Marten Transport (NASDAQ: MRTN) announced that it will pay a special cash dividend of $0.65 per share in addition to its regular quarterly cash dividend of $0.03 per share. Additionally, the company announced that it has increased its share repurchase program authorizing the repurchase of $34 million, or roughly 1.8 million shares of common stock.
“The Board’s decision to declare the special and quarterly cash dividends and to increase our share repurchase program reflects our confidence in our financial strength and continued commitment to enhancing stockholder value,” said Marten’s Chairman and Chief Executive Officer Randolph L. Marten.
The announcement follows the Wisconsin-based truckload (TL) carrier’s record second quarter 2019 earnings report. In the quarter, the temperature-controlled carrier reported its highest revenue and operating income in company history as operating income increased 38 percent increase in its dedicated division, up 29 percent overall. Marten added 179 tractors in the period, 138 of which were in the dedicated division after adding 116 tractors in the first quarter of 2019. Revenue per tractor per week increased 5.4 percent in dedicated and 2.1 percent in the TL division.
From the press release, “With the payment of these dividends, Marten will have paid a total of $84.3 million in cash dividends, including a $16.6 million special dividend in 2012, since the dividend program was implemented in the third quarter of 2010.”
TL carriers had a history of paying special dividends when the top-end of the capital gains tax rate was 15 percent between the years of 2004 and 2012. When the maximum tax rate for capital gains increased to 20 percent in 2013, the group found other methods of returning cash to its shareholders, namely share repurchases.
Werner Enterprises, Inc. (NASDAQ: WERN) announced a special cash dividend of $3.75 per common share on May 14, 2019, although the carrier used debt to fund its special dividend. Marten made no reference to how its special dividend will be paid, but the carrier had $83 million in cash and no long-term debt on its balance sheet at the close of the second quarter. Marten’s special dividend in sum is roughly $35.5 million.
Marten Transport provides truck-based transportation across its five offerings (TL, Dedicated, Intermodal, Brokerage and MRTN de Mexico). Marten specializes in the transportation and distribution of food and consumer packaged goods requiring a temperature-controlled environment.