Financial Performance - Net income for Q3 2025 was $2.2 million, or $0.03 per diluted share, down from $3.8 million, or $0.05 per diluted share in Q3 2024[2][15] - Operating revenue for Q3 2025 was $220.5 million, a decrease from $237.4 million in Q3 2024; excluding fuel surcharges, it was $194.0 million compared to $207.9 million[3][15] - Operating income for Q3 2025 was $2.7 million, down from $4.3 million in Q3 2024[5][15] - For the first nine months of 2025, net income was $13.7 million, or $0.17 per diluted share, compared to $21.3 million, or $0.26 per diluted share in the same period of 2024[2][15] - Operating revenue for the first nine months of 2025 was $673.5 million, down from $733.3 million in 2024; excluding fuel surcharges, it was $593.5 million compared to $637.1 million[4][15] - Total operating revenue declined by 7.1% to $220,470,000 from $237,366,000 year-over-year[17] - Total operating revenue for the nine months ended September 30, 2025, was $673,544,000, down 8.1% from $733,276,000 in 2024[19] Operating Expenses - Operating expenses as a percentage of operating revenue increased to 98.8% in Q3 2025 from 98.2% in Q3 2024[6][15] - Operating expenses for the first nine months of 2025 were 97.3% of operating revenue, compared to 96.4% in 2024[7][15] - The consolidated operating ratio increased to 98.8% from the previous period[19] - The consolidated operating ratio, net of fuel surcharges, was 96.9% compared to 95.8% in the previous period[19] Revenue Breakdown - Truckload revenue, net of fuel surcharge revenue decreased by 3.4% to $90,138,000 compared to $93,278,000 in the previous period[17] - Total Dedicated revenue, net of fuel surcharge revenue fell by 10.7% to $67,010,000 compared to $75,021,000[17] - Intermodal revenue, net of fuel surcharge revenue decreased significantly by 31.9% to $8,369,000 from $12,289,000[17] - Truckload segment revenue for the three months ended September 30, 2025, was $104,829,000, a decrease of 2.2% compared to $108,424,000 in 2024[21] - Dedicated segment revenue for the three months ended September 30, 2025, was $67,010,000, down 10.7% from $75,021,000 in 2024[21] - Intermodal segment revenue for the three months ended September 30, 2025, was $9,851,000, a decline of 32.1% compared to $14,509,000 in 2024[21] - Brokerage segment revenue for the three months ended September 30, 2025, was $38,780,000, slightly down from $39,412,000 in 2024, representing a decrease of 1.6%[21] Cash Flow and Investments - Net cash provided by operating activities for the three months ended September 30, 2025, was $18,538,000, a decrease of 37.1% from $29,478,000 in 2024[21] - Net cash used for investing activities for the three months ended September 30, 2025, was $5,786,000, compared to a net cash used of $59,222,000 in 2024[21] Strategic Actions - The company sold intermodal business assets to Hub Group, Inc. for $51.8 million in cash, effective September 30, 2025[8] - The company maintains a debt-free balance sheet, allowing for continued investment in technology and fleet modernization[8] - The company expects future growth opportunities due to recent immigration enforcement efforts impacting the freight market[10][8] Operational Metrics - Average revenue per tractor per week in the Truckload segment for the three months ended September 30, 2025, was $4,129, a decrease from $4,187 in 2024[21] - Total miles driven in the Truckload segment for the three months ended September 30, 2025, was 38,081,000, down from 39,288,000 in 2024[21] - Average tractors in the Dedicated segment for the three months ended September 30, 2025, was 1,142, a decrease from 1,296 in 2024[21] - Total tractors as of September 30, 2025, was 2,823, down from 3,080 in 2024[21] - Operating income for the Truckload segment fell by 97.1% to $42,000 from $1,462,000[19]

Financial Performance & Market Conditions - Marten Transport's earnings are pressured by the freight market recession's oversupply and weak demand, along with inflationary operating costs and freight rate reductions[10] - Operating revenue decreased by 7.1% in Q3 2025 compared to Q3 2024[13] - Net income decreased by 40.7% in Q3 2025 compared to Q3 2024[13] - The company's operating ratio net of fuel surcharges was 97.9% in Q3 2025[55] Strategic Initiatives & Business Segments - Marten sold its intermodal business to Hub Group, Inc for $51.8 million in cash, effective September 30, 2025, to focus on core operations[6] - Dedicated and brokerage operations significantly contributed to the company's total operating income in 2024 and Q3 YTD 2025[24, 27] - Marten de Mexico's operating revenue was $41.3 million for Q3 YTD 2025, compared to $48.6 million for Q3 YTD 2024 (excluding fuel surcharges)[33] Investments & Operational Improvements - The cost of tractors increased by 17% and refrigerated trailers by 30% in 2025 compared to 2021[41] - The company is investing in safety technology enhancements like collision avoidance, blind spot detection, and lane departure systems[43] - Marten is implementing renewable energy projects, with 18 projects across its national network, generating 3 million kWh annually and offsetting 2,125 metric tons of CO2[44]

Group 1 - Marten Transport, Ltd. has completed the sale of its intermodal business assets to Hub Group, Inc. for $51.8 million in cash, effective September 30, 2025 [1] - The transaction includes the sale of over 1,200 refrigerated containers and related contracts [1] - Marten Transport is a leading temperature-sensitive truckload carrier in the U.S., focusing on transporting food, beverages, and consumer packaged goods that require temperature control [2] Group 2 - The company operates in the U.S., Mexico, and Canada, emphasizing expedited services for high-volume customers [2] - Marten Transport's common stock is traded on the Nasdaq Global Select Market under the symbol MRTN [2]

Core Viewpoint - Marten Transport, Ltd. announces the retirement of CEO Timothy Kohl effective September 30, 2025, with Randolph Marten taking over as CEO and Chairman of the Board on October 1, 2025 [1][2]. Company Leadership - Timothy Kohl has been with the company since 2007, serving as CEO and previously as President, leading the company through significant growth and transformation [2]. - Randolph Marten has a long history with the company, having been a full-time employee since 1974 and serving in various leadership roles, including CEO from January 2005 to May 2021 [2]. Company Overview - Marten Transport is headquartered in Mondovi, Wisconsin, and operates a multifaceted business model that includes temperature-sensitive and dry truck-based transportation across six distinct business platforms [3]. - The company is recognized as one of the leading temperature-sensitive truckload carriers in the United States, specializing in the transportation of food, beverages, and consumer packaged goods that require temperature control [3]. - Marten Transport provides services in the United States, Mexico, and Canada, focusing on expedited movements for high-volume customers [3].

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements.) This section presents unaudited financial statements showing decreased revenue and net income amid a strong liquidity position [Consolidated Condensed Balance Sheets](index=3&type=section&id=CONSOLIDATED%20CONDENSED%20BALANCE%20SHEETS) Key Balance Sheet Items (in thousands) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | **ASSETS** | | | | Cash and cash equivalents | $35,052 | $17,267 | | Total current assets | $155,813 | $138,511 | | Net property and equipment | $834,268 | $828,613 | | Total assets | $991,816 | $968,757 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Total current liabilities | $116,685 | $93,519 | | Total liabilities | $221,100 | $200,835 | | Total stockholders' equity | $770,716 | $767,922 | | Total liabilities and stockholders' equity | $991,816 | $968,757 | - Cash and cash equivalents increased by **$17.785 million** from December 31, 2024, to June 30, 2025[7](index=7&type=chunk) - Total assets increased by **$23.059 million**, and total liabilities increased by **$20.265 million** from December 31, 2024, to June 30, 2025[7](index=7&type=chunk) [Consolidated Condensed Statements of Operations](index=4&type=section&id=CONSOLIDATED%20CONDENSED%20STATEMENTS%20OF%20OPERATIONS) Key Operating Results (in thousands, except per share data) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Operating revenue | $229,922 | $246,238 | $453,074 | $495,910 | | Operating income | $9,734 | $9,974 | $15,593 | $22,224 | | Net income | $7,186 | $7,889 | $11,521 | $17,535 | | Basic earnings per common share | $0.09 | $0.10 | $0.14 | $0.22 | | Diluted earnings per common share | $0.09 | $0.10 | $0.14 | $0.22 | | Dividends declared per common share | $0.06 | $0.06 | $0.12 | $0.12 | - Operating revenue decreased by **6.6%** for the three months and **8.6%** for the six months ended June 30, 2025, compared to the same periods in 2024[9](index=9&type=chunk) - Net income decreased by **8.9%** for the three months and **34.3%** for the six months ended June 30, 2025, compared to the same periods in 2024[9](index=9&type=chunk) [Consolidated Condensed Statements of Stockholders' Equity](index=5&type=section&id=CONSOLIDATED%20CONDENSED%20STATEMENTS%20OF%20STOCKHOLDERS'%20EQUITY) Changes in Stockholders' Equity (in thousands) | Metric (in thousands) | Balance at Dec 31, 2024 | Balance at June 30, 2025 | | :--- | :--- | :--- | | Common Stock Shares | 81,464 | 81,520 | | Common Stock Amount | $815 | $815 | | Additional Paid-In Capital | $52,941 | $53,994 | | Retained Earnings | $714,166 | $715,907 | | Total Stockholders' Equity | $767,922 | $770,716 | - Total stockholders' equity increased by **$2.794 million** from December 31, 2024, to June 30, 2025, primarily due to net income partially offset by dividends[10](index=10&type=chunk) - Dividends on common stock of **$0.06 per share** were paid in each of the first two quarters of 2025 and 2024, totaling $4.891 million and $4.889 million respectively for the second quarter[10](index=10&type=chunk)[12](index=12&type=chunk) [Consolidated Condensed Statements of Cash Flows](index=7&type=section&id=CONSOLIDATED%20CONDENSED%20STATEMENTS%20OF%20CASH%20FLOWS) Summary of Cash Flows (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $69,368 | $81,543 | | Net cash used for investing activities | $(41,528) | $(48,025) | | Net cash used for financing activities | $(10,055) | $(9,532) | | Net change in cash and cash equivalents | $17,785 | $23,986 | | Cash and cash equivalents, End of period | $35,052 | $77,199 | - Net cash provided by operating activities decreased by **$12.175 million (14.9%)** in the first six months of 2025 compared to 2024[15](index=15&type=chunk) - Cash used for investing activities decreased by **$6.497 million (13.5%)** in the first six months of 2025, primarily due to lower revenue equipment additions[15](index=15&type=chunk) [Notes to Consolidated Condensed Financial Statements](index=8&type=section&id=NOTES%20TO%20CONSOLIDATED%20CONDENSED%20FINANCIAL%20STATEMENTS) [(1) Consolidated Condensed Financial Statements](index=8&type=section&id=%281%29%20Consolidated%20Condensed%20Financial%20Statements) - The unaudited consolidated condensed financial statements are prepared in accordance with **U.S. GAAP** for interim financial statements and include normal recurring adjustments[16](index=16&type=chunk) - Interim results do not necessarily indicate full-year results and should be read with reference to the **2024 Annual Report on Form 10-K**[16](index=16&type=chunk) [(2) Earnings per Common Share](index=8&type=section&id=%282%29%20Earnings%20per%20Common%20Share) Earnings Per Share Calculation (in thousands, except per share) | Metric (in thousands, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | $7,186 | $7,889 | $11,521 | $17,535 | | Basic earnings per common share | $0.09 | $0.10 | $0.14 | $0.22 | | Diluted earnings per common share | $0.09 | $0.10 | $0.14 | $0.22 | | Basic weighted-average shares | 81,510 | 81,381 | 81,502 | 81,365 | | Diluted weighted-average shares | 81,517 | 81,446 | 81,512 | 81,442 | - Certain stock options and unvested performance unit awards were excluded from diluted EPS calculation as their inclusion would be **antidilutive**[17](index=17&type=chunk)[18](index=18&type=chunk) [(3) Long-Term Debt](index=8&type=section&id=%283%29%20Long-Term%20Debt) - The company has an unsecured committed credit facility of **$30.0 million** maturing in August 2027, with no outstanding principal balance at June 30, 2025, or December 31, 2024[19](index=19&type=chunk) - As of June 30, 2025, outstanding standby letters of credit totaled **$22.4 million**, with **$7.6 million** remaining borrowing availability[19](index=19&type=chunk) - The credit agreement includes restrictive covenants, such as a **$150 million limit** on stock redemptions and dividends per fiscal year, with which the company was in compliance[20](index=20&type=chunk) [(4) Related Party Transactions](index=9&type=section&id=%284%29%20Related%20Party%20Transactions) - The company purchased **$13,000** in tires and related services from Bauer Built, Inc (BBI) in the first six months of 2025, where a company director is chairman and CEO[21](index=21&type=chunk) - An additional **$613,000** was paid to tire manufacturers for BBI-provided tires in the first six months of 2025, for which BBI received commissions[21](index=21&type=chunk) - **No transactions** occurred with Durand Builders Service, Inc in the first six months of 2025, compared to $7,000 paid in 2024, where another company director is CEO and principal stockholder[22](index=22&type=chunk) [(5) Share Repurchase Program](index=9&type=section&id=%285%29%20Share%20Repurchase%20Program) - The Board of Directors approved an increase in the share repurchase program to **$50.0 million** (approximately 3.1 million shares) on May 3, 2022[23](index=23&type=chunk) - **No shares were repurchased** in the first six months of 2025, 2024, 2023, or the third and fourth quarters of 2022[24](index=24&type=chunk) - As of June 30, 2025, **$33.2 million** (approximately 2.2 million shares) remained available for future repurchases[24](index=24&type=chunk) [(6) Dividends](index=9&type=section&id=%286%29%20Dividends) - Quarterly cash dividends of **$0.06 per share** of common stock were paid in the first two quarters of 2025 and 2024, totaling **$9.8 million** in each period[25](index=25&type=chunk) [(7) Accounting for Share-based Payment Arrangement Compensation](index=9&type=section&id=%287%29%20Accounting%20for%20Share-based%20Payment%20Arrangement%20Compensation) - Pre-tax compensation expense for stock options and performance unit awards was **$1.3 million** in the first six months of 2025, down from $1.4 million in 2024[26](index=26&type=chunk) - **No significant changes** to the structure of stock-based award plans occurred in the first six months of 2025[26](index=26&type=chunk) [(8) Fair Value of Financial Instruments](index=9&type=section&id=%288%29%20Fair%20Value%20of%20Financial%20Instruments) - The carrying amounts of cash equivalents, accounts receivable, and accounts payable **approximate fair value** due to their short maturity[27](index=27&type=chunk) [(9) Commitments and Contingencies](index=9&type=section&id=%289%29%20Commitments%20and%20Contingencies) - The company is committed to new revenue equipment purchases of **$64.3 million** for the remainder of 2025 and has operating lease obligations totaling **$698,000** through 2028[28](index=28&type=chunk) - The company self-insures for various claims, with increased responsibility for auto liability claims: **$3.0 million per claim** for the policy year effective June 1, 2025, up from $2.0 million in 2024 and $1.0 million in 2023[30](index=30&type=chunk) - Management believes the resolution of open claims and pending litigation is **not likely to have a materially adverse effect** on financial statements, considering existing reserves[32](index=32&type=chunk) [(10) Revenue and Business Segments](index=11&type=section&id=%2810%29%20Revenue%20and%20Business%20Segments) - Marten Transport operates four reporting segments: **Truckload, Dedicated, Intermodal, and Brokerage**, offering temperature-sensitive and dry truck-based transportation[33](index=33&type=chunk)[34](index=34&type=chunk) Segment Revenue (in thousands) | Segment (in thousands) | Three Months Ended June 30, 2025 Revenue | Three Months Ended June 30, 2024 Revenue | Six Months Ended June 30, 2025 Revenue | Six Months Ended June 30, 2024 Revenue | | :--- | :--- | :--- | :--- | :--- | | Total Truckload revenue | $106,486 | $112,523 | $210,877 | $224,074 | | Total Dedicated revenue | $71,874 | $81,266 | $145,499 | $167,726 | | Total Intermodal revenue | $11,703 | $15,064 | $23,820 | $31,036 | | Brokerage revenue | $39,859 | $37,385 | $72,878 | $73,074 | | Total operating revenue | $229,922 | $246,238 | $453,074 | $495,910 | Segment Operating Income/(Loss) (in thousands) | Segment (in thousands) | Three Months Ended June 30, 2025 Operating Income/(Loss) | Three Months Ended June 30, 2024 Operating Income/(Loss) | Six Months Ended June 30, 2025 Operating Income/(Loss) | Six Months Ended June 30, 2024 Operating Income/(Loss) | | :--- | :--- | :--- | :--- | :--- | | Truckload | $2,344 | $1,115 | $2,044 | $1,604 | | Dedicated | $5,429 | $6,650 | $10,283 | $15,908 | | Intermodal | $(735) | $(684) | $(1,590) | $(878) | | Brokerage | $2,696 | $2,893 | $4,856 | $5,590 | | Total operating income | $9,734 | $9,974 | $15,593 | $22,224 | [(11) Use of Estimates](index=15&type=section&id=%2811%29%20Use%20of%20Estimates) - Preparation of financial statements requires estimates and assumptions, primarily related to **insurance and claims accruals and depreciation**, which may differ from ultimate results[51](index=51&type=chunk) [(12) Sale of Intermodal Business Assets Subsequent Event](index=16&type=section&id=%2812%29%20Sale%20of%20Intermodal%20Business%20Assets%20Subsequent%20Event) - On July 22, 2025, Marten Transport announced an agreement to sell its Intermodal business assets, including over 1,200 refrigerated containers and associated customer contracts, to Hub Group, Inc for **$51.8 million in cash**[52](index=52&type=chunk) - The transaction is expected to close by the end of the third quarter of 2025 and is **not anticipated to have a material impact** on the company's results of operations[52](index=52&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) This analysis highlights decreased revenue and income due to a soft freight market despite the company maintaining strong liquidity [Overview](index=16&type=section&id=Overview) - Marten Transport has transitioned from a refrigerated long-haul carrier to a multifaceted business offering time and temperature-sensitive and dry truck-based transportation across six platforms, reported in four segments: **Truckload, Dedicated, Intermodal, and Brokerage**[54](index=54&type=chunk) - Operating revenue decreased by **$42.8 million (8.6%)** in the first six months of 2025 compared to 2024, with Truckload, Dedicated, and Intermodal segments experiencing declines, while Brokerage revenue saw a slight decrease[62](index=62&type=chunk) - Operating income declined **29.8% to $15.6 million**, and net income declined **34.3% to $11.5 million** in the first six months of 2025, primarily due to a softened freight market[64](index=64&type=chunk) [Results of Operations](index=18&type=section&id=Results%20of%20Operations) [Comparison of Three Months Ended June 30, 2025 to Three Months Ended June 30, 2024](index=19&type=section&id=Comparison%20of%20Three%20Months%20Ended%20June%2030%2C%202025%20to%20Three%20Months%20Ended%20June%2030%2C%202024) Q2 2025 vs Q2 2024 Performance (in thousands) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Dollar Change | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Total operating revenue | $229,922 | $246,238 | $(16,316) | (6.6)% | | Total operating income | $9,734 | $9,974 | $(240) | (2.4)% | | Net income | $7,186 | $7,889 | $(703) | (8.9)% | | Consolidated operating ratio | 95.8% | 95.9% | | | | Consolidated operating ratio, net of fuel surcharges | 95.2% | 95.3% | | | - Truckload operating income increased by **110.2% to $2.344 million**, while Dedicated operating income decreased by **18.4% to $5.429 million**[70](index=70&type=chunk) - Salaries, wages and benefits decreased by **$7.9 million (9.2%)**, primarily due to reductions in company driver compensation and lower self-insured medical claims[77](index=77&type=chunk) - Insurance and claims expense increased by **$3.3 million (26.2%)** due to higher self-insured auto liability claim costs and insurance premiums[83](index=83&type=chunk) [Comparison of Six Months Ended June 30, 2025 to Six Months Ended June 30, 2024](index=23&type=section&id=Comparison%20of%20Six%20Months%20Ended%20June%2030%2C%202025%20to%20Six%20Months%20Ended%20June%2030%2C%202024) H1 2025 vs H1 2024 Performance (in thousands) | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Dollar Change | Percentage Change | | :--- | :--- | :--- | :--- | :--- | | Total operating revenue | $453,074 | $495,910 | $(42,836) | (8.6)% | | Total operating income | $15,593 | $22,224 | $(6,631) | (29.8)% | | Net income | $11,521 | $17,535 | $(6,014) | (34.3)% | | Consolidated operating ratio | 96.6% | 95.5% | | | | Consolidated operating ratio, net of fuel surcharges | 96.1% | 94.8% | | | - Dedicated segment operating income decreased by **35.4% to $10.283 million**, and Intermodal operating loss increased by **81.1% to $(1.590) million**[88](index=88&type=chunk) - Salaries, wages and benefits decreased by **$17.9 million (10.2%)**, driven by reductions in company driver and non-driver compensation, and lower self-insured medical claims[95](index=95&type=chunk) - Insurance and claims increased by **$5.0 million (20.7%)** due to higher self-insured auto liability claim costs and insurance premiums, partially offset by lower physical damage and workers' compensation claims[99](index=99&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) Cash Flow Summary (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash flows provided by operating activities | $69,368 | $81,543 | | Net cash flows used for investing activities | $(41,528) | $(48,025) | | Net cash flows used for financing activities | $(10,055) | $(9,532) | - In the first six months of 2025, operating cash flows of **$69.4 million** were primarily used for new revenue equipment purchases ($38.8 million net), cash dividends ($9.8 million), and other asset purchases ($2.7 million), resulting in a **$17.8 million increase in cash**[108](index=108&type=chunk) - The company estimates capital expenditures, net of dispositions, will be approximately **$65 million** for the remainder of 2025, including **$64.3 million** in new revenue equipment commitments[109](index=109&type=chunk) - Marten Transport believes its liquidity sources, including anticipated cash flows, existing cash, and borrowing availability, are **adequate to meet needs** for at least the next twelve months, with no significant liquidity constraints foreseen[109](index=109&type=chunk) [Seasonality](index=28&type=section&id=Seasonality) - Tractor productivity generally **decreases during winter** due to inclement weather and reduced shipper volumes[114](index=114&type=chunk) - Operating expenses typically **increase in harsh weather** due to higher accident frequency, increased claims, lower fuel efficiency, and more equipment repairs[114](index=114&type=chunk) [Critical Accounting Estimates](index=28&type=section&id=Critical%20Accounting%20Estimates) - There have been **no material changes** in critical accounting estimates since the Annual Report on Form 10-K for the year ended December 31, 2024[115](index=115&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk.) This section details market risk exposure, primarily from diesel fuel price fluctuations, and mitigation strategies via fuel surcharges - The company's primary market risk is the **price and availability of diesel fuel**, which can significantly impact operating results[116](index=116&type=chunk) - A **5% increase** in the average cost of diesel fuel would have increased fuel expense by **$3.2 million** in the first six months of 2025 (compared to $3.8 million in 2024)[116](index=116&type=chunk) - **Fuel surcharge programs** with customers help recover a substantial portion of higher fuel costs, though they are not fully effective for non-revenue miles or idling[117](index=117&type=chunk) - The company employs strategies like volume purchasing, optimizing driver fuel purchases, shorter lengths of haul, and auxiliary power units to **control fuel usage and costs**[117](index=117&type=chunk) [Item 4. Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management confirms the effectiveness of disclosure controls and procedures with no material changes to internal controls during the period - Disclosure controls and procedures were evaluated and deemed **effective** as of June 30, 2025[119](index=119&type=chunk) - **No material changes** in internal control over financial reporting occurred during the period covered by the report[119](index=119&type=chunk) PART II. OTHER INFORMATION [Item 1A. Risk Factors](index=29&type=section&id=Item%201A.%20Risk%20Factors.) This section updates risk factors, focusing on economic conditions, trade tariffs, and geopolitical instability - The business is subject to general economic and business factors beyond its control, such as **excess capacity** in the trucking industry, economic cycles, and fluctuations in interest rates and fuel prices[121](index=121&type=chunk) - New and increased **tariff rates** on imported goods, and potential retaliatory trade policies, may decrease shipping volumes, increase equipment costs, and impact the ability to recover fuel price increases, adversely affecting revenue and operations[122](index=122&type=chunk) - Actual or threatened **armed conflicts, terrorist attacks**, and related events could have unpredictable adverse effects on the economy, consumer confidence, and future operating results[123](index=123&type=chunk) [Item 5. Other Information](index=29&type=section&id=Item%205.%20Other%20Information.) No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter - **No directors or officers** adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the three months ended June 30, 2025[124](index=124&type=chunk) [Item 6. Exhibits](index=30&type=section&id=Item%206.%20Exhibits.) This section lists filed exhibits, including incentive plans, executive compensation details, and Sarbanes-Oxley certifications - Exhibits include the Marten Transport, Ltd **2025 Equity Incentive Plan** and related agreements, as well as Named Executive Officer Compensation[126](index=126&type=chunk) - Certifications pursuant to **Section 302 and Section 906 of the Sarbanes-Oxley Act** of 2002 by the CEO and CFO are filed with the report[126](index=126&type=chunk) - Financial information for the period ended June 30, 2025, is filed in **iXBRL format**[126](index=126&type=chunk) [SIGNATURES](index=31&type=section&id=SIGNATURES) The report is duly authorized by the CEO and CFO on behalf of Marten Transport, Ltd as of August 8, 2025 - The report was signed by **Timothy M. Kohl, Chief Executive Officer**, and **James J. Hinnendael, Executive Vice President and Chief Financial Officer**, on August 8, 2025[130](index=130&type=chunk)

Core Viewpoint - Marten Transport, Ltd. has entered into an agreement to sell its intermodal business assets to Hub Group, Inc. for $51.8 million in cash, reflecting a strategic focus on core operations and growth opportunities [1][2][3]. Company Overview - Marten Transport is a leading temperature-sensitive truckload carrier in the United States, specializing in transporting food, beverages, and consumer packaged goods that require temperature control [5]. - The company operates across the United States, Mexico, and Canada, focusing on expedited movements for high-volume customers [5]. Transaction Details - The transaction involves the sale of over 1,200 refrigerated containers and related contracts, expected to close by the end of the third quarter, subject to customary closing conditions [2]. - Legal counsel for the transaction is provided by Fox Rothschild LLP [4]. Strategic Focus - Executive Chairman Randolph L. Marten emphasized that the transaction aligns with the company's integrated business strategy, allowing for investment in core operations and capitalizing on profitable organic growth opportunities [3].

Core Viewpoint - Hub Group, Inc. has announced the acquisition of Marten Transport's intermodal assets, significantly enhancing its temperature-controlled intermodal service capabilities and scale [3][5]. Transaction Highlights - The acquisition involves an asset purchase of intermodal equipment and contracts for $51.8 million in cash, expected to close by the end of Q3 2025, subject to customary closing conditions [5]. - The deal includes approximately 1,200 refrigerated containers, positioning Hub Group as the second largest provider of temperature-controlled intermodal solutions in North America [9]. - Marten Intermodal generated $51.5 million in revenue over the trailing twelve months ending June 30, 2025 [9]. Strategic Implications - The acquisition is expected to double Hub Group's temperature-controlled container fleet and leverage its existing intermodal network to serve Marten Intermodal's customers [5]. - The transaction aligns with Hub Group's long-term investment strategy, aiming to expand margins and maintain capital flexibility [5]. - The deal is anticipated to be immediately accretive to Hub Group's fourth quarter 2025 EPS and also accretive to 2026 EPS, contributing positively to long-term returns on invested capital [9]. Operational Synergies - The acquisition is expected to create operational synergies through increased scale and network density [9]. - There are cross-sell opportunities with additional refrigerated customers across various business lines [9].

Executive Summary & Financial Highlights [Second Quarter 2025 Financial Performance](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Performance) Marten Transport reported a decrease in net income and diluted EPS for Q2 2025 compared to Q2 2024, alongside a decline in operating revenue. Operating income also saw a slight decrease, while operating expenses as a percentage of operating revenue remained relatively stable | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | Change (YoY) | Percentage Change (YoY) | | :-------------------------------- | :-------------------- | :-------------------- | :----------- | :---------------------- | | Net Income | $7.2 | $7.9 | -$0.7 | -8.9% | | Diluted EPS | $0.09 | $0.10 | -$0.01 | -10.0% | | Operating Revenue | $229.9 | $246.2 | -$16.3 | -6.6% | | Operating Revenue (excl. fuel surcharges) | $203.8 | $213.5 | -$9.7 | -4.5% | | Fuel Surcharge Revenue | $26.1 | $32.7 | -$6.6 | -20.2% | | Operating Income | $9.7 | $10.0 | -$0.3 | -3.0% | | Operating Expenses as % of Operating Revenue | 95.8% | 95.9% | -0.1% | -0.1% | | Operating Expenses as % of Operating Revenue (net of fuel surcharges) | 95.2% | 95.3% | -0.1% | -0.1% | [Six-Month Period 2025 Financial Performance](index=1&type=section&id=Six-Month%20Period%202025%20Financial%20Performance) For the first six months of 2025, Marten Transport experienced a significant reduction in net income and diluted EPS compared to the same period in 2024. Total operating revenue and operating income also declined, while operating expenses as a percentage of revenue increased | Metric | YTD 2025 (in millions) | YTD 2024 (in millions) | Change (YoY) | Percentage Change (YoY) | | :-------------------------------- | :-------------------- | :-------------------- | :----------- | :---------------------- | | Net Income | $11.5 | $17.5 | -$6.0 | -34.3% | | Diluted EPS | $0.14 | $0.22 | -$0.08 | -36.4% | | Operating Revenue | $453.1 | $495.9 | -$42.8 | -8.6% | | Operating Revenue (excl. fuel surcharges) | $399.6 | $429.3 | -$29.7 | -6.9% | | Fuel Surcharge Revenue | $53.5 | $66.6 | -$13.1 | -19.7% | | Operating Income | $15.6 | $22.2 | -$6.6 | -29.7% | | Operating Expenses as % of Operating Revenue | 96.6% | 95.5% | +1.1% | +1.1% | | Operating Expenses as % of Operating Revenue (net of fuel surcharges) | 96.1% | 94.8% | +1.3% | +1.4% | [Management Commentary](index=1&type=section&id=Management%20Commentary) Executive Chairman Randolph L. Marten highlighted the continued value of the company's multifaceted business model, particularly dedicated and brokerage operations, despite significant pressure from a prolonged freight market recession characterized by oversupply, weak demand, inflationary operating costs, freight rate reductions, and network disruptions. The company remains focused on mitigating market impacts and investing in organic growth opportunities, anticipating positive effects from increased enforcement of English Language Proficiency and B-1 visa regulations - The company's earnings are heavily pressured by the considerable duration and depth of the freight market recession's oversupply and weak demand[8](index=8&type=chunk) - Cumulative impact of inflationary operating costs, freight rate reductions, and freight network disruptions are contributing to earnings pressure[8](index=8&type=chunk) - Marten Transport is focused on minimizing market impact, investing in profitable organic growth opportunities, and expects positive impacts from anticipated additional industry capacity exits due to increased enforcement of English Language Proficiency and B-1 visa regulations[9](index=9&type=chunk) Company Overview [Business Description](index=2&type=section&id=Business%20Description) Marten Transport, Ltd. is a multifaceted transportation and distribution company specializing in time and temperature-sensitive and dry truck-based services across six distinct business platforms. It is a leading temperature-sensitive truckload carrier in the U.S., serving high-volume customers in the United States, Mexico, and Canada - Marten Transport offers a network of time and temperature-sensitive and dry truck-based transportation and distribution capabilities[10](index=10&type=chunk) - The company operates through six distinct business platforms: Temperature-Sensitive and Dry Truckload, Dedicated, Intermodal, Brokerage, and MRTN de Mexico[10](index=10&type=chunk) - Marten is a leading temperature-sensitive truckload carrier in the United States, specializing in transporting food, beverages, and other consumer packaged goods requiring temperature control, with services extending to Mexico and Canada[10](index=10&type=chunk) [Forward-Looking Statements & Contacts](index=2&type=section&id=Forward-Looking%20Statements%20%26%20Contacts) The press release includes forward-looking statements subject to substantial risks and uncertainties, with actual results potentially differing materially. The company disclaims any obligation to update these statements. Contact information for key executives is provided - The report contains forward-looking statements regarding future growth and market impacts, which involve substantial risks and uncertainties[11](index=11&type=chunk) - Important factors that could cause actual results to differ are discussed in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2024[11](index=11&type=chunk) - Contact information for CEO Tim Kohl, President Doug Petit, and EVP & CFO Jim Hinnendael is provided[12](index=12&type=chunk) Consolidated Financial Statements [Consolidated Condensed Balance Sheets](index=3&type=section&id=Consolidated%20Condensed%20Balance%20Sheets) Marten Transport's balance sheet shows an increase in total assets and liabilities as of June 30, 2025, compared to December 31, 2024. Cash and cash equivalents significantly increased, while total stockholders' equity also saw a modest rise | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------ | :---------------- | :----- | | Cash and cash equivalents | $35,052 | $17,267 | +$17,785 | | Total current assets | $155,813 | $138,511 | +$17,302 | | Net property and equipment | $834,268 | $828,613 | +$5,655 | | Total assets | $991,816 | $968,757 | +$23,059 | | Total current liabilities | $116,685 | $93,519 | +$23,166 | | Total liabilities | $221,100 | $200,835 | +$20,265 | | Total stockholders' equity | $770,716 | $767,922 | +$2,794 | [Consolidated Condensed Statements of Operations](index=4&type=section&id=Consolidated%20Condensed%20Statements%20of%20Operations) The statements of operations reveal a decline in operating revenue, operating income, and net income for both the three-month and six-month periods ended June 30, 2025, compared to the prior year. This was accompanied by a decrease in diluted EPS, while dividends declared per common share remained constant | Metric (in thousands, except per share) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------------- | :------ | :------ | :------- | :------- | | Operating revenue | $229,922 | $246,238 | $453,074 | $495,910 | | Total operating expenses | $220,188 | $236,264 | $437,481 | $473,686 | | Operating income | $9,734 | $9,974 | $15,593 | $22,224 | | Net income | $7,186 | $7,889 | $11,521 | $17,535 | | Diluted earnings per common share | $0.09 | $0.10 | $0.14 | $0.22 | | Dividends declared per common share | $0.06 | $0.06 | $0.12 | $0.12 | Segment Performance Analysis [Three Months Ended June 30, 2025 vs 2024](index=5&type=section&id=Three%20Months%20Ended%20June%2030%2C%202025%20vs%202024) For Q2 2025, Truckload operating income significantly increased by 110.2% despite a revenue decrease, driven by an improved operating ratio. Dedicated and Brokerage segments saw declines in both revenue and operating income, while Intermodal continued to report an operating loss with a higher operating ratio | Segment (in thousands) | Q2 2025 Revenue | Q2 2024 Revenue | Revenue Change (YoY) | Q2 2025 Operating Income/(Loss) | Q2 2024 Operating Income/(Loss) | Operating Income Change (YoY) | Q2 2025 Operating Ratio | Q2 2024 Operating Ratio | | :--------------------- | :-------------- | :-------------- | :------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------- | :---------------------- | | Truckload | $106,486 | $112,523 | -5.4% | $2,344 | $1,115 | +110.2% | 97.8% | 99.0% | | Dedicated | $71,874 | $81,266 | -11.6% | $5,429 | $6,650 | -18.4% | 92.4% | 91.8% | | Intermodal | $11,703 | $15,064 | -22.3% | ($735) | ($684) | -7.5% | 106.3% | 104.5% | | Brokerage | $39,859 | $37,385 | +6.6% | $2,696 | $2,893 | -6.8% | 93.2% | 92.3% | | Total | $229,922 | $246,238 | -6.6% | $9,734 | $9,974 | -2.4% | 95.8% | 95.9% | [Six Months Ended June 30, 2025 vs 2024](index=6&type=section&id=Six%20Months%20Ended%20June%2030%2C%202025%20vs%202024) For the first six months of 2025, total operating revenue decreased across all segments except Brokerage, which saw a slight decline. Truckload operating income increased, but Dedicated, Intermodal, and Brokerage segments experienced significant drops in operating income, leading to a substantial consolidated operating income decrease of 29.8% | Segment (in thousands) | YTD 2025 Revenue | YTD 2024 Revenue | Revenue Change (YoY) | YTD 2025 Operating Income/(Loss) | YTD 2024 Operating Income/(Loss) | Operating Income Change (YoY) | YTD 2025 Operating Ratio | YTD 2024 Operating Ratio | | :--------------------- | :--------------- | :--------------- | :------------------- | :------------------------------- | :------------------------------- | :---------------------------- | :----------------------- | :----------------------- | | Truckload | $210,877 | $224,074 | -5.9% | $2,044 | $1,604 | +27.4% | 99.0% | 99.3% | | Dedicated | $145,499 | $167,726 | -13.3% | $10,283 | $15,908 | -35.4% | 92.9% | 90.5% | | Intermodal | $23,820 | $31,036 | -23.3% | ($1,590) | ($878) | -81.1% | 106.7% | 102.8% | | Brokerage | $72,878 | $73,074 | -0.3% | $4,856 | $5,590 | -13.1% | 93.3% | 92.4% | | Total | $453,074 | $495,910 | -8.6% | $15,593 | $22,224 | -29.8% | 96.6% | 95.5% | Operating Statistics & Cash Flow [Operating Statistics by Segment](index=7&type=section&id=Operating%20Statistics%20by%20Segment) Operational statistics for Q2 and YTD 2025 show varied performance across segments. Truckload and Dedicated segments experienced decreases in average tractors and total miles, while Brokerage loads increased. Average revenue per tractor per week saw slight increases in Truckload and Dedicated segments Truckload Segment Operating Statistics | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------------- | :------ | :------ | :------- | :------- | | Revenue (in thousands) | $106,486 | $112,523 | $210,877 | $224,074 | | Average revenue, net of fuel surcharges, per tractor per week | $4,209 | $4,093 | $4,203 | $4,044 | | Average tractors | 1,690 | 1,805 | 1,680 | 1,817 | | Total miles (in thousands) | 39,221 | 40,847 | 77,494 | 80,550 | Dedicated Segment Operating Statistics | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------------- | :------ | :------ | :------- | :------- | | Revenue (in thousands) | $71,874 | $81,266 | $145,499 | $167,726 | | Average revenue, net of fuel surcharges, per tractor per week | $3,807 | $3,754 | $3,827 | $3,768 | | Average tractors | 1,239 | 1,382 | 1,251 | 1,421 | | Total miles (in thousands) | 25,132 | 28,231 | 50,368 | 57,311 | Intermodal and Brokerage Segment Operating Statistics | Segment | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------- | :--------------------- | :------ | :------ | :------- | :------- | | Intermodal | Revenue (in thousands) | $11,703 | $15,064 | $23,820 | $31,036 | | | Loads | 3,555 | 4,464 | 7,212 | 9,053 | | | Average tractors | 77 | 121 | 77 | 123 | | Brokerage | Revenue (in thousands) | $39,859 | $37,385 | $72,878 | $73,074 | | | Loads | 24,094 | 22,700 | 44,510 | 42,761 | [Cash Flow Activities](index=7&type=section&id=Cash%20Flow%20Activities) Net cash provided by operating activities decreased for both the three-month and six-month periods ended June 30, 2025, compared to the prior year. Net cash used for investing activities increased in Q2 but decreased for the six-month period, while net cash used for financing activities saw a slight increase | Cash Flow Activity (in thousands) | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Net cash provided by operating activities | $33,153 | $35,821 | $69,368 | $81,543 | | Net cash used for investing activities | ($33,115) | ($27,776) | ($41,528) | ($48,025) | | Net cash used for financing activities | ($4,891) | ($4,576) | ($10,055) | ($9,532) | [Key Equipment and Share Data](index=7&type=section&id=Key%20Equipment%20and%20Share%20Data) As of June 30, 2025, Marten Transport reported a decrease in total tractors and trailers compared to the prior year. The average age of company tractors increased, while the average age of trailers remained constant. Weighted average shares outstanding saw a slight increase | Metric | June 30, 2025 | June 30, 2024 | | :-------------------------------- | :------------ | :------------ | | Total tractors | 2,928 | 3,126 | | Average age of company tractors (in years) | 2.1 | 1.8 | | Total trailers | 5,164 | 5,539 | | Average age of company trailers (in years) | 5.0 | 5.0 | | Ratio of trailers to tractors | 1.8 | 1.8 | | Total refrigerated containers | 786 | 787 | Weighted Average Shares Outstanding | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :-------------------------------- | :------ | :------ | :------- | :------- | | Basic | 81,510 | 81,381 | 81,502 | 81,365 | | Diluted | 81,517 | 81,446 | 81,512 | 81,442 |

Core Viewpoint - The Zacks Transportation-Truck industry is facing significant challenges due to tariff-induced economic uncertainties, weak freight rates, driver shortages, and inflation, yet some companies like Marten Transport and PAMT CORP are positioned to endure these difficulties [1]. Industry Overview - The Zacks Transportation-Truck industry consists of truck operators that transport freight across North America, offering various services including full-truckload and less-than-truckload (LTL) [2]. - Companies in this sector provide diverse trucking services such as dry-van, dedicated, refrigerated, flatbed, and expedited, along with logistics and intermodal services [2]. Current Trends - Supply-chain disruptions and weak freight rates are negatively impacting the industry, with the Cass Freight Shipments Index declining by 5.3% year-over-year in March, marking eight consecutive months of decline [3]. - The industry is focusing on cost-cutting measures to improve productivity and efficiency in response to high inflation affecting labor, freight, and fuel costs [4]. - A prolonged driver shortage is expected to leave the trucking industry short of over 160,000 drivers by 2030, exacerbating supply-chain challenges [5]. Tariff Impact - The current administration's protectionist policies and new tariffs are creating trade tensions with major partners like Canada, Mexico, and China, leading to increased volatility and uncertainty in global trade, which is detrimental to the industry [6]. Industry Ranking and Performance - The Zacks Transportation-Truck industry ranks 244 out of 246 Zacks industries, placing it in the bottom 1% and indicating poor near-term prospects [7]. - Analysts have reduced the industry's earnings estimate for 2025 by 42.7% year-over-year, reflecting a negative outlook for earnings growth [8]. - Over the past year, the industry has underperformed, declining by 30.6%, while the S&P 500 increased by 8.3% and the broader transportation sector fell by 17.4% [10]. Valuation Metrics - The industry is currently trading at an EV-to-EBITDA ratio of 13.64X, which is lower than the S&P 500's 15.2X but higher than the sector's 8.82X [13]. Notable Companies - Marten Transport, based in Mondovi, WI, operates across five business platforms and has shown impressive cost-control efforts, currently holding a Zacks Rank 3 (Hold) [17]. - PAMT CORP provides truckload dry van carrier services and has expanded its customer base significantly through acquisitions, also holding a Zacks Rank 3 [21].

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements.) Presents unaudited consolidated financial statements for Q1 2025, detailing a significant decrease in net income and changes in assets and liabilities [Consolidated Condensed Balance Sheets](index=2&type=section&id=CONSOLIDATED%20CONDENSED%20BALANCE%20SHEETS) Total assets increased to **$983.3 million** as of March 31, 2025, driven by cash, while total liabilities also grew Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | $162,500 | $138,511 | | **Net property and equipment** | $819,057 | $828,613 | | **Total assets** | **$983,332** | **$968,757** | | **Total current liabilities** | $109,623 | $93,519 | | **Total liabilities** | $215,832 | $200,835 | | **Total stockholders' equity** | $767,500 | $767,922 | | **Total liabilities and stockholders' equity** | **$983,332** | **$968,757** | [Consolidated Condensed Statements of Operations](index=3&type=section&id=CONSOLIDATED%20CONDENSED%20STATEMENTS%20OF%20OPERATIONS) Operating revenue decreased by **10.6%** and net income declined by **55.1%** in Q1 2025, leading to lower diluted earnings per share Q1 2025 vs Q1 2024 Performance (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | **Operating revenue** | $223,152 | $249,672 | | **Total operating expenses** | $217,293 | $237,422 | | **Operating income** | $5,859 | $12,250 | | **Net income** | **$4,335** | **$9,646** | | **Diluted earnings per common share** | **$0.05** | **$0.12** | | **Dividends declared per common share** | $0.06 | $0.06 | [Consolidated Condensed Statements of Cash Flows](index=5&type=section&id=CONSOLIDATED%20CONDENSED%20STATEMENTS%20OF%20CASH%20FLOWS) Net cash from operating activities decreased to **$36.2 million** in Q1 2025, with a net increase in cash and cash equivalents to **$39.9 million** Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $36,215 | $45,722 | | Net cash used for investing activities | ($8,413) | ($20,249) | | Net cash used for financing activities | ($5,164) | ($4,956) | | **Net change in cash and cash equivalents** | **$22,638** | **$20,517** | | **Cash and cash equivalents, end of period** | **$39,905** | **$73,730** | [Notes to Consolidated Condensed Financial Statements](index=6&type=section&id=Notes%20to%20Consolidated%20Condensed%20Financial%20Statements) Details accounting policies, segment performance, debt facilities, and significant commitments, noting declines across all business segments - The company has a **$30.0 million** unsecured credit facility maturing in August 2027, with no outstanding principal balance as of March 31, 2025. Remaining borrowing availability was **$7.6 million**[16](index=16&type=chunk) - The company has commitments for new revenue equipment purchases of **$124.3 million** for the remainder of 2025[24](index=24&type=chunk) Segment Operating Income/(Loss) (in thousands) | Segment | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Truckload | $(300) | $489 | | Dedicated | $4,854 | $9,258 | | Intermodal | $(855) | $(194) | | Brokerage | $2,160 | $2,697 | | **Total operating income** | **$5,859** | **$12,250** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=12&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) Management attributes Q1 2025 revenue and operating income declines to a softened freight market, impacting all segments and worsening the operating ratio, while maintaining strong liquidity - Operating revenue decreased **10.6%** and net income declined **55.1%** in Q1 2025 compared to Q1 2024, primarily due to a softened freight market[54](index=54&type=chunk)[56](index=56&type=chunk) - The consolidated operating ratio worsened to **97.4%** in Q1 2025 from **95.1%** in Q1 2024. Net of fuel surcharges, the ratio increased to **97.0%** from **94.3%**[56](index=56&type=chunk) - The company plans capital expenditures, net of dispositions, of approximately **$107 million** for the remainder of 2025[57](index=57&type=chunk)[86](index=86&type=chunk) [Results of Operations](index=15&type=section&id=Results%20of%20Operations) Detailed analysis reveals broad-based weakness in Q1 2025, with revenue declines across all segments and increased insurance and claims expenses Segment Revenue Changes (Q1 2025 vs Q1 2024, in thousands) | Segment Revenue (Net of Fuel Surcharge) | Q1 2025 | Q1 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Truckload | $90,106 | $95,022 | $(4,916) | (5.2)% | | Dedicated | $62,405 | $71,738 | $(9,333) | (13.0)% | | Intermodal | $10,268 | $13,281 | $(3,013) | (22.7)% | | Brokerage | $33,019 | $35,689 | $(2,670) | (7.5)% | - The Truckload segment's operating ratio increased to **100.3%** from **99.6%** due to higher insurance, depreciation, and maintenance costs[65](index=65&type=chunk) - Insurance and claims expense increased by **$1.7 million (14.8%)** in Q1 2025, primarily due to higher self-insured auto liability claim costs and insurance premiums[76](index=76&type=chunk) - The effective income tax rate rose to **30.2%** from **26.1%** in the prior-year period, mainly due to increases in non-deductible expenses as a percentage of lower projected earnings[80](index=80&type=chunk) [Liquidity and Capital Resources](index=20&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity through cash from operations and an undrawn credit facility, with available funds for share repurchases and planned capital expenditures - Net cash from operating activities was **$36.2 million** in Q1 2025, down from **$45.7 million** in Q1 2024[83](index=83&type=chunk)[85](index=85&type=chunk) - As of March 31, 2025, the company had no outstanding long-term debt and **$7.6 million** in borrowing availability under its credit facility[88](index=88&type=chunk) - The company has a share repurchase program with authorization for up to **$33.2 million** remaining as of March 31, 2025. No shares were repurchased in Q1 2025[84](index=84&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=21&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk.) The primary market risk is diesel fuel price volatility, partially mitigated by surcharges, with a hypothetical **5%** increase impacting Q1 2025 fuel expense by **$1.6 million** - The primary market risk is the price and availability of diesel fuel[93](index=93&type=chunk) - A **5%** increase in the average cost of diesel fuel would have increased fuel expense by **$1.6 million** in Q1 2025[93](index=93&type=chunk) - The company uses fuel surcharge programs to pass through a significant portion of fuel cost increases to customers, but these programs are not fully effective in mitigating all fuel-related price increases[94](index=94&type=chunk) [Item 4. Controls and Procedures](index=22&type=section&id=Item%204.%20Controls%20and%20Procedures.) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[96](index=96&type=chunk) - No changes occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[96](index=96&type=chunk) PART II. OTHER INFORMATION [Item 1A. Risk Factors](index=22&type=section&id=Item%201A.%20Risk%20Factors.) No material changes to risk factors from the 2024 Annual Report, with an updated emphasis on general economic conditions, trucking capacity, trade policies, and geopolitical events - An updated risk factor highlights dependence on general economic and business factors beyond the company's control[98](index=98&type=chunk) - Specific risks mentioned include excess capacity in the trucking industry, the impact of trade tariffs on shipping volumes and equipment costs, and unpredictable effects of geopolitical conflicts[99](index=99&type=chunk)[100](index=100&type=chunk) [Item 5. Other Information](index=22&type=section&id=Item%205.%20Other%20Information.) No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2025 - No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement in Q1 2025[101](index=101&type=chunk) [Item 6. Exhibits](index=23&type=section&id=Item%206.%20Exhibits.) Lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and financial data in iXBRL format - Filed exhibits include certifications from the CEO (31.1) and CFO (31.2) pursuant to Section 302 of the Sarbanes-Oxley Act[103](index=103&type=chunk) - The report includes financial statements and notes formatted in iXBRL (Exhibit 101)[103](index=103&type=chunk)