid claim reserves are determined by projecting the estimated ultimate loss related to a claim, less actual costs paid to date. These estimates rely on the assumption that historical claim patterns are an accurate representation for future claims that have been incurred, but not completely paid. The principal considerations for our determination that auto and workers’ compensation claims reserves is a critical audit matter are the high level of estimation uncertainty and the level of audit effort and expertise required to audit the reserve related to determining the severity of these types of claims, as well as the inherent subjectivity in management’s judgment in estimating the total costs to settle or dispose of these claims.
Our audit procedures related to the accuracy of insurance claims reserves for auto liability and workers’ compensation liability claims included the following, among others.
|
● |
We tested the effectiveness of controls over auto and workers’ compensation claims, including the completeness and accuracy of claim expenses and payments and management’s review over actuarial calculations. |
|
● |
We tested management’s process for determining the auto and workers’ compensation reserves including evaluating the reasonableness of the methods and assumptions used in estimating the ultimate claim losses with the assistance of an actuarial specialist. |
|
● |
We tested the claims data used in the actuarial calculation by selecting samples of historical claims data and inspecting source documents to test key attributes of the claims data. |
/s/
We have served as the Company’s auditor since 2014.
February 27, 2026
MARTEN TRANSPORT, LTD.
Consolidated Balance Sheets
|
December 31, |
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(In thousands, except share information) |
2025 |
2024 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ | $ | ||||||
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Escrow deposit |
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Receivables: |
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Trade, less allowances of $ |
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Other |
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Prepaid expenses and other |
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Total current assets |
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Property and equipment: |
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Revenue equipment |
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Buildings and land |
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Office equipment and other |
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|
Less accumulated depreciation |
( |
) | ( |
) | ||||
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Net property and equipment |
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Other noncurrent assets |
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Total assets |
$ | $ | ||||||
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
$ | $ | ||||||
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Insurance and claims accruals |
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Accrued and other current liabilities |
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Total current liabilities |
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Deferred income taxes |
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Noncurrent operating lease liabilities |
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Total liabilities |
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Commitments and contingencies (Note 12) |
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Stockholders’ equity: |
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|
Preferred stock, $ par value per share; |
||||||||
|
Common stock, $ par value per share; |
||||||||
|
Additional paid-in capital |
||||||||
|
Retained earnings |
||||||||
|
Total stockholders’ equity |
||||||||
|
Total liabilities and stockholders’ equity |
$ | $ | ||||||
The accompanying notes are an integral part of these consolidated financial statements.
MARTEN TRANSPORT, LTD.
Consolidated Statements of Operations
|
For the years ended December 31, |
||||||||||||
|
(In thousands, except per share information) |
2025 |
2024 |
2023 |
|||||||||
|
Operating revenue |
$ | $ | $ | |||||||||
|
Operating expenses (income): |
||||||||||||
|
Salaries, wages and benefits |
||||||||||||
|
Purchased transportation |
||||||||||||
|
Fuel and fuel taxes |
||||||||||||
|
Supplies and maintenance |
||||||||||||
|
Depreciation |
||||||||||||
|
Operating taxes and licenses |
||||||||||||
|
Insurance and claims |
||||||||||||
|
Communications and utilities |
||||||||||||
|
Gain on disposition of revenue equipment |
( |
) | ( |
) |
( |
) | ||||||
|
Other |
||||||||||||
|
Total operating expenses |
||||||||||||
|
Operating income |
||||||||||||
|
Other |
( |
) | ( |
) |
( |
) | ||||||
|
Income before income taxes |
||||||||||||
|
Income taxes expense |
||||||||||||
|
Net income |
$ | $ | $ | |||||||||
|
Basic earnings per common share |
$ | $ | $ | |||||||||
|
Diluted earnings per common share |
$ | $ | $ | |||||||||
|
Dividends declared per common share |
$ | $ | $ | |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
MARTEN TRANSPORT, LTD.
Consolidated Statements of Stockholders’ Equity
|
Common Stock |
Additional |
Retained |
Total Stockholders’ |
|||||||||||||||||
|
(In thousands) |
Shares |
Amount |
Paid-In Capital |
Earnings |
Equity |
|||||||||||||||
|
Balance at December 31, 2022 |
$ | $ | $ | $ | ||||||||||||||||
|
Net income |
— | |||||||||||||||||||
|
Issuance of common stock from share-based payment arrangement exercises and vesting of performance awards |
||||||||||||||||||||
|
Employee taxes paid in exchange for shares withheld |
— | ( |
) |
( |
) |
|||||||||||||||
|
Share-based payment arrangement compensation expense |
— | — | ||||||||||||||||||
|
Dividends on common stock, $ |
— | ( |
) |
( |
) |
|||||||||||||||
|
Balance at December 31, 2023 |
||||||||||||||||||||
|
Net income |
— | |||||||||||||||||||
|
Issuance of common stock from share-based payment arrangement exercises and vesting of performance awards |
||||||||||||||||||||
|
Employee taxes paid in exchange for shares withheld |
— | ( |
) | ( |
) | |||||||||||||||
|
Share-based payment arrangement compensation expense |
— | — | ||||||||||||||||||
|
Dividends on common stock, $ |
— | ( |
) |
( |
) |
|||||||||||||||
|
Balance at December 31, 2024 |
||||||||||||||||||||
|
Net income |
— | |||||||||||||||||||
|
Issuance of common stock from share-based payment arrangement exercises and vesting of performance awards |
||||||||||||||||||||
|
Employee taxes paid in exchange for shares withheld |
— | ( |
) | ( |
) | |||||||||||||||
|
Share-based payment arrangement compensation expense |
— | |||||||||||||||||||
|
Dividends on common stock, $ |
— | ( |
) | ( |
) | |||||||||||||||
|
Balance at December 31, 2025 |
$ | $ | $ | $ | ||||||||||||||||
The accompanying notes are an integral part of these consolidated financial statements.
MARTEN TRANSPORT, LTD.
Consolidated Statements of Cash Flows
|
For the years ended December 31, |
||||||||||||
|
(In thousands) |
2025 |
2024 |
2023 |
|||||||||
|
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: |
||||||||||||
|
Operations: |
||||||||||||
|
Net income |
$ | $ | $ | |||||||||
|
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||||||
|
Depreciation |
||||||||||||
|
Tires in service amortization |
||||||||||||
|
Gain on disposition of revenue equipment |
( |
) | ( |
) |
( |
) | ||||||
|
Deferred income taxes |
( |
) | ( |
) | ( |
) | ||||||
|
Share-based payment arrangement compensation expense |
||||||||||||
|
Changes in other current operating items: |
||||||||||||
|
Receivables |
( |
) | ||||||||||
|
Prepaid expenses and other |
( |
) | ( |
) | ( |
) | ||||||
|
Accounts payable |
( |
) | ( |
) | ( |
) | ||||||
|
Insurance and claims accruals |
( |
) | ( |
) | ||||||||
|
Accrued and other current liabilities |
( |
) | ( |
) | ( |
) | ||||||
|
Net cash provided by operating activities |
||||||||||||
|
CASH FLOWS USED FOR INVESTING ACTIVITIES: |
||||||||||||
|
Revenue equipment additions |
( |
) | ( |
) |
( |
) | ||||||
|
Proceeds from revenue equipment dispositions |
||||||||||||
|
Buildings and land, office equipment and other additions |
( |
) | ( |
) |
( |
) | ||||||
|
Proceeds from buildings and land, office equipment and other dispositions |
||||||||||||
|
Other |
( |
) | ( |
) |
( |
) | ||||||
|
Net cash used for investing activities |
( |
) | ( |
) |
( |
) | ||||||
|
CASH FLOWS USED FOR FINANCING ACTIVITIES: |
||||||||||||
|
Dividends on common stock |
( |
) | ( |
) |
( |
) | ||||||
|
Issuance of common stock from share-based payment arrangement exercises and vesting of performance awards |
||||||||||||
|
Employee taxes paid in exchange for shares withheld |
( |
) | ( |
) |
( |
) | ||||||
|
Net cash used for financing activities |
( |
) | ( |
) |
( |
) | ||||||
|
NET CHANGE IN CASH AND CASH EQUIVALENTS AND ESCROW DEPOSIT |
( |
) | ( |
) | ||||||||
|
CASH AND CASH EQUIVALENTS AND ESCROW DEPOSIT: |
||||||||||||
|
Beginning of year |
||||||||||||
|
End of year |
$ | $ | $ | |||||||||
|
SUPPLEMENTAL NON-CASH DISCLOSURE: |
||||||||||||
|
Change in property and equipment not yet paid |
$ | $ | ( |
) | $ | ( |
) | |||||
|
Operating lease assets and liabilities acquired |
$ | $ | $ | |||||||||
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
||||||||||||
|
Cash paid for: |
||||||||||||
|
Income taxes |
$ | $ | $ | |||||||||
|
Interest |
$ | $ | $ | |||||||||
|
RECONCILIATION OF CASH AND CASH EQUIVALENTS AND ESCROW DEPOSIT IN THE CONSOLIDATED BALANCE SHEETS: |
||||||||||||
|
Cash and cash equivalents |
$ | $ | $ | |||||||||
|
Escrow deposit |
||||||||||||
|
Total cash and cash equivalents and escrow deposit shown above |
$ | $ | $ | |||||||||
The accompanying notes are an integral part of these consolidated financial statements.
MARTEN TRANSPORT, LTD.
Notes to Consolidated Financial Statements
December 31, 2025, 2024 and 2023
1. Summary of Significant Accounting Policies
Nature of business: Marten Transport, Ltd. is a multifaceted business offering a network of time and temperature-sensitive and dry truck-based transportation and distribution capabilities across our current distinct business platforms – Temperature-Sensitive and Dry Truckload, Dedicated, Brokerage and MRTN de Mexico. As discussed in Note 13, our Intermodal operations were sold effective September 30, 2025. We are one of the leading temperature-sensitive truckload carriers in the United States, specializing in transporting and distributing food and other consumer packaged goods that require a temperature-controlled or insulated environment. We operate throughout the United States and into and out of Mexico and Canada.
Trade accounts receivable: Trade accounts receivable are recorded at the invoiced amounts, net of an allowance for credit losses. Our allowance for credit losses was $
Other receivables increased to $
Property and equipment: Additions and improvements to property and equipment are capitalized at cost. Maintenance and repair expenditures are charged to operations. Gains and losses on disposals of revenue equipment are included in operations as they are a normal, recurring component of our operations.
Depreciation is computed based on the cost of the asset, reduced by its estimated salvage value, using the straight-line method for financial reporting purposes. We begin depreciating assets in the month that each asset is placed in service and, therefore, is ready for its intended use, and depreciate each asset until it is taken out of service and available for sale. Accelerated methods are used for income tax reporting purposes. Following is a summary of estimated useful lives for financial reporting purposes:
|
Years |
|||||
|
Tractors |
|||||
|
Trailers |
|||||
|
Refrigerated containers |
|||||
|
Office, service and other equipment |
- | ||||
|
Buildings and improvements |
- | ||||
In 2025, we replaced our company-owned tractors within an average of
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less the costs to sell.
Income taxes: Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. We have reflected the necessary deferred tax assets and liabilities in the accompanying consolidated balance sheets. We believe the future tax deductions will be realized principally through future reversals of existing taxable temporary differences and future taxable income.
In the ordinary course of business there is inherent uncertainty in quantifying our income tax positions. We assess our income tax positions and record tax benefits for all years subject to examination based upon management’s evaluation of the facts, circumstances and information available at the reporting dates. For those tax positions where it is more-likely-than-not that a tax benefit will be sustained, we have recorded the largest amount of tax benefit with a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more-likely-than-not that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements. Potential accrued interest and penalties related to unrecognized tax benefits are recognized as a component of income tax expense.
Revenue recognition: We account for our revenue in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, 606, Revenue from Contracts with Customers. The current revenue standard requires us to recognize revenue and related expenses within each of our four reporting segments over time as our customers simultaneously receive and consume benefits as we perform the freight services.
We account for revenue of our Brokerage segment and formerly our Intermodal segment, along with revenue on freight transported by independent contractors within our Truckload and Dedicated segments, on a gross basis because we are the principal service provider controlling the promised service before it is transferred to each customer. We are primarily responsible for fulfilling the promise to provide each specified service to each customer. We bear the primary risk of loss in the event of cargo claims by our customers. We also have complete control and discretion in establishing the price for each specified service. Accordingly, all such revenue billed to customers is classified as operating revenue. All corresponding payments to carriers for transportation services we arrange in connection with our brokerage and formerly our intermodal activities, and to independent contractor providers of revenue equipment, are classified as purchased transportation expense within our consolidated statements of operations. See Note 14 for more information.
Our largest customer, Walmart, accounted for
Adoption of new accounting standards: In November 2023, the FASB issued Accounting Standards Update, or ASU, 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. We adopted this standard on a retrospective basis for the 2024 annual period, and for interim periods beginning January 1, 2025. The impact of this standard is limited to financial statement disclosures.
We adopted FASB ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, for the year ended December 31, 2025. The standard expanded disclosures related to the effective tax rate reconciliation, cash income taxes paid by jurisdiction, and income before income taxes by jurisdiction. We adopted the standard on a prospective basis. The impact of this standard is limited to financial statement disclosures. Prior-period disclosures were not recast.
2. Details of Consolidated Balance Sheet Accounts
Prepaid expenses and other: As of December 31, prepaid expenses and other consisted of the following:
|
(In thousands) |
2025 |
2024 |
||||||
|
Insurance premiums |
$ | $ | ||||||
|
License fees |
||||||||
|
Parts and tires inventory |
||||||||
|
Tires in service |
||||||||
|
Contract assets |
||||||||
|
Other |
||||||||
| $ | $ | |||||||
Accrued and other current liabilities: As of December 31, accrued and other current liabilities consisted of the following:
|
(In thousands) |
2025 |
2024 |
||||||
|
Accrued expenses |
$ | $ | ||||||
|
Vacation |
||||||||
|
Salaries and wages |
||||||||
|
Accrued income taxes |
||||||||
|
Other |
||||||||
| $ | $ | |||||||
3. Long-Term Debt
In August 2022, we entered into a credit agreement that provides for an unsecured committed credit facility with an aggregate principal amount of $
Our credit agreement effective in August 2022 prohibits us from paying, in any fiscal year, stock redemptions and dividends in excess of $
4. Related Party Transactions
The following related party transactions occurred during the three years ended December 31, 2025:
(a) We purchase tires and obtain related services from a company in which one of our directors is the chairman of the board and chief executive officer. We paid that company $
(b) We paid $
5. Income Taxes
We adopted FASB ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, for the year ended December 31, 2025. The standard expanded disclosures related to the effective tax rate reconciliation, cash income taxes paid by jurisdiction, and income before income taxes by jurisdiction. We adopted the standard on a prospective basis. The impact of this standard is limited to financial statement disclosures. Prior-period disclosures were not recast.
Income before income taxes by jurisdiction consisted of the following:
|
(In thousands) |
2025 |
|||
|
Domestic |
$ | |||
|
Foreign |
||||
|
Total income before income taxes |
$ | |||
The components of income taxes expense consisted of the following:
|
(In thousands) |
2025 |
2024 |
2023 |
|||||||||
|
Current: |
||||||||||||
|
Federal |
$ | $ | $ | |||||||||
|
State |
||||||||||||
|
Foreign |
||||||||||||
|
Total current |
||||||||||||
|
Deferred: |
||||||||||||
|
Federal |
( |
) | ( |
) | ( |
) | ||||||
|
State |
( |
) | ( |
) | ( |
) | ||||||
|
Foreign |
||||||||||||
|
Total deferred |
( |
) | ( |
) | ( |
) | ||||||
|
Total expense |
$ | $ | $ | |||||||||
Income taxes expense by jurisdiction consisted of the following:
|
(In thousands) |
2025 |
|||
|
Federal |
$ | |||
|
State |
||||
|
Foreign |
||||
|
Total income taxes expense |
$ | |||
The federal statutory income tax rate is reconciled to the effective income tax rate after the adoption of FASB ASU 2023-09 as follows:
|
(Dollars in thousands) |
2025 |
|||||||
|
U.S statutory federal tax rate |
$ | % | ||||||
|
State and local income taxes, net of federal income tax effects |
||||||||
|
Nontaxable or non-deductible items: |
||||||||
|
Non-deductible per diem expenses |
||||||||
|
Other |
||||||||
|
Tax credits |
( |
) | ( |
) | ||||
|
Other adjustments |
||||||||
|
Effective tax rate |
$ | % | ||||||
States comprising a substantial portion of state and local income tax expense in 2025, in the aggregate representing at least 50%, included Arkansas, California, Georgia, Florida, Texas and Wisconsin.
The federal statutory income tax rate is reconciled to the effective income tax rate prior to the adoption of FASB ASU 2023-09 as follows:
|
2024 |
2023 |
|||||||
|
Federal statutory income tax rate |
% |
% |
||||||
|
Increase in taxes arising from state income taxes, net of federal income tax benefit |
||||||||
|
Per diem and other non-deductible expenses |
||||||||
|
Federal tax credits |
( |
) | ||||||
|
Other, net |
( |
) | ||||||
|
Effective tax rate |
% |
% |
||||||
As of December 31, the net deferred tax liability consisted of the following:
|
(In thousands) |
2025 |
2024 |
||||||
|
Deferred tax assets: |
||||||||
|
Reserves and accrued liabilities |
$ | $ | ||||||
|
Other |
||||||||
|
Deferred tax liabilities: |
||||||||
|
Depreciation |
||||||||
|
Prepaid expenses |
||||||||
|
Net deferred tax liability |
$ | $ | ||||||
We have not provided a valuation allowance against deferred tax assets at December 31, 2025 or 2024. We believe the deferred tax assets will be realized principally through future reversals of existing taxable temporary differences (deferred tax liabilities) and future taxable income.
Income taxes paid, net of refunds received, by jurisdiction consisted of the following:
|
(In thousands) |
2025 |
|||
|
Federal |
$ | |||
|
State (aggregate) |
||||
|
Foreign |
||||
|
Total income taxes paid |
$ | |||
State income taxes paid are presented in the aggregate, as no individual state represented 5% or more of total income taxes paid in 2025. Foreign income taxes paid relate to our Mexican subsidiary.
Our reserves for unrecognized tax benefits were $
The federal statute of limitations remains open for and forward. We file tax returns in numerous state jurisdictions with varying statutes of limitations.
6. Earnings per Common Share
Basic and diluted earnings per common share were computed as follows:
|
(In thousands, except per share amounts) |
2025 |
2024 |
2023 |
|||||||||
|
Numerator: |
||||||||||||
|
Net income |
$ | $ | $ | |||||||||
|
Denominator: |
||||||||||||
|
Basic earnings per common share - weighted-average shares |
||||||||||||
|
Effect of dilutive stock options |
||||||||||||
|
Diluted earnings per common share - weighted-average shares and assumed conversions |
||||||||||||
|
Basic earnings per common share |
$ | $ | $ | |||||||||
|
Diluted earnings per common share |
$ | $ | $ | |||||||||
Options totaling
Unvested performance awards (see Note 10) totaling
7. Share Repurchase Program
Our existing share repurchase program, which was initially announced in December 2007, currently provides for the repurchase of up to $
We have not repurchased any shares under this program since the second quarter of 2022. As of December 31, 2025, future repurchases of up to $
8. Dividends
In 2010, we announced a regular cash dividend program to our stockholders, subject to approval each quarter. Quarterly cash dividends of $
9. Leases
We lease facilities, drop yards, office space, land and equipment, and previously chassis. All leases are classified as operating leases. We do not have any financing leases. Payments for operating leases that extend beyond 12 months are fixed.
Some leases include options to renew, with renewal terms that can extend the lease term from months to years. The exercise of lease renewal options is at our sole discretion and is considered in the determination of the operating lease assets and lease liabilities once reasonably certain of exercise.
Management has elected to apply the short-term lease exemption to leases with an initial term of 12 months or less and these leases are not capitalized. This primarily affects drop yards, for which we recognize lease expense on a straight-line basis over the lease term.
As of December 31, the classification of operating leases in our consolidated balance sheets was as follows:
|
(In thousands) |
2025 |
2024 |
||||||
|
Assets: |
||||||||
|
|
$ | $ | ||||||
|
Liabilities: |
||||||||
|
|
||||||||
|
Noncurrent operating lease liabilities |
||||||||
|
Total liabilities |
$ | $ | ||||||
|
(a) |
|
The maturity of the operating lease liabilities is as follows:
|
Amount |
||||
|
Maturities: |
||||
|
2026 |
$ | |||
|
2027 |
||||
|
2028 |
||||
|
Total lease payments |
||||
|
Adjust to present value |
( |
) | ||
|
Total operating lease liabilities |
$ | |||
The weighted-average remaining lease term at December 31, 2025 was
Operating lease assets obtained in exchange for lease obligations in 2025 and 2024 totaled $
Total operating lease expense for 2025 was $
10. Employee Benefits
Equity Incentive Plans - In May 2025, our stockholders approved our 2025 Equity Incentive Plan (the “2025 Plan”). Our Board of Directors adopted the 2025 Plan in March 2025. Under our 2025 Plan, our employees are eligible to receive equity compensation awards, including non-statutory and incentive stock options and restricted stock awards, stock appreciation rights, performance awards, restricted stock units, deferred stock units, stock bonuses and other stock-based awards. Stock options expire within
As of December 31, 2025, there were
Under the 2015 Plan, officers, directors and employees were granted non-statutory stock options and performance awards with similar terms to the options and awards under the 2025 Plan. As of December 31, 2025, there were
We use the Black-Scholes option pricing model to calculate the grant-date fair value of option awards. The fair value of service-based option awards granted was estimated as of the date of grant using the following weighted average assumptions:
|
2025 |
2024 |
2023 |
||||||||||
|
Expected option life in years(1) |
||||||||||||
|
Expected stock price volatility percentage(2) |
% |
% |
% |
|||||||||
|
Risk-free interest rate percentage(3) |
% |
% |
% |
|||||||||
|
Expected dividend yield(4) |
% |
% |
% |
|||||||||
|
Fair value as of the date of grant |
$ | $ | $ | |||||||||
|
(1) |
|
|
(2) |
|
|
(3) |
|
|
(4) |
|
Compensation costs associated with service-based option awards with graded vesting are recognized, net of an estimated forfeiture rate, on a straight-line basis over the requisite service period, which is the period between the grant date and the award’s stated vesting term. Service-based option awards become immediately exercisable in full in the event of death or disability and upon a change in control with respect to all options that have been outstanding for at least six months.
In May 2019, we granted
In May 2020, we granted
In May 2021, we granted
In May 2022, we granted
In May 2023, we granted
In May 2024, we granted
In May 2025, we granted
The fair value of each performance award is based on the closing market price on the date of grant. We recognize compensation expense for these awards based on the estimated number of awards probable of achieving the vesting requirements of the awards, net of an estimated forfeiture rate.
The amount of share-based compensation recognized during a period is based on the value of the portion of the awards that are ultimately expected to vest. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. We currently expect, based on an analysis of our historical forfeitures and known forfeitures on existing awards, that approximately
Total share-based compensation expense recorded in 2025 was $
As of December 31, 2025, there was a total of $
Option activity in 2025 was as follows:
|
Shares |
Weighted- Average Exercise Price |
|||||||
|
Outstanding at December 31, 2024 |
$ | |||||||
|
Granted |
||||||||
|
Exercised |
( |
) |
||||||
|
Forfeited |
( |
) |
||||||
|
Outstanding at December 31, 2025 |
$ | |||||||
|
Exercisable at December 31, 2025 |
$ | |||||||
The
The fair value of options granted in 2025, 2024 and 2023 was $
Nonvested service-based option awards as of December 31, 2025 and changes during 2025 were as follows:
|
Shares |
Weighted- Average Grant Date Fair Value |
Weighted- Average Remaining Contractual Life (in Years) |
||||||||||
|
Nonvested at December 31, 2024 |
$ | |||||||||||
|
Granted |
||||||||||||
|
Vested |
( |
) |
||||||||||
|
Forfeited |
( |
) |
||||||||||
|
Nonvested at December 31, 2025 |
$ | |||||||||||
The total fair value of options which vested during 2025, 2024 and 2023 was $
The following table summarizes our nonvested performance award activity in 2025:
|
Shares |
Weighted-Average Grant Date Fair Value |
|||||||
|
Nonvested at December 31, 2024 |
$ | |||||||
|
Granted |
||||||||
|
Vested(1) |
( |
) | ||||||
|
Forfeited |
( |
) | ||||||
|
Nonvested at December 31, 2025 |
$ | |||||||
|
(1) |
|
Retirement Savings Plan - We sponsor a defined contribution retirement savings plan under Section 401(k) of the Internal Revenue Code. Employees are eligible for the plan after three months of service. Participants are able to contribute up to the limit set by law, which in 2025 was $
Stock Purchase Plans - We sponsored an Employee Stock Purchase Plan and an Independent Contractor Stock Purchase Plan. Eligible participants specified the amount of regular payroll or contract payment deductions and voluntary cash contributions that were used to purchase shares of our common stock. The purchases were made at the market price on the open market. We paid the broker’s commissions and administrative charges for purchases of common stock under the plans. The plans were terminated in December 2025.
11. Fair Value of Financial Instruments
The carrying amounts of cash equivalents, accounts receivable and accounts payable approximate fair value because of the short maturity of these instruments.
12. Commitments and Contingencies
We are committed to new revenue equipment purchases of $
We self-insure, in part, for losses relating to workers’ compensation, auto liability, general liability, cargo and property damage claims, along with employees’ health insurance, with varying risk retention levels. We maintain insurance coverage with licensed insurance carriers for per-incident and total losses in excess of the amounts for which we self-insure up to specified policy limits and outside of certain liability tiers for which we retain liability. The level of our insurance coverage is in amounts we consider adequate based upon historical experience and our ongoing review. We reserve currently for the estimated cost of the uninsured portion of pending claims.
We are also involved in other legal actions that arise in the ordinary course of business. A number of trucking companies, including us, have been subject to lawsuits, including class action lawsuits, alleging violations of various federal and state wage and hour laws. A number of these lawsuits have resulted in the payment of substantial settlements or damages by the defendants. We self-insure for such claims and record a liability when we believe that it is probable that a loss has been incurred and the amount can be reasonably estimated.
The outcome of litigation, particularly class action lawsuits, is difficult to assess or quantify, and the magnitude of the potential loss relating to such lawsuits may remain unknown for substantial periods of time. The cost to defend litigation may also be significant. Not all claims are covered by our insurance, and there can be no assurance that our coverage limits will be adequate to cover all amounts in dispute. To the extent we experience claims that are uninsured, exceed our coverage limits, involve significant aggregate use of our self-insured retention amounts or cause increases in future premiums, the resulting expense could have a materially adverse effect on our business and operating results. Based on our present knowledge of the facts and, in certain cases, advice of outside counsel, management believes the resolution of open claims and pending litigation, taking into account existing reserves, is not likely or probable to have a materially adverse effect on our consolidated financial statements; however, the final disposition of these matters and the impact of such final dispositions cannot be determined at this time. As such, future liability claims or adverse developments in existing claims could have a materially adverse effect on our consolidated financial statements. Information is provided in Part I, Item 3. Legal Proceedings for such existing claims.
13. Sale of Intermodal Business Assets
On September 30, 2025, we closed on the previously announced agreement to sell the assets related to our Intermodal business to Hub Group, Inc. The transaction was structured as an asset sale of certain Intermodal equipment, including over
In connection with this transaction, $
14. Revenue and Business Segments
We account for our revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers. We combine our current operating segments, along with our Intermodal operating segment which was sold effective September 30, 2025, into reporting segments (Truckload, Dedicated, Brokerage and Intermodal) for financial reporting purposes. These four reporting segments are also the appropriate categories for the disaggregation of our revenue under FASB ASC 606.
Our Truckload segment provides a combination of regional short-haul and medium-to-long-haul full-load transportation services. We transport food and other consumer packaged goods that require a temperature-controlled or insulated environment, along with dry freight, across the United States and into and out of Mexico and Canada. Our agreements with customers are typically for one year.
Our Dedicated segment provides customized transportation solutions tailored to meet each individual customer’s requirements, utilizing temperature-controlled trailers, dry vans and other specialized equipment within the United States. Our agreements with customers range from to years and are subject to annual rate reviews.
Generally, we are paid by the mile for our Truckload and Dedicated services. We also derive Truckload and Dedicated revenue from fuel surcharges, loading and unloading activities, equipment detention and other accessorial services. The main factors that affect our Truckload and Dedicated revenue are the rate per mile we receive from our customers, the percentage of miles for which we are compensated, the number of miles we generate with our equipment and changes in fuel prices. We monitor our revenue production primarily through average Truckload and Dedicated revenue, net of fuel surcharges, per tractor per week. We also analyze our average Truckload and Dedicated revenue, net of fuel surcharges, per total mile, non-revenue miles percentage, the miles per tractor we generate, our fuel surcharge revenue, our accessorial revenue and our other sources of operating revenue.
Our Brokerage segment develops contractual relationships with and arranges for third-party carriers to transport freight for our customers in temperature-controlled trailers and dry vans within the United States and into and out of Mexico through Marten Transport Logistics, LLC, which was established in 2007 and operates pursuant to brokerage authority granted by the United States Department of Transportation, or DOT. We retain the billing, collection and customer management responsibilities. The main factors that affect our Brokerage revenue are the rate per mile and other charges that we receive from our customers.
Operating results of our MRTN de Mexico business, which offers our customers door-to-door service between the United States and Mexico with our Mexican partner carriers, is reported within our Truckload and Brokerage segments.
Our Intermodal segment transported our customers’ freight within the United States utilizing our refrigerated containers on railroad flatcars for portions of trips, with the balance of the trips using our tractors or, to a lesser extent, contracted carriers. The main factors that affected our Intermodal revenue were the rate per mile and other charges we received from our customers. As discussed in Note 13, our Intermodal operations were sold effective September 30, 2025.
Our customer agreements are typically for terms except for our Dedicated agreements which range from three to five years with annual rate reviews. Under FASB ASC 606, the contract date for each individual load within each of our four reporting segments is generally the date that each load is tendered to and accepted by us. For each load transported within each of our four reporting segments, the entire amount of revenue to be recognized is a single performance obligation and our agreements with our customers detail the per-mile charges for line haul and fuel surcharges, along with the rates for loading and unloading, stop offs and drops, equipment detention and other accessorial services, which is the transaction price. There are no discounts that would be a material right or consideration payable to a customer. We are required to recognize revenue and related expenses over time, from load pickup to delivery, for each load within each of our four reporting segments. We base our calculation of the amount of revenue to record in each period for individual loads picking up in one period and delivering in the following period using the number of hours estimated to be incurred within each period applied to each estimated transaction price. Contract assets for this estimated revenue which are classified within prepaid expenses and other within our consolidated balance sheets were $
The following table sets forth for the years indicated our operating revenue and operating income by segment.
|
(In thousands) |
2025 |
2024 |
2023 |
|||||||||
|
Operating revenue: |
||||||||||||
|
Truckload revenue, net of fuel surcharge revenue |
$ | $ | $ | |||||||||
|
Truckload fuel surcharge revenue |
||||||||||||
|
Total Truckload revenue |
||||||||||||
|
Dedicated revenue, net of fuel surcharge revenue |
||||||||||||
|
Dedicated fuel surcharge revenue |
||||||||||||
|
Total Dedicated revenue |
||||||||||||
|
Intermodal revenue, net of fuel surcharge revenue |
||||||||||||
|
Intermodal fuel surcharge revenue |
||||||||||||
|
Total Intermodal revenue |
||||||||||||
|
Brokerage revenue |
||||||||||||
|
Total operating revenue |
$ | $ | $ | |||||||||
|
Operating income/(loss): |
||||||||||||
|
Truckload |
$ | $ | $ | |||||||||
|
Dedicated |
||||||||||||
|
Intermodal |
( |
) | ( |
) | ( |
) | ||||||
|
Brokerage |
||||||||||||
|
Total operating income |
$ | $ | $ | |||||||||
The following segment operating results for the years indicated are provided monthly to our chief operating decision maker, our Chairman of the Board and Chief Executive Officer, and used in assessing segment performance and allocating resources, primarily based upon each segment’s variances in operating revenue, operating income and operating ratio. We do not prepare separate balance sheets by segment and, as a result, assets are not separately identifiable by segment.
|
2025 Segment Operating Results |
||||||||||||||||||||
|
(In thousands) |
Truckload |
Dedicated |
Intermodal |
Brokerage |
Total |
|||||||||||||||
|
Operating revenue |
$ | $ | $ | $ | $ | |||||||||||||||
|
Operating expense (income): |
||||||||||||||||||||
|
Salaries, wages and benefits |
||||||||||||||||||||
|
Purchased transportation |
||||||||||||||||||||
|
Fuel and fuel taxes |
||||||||||||||||||||
|
Supplies and maintenance |
||||||||||||||||||||
|
Depreciation |
||||||||||||||||||||
|
Operating taxes and licenses |
||||||||||||||||||||
|
Insurance and claims |
||||||||||||||||||||
|
Communications and utilities |
||||||||||||||||||||
|
Gain on disposition of revenue equipment |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
|
Other |
||||||||||||||||||||
|
Total operating expenses |
||||||||||||||||||||
|
Operating income |
$ | $ | $ | ( |
) | $ | $ | |||||||||||||
|
Operating ratio |
% | % | % | % | % | |||||||||||||||
|
Operating ratio, net of fuel surcharges |
% | % | % | % | % | |||||||||||||||
|
2024 Segment Operating Results |
||||||||||||||||||||
|
(In thousands) |
Truckload |
Dedicated |
Intermodal |
Brokerage |
Total |
|||||||||||||||
|
Operating revenue |
$ | $ | $ | $ | $ | |||||||||||||||
|
Operating expense (income): |
||||||||||||||||||||
|
Salaries, wages and benefits |
||||||||||||||||||||
|
Purchased transportation |
||||||||||||||||||||
|
Fuel and fuel taxes |
||||||||||||||||||||
|
Supplies and maintenance |
( |
) | ||||||||||||||||||
|
Depreciation |
||||||||||||||||||||
|
Operating taxes and licenses |
||||||||||||||||||||
|
Insurance and claims |
||||||||||||||||||||
|
Communications and utilities |
||||||||||||||||||||
|
Gain on disposition of revenue equipment |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
|
Other |
||||||||||||||||||||
|
Total operating expenses |
||||||||||||||||||||
|
Operating income/(loss) |
$ | $ | $ | ( |
) | $ | $ | |||||||||||||
|
Operating ratio |
% | % | % | % | % | |||||||||||||||
|
Operating ratio, net of fuel surcharges |
% | % | % | % | % | |||||||||||||||
|
2023 Segment Operating Results |
||||||||||||||||||||
|
(In thousands) |
Truckload |
Dedicated |
Intermodal |
Brokerage |
Total |
|||||||||||||||
|
Operating revenue |
$ | $ | $ | $ | $ | |||||||||||||||
|
Operating expense (income): |
||||||||||||||||||||
|
Salaries, wages and benefits |
||||||||||||||||||||
|
Purchased transportation |
||||||||||||||||||||
|
Fuel and fuel taxes |
||||||||||||||||||||
|
Supplies and maintenance |
||||||||||||||||||||
|
Depreciation |
||||||||||||||||||||
|
Operating taxes and licenses |
||||||||||||||||||||
|
Insurance and claims |
||||||||||||||||||||
|
Communications and utilities |
||||||||||||||||||||
|
Gain on disposition of revenue equipment |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||
|
Other |
||||||||||||||||||||
|
Total operating expenses |
||||||||||||||||||||
|
Operating income/(loss) |
$ | $ | $ | ( |
) | $ | $ | |||||||||||||
|
Operating ratio |
% | % | % | % | % | |||||||||||||||
|
Operating ratio, net of fuel surcharges |
% | % | % | % | % | |||||||||||||||
|
ITEM 9. |
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
None.
|
ITEM 9A. |
CONTROLS AND PROCEDURES |
As required by Rule 13a-15 under the Securities Exchange Act of 1934 (“Exchange Act”), we have carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of the end of the period covered by this report. This evaluation was carried out under the supervision and with the participation of our management, including our Chairman of the Board and Chief Executive Officer and our Executive Vice President and Chief Financial Officer. Based upon that evaluation, our Chairman of the Board and Chief Executive Officer and our Executive Vice President and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2025. There were no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting. We intend to periodically evaluate our disclosure controls and procedures as required by the Exchange Act Rules.
We have included Management’s Annual Report on Internal Control Over Financial Reporting in Item 8 above.
|
ITEM 9B. |
OTHER INFORMATION |
During the three months ended December 31, 2025, of our directors or “officers” (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Securities and Exchange Commission Regulation S-K.
|
ITEM 9C. |
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS. |
Not applicable.
PART III
|
ITEM 10. |
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
A. Directors of the Registrant.
The information in the “Election of Directors--Information About Nominees” and “Election of Directors--Other Information About Nominees” sections of our 2026 Proxy Statement is incorporated in this Report by reference.
B. Executive Officers of the Registrant.
Information about our executive officers is included in this Report under Item 4A, “Information About our Executive Officers.”
C. Procedure for Director Nominations by Security Holders.
There have been no material changes to the procedures by which security holders may recommend nominees to our board of directors.
D. Audit Committee Financial Expert.
The information in the “Election of Directors—Board and Board Committees” section of our 2026 Proxy Statement is incorporated in this Report by reference.
E. Identification of the Audit Committee.
The information in the “Election of Directors—Board and Board Committees” section of our 2026 Proxy Statement is incorporated in this Report by reference.
F. Code of Ethics for Senior Financial Management.
Our Code of Ethics for Senior Financial Management applies to each of our executive officers, including our principal executive officer and principal financial officer, along with our Senior Vice President of Finance and Controller, and meets the requirements of the SEC. We have posted our Code of Ethics for Senior Financial Management on our website at www.marten.com. We intend to disclose any amendments to and any waivers from a provision of our Code of Ethics for Senior Financial Management on our website within five business days following such amendment or waiver.
G. Insider Trading Policy.
Within each of our Code of Ethics we have
|
ITEM 11. |
EXECUTIVE COMPENSATION |
The information in the “Election of Directors--Director Compensation,” “Compensation and Other Benefits,” “Compensation Discussion and Analysis” and “Compensation Committee Report” sections of our 2026 Proxy Statement is
|
ITEM 12. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
The information in the “Security Ownership of Certain Beneficial Owners and Management” and “Compensation and Other Benefits--Equity Compensation Plan Information” sections of our 2026 Proxy Statement is incorporated in this Report by reference.
|
ITEM 13. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
The information in the “Related Party Transactions” and “Election of Directors--Board and Board Committees” sections of our 2026 Proxy Statement is incorporated in this Report by reference.
|
ITEM 14. |
PRINCIPAL ACCOUNTANT FEES AND SERVICES |
The information in the “Fees of Independent Auditors” section of our 2026 Proxy Statement is incorporated in this Report by reference.
PART IV
|
ITEM 15. |
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |
|
(a) |
1. |
Financial Statements (See Part II, Item 8 of this Report): |
Page |
|
|
|
|
|
|
|
|
Management’s Annual Report on Internal Control Over Financial Reporting |
31 |
|
|
|
|
|
|
|
|
Reports of Independent Registered Public Accounting Firm (PCAOB ID Number |
32 |
|
|
|
|
|
|
|
|
Consolidated Balance Sheets as of December 31, 2025 and 2024 |
35 |
|
|
|
|
|
|
|
|
Consolidated Statements of Operations for the years ended December 31, 2025, 2024 and 2023 |
36 |
|
|
|
|
|
|
|
|
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2025, 2024 and 2023 |
37 |
|
|
|
|
|
|
|
|
Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023 |
38 |
|
|
|
|
|
|
|
|
Notes to Consolidated Financial Statements |
39 |
|
|
|
|
|
|
|
2. |
Financial Statement Schedules (Consolidated Financial Statement Schedule Included in Part IV of this Report): |
|
|
|
|
|
|
|
|
|
Schedule II – Valuation and Qualifying Accounts and Reserves |
63 |
|
Schedules not listed above have been omitted as the required information is inapplicable or the information is presented in the consolidated financial statements or related notes. |
|||
3. Exhibits:
The exhibits to this Report are listed below. A copy of any of the exhibits listed will be sent at a reasonable cost to any stockholder as of March 6, 2026. Requests should be sent to James J. Hinnendael, Executive Vice President and Chief Financial Officer, at our corporate headquarters. The following exhibits are filed with or incorporated by reference into this Annual Report on Form 10-K:
|
Item No. |
Item |
|
Filing Method |
|
|
3.1 |
Amended and Restated Certificate of Incorporation effective August 11, 2003 |
|
Incorporated by reference to Exhibit 4.1 of the Company’s Amendment No. 2 to Registration Statement on Form S-2 (File No. 333-107367). |
|
|
3.2 |
Amendment to Amended and Restated Certificate of Incorporation effective May 25, 2005 |
|
Incorporated by reference to Exhibit 3.3 of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2005 (File No. 0-15010). |
|
|
3.3 |
Second Amendment to Amended and Restated Certificate of Incorporation effective June 1, 2015 |
|
Incorporated by reference to Exhibit 3.4 of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 0-15010). |
|
|
3.4 |
Third Amendment to Amended and Restated Certificate of Incorporation effective May 18, 2018 |
Incorporated by reference to Exhibit 3.5 of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2018 (File No. 0-15010). |
||
|
3.5 |
Incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed August 21, 2023. |
|||
|
4.1 |
Specimen form of the Company’s Common Stock Certificate |
|
Incorporated by reference to Exhibit 4.1 of the Company’s Registration Statement on Form S-1 (File No. 33-8108). (Filed on paper – hyperlink is not required pursuant to Rule 105 of Regulation S-T). |
|
|
4.2 |
Amended and Restated Certificate of Incorporation effective August 11, 2003 |
|
See Exhibit 3.1 above. |
|
|
4.3 |
Amendment to Amended and Restated Certificate of Incorporation effective May 25, 2005 |
|
See Exhibit 3.2 above. |
|
|
4.4 |
Second Amendment to Amended and Restated Certificate of Incorporation effective June 1, 2015 |
|
See Exhibit 3.3 above. |
|
|
4.5 |
Third Amendment to Amended and Restated Certificate of Incorporation effective May 18, 2018 |
See Exhibit 3.4 above. |
||
|
4.6 |
See Exhibit 3.5 above. |
|||
|
4.7 |
Filed with this Report. |
|||
| 10.1 | Marten Transport, Ltd. 2005 Stock Incentive Plan | * | Incorporated by reference to Exhibit 10.18 of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2005 (File No. 0-15010). |
|
Item No. |
Item |
Filing Method |
||
|
10.2 |
Form of Amended and Restated Change in Control Severance Agreement |
* |
Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed August 15, 2007. |
|
|
10.3 |
Form of First Amendment to Amended and Restated Change in Control Severance Agreement |
* |
Incorporated by reference to Exhibit 10.18 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2008 (File No. 0-15010). |
|
|
10.4 |
* |
Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed February 22, 2010. |
||
|
10.5 |
Amendment to the Marten Transport, Ltd. 2005 Stock Incentive Plan |
* |
Incorporated by reference to Exhibit 10.17 of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2010 (File No. 0-15010). |
|
|
10.6 |
Form of Second Amendment to Amended and Restated Change in Control Agreement |
* |
Incorporated by Reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed March 8, 2011. |
|
|
10.7 |
* |
Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed March 5, 2012. |
||
|
10.8 |
Form of Non-Statutory Stock Option Agreement for the 2015 Equity Incentive Plan |
* |
Incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed May 15, 2015. |
|
|
10.9 |
Form of Performance Unit Awards Agreement for the 2015 Equity Incentive Plan |
* |
Incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K filed May 15, 2015. |
|
|
10.10 |
* |
Incorporated by reference to Exhibit 10.21 of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 (File No. 0-15010). |
||
|
10.11 |
Amended and Restated Executive Officer Performance Incentive Plan |
* |
Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed December 4, 2015. |
|
|
10.12 |
Second Amended and Restated Executive Officer Performance Incentive Plan |
* |
Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed August 18, 2017. |
|
|
10.13 |
Marten Transport, Ltd. 2015 Equity Incentive Plan, as amended |
* |
Incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed May 13, 2019. |
|
|
10.14 |
Form of Performance Unit Award Agreement for the 2015 Equity Incentive Plan |
* |
Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed May 11, 2020. |
|
Item No. |
Item |
Filing Method |
||
|
10.15 |
Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed August 22, 2022. |
|||
|
10.16 |
* |
Incorporated by reference to Exhibit 99.1 of the Company’s Current Report on Form S-8 filed May 9, 2025. |
||
|
10.17 |
Form of Non-Statutory Stock Option Agreement for the 2025 Equity Incentive Plan |
* |
Incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed May 12, 2025. |
|
|
10.18 |
Form of Performance Award Agreement for the 2025 Equity Incentive Plan |
* |
Incorporated by reference to Exhibit 10.3 of the Company’s Current Report on Form 8-K filed May 12, 2025. |
|
|
10.19 |
* |
Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed May 12, 2025. |
||
|
10.20 |
* |
Incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed October 6, 2025. |
||
|
19.1 |
Filed with this Report. |
|||
|
23.1 |
|
Filed with this Report. |
||
|
31.1 |
|
Filed with this Report. |
||
|
31.2 |
|
Filed with this Report. |
||
|
32.1 |
|
Filed with this Report. |
||
|
97.1 |
Incorporated by reference to Exhibit 97.1 of the Company’s Annual Report on Form 10-K filed February 28, 2024. |
|
Item No. |
Item |
Filing Method |
||
|
101 |
The following financial information from Marten Transport, Ltd.’s Annual Report on Form 10-K for the period ended December 31, 2025, filed with the SEC on February 27, 2026, formatted in iXBRL, or Inline eXtensible Business Reporting Language: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Stockholders’ Equity, (iv) Consolidated Statements of Cash Flows, and (v) Notes to Consolidated Financial Statements |
|
Filed with this Report. |
|
|
104 |
The cover page from Marten Transport, Ltd.’s Annual Report on Form 10-K for the period ended December 31, 2025, formatted in iXBRL, included in Exhibit 101 |
Filed with this Report. |
* A management contract or compensatory plan or arrangement.
|
ITEM 16. |
FORM 10-K SUMMARY |
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Marten Transport, Ltd., the Registrant, has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
|
Dated: February 27, 2026 |
MARTEN TRANSPORT, LTD. |
|
|
|
|
|
|
|
|
By /s/ Randolph L. Marten |
|
|
Randolph L. Marten |
|
|
Chairman of the Board and Chief Executive Officer (Principal Executive Officer) |
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below on February 27, 2026, by the following persons on behalf of the Registrant and in the capacities indicated.
|
Signature |
Title |
|
|
|
|
|
|
|
/s/ Randolph L. Marten |
Chairman of the Board, Chief Executive Officer and Director |
|
Randolph L. Marten |
|
|
|
|
|
|
|
|
/s/ James J. Hinnendael |
Executive Vice President and Chief Financial |
|
James J. Hinnendael |
Officer (Principal Financial and Accounting Officer) |
|
|
|
|
|
|
|
/s/ Larry B. Hagness |
Director |
|
Larry B. Hagness |
|
|
|
|
|
|
|
|
/s/ Jerry M. Bauer |
Director |
|
Jerry M. Bauer |
|
|
|
|
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/s/ Robert L. Demorest |
Director |
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Robert L. Demorest |
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/s/ Ronald R. Booth |
Director |
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Ronald R. Booth |
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/s/ Kathleen P. Iverson |
Director |
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Kathleen P. Iverson |
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/s/ Patricia L. Jones |
Director |
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Patricia L. Jones |
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SCHEDULE II
MARTEN TRANSPORT, LTD.
Valuation and Qualifying Accounts and Reserves
(In thousands)
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Balance at |
Charged to |
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Beginning of |
Costs and |
Balance at |
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Description |
Year |
Expenses |
Deductions |
End of Year |
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Insurance and claims accruals: |
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Year ended December 31, 2025 |
$ | $ | $ | ( |
) | (1) | $ | ||||||||||
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Year ended December 31, 2024 |
( |
) | (1) | ||||||||||||||
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Year ended December 31, 2023 |
( |
) | (1) | ||||||||||||||
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Allowance for doubtful accounts: |
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Year ended December 31, 2025 |
( |
) | (2) | ||||||||||||||
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Year ended December 31, 2024 |
( |
) | (2) | ||||||||||||||
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Year ended December 31, 2023 |
( |
) | (2) | ||||||||||||||
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(1) |
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(2) |
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See report of independent registered public accounting firm.
Exhibit 4.7
MARTEN TRANSPORT, LTD.
DESCRIPTION OF SECURITIES REGISTERED PURSUANT TO SECTION 12 OF
THE SECURITIES EXCHANGE ACT OF 1934
Marten Transport, Ltd., a Delaware corporation (“Marten,” “we,” “us” and “our”), has only one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended: our common stock, par value $0.01 per share (“common stock”).
The following description of our common stock is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to our Amended and Restated Certificate of Incorporation, as amended (our “Charter”), and our Bylaws, as amended (our “Bylaws”), which are filed as exhibits to our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and are incorporated by reference herein. We encourage you to read our Charter, our Bylaws and the applicable provisions of the General Corporation Law of the State of Delaware (the “DGCL”) for additional information.
Authorized Shares
Our Charter authorizes the issuance of up to 194,000,000 shares of capital stock, consisting of:
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● |
192,000,000 shares of common stock; and |
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2,000,000 shares of preferred stock, par value $0.01 per share (“preferred stock”). |
As of December 31, 2025, we had 81,542,174 shares of common stock outstanding and no shares of preferred stock outstanding.
The Board of Directors of Marten (the “Board”) is authorized to establish out of the authorized but unissued shares of preferred stock, one or more series of preferred stock, and, with respect to each such series, to fix the number of shares constituting such series and the designation of such series, the rights, powers and preferences and relative participating, optional or other special rights, if any, and any qualifications, limitations or restrictions of each such series. Each such class or series of preferred stock shall have such voting powers (full or limited or no voting powers), such preferences and relative, participating, optional or other special rights, and such qualifications, limitations or restrictions as shall be stated and expressed in the resolution or resolutions providing for the issue of such series of preferred stock as may be adopted from time to time by the Board prior to the issuance of any shares thereof.
We may amend from time to time our Charter to increase the number of authorized shares of common stock or preferred stock. Any such amendment would require the approval of the holders of a majority of the voting power of the shares entitled to vote thereon.
Voting Rights
Each holder of our common stock is entitled to one vote per each share on all matters submitted to a vote of stockholders. Our common stock does not have cumulative voting rights. Subject to applicable law and the rights, if any, of the holders of outstanding shares of any series of preferred stock we may designate and issue in the future, holders of our common stock are entitled to vote on all matters on which stockholders generally are entitled to vote.
Our Bylaws provide that at all meetings of stockholders for the election of directors at which a quorum is present, a plurality of the votes cast shall be sufficient to elect directors. Our Bylaws further provide that unless otherwise provided by our Charter, Bylaws, the rules or regulations of any stock exchange applicable to Marten or applicable law or pursuant to any regulation applicable to Marten or its securities, all other matters shall be decided by the affirmative vote of the holders of a majority in voting power of the shares of stock of Marten that are present in person or by proxy and entitled to vote thereon.
Dividend Rights
Subject to the provisions of the applicable statutes and our Charter, dividends upon the capital stock of Marten may be declared by the Board at any regular or special meeting, and may be paid in cash, in property or in shares of the capital stock. Before payment of any dividend, there may be set aside out of any funds of Marten available for dividends such sum or sums as the directors from time to time, in their absolute discretion, deem proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of Marten, or for such other purposes as the directors shall deem conducive to the interests of Marten, and the directors may modify or abolish any such reserve in the manner in which it was created.
Liquidation Rights
If there is a liquidation, dissolution or winding up of Marten, subject to applicable law and the rights, if any, of the holders of outstanding shares of any series of preferred stock we may designate and issue in the future, holders of our common stock are entitled to share pro rata in the distribution of our assets remaining after the payment in full of our liabilities.
Other Rights and Preferences
Under the terms of our Charter, the holders of our common stock have no preemptive rights, conversion rights or other subscription rights, and there are no redemption or sinking fund provisions applicable to our common stock. The rights, preferences and privileges of the holders of our common stock are subject to, and may be adversely affected by, the rights of the holders of shares of any series of preferred stock that the Board may designate and issue in the future. Our Charter and Bylaws do not restrict the ability of a holder of our common stock to transfer such holder’s shares of common stock. All currently outstanding shares of our common stock are fully paid and non-assessable.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is Computershare Shareowner Services.
Exchange Listing
Our common stock is listed on The NASDAQ Stock Market LLC (NASDAQ Global Select Market) under the symbol “MRTN.”
Anti-Takeover Effects of Certain Provisions of our Charter and Bylaws and the DGCL
Our Charter and Bylaws and the DGCL contain provisions that may have the anti-takeover effect of delaying, deferring or preventing a change in control of Marten. Our Charter and Bylaws and the DGCL contain the following anti-takeover provisions that may have the anti-takeover effect of delaying, deferring or preventing a change in control of Marten:
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We have shares of common stock and preferred stock available for future issuance without stockholder approval. The existence of unissued and unreserved common stock and preferred stock may enable the Board to issue shares to persons friendly to current management or to issue preferred stock with terms that could render more difficult or discourage a third-party attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise, thereby protecting the continuity of our management. |
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The Board may make, alter, amend and repeal our Bylaws without stockholder approval, subject to the power of our stockholders to alter, amend or repeal any Bylaw, whether adopted by them or otherwise. |
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Subject to the rights, if any, of the holders of any outstanding series of preferred stock as provided for or fixed pursuant to the provisions of our Charter and the right of stockholders to elect directors to fill vacancies on the Board in connection with a special election meeting, if the office of any director becomes vacant by reason of death, resignation, removal, disqualification or otherwise, the directors then in office, although less than a quorum, by a majority vote may choose a successor who shall hold office for the unexpired term in respect of which such vacancy occurred. With respect to the initial election of a director to fill a newly created directorship resulting from an increase in the number of directors by action of the Board in the manner permitted by statute, such vacancy shall be filled by the affirmative vote of a majority of the directors serving at the time of the increase. |
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Stockholders must follow advance notice procedures to submit nominations of candidates for election to the Board at an annual or special meeting of our stockholders and must follow advance notice procedures to submit other proposals for business to be brought before an annual meeting of our stockholders. |
Delaware Business Combination Statute
We are a Delaware corporation, and, in our Charter, we have elected to be subject to Section 203 of the DGCL, known as the Delaware Business Combination Statute. In general, Section 203 of the DGCL prohibits a publicly-held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years following the time the person became an interested stockholder, unless:
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Prior to the time the stockholder became an interested stockholder, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; |
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Upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, exclusive of shares owned by directors who are also officers and by certain employee stock plans; or |
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At or subsequent to such time, the business combination is approved by the board of directors and authorized at an annual or special meeting of the stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock that is not owned by the interested stockholder. |
Generally, a “business combination” includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. Generally, an “interested stockholder” is a person who, together with affiliates and associates, owns 15% or more of a corporation’s voting stock or is the corporation’s affiliate or associate and was the owner of 15% or more of the corporation’s outstanding voting stock at any time within the three-year period immediately before the date of determination.
Exhibit 19.1
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have issued our reports dated February 27, 2026, with respect to the consolidated financial statements and internal control over financial reporting included in the Annual Report of Marten Transport, Ltd. and subsidiaries on Form 10-K for the year ended December 31, 2025. We consent to the incorporation by reference of the aforementioned reports in the Registration Statements of Marten Transport, Ltd. on Forms S-8 (File No. 333-287141, File No. 333-234594, File No. 333-204386, File No. 333-128168, and File No. 333-81494).
/s/ GRANT THORNTON LLP
Minneapolis, Minnesota
February 27, 2026
Exhibit 31.1
CERTIFICATION
I, Randolph L. Marten, certify that:
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1. |
I have reviewed this annual report on Form 10-K of Marten Transport, Ltd.; |
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2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
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3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
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4. |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
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(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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(c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
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5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
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(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
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(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
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Date: February 27, 2026 |
/s/ Randolph L. Marten |
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Randolph L. Marten |
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Chairman of the Board and Chief Executive Officer (Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION
I, James J. Hinnendael, certify that:
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1. |
I have reviewed this annual report on Form 10-K of Marten Transport, Ltd.; |
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2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
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3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
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4. |
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
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(a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
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(b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
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(c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
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(d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
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5. |
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
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(a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
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(b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
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Date: February 27, 2026 |
/s/ James J. Hinnendael |
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James J. Hinnendael |
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Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. §1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Marten Transport, Ltd. (the “Company”) on Form 10-K for the period ended December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best knowledge of the undersigned:
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(1) |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
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(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
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Date: February 27, 2026 |
/s/ Randolph L. Marten |
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Randolph L. Marten |
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Chairman of the Board and Chief Executive Officer |
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/s/ James J. Hinnendael |
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James J. Hinnendael |
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Executive Vice President and Chief Financial Officer |