Marten Transport, Ltd. Annual Report 2024

FY2024 Annual Report · Marten Transport, Ltd.

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2024
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 0-15010
MARTEN TRANSPORT, LTD.
(Exact name of registrant as specified in its charter)
Delaware

39-1140809
(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)
129 Marten Street

Mondovi, Wisconsin
54755
(715) 926-4216
(Address of principal executive offices)
(Zip Code)
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class:
Trading symbol:
Name of each exchange on which registered:
COMMON STOCK, PAR VALUE
MRTN
THE NASDAQ STOCK MARKET LLC
$.01 PER SHARE

(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. Yes ☒ No ☐
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 ☐ No ☒
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. Yes ☒ No ☐
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). Yes
☒ No ☐
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.

Large accelerated filer ☒ Accelerated filer ☐

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 ☐ No ☒
As of June 28, 2024 (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 directors and executive officers, was $1,158,326,000.
As of February 14, 2025, 81,463,938 shares of Common Stock of the Registrant were outstanding.
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 6, 2025, or 2025 Proxy Statement.

i
TABLE OF CONTENTS

Page

PART I

ITEM 1.
BUSINESS
1
ITEM 1A.
RISK FACTORS
6
ITEM 1B.
UNRESOLVED STAFF COMMENTS
12
ITEM 1C.
CYBERSECURITY
13
ITEM 2.
PROPERTIES
14
ITEM 3.
LEGAL PROCEEDINGS
14
ITEM 4.
MINE SAFETY DISCLOSURES
14
ITEM 4A.
INFORMATION ABOUT OUR EXECUTIVE OFFICERS
15

PART II

ITEM 5.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES 16
ITEM 6.
[RESERVED]

ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
18
ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
30
ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
31
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
54
ITEM 9A.
CONTROLS AND PROCEDURES
54
ITEM 9B.
OTHER INFORMATION
54
ITEM 9C.
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
54
PART III

ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
55
ITEM 11.
EXECUTIVE COMPENSATION
55
ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
55
ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE
56
ITEM 14.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
56

PART IV

ITEM 15.
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
56
ITEM 16.
FORM 10-K SUMMARY
61

Signature Page
62

1
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

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 six distinct
business platforms – Temperature-Sensitive and Dry Truckload, Dedicated, Intermodal, Brokerage and MRTN de Mexico.
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
2024, we generated $963.7 million in operating revenue. Approximately 59% of our Truckload and Dedicated revenue in
2024 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 2024, our average length of haul was 418 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 3,006 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, Intermodal and Brokerage. 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.

2
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.

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 2024, our largest customer
was Walmart.

Our marketing efforts are conducted by a staff of 346 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:

●
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.

●
Electronic data interchange and internet communication with customers concerning freight tendering, invoices,
shipment status and other information.

●
Electronic logging devices in our tractors to monitor drivers’ hours of service.

●
Auxiliary power units installed on our company-owned tractors that allow us to decrease fuel costs associated
with idling our tractors.

●
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 7.6% during 2024, 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 2024, our top 30 customers accounted
for approximately 69% of our revenue excluding fuel surcharges, and our top ten customers accounted for 48% 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. Eight 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 seven 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, 2024, we had 3,776 employees. This total consists of 2,915 drivers, 270 mechanics and
maintenance personnel, and 591 support personnel, which includes management and administration. As of that date, we also
contracted with 88 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. As part of those efforts, we are also committed to hiring,
developing and supporting a diverse and inclusive workplace.

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.

4
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. The COVID-19 pandemic has also heightened our responsibility of
ensuring our employees have a safe work environment and we have implemented numerous efforts to keep our valued
employees safe, healthy and informed. 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, 2024, we operated a fleet of 3,006 tractors, including 2,918 company-owned tractors and 88
tractors supplied by independent contractors. The average age of our company-owned tractor fleet at December 31, 2024 was
approximately 1.9 years. In 2024, we replaced our company-owned tractors within an average of 3.9 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
December 31, 2024, 2.8% at December 31, 2023 and 2.6% at December 31, 2022.

As of December 31, 2024, we operated a fleet of 5,440 trailers, consisting of 3,138 refrigerated trailers and 2,302
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, 2024 was approximately 5.3 years. In 2024, we replaced
our company-owned trailers within an average of 8.4 years after purchase.

As of December 31, 2024, we operated a fleet of 786 refrigerated containers for use on railroad flatcars as compared
to a fleet of 787 refrigerated containers as of December 31, 2023.

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 $23.1 million in standby
letters of credit to guarantee settlement of claims under agreements with our insurance carriers and regulatory authorities.
We maintain insurance coverage for per-incident and total losses in excess of the amounts for which we self-insure up to
specified policy limits with licensed insurance carriers. 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.

5
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 2024, 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, 2024, 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.

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.

6
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 57% in 2022, 67% in 2023 and 74% in 2024. The impact of the
clearinghouse has been significant, with a total of approximately 181,000 drivers removed from the trucking industry from
January 2020 through December 2024.

In September 2020, the United States Department of Health and Human Services proposed mandatory guidelines
for federal workplace drug testing programs using hair follicles, which is a more strenuous test than current requirements.
The FMCSA has not issued proposed regulations.

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 2022 through 2024.

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.

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.

7
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.

Lack of capacity, changes in equipment requirements and service instability in the railroad industry could increase
our operating costs and reduce our ability to offer intermodal services, which could adversely affect our revenue, results of
operations and customer relationships. Our Intermodal segment is dependent on railroad services and their capacity to
transport freight for our customers. We expect our dependence on railroads will continue to increase as we expand our
intermodal services. We compete for the availability of railroad services with other intermodal operators as well as certain
industries reliant on the use of rail cars, such as oil and agricultural, whose consumption of railroad capacity has significantly
fluctuated over the past several years. In most markets, rail service is limited to a few railroads or even a single railroad. Any
capacity constraints, changes in equipment requirements, threatened or actual rail worker strikes, service problems or
reduction in service by the railroads with which we have, or in the future may have, relationships is likely to increase the cost
of the rail-based services we provide and reduce the reliability, timeliness and overall attractiveness of our rail-based services,
which could adversely affect our revenue, results of operations and customer relationships. Furthermore, railroads are
relatively free to adjust shipping rates up or down as market conditions permit. Price increases could result in higher costs to
our customers and reduce or eliminate our ability to offer intermodal services. In addition, we cannot assure you that we will
be able to negotiate additional contracts with railroads to expand our capacity, add additional routes or obtain multiple
providers, which could limit our ability to provide this service.

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.

8
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 2024, our top 30 customers, based on revenue excluding fuel surcharges, accounted for approximately 69% of our
revenue; our top ten customers accounted for approximately 48% of our revenue; our top five customers accounted for
approximately 36% of our revenue; our top two customers accounted for approximately 27% 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.

We maintain insurance above the amounts for which we self-insure with licensed insurance carriers. 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 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.

9
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 the summer of 2023 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 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. The State of California recently 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, starting in 2026. Additionally, on March 6, 2024, the SEC adopted climate-related disclosure
rules, which could increase compliance burdens and associated regulatory costs and complexity. Following a number of
petitions for review filed against the SEC, on April 4, 2024, the SEC issued an order staying the rules pending judicial review.
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. COVID-19, which was initially declared
a pandemic by the World Health Organization on March 11, 2020 and was declared no longer a global health emergency on
May 5, 2023, negatively affected economic conditions, supply chains, labor markets and demand for certain shipped goods.

10
The extent to which our business, results of operations and financial condition may be negatively affected by the
COVID-19 pandemic or future 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 a new COVID-19 variant or strain, or
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, the conflict between Israel and Hamas, 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.

11
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.

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.

In September 2020, the United States Department of Health and Human Services proposed mandatory guidelines
for federal workplace drug testing programs using hair follicles, which is a more strenuous test than the current requirements.
The FMCSA has not yet issued proposed regulations.

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.

12
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 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 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 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 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.

ITEM 1B.
UNRESOLVED STAFF COMMENTS

None.

13
ITEM 1C.
CYBERSECURITY

We have processes in place for assessing, identifying and managing material risks from cybersecurity threats. In
order to assess and identify material risks from cybersecurity threats, we engage a third-party managed security service
provider to conduct ongoing (24x7x365) security information and event management (SIEM) monitoring to collect, aggregate
and analyze data from our applications, devices, servers and users in real-time to assist our security team in detecting and
blocking cybersecurity attacks. In addition, we conduct periodic security vulnerability scans as well as external and internal
penetration testing that simulate attacks on our computer systems to assist with the discovery and remediation of security
flaws and vulnerabilities. Management continually reassesses our cybersecurity risk environment based on changing
circumstances and new information identified by our monitoring, scanning and testing, as well as third party resources. Our
processes for assessing, identifying and managing cybersecurity threats have been integrated into our overall risk
management processes. The information provided by these processes facilitates management’s ongoing assessment of our
cybersecurity risk environment and provides current and accurate information regarding cybersecurity risks to management,
our Audit Committee and Board to allow appropriate management of such risks through remediation or other risk mitigation
activities.
We engage various third-party cybersecurity service providers to assist with protection and monitoring of our
systems and information, including with respect to protection of our e-mail and system access. These service providers are
subject to an initial risk assessment as well as periodic risk assessments in order to evaluate, identify and mitigate risks from
cybersecurity threats arising from our use of such service providers.
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 safely 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.
Management is responsible for our day-to-day cybersecurity risk management and the Board’s responsibility is to
engage in informed oversight of and provide overall direction with respect to such risk management. As part of its charter,
the Audit Committee discusses with management and the independent auditors our adequacy and effectiveness of accounting
and financial controls, including our systems to monitor and manage business, information technology and cybersecurity
risks. On an annual basis, management prepares and presents to the Audit Committee a risk management summary that
identifies risks by operational department (e.g., executive, finance, human resources, information systems, maintenance,
operations, sales and marketing, risk management and safety), estimated maximum exposure per occurrence, the risk
management option and insured level. The Board, its committees and management continually re-assess our cybersecurity
risk environment based on changing circumstances and new information. The Audit Committee regularly discusses with
management its enterprise risk management process, including our cybersecurity exposures, the steps management has taken
to monitor and control such exposures and guidelines and policies to govern our risk assessment and risk management
processes. The Audit Committee periodically reports to the Board regarding significant matters identified with respect to the
foregoing, including, among others, our risk assessment and risk management approach to cybersecurity.

14
Our Executive Vice President and Chief Technology Officer, Randall Baier, is responsible for our day-to-day
assessment and management of cybersecurity risks. 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. We have implemented a number of processes which allow Mr. Baier and his
team to be informed about and monitor the prevention, detection, mitigation and remediation of cybersecurity incidents.
These processes include, among other things, system alerts of potential malicious cyber activity, access to real-time
dashboards that monitor and assess our systems, status reports provided on a daily, weekly and monthly basis and regular
ongoing communications with service providers regarding potential new attack vectors and vulnerabilities. Mr. Baier shares
such information with our management team and reports information about such risks to the Audit Committee.
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 operate facilities in or near the following cities at which we primarily perform operations and
maintenance activities:

•
Mondovi, Wisconsin
•
Atlanta, Georgia
•
Memphis, Tennessee
•
Phoenix, Arizona
•
Indianapolis, Indiana
•
Desoto, Texas
•
Jurupa Valley, California
•
Kansas City, Kansas
•
Laredo, Texas
•
Otay Mesa, California
•
Portland, Oregon
•
Colonial Heights, Virginia
•
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 operates 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.

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.

ITEM 4.
MINE SAFETY DISCLOSURES

Not Applicable.

15
ITEM 4A.
INFORMATION ABOUT OUR EXECUTIVE OFFICERS

Our executive officers, with their ages and the offices held as of February 14, 2025, are as follows:

Name
Age
Position
Randolph L. Marten
72
Executive Chairman of the Board and Director

Timothy M. Kohl
77
Chief Executive Officer
Douglas P. Petit
58
President

James J. Hinnendael
61
Executive Vice President and Chief Financial Officer
Adam D. Phillips
47
Executive Vice President and Chief Operating Officer

Randall J. Baier
54
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 Executive Chairman of the Board since May 2021. Mr. Marten also served as 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.

Timothy M. Kohl has been our Chief Executive Officer since May 2021. Mr. Kohl also served as our President
from June 2008 to August 2021 after joining the Company in November 2007. Mr. Kohl served as Knight Transportation
Inc.’s President from 2004 to 2007 and as its Secretary from 2000 to 2007. Mr. Kohl served as a director on Knight’s Board
of Directors from 2001 to 2006, and he served as its Chief Financial Officer from 2000 to 2004. Mr. Kohl also served as
Knight’s Vice President of Human Resources from 1996 to 1999. From 1999 to 2000, Mr. Kohl served as Vice President of
Knight’s southeast region. Prior to his employment with Knight, Mr. Kohl was employed by Burlington Motor Carriers as a
Vice President. Prior to his employment with Burlington Motor Carriers, Mr. Kohl served as a Vice President for J.B. Hunt.

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.

16
PART II

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 14,
2025, we had 152 record stockholders and approximately 24,701 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 2024 and 2023 which totaled $19.5
million in each year, and in each quarter of 2022 which totaled $19.6 million. 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. Our previous credit agreement prohibited us from making such payments in excess of
25% of our net income from the prior fiscal year. A waiver allowing stock redemptions and dividends in excess of the 25%
limitation in total amounts of up to $80 million in 2022 was obtained from the lender in March 2022. The current and previous
credit agreements also contain 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, 2024 and
December 31, 2023.

Share Repurchase Program

In August 2019, our Board of Directors approved and we announced an increase from current availability in our
existing share repurchase program providing for the repurchase of up to $34.0 million, or approximately 1.8 million shares,
of our common stock, which was increased by our Board of Directors to 2.7 million shares in August 2020 to reflect the
three-for-two stock split effected in the form of a stock dividend on August 13, 2020. On May 3, 2022, our Board of Directors
approved and we announced an additional increase from current availability in our existing share repurchase program
providing 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 Exchange Act. 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 repurchased and retired 1.3 million shares of common stock for $25.0 million in the first quarter of 2022, and
963,000 shares of common stock for $16.8 million in the second quarter of 2022. We did not repurchase any shares in 2024,
in 2023, or in the third or fourth quarters of 2022. As of December 31, 2024, future repurchases of up to $33.2 million, or
approximately 2.2 million shares, were available in the share repurchase program.

17
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, 2019, 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.

$0
$50
$100
$150
$200
$250
12/19
12/20
12/21
12/22
12/23
12/24
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among Marten Transport, Ltd., the NASDAQ Composite Index,
and SIC code 4213
Marten Transport, Ltd.
NASDAQ Composite
SIC code 4213
*$100 invested on 12/31/19 in stock or index, including reinvestment of dividends.
Fiscal year ending December 31.

18
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

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 Intermodal segment transports 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 affect our Intermodal revenue are the rate per mile and other charges we receive
from our customers.

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.

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.

19
Our operating revenue decreased $167.7 million, or 14.8%, in 2024 from 2023. Our operating revenue, net of fuel
surcharges, decreased $132.0 million, or 13.6%, compared with 2023. Truckload segment revenue, net of fuel surcharges,
decreased 4.6% from 2023, primarily due to a decrease in our average revenue per tractor, despite an increase in our average
fleet size. Dedicated segment revenue, net of fuel surcharges, decreased 20.3% from 2023, primarily due to decreases in both
our average fleet size and our average revenue per tractor. 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. Brokerage segment
revenue decreased 11.8% from 2023, primarily due to a decrease in our revenue per load. Fuel surcharge revenue decreased
to $123.7 million in 2024 from $159.4 million in 2023.

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 Intermodal and Brokerage segments, 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 63.1% to $33.2 million in 2024 from $90.1 million in 2023. Our operating expenses
as a percentage of operating revenue, or “operating ratio,” was 96.6% in 2024 and 92.0% in 2023. Operating expenses as a
percentage of operating revenue, with both amounts net of fuel surcharges, increased to 96.0% in 2024 from 90.7% in 2023.
Our 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.

Our business requires substantial ongoing capital investments, particularly for new tractors and trailers. At
December 31, 2024, we had $17.3 million of cash and cash equivalents, $767.9 million in stockholders’ equity and no long-
term debt outstanding. 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. We estimate that capital expenditures, net of proceeds from dispositions, will
be approximately $150 million in 2025. Quarterly cash dividends of $0.06 per share of common stock were paid in each
quarter of 2024 which totaled $19.5 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.

20
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:

2024

2023

2022

Truckload Segment:

Revenue (in thousands)
$
439,792 $
465,475 $
500,462
Average revenue, net of fuel surcharges, per tractor per week(1)
$
4,123 $
4,377 $
4,898
Average tractors(1)

1,751
1,733
1,611
Average miles per trip

533
519
510
Total miles (in thousands)

158,985
155,929
149,868

Dedicated Segment:

Revenue (in thousands)
$
319,135 $
408,272 $
429,092
Average revenue, net of fuel surcharges, per tractor per week(1)
$
3,767 $
3,936 $
3,963
Average tractors(1)

1,356
1,632
1,631
Average miles per trip

319
335
341
Total miles (in thousands)

110,681
133,163
136,310

Intermodal Segment:

Revenue (in thousands)
$
58,754 $
92,078 $
129,765
Loads

16,975
25,160
31,862
Average tractors

110
159
175

Brokerage Segment:

Revenue (in thousands)
$
146,027 $
165,630 $
204,559
Loads

89,138
91,077
95,615

(1)
Includes tractors driven by both company-employed drivers and independent contractors. Independent contractors
provided 88, 94 and 96 tractors as of December 31, 2024, 2023 and 2022, respectively.

21
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.

22
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%

23
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 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 $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 consists of amounts payable to railroads and carriers for transportation services we arrange
in connection with Brokerage and 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 third-party railroad and motor
carriers, the ratio of company drivers versus independent contractors and the amount of fuel surcharges passed through to
independent contractors. 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 United States Department of Energy, or 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. 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
$4.1 million, or 6.0%, from 2023 primarily due to lower outside repair and loading/unloading costs.

Depreciation relates to owned tractors, trailers, containers, auxiliary power units, communication units, terminal
facilities and other assets. 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. 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 $2.9 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. 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 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. Future gains or
losses on dispositions of revenue equipment will be impacted by the market for used revenue equipment, which is beyond
our control.

24
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.

25
Comparison of Year Ended December 31, 2023 to Year Ended December 31, 2022

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)

2023

2022
2023 vs.
2022
2023 vs.
2022

Operating revenue:

Truckload revenue, net of fuel surcharge revenue
$
395,565 $
411,448 $
(15,883 )
(3.9)%
Truckload fuel surcharge revenue

69,910
89,014
(19,104 )
(21.5)
Total Truckload revenue

465,475
500,462
(34,987 )
(7.0)

Dedicated revenue, net of fuel surcharge revenue

334,962
336,973
(2,011 )
(0.6)
Dedicated fuel surcharge revenue

73,310
92,119
(18,809 )
(20.4)
Total Dedicated revenue

408,272
429,092
(20,820 )
(4.9)

Intermodal revenue, net of fuel surcharge revenue

75,887
100,452
(24,565 )
(24.5)
Intermodal fuel surcharge revenue

16,191
29,313
(13,122 )
(44.8)
Total Intermodal revenue

92,078
129,765
(37,687 )
(29.0)

Brokerage revenue

165,630
204,559
(38,929 )
(19.0)

Total operating revenue
$ 1,131,455 $ 1,263,878 $ (132,423 )
(10.5)%

Operating income/(loss):

Truckload
$
24,835 $
59,392 $
(34,557 )
(58.2)%
Dedicated

48,377
50,566
(2,189 )
(4.3)
Intermodal

(156 )
10,639
(10,795 )
(101.5)
Brokerage

17,054
22,747
(5,693 )
(25.0)
Total operating income
$
90,110 $
143,344 $
(53,234 )
(37.1)%

Operating ratio:

Truckload

94.7 %
88.1 %

Dedicated

88.2
88.2

Intermodal

100.2
91.8

Brokerage

89.7
88.9

Consolidated operating ratio

92.0 %
88.7 %

Operating ratio, net of fuel surcharges:

Truckload

93.7 %
85.6 %

Dedicated

85.6
85.0

Intermodal

100.2
89.4

Brokerage

89.7
88.9

Consolidated operating ratio, net of fuel surcharges

90.7 %
86.4 %

Our operating revenue decreased $132.4 million, or 10.5%, to $1.131 billion in 2023 from $1.264 billion in 2022. Our
operating revenue, net of fuel surcharges, decreased $81.4 million, or 7.7%, to $972.0 million in 2023 from $1.053 billion in
2022. This decrease in 2023 was due to a $38.9 million decrease in Brokerage revenue, a $24.6 million decrease in Intermodal
revenue, net of fuel surcharges, a $15.9 million decrease in Truckload revenue, net of fuel surcharges, and a $2.0 million decrease
in Dedicated revenue, net of fuel surcharges. Fuel surcharge revenue decreased to $159.4 million in 2023 from $210.4 million in
2022.

In addition to the factors discussed below, our profitability across each segment in 2023 was impacted by a freight
market which has considerably softened from the exceptionally tight conditions during 2022.

26
Truckload segment revenue decreased $35.0 million, or 7.0%, to $465.5 million in 2023 from $500.5 million in 2022.
Truckload segment revenue, net of fuel surcharges, decreased $15.9 million, or 3.9%, to $395.6 million in 2023 from $411.4
million in 2022 primarily due to a decrease in our average revenue per tractor, despite an increase in our average fleet size. The
operating ratio increased to 94.7% in 2023 from 88.1% in 2022. Impacting the 2023 operating ratio was a decrease in our average
revenue per tractor along with higher company driver compensation, depreciation, maintenance and net fuel costs as a percentage
of revenue.

Dedicated segment revenue decreased $20.8 million, or 4.9%, to $408.3 million in 2023 from $429.1 million in 2022.
Dedicated segment revenue, net of fuel surcharges, decreased 0.6% primarily due to a decrease in our average revenue per tractor.
The operating ratio was 88.2% in each of 2023 and 2022.

Intermodal segment revenue decreased $37.7 million, or 29.0%, to $92.1 million in 2023 from $129.8 million in 2022.
Intermodal segment revenue, net of fuel surcharges, decreased 24.5% from 2022 primarily due to decreases in both our number
of loads and our revenue per load. The operating ratio in 2023 increased to 100.2% from 91.8% in 2022. Impacting the 2023
operating ratio was a decrease in our revenue per load along with higher net fuel, company driver compensation, depreciation,
maintenance, purchased transportation and chassis rental costs as a percentage of revenue.

Brokerage segment revenue decreased $38.9 million, or 19.0%, to $165.6 million in 2023 from $204.6 million in 2022
primarily due to decreases in both our revenue per load and our number of loads. The operating ratio in 2023 of 89.7% was up
from 88.9% in 2022. This increase was due to higher costs across most areas of the segment, partially offset by a decrease in the
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)

2023 vs.
2022
2023 vs.
2022

2023

2022

Operating revenue
$
(132,423 )
(10.5)%
100.0%
100.0%
Operating expenses (income):

Salaries, wages and benefits

(11,486 )
(2.9)
33.5
30.9
Purchased transportation

(50,458 )
(20.2)

17.6
19.8
Fuel and fuel taxes

(38,134 )
(17.4)

15.9
17.3
Supplies and maintenance

11,711
21.0

6.0
4.4
Depreciation

5,708
5.1

10.3
8.8
Operating taxes and licenses

290
2.7

1.0
0.9
Insurance and claims

5,501
10.9

5.0
4.0
Communications and utilities

972
10.6

0.9
0.7
Gain on disposition of revenue equipment

(233 )
(1.7)

(1.2)
(1.1)
Other

(3,060 )
(8.0)

3.1
3.0
Total operating expenses

(79,189 )
(7.1)
92.0
88.7
Operating income

(53,234 )
(37.1)

8.0
11.3
Other

(2,979 )
(360.2)

(0.3)
(0.1)
Income before income taxes

(50,255 )
(34.9)

8.3
11.4
Income taxes expense

(10,274 )
(30.4)

2.1

2.7
Net income
$
(39,981 )
(36.2)%
6.2%
8.7%

Salaries, wages and benefits expense decreased $11.5 million, or 2.9%, in 2023 from 2022. This decrease resulted
primarily from a $9.6 million decrease in bonus compensation expense for our non-driver employees and lower company
driver compensation expense of $4.6 million, partially offset by a $4.7 million increase in non-driver compensation expense.

27
Purchased transportation expense decreased $50.5 million in total, or 20.2%, in 2023 from 2022. Amounts payable
to carriers for transportation services we arranged in our Brokerage segment decreased $34.1 million to $136.1 million in
2023 from $170.1 million in 2022, primarily due to decreases in both our cost per load and number of loads. Amounts payable
to railroads and drayage carriers for transportation services within our Intermodal segment decreased to $47.5 million in 2023
from $65.3 million in 2022, primarily due to decreases in both our number of loads and cost per load. The portion of purchased
transportation expense related to independent contractors within our Truckload and Dedicated segments, including fuel
surcharges, increased $1.3 million in 2023.

Fuel and fuel taxes decreased by $38.1 million, or 17.4%, in 2023 from 2022. Net fuel expense (fuel and fuel taxes
net of fuel surcharge revenue and surcharges passed through to independent contractors, outside drayage carriers and
railroads) increased $5.2 million, or 16.2%, to $37.1 million in 2023 from $31.9 million in 2022. Fuel surcharges passed
through to independent contractors, outside drayage carriers and railroads decreased to $16.0 million from $23.8 million in
2022. The DOE national average cost of fuel decreased to $4.21 per gallon from $4.99 per gallon in 2022. Despite this price
decrease, our net fuel expense increased to 4.6% of Truckload, Dedicated and Intermodal segment revenue, net of fuel
surcharges, in 2023 from 3.8% in 2022, primarily due to the record heat in the third quarter of 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 increased $11.7 million, or 21.0%, from 2022 primarily due to higher outside
repair, loading/unloading and parts costs.

The $5.7 million, or 5.1%, increase in depreciation in 2023 was primarily due to an increase in our average tractor
fleet size during the year, along with higher prices of new equipment.

The $5.5 million, or 10.9% increase in insurance and claims in 2023 was primarily due to increases in our self-
insured cost of physical damage claims related to our revenue equipment, self-insured workers’ compensation claim costs
and insurance premiums, partially offset by a reduction in our self-insured auto liability claim costs.

Gain on disposition of revenue equipment was $13.6 million in 2023, up slightly from $13.4 million in 2022
primarily due to an increase in the number of units sold, offset by a decrease in the average gain for our tractor and trailer
sales.

Our operating income declined 37.1% to $90.1 million in 2023 from $143.3 million in 2022 as a result of the
foregoing factors. Our operating expenses as a percentage of operating revenue, or “operating ratio,” was 92.0% in 2023 and
88.7% in 2022. The operating ratio for our Truckload segment was 94.7% in 2023 and 88.1% in 2022, for our Dedicated
segment was 88.2% in each of 2023 and 2022, for our Intermodal segment was 100.2% in 2023 and 91.8% in 2022, and for
our Brokerage segment was 89.7% in 2023 and 88.9% in 2022. Operating expenses as a percentage of operating revenue,
with both amounts net of fuel surcharges, was 90.7% in 2023 and 86.4% in 2022.

Other non-operating income increased to $3.8 million from $827,000 in 2022 due to increased interest income earned
on our cash and cash equivalents.

Our effective income tax rate increased to 25.1% in 2023 from 23.5% in 2022 primarily due to increases in per diem
and other non-deductible expenses.

As a result of the factors described above, net income declined 36.2% to $70.4 million, or $0.86 per diluted share,
in 2023 from $110.4 million, or $1.35 per diluted share, in 2022.

28
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)

2024

2023

2022

Net cash flows provided by operating activities
$
134,814 $
164,378 $
219,489
Net cash flows used for investing activities

(152,138 )
(172,540)
(134,958)
Net cash flows used for financing activities

(18,622 )
(19,225)
(60,926)

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. In 2022, net cash flows provided by operating activities of $219.5 million were
primarily used to purchase new revenue equipment, net of proceeds from dispositions, in the amount of $120.9 million, to
repurchase and retire 2.3 million shares of our common stock for $41.8 million, to pay cash dividends of $19.6 million and
to construct and upgrade regional operating facilities in the amount of $11.2 million, resulting in a $23.6 million increase in
cash and cash equivalents.

We estimate that capital expenditures, net of proceeds from dispositions, will be approximately $150 million in
2025. This amount includes commitments to purchase $191.2 million of new revenue equipment, prior to considering
proceeds from dispositions. Additionally, operating lease obligations total $627,000 through 2028. Quarterly cash dividends
of $0.06 per share of common stock were paid in each quarter of 2024 and 2023 which totaled $19.5 million in each year,
and in each quarter of 2022 which totaled $19.6 million. 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.

29
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, 2024, 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 $23.1 million and remaining borrowing availability of $6.9 million. At December 31, 2023, there was also no
outstanding principal balance on the facility. As of that date, we had outstanding standby letters of credit of $20.7 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 7.5% at 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, 2024.

Seasonality

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,
2024 and are responsible for the first $2.0 million on each auto liability claim with 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 $23.1 million in standby letters of credit to
guarantee settlement of claims under agreements with our insurance carriers and regulatory authorities. We maintain
insurance coverage for per-incident and total losses in excess of these risk retention levels 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 $37.5 million and $40.3 million as of
December 31, 2024 and 2023, 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.

30
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 2024 or 2023. 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 2023, a 5% increase in the average cost of diesel fuel would have
increased our fuel expense by $8.8 million. 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. There were no material quantitative changes in market
risk from 2023 to 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.

31
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 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, 2024. 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, 2024.
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 28, 2025

32
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, 2024, 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, 2024, 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, 2024, and
our report dated February 28, 2025 expressed as 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 28, 2025

33
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, 2024 and 2023, the related consolidated statements of operations, stockholders’
equity, and cash flows for each of the three years in the period ended December 31, 2024, 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, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December
31, 2024, 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, 2024, 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 28, 2025 expressed as 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 13 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.

34
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/ GRANT THORNTON LLP

We have served as the Company’s auditor since 2014.

Minneapolis, Minnesota
February 28, 2025

35
MARTEN TRANSPORT, LTD.
Consolidated Balance Sheets

December 31,

(In thousands, except share information)

2024

2023

ASSETS

Current assets:

Cash and cash equivalents
$
17,267 $
53,213
Receivables:

Trade, less allowances of $496 and $497, respectively

89,992
105,501
Other

5,364
10,356
Prepaid expenses and other

25,888
27,512
Total current assets

138,511
196,582
Property and equipment:

Revenue equipment

1,028,863
996,396
Buildings and land

108,990
108,867
Office equipment and other

60,884
57,073
Less accumulated depreciation

(370,124)
(370,103)
Net property and equipment

828,613
792,233
Other noncurrent assets

1,633
1,524
Total assets
$
968,757 $
990,339
LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable
$
25,781 $
36,516
Insurance and claims accruals

44,246
47,017
Accrued and other current liabilities

23,492
26,709
Total current liabilities

93,519
110,242
Deferred income taxes

107,034
122,462
Noncurrent operating lease liabilities
282
249
Total liabilities

200,835
232,953
Commitments and contingencies (Note 13)

Stockholders’ equity:

Preferred stock, $.01 par value per share; 2,000,000 shares authorized; no
shares issued and outstanding

—
—
Common stock, $.01 par value per share; 192,000,000 shares authorized;
81,463,938 shares at December 31, 2024, and 81,312,168 shares at December
31, 2023, issued and outstanding

815
813
Additional paid-in capital

52,941
49,789
Retained earnings

714,166
706,784
Total stockholders’ equity

767,922
757,386
Total liabilities and stockholders’ equity
$
968,757 $
990,339

The accompanying notes are an integral part of these consolidated financial statements.

36
MARTEN TRANSPORT, LTD.
Consolidated Statements of Operations

For the years ended December 31,

(In thousands, except per share information)

2024

2023

2022

Operating revenue
$
963,708 $
1,131,455 $
1,263,878
Operating expenses (income):

Salaries, wages and benefits

341,732
378,818
390,304
Purchased transportation

169,142
199,334
249,792
Fuel and fuel taxes

147,143
180,437
218,571
Supplies and maintenance

63,337
67,411
55,700
Depreciation

111,653
116,722
111,014
Operating taxes and licenses

10,302
11,053
10,763
Insurance and claims

53,109
56,014
50,513
Communications and utilities

9,029
10,149
9,177
Gain on disposition of revenue equipment

(4,971)
(13,612)
(13,379)
Other

30,012
35,019
38,079
Total operating expenses

930,488
1,041,345
1,120,534
Operating income

33,220
90,110
143,344
Other

(3,126)
(3,806)
(827)
Income before income taxes

36,346
93,916
144,171
Income taxes expense

9,424
23,543
33,817
Net income
$
26,922 $
70,373 $
110,354
Basic earnings per common share
$
0.33 $
0.87 $
1.35
Diluted earnings per common share
$
0.33 $
0.86 $
1.35
Dividends declared per common share
$
0.24 $
0.24 $
0.24

The accompanying notes are an integral part of these consolidated financial statements.

37
MARTEN TRANSPORT, LTD.
Consolidated Statements of Stockholders’ Equity

Common Stock

Additional

Retained

Total
Stockholders’

(In thousands)

Amount
Paid-In Capital
Earnings

Equity

Balance at December 31, 2021
83,034
$
830
$
85,718
$
565,129
$
651,677
Net income
—
—
—
110,354
110,354
Repurchase and retirement of
common stock
(2,270)
(23)
(41,730)
—
(41,753)
Issuance of common stock from
share-based payment
arrangement exercises, deferred
compensation plan distributions
and vesting of performance unit
awards

351
4
1,996
—
2,000
Employee taxes paid in exchange
for shares withheld

—
—
(1,610)
—
(1,610)
Share-based payment arrangement
compensation expense

—
—
2,814
—
2,814
Dividends on common stock
—
—
—
(19,563)
(19,563)
Balance at December 31, 2022
81,115
811
47,188
655,920
703,919
Net income
—
—
—
70,373
70,373
Issuance of common stock from
share-based payment
arrangement exercises and
vesting of performance unit
awards

197
2
1,208
—
1,210
Employee taxes paid in exchange
for shares withheld

—
—
(926)
—
(926)
Share-based payment arrangement
compensation expense

—
—
2,319
—
2,319
Dividends on common stock
—
—
—
(19,509)
(19,509)
Balance at December 31, 2023
81,312
813
49,789
706,784
757,386
Net income
—
—
—
26,922
26,922
Issuance of common stock from
share-based payment
arrangement exercises and
vesting of performance unit
awards

152
2
1,298
—
1,300
Employee taxes paid in exchange
for shares withheld

—
—
(382)
—
(382)
Share-based payment arrangement
compensation expense

—
—
2,236
—
2,236
Dividends on common stock
—
—
—
(19,540)
(19,540)
Balance at December 31, 2024
81,464
$
815
$
52,941
$
714,166
$
767,922

The accompanying notes are an integral part of these consolidated financial statements.

38
MARTEN TRANSPORT, LTD.
Consolidated Statements of Cash Flows

For the years ended December 31,

(In thousands)
2024
2023

2022

CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:

Operations:

Net income
$
26,922 $
70,373 $
110,354
Adjustments to reconcile net income to net cash provided by operating
activities:

Depreciation

111,653
116,722
111,014
Tires in service amortization
6,888
7,172
6,604
Gain on disposition of revenue equipment

(4,971)
(13,612)
(13,379)
Deferred income taxes

(15,428)
(14,579)
11,878
Share-based payment arrangement compensation expense

2,236
2,319
2,814
Changes in other current operating items:

Receivables

19,831

12,751

(23,547)
Prepaid expenses and other

(4,055)
(3,939)
(8,227)
Accounts payable

(2,439)
(3,615)
11,893
Insurance and claims accruals

(2,771)
1,270
3,733
Accrued and other current liabilities

(3,052)
(10,484)
6,352
Net cash provided by operating activities

134,814
164,378
219,489
CASH FLOWS USED FOR INVESTING ACTIVITIES:

Revenue equipment additions

(227,838)
(231,943)
(162,556)
Proceeds from revenue equipment dispositions

81,057
68,009
41,695
Buildings and land, office equipment and other additions

(5,392)
(8,614)
(14,067)
Proceeds from buildings and land, office equipment and other dispositions

84
53
8
Other

(49)
(45)
(38)
Net cash used for investing activities

(152,138)
(172,540)
(134,958)
CASH FLOWS USED FOR FINANCING ACTIVITIES:

Dividends on common stock

(19,540)
(19,509)
(19,563)
Repurchase and retirement of common stock
-
-
(41,753)
Issuance of common stock from share-based payment arrangement exercises,
deferred compensation plan distributions and vesting of performance unit
awards

1,300
1,210
2,000
Employee taxes paid in exchange for shares withheld
(382)
(926)
(1,610)
Net cash used for financing activities

(18,622)
(19,225)
(60,926)
NET CHANGE IN CASH AND CASH EQUIVALENTS

(35,946)
(27,387)
23,605
CASH AND CASH EQUIVALENTS:

Beginning of year

53,213
80,600
56,995
End of year
$
17,267 $
53,213 $
80,600
SUPPLEMENTAL NON-CASH DISCLOSURE:

Change in property and equipment not yet paid
$
(7,626) $
(1,612) $
10,470
Operating lease assets and liabilities acquired
$
253 $
89
$
318
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid for:

Income taxes
$
19,170 $
36,978 $
23,649
Interest
$
- $
10 $
65

The accompanying notes are an integral part of these consolidated financial statements.

39
MARTEN TRANSPORT, LTD.
Notes to Consolidated Financial Statements
December 31, 2024, 2023 and 2022

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 six distinct business platforms –
Temperature-Sensitive and Dry Truckload, Dedicated, Intermodal, Brokerage and MRTN de Mexico. 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.

Principles of consolidation: The accompanying consolidated financial statements include Marten Transport, Ltd.
and its subsidiaries. All intercompany accounts and transactions are eliminated upon consolidation.

Cash and cash equivalents: Cash in excess of current operating requirements is invested in short-term, highly liquid
investments. We consider all highly liquid investments purchased with original maturities of three months or less to be cash
equivalents. We maintain our cash and cash equivalents in bank accounts which, at times, may exceed federally insured
limits. We have not experienced any losses in such accounts.

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 $496,000 and $497,000 as of December 31, 2024 and 2023, respectively.
A considerable amount of judgment is required in assessing the realization of these receivables including the current
creditworthiness of each customer and related aging of the past-due balances, including any billing disputes. In order to assess
the collectability of these receivables, we perform ongoing credit evaluations of our customers’ financial condition. Through
these evaluations, we may become aware of a situation where a customer may not be able to meet its financial obligations
due to deterioration of its financial viability, credit ratings or bankruptcy. The allowance for credit losses is based on the best
information available to us and is reevaluated and adjusted as additional information is received. We evaluate the allowance
based on historical write-off experience, the size of the individual customer balances, past-due amounts and the overall
national economy. We review the adequacy of our allowance for credit losses monthly. Invoice balances over 30 days after
the contractual due date are considered past due per our policy and are reviewed individually for collectability. Initial
payments by new customers are monitored for compliance with contractual terms. Account balances are charged off against
the allowance after all means of collection have been exhausted and the potential recovery is considered remote.

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
12
Service and other equipment

3
- 15

Buildings and improvements

20
- 40

40
In 2024, we replaced our company-owned tractors within an average of 3.9 years and our trailers within an average
of 8.4 years after purchase. Our useful lives for depreciating tractors is five years, for trailers is seven years and for refrigerated
containers is 12 years, with a 25% salvage value for tractors placed in service through 2023, a 20% salvage value for tractors
placed in service beginning in 2024, a 35% salvage value for trailers and no salvage value for refrigerated containers. These
salvage values are based upon the expected market values of the equipment after five years for tractors and seven years for
trailers. Depreciation expense calculated in this manner approximates the continuing declining value of the revenue
equipment and continues at a consistent straight-line rate for units held beyond the normal replacement cycle.

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.

Tires in service: The cost of original equipment and replacement tires placed in service is capitalized. Amortization
is calculated based on cost, less estimated salvage value, using the straight-line method over 24 months. Tire amortization,
which is included within supplies and maintenance in our consolidated statements of operations, was $6.9 million in 2024,
$7.2 million in 2023 and $6.6 million in 2022. The current portion of capitalized tires in service is included in prepaid
expenses and other in the accompanying consolidated balance sheets. The long-term portion of capitalized tires in service
and the estimated salvage value are included in revenue equipment in the accompanying consolidated balance sheets. The
cost of recapping tires is charged to operations as incurred.

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.

Insurance and claims: 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
renewed our liability insurance policies effective June 1, 2024 and are responsible for the first $2.0 million on each auto
liability claim with 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. We maintain
insurance coverage for per-incident and total losses in excess of these risk retention levels 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, including legal costs. These reserves are periodically evaluated and adjusted based on our evaluation of
the nature and severity of outstanding individual claims and an estimate of future claims development based on historical
development. Under agreements with our insurance carriers and regulatory authorities, we have $23.1 million in standby
letters of credit to guarantee settlement of claims.

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.

41
We account for revenue of our Intermodal and Brokerage segments and 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 and all corresponding payments to carriers
for transportation services we arrange in connection with brokerage and 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 20% of our revenue excluding fuel surcharges in 2024 and 21% of
our trade receivables as of December 31, 2024, 19% of our revenue in 2023 and 19% of our trade receivables as of December
31, 2023, and 21% of our revenue in 2022. During each of 2024, 2023 and 2022, approximately 99% of our revenue was
generated within the United States.

Share-based payment arrangement compensation: Under our stock incentive plans, all of our employees and any
subsidiary employees, as well as all of our non-employee directors, may be granted stock-based awards, including incentive
and non-statutory stock options and performance unit awards. We account for share-based payment arrangements in
accordance with FASB ASC 718, Compensation-Stock Compensation, which requires all share-based payments to employees
and non-employee directors, including grants of employee stock options and performance unit awards, to be recognized in
the income statement based on their fair values at the date of grant.

Earnings per common share: Basic earnings per common share is computed by dividing net income by the
weighted-average number of common shares outstanding during the year. Diluted earnings per common share is computed
by dividing net income by the sum of the weighted-average number of common shares outstanding plus all additional common
shares that would have been outstanding if potentially dilutive common shares related to stock options and performance unit
awards had been issued using the treasury stock method.

Segment reporting: We report our operating segments in accordance with accounting standards codified in FASB
ASC 280, Segment Reporting. We have six current operating segments that are aggregated into four reporting segments
(Truckload, Dedicated, Intermodal and Brokerage) for financial reporting purposes. See Note 14 for more information.

Use of estimates: We must make estimates and assumptions to prepare the consolidated financial statements in
conformity with U.S. generally accepted accounting principles. These estimates and assumptions affect the reported amounts
of assets and liabilities and the disclosure of contingent assets and liabilities in the consolidated financial statements and the
reported amount of revenue and expenses during the reporting period. These estimates are primarily related to insurance and
claims accruals and depreciation. Ultimate results could differ from these estimates.

Adoption of new accounting standard: In November 2023, the FASB issued Accounting Standards Update 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.

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)

2024

2023

License fees
$
5,863 $
5,557
Parts and tires inventory

5,694
6,286
Insurance premiums

5,324
4,608
Tires in service
4,582
4,984
Contract assets

1,584
2,106
Other
2,841
3,971

$
25,888 $
27,512

42
Accrued and other current liabilities: As of December 31, accrued and other current liabilities consisted of the
following:

(In thousands)

2024

2023

Accrued expenses
$
10,243 $
10,575
Vacation
8,377
9,612
Salaries and wages

1,429
3,800
Accrued income taxes
1,065
-
Other
2,378
2,722

$
23,492 $
26,709

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 $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, 2024, 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 $23.1 million and remaining borrowing availability of $6.9 million. At December 31, 2023, there was also no
outstanding principal balance on the facility. As of that date, we had outstanding standby letters of credit of $20.7 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 7.5% at December 31, 2024.

4. Related Party Transactions

The following related party transactions occurred during the three years ended December 31, 2024:

(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 $27,000 in 2024, $195,000 in 2023 and $477,000 in 2022 for
tires and related services. In addition, we paid $2.2 million in 2024 and $2.0 million in each of 2023 and 2022 to tire
manufacturers for tires that were provided by the same company. The same company received commissions from the tire
manufacturers related to these purchases. We did not have any accounts payable to that company as of December 31, 2024
or 2023.

(b) We paid $8,000 in each of 2024 and 2023 and $10,000 in 2022 for building repairs to a company in which one
of our directors is the chief executive officer and the principal stockholder. We did not have any accounts payable to that
company as of December 31, 2024 or 2023.

43
5. Income Taxes

The components of the income taxes expense consisted of the following:

(In thousands)

2024

2023

2022

Current:

Federal
$
21,254 $
33,416
$
18,025
State

3,598
4,706
3,914
Total current

24,852
38,122
21,939

Deferred:

Federal

(12,748)
(13,526)
9,795
State

(2,680)
(1,053)
2,083
Total deferred

(15,428)
(14,579)
11,878
Total expense
$
9,424
$
23,543
$
33,817

The federal statutory income tax rate is reconciled to the effective income tax rate as follows:

2024

2023

2022

Federal statutory income tax rate

21%
21%
21%
Increase in taxes arising from state income taxes, net
of federal income tax benefit

2
3

3
Per diem and other non-deductible expenses

4
2

-
Federal tax credits
(1)
-
-
Other, net

(1)

(1)
Effective tax rate

26%
25%
23%

As of December 31, the net deferred tax liability consisted of the following:

(In thousands)

2024

2023

Deferred tax assets:

Reserves and accrued liabilities
$
12,347 $
13,126
Other

1,454
1,212

13,801
14,338
Deferred tax liabilities:

Depreciation
117,595 133,634
Prepaid expenses

3,240
3,166

120,835 136,800
Net deferred tax liability
$ 107,034 $ 122,462

We have not provided a valuation allowance against deferred tax assets at December 31, 2024 or 2023. 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.

Our reserves for unrecognized tax benefits were $386,000 as of December 31, 2024 and $434,000 as of December
31, 2023. The $48,000 decrease in the amount reserved relates to current period tax positions. If recognized, $305,000 of the
unrecognized tax benefits as of December 31, 2024 would favorably impact our effective tax rate. Potential interest and
penalties related to unrecognized tax benefits of $14,000 were recognized in our financial statements as of each of December
31, 2024 and 2023. The federal statute of limitations remains open for 2021 and forward. We file tax returns in numerous
state jurisdictions with varying statutes of limitations.

44
6. Earnings per Common Share

Basic and diluted earnings per common share were computed as follows:

(In thousands, except per share amounts)

2024

2023

2022

Numerator:

Net income
$
26,922 $
70,373 $
110,354
Denominator:

Basic earnings per common share - weighted-average shares

81,406
81,272
81,692
Effect of dilutive stock options

66
141
267
Diluted earnings per common share - weighted-average shares
and assumed conversions

81,472
81,413
81,959
Basic earnings per common share
$
0.33 $
0.87 $
1.35
Diluted earnings per common share
$
0.33 $
0.86 $
1.35

Options totaling 504,500, 173,300 and 541,500 equivalent shares were outstanding but were not included in the
calculation of diluted earnings per share for 2024, 2023 and 2022, respectively, because including the options in the
denominator would be antidilutive, or decrease the number of weighted-average shares, due to their exercise prices exceeding
the average market price of the common shares, or because inclusion of average unrecognized compensation expense in the
calculation would cause the options to be antidilutive.

Unvested performance unit awards (see Note 10) totaling 112,250, 106,582 and 16,632 equivalent shares for 2024,
2023 and 2022, respectively, were considered outstanding but were not included in the calculation of diluted earnings per
share because inclusion of average unrecognized compensation expense in the calculation would cause the performance units
to be antidilutive.

7. Share Repurchase Program

8. Dividends

45
9. Leases

We lease facilities, drop yards, office space, land, chassis and equipment. 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 six months to five
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 and chassis, 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)

2024

2023
Assets:
Other noncurrent assets (a)
$
578
$
517
Liabilities:
Accrued and other current liabilities
296
268
Noncurrent operating lease liabilities
282
249
Total liabilities
$
578
$
517

(a) Operating lease asset balances at December 31, 2024 and 2023.

The maturity of the operating lease liabilities is as follows:

Amount
Maturities:
2025
$
318
2026
233
2027
65
2028
11
Total lease payments
627
Adjust to present value
(49)
Total operating lease liabilities
$
578
The weighted-average remaining lease term at December 31, 2024 was 27 months and at December 31, 2023 was
33 months. The weighted-average discount rate was 6.5% at December 31, 2024 and 5.1% at December 31, 2023. The
operating leases identified do not specify implicit rates, accordingly, we use our incremental borrowing rate at the time of
lease inception to determine the present value of lease payments.

Operating lease assets obtained in exchange for lease obligations in 2024 and 2023 totaled $253,000 and $89,000,
respectively. We paid $307,000 of cash for capitalized operating leases during 2024 and $332,000 during 2023.

Total operating lease expense for 2024 was $5.2 million and for 2023 was $6.5 million. These amounts are reported
within other operating expenses in our consolidated statements of operations and include $4.9 million and $6.2 million,
respectively, of short-term lease expense with an initial term of 12 months or less.

46
10. Employee Benefits

Equity Incentive Plans - In May 2015, our stockholders approved our 2015 Equity Incentive Plan (the “2015 Plan”).
Our Board of Directors adopted the 2015 Plan in March 2015. Under our 2015 Plan, each of our employees and any subsidiary
employees, as well as all of our non-employee directors, may be granted stock-based awards, including non-statutory stock
options, performance unit awards and shares of common stock, of which 2,781,347 shares have been awarded as of December
31, 2024. Stock options expire within 7 or 10 years after the date of grant and the exercise price must be at least the fair
market value of our common stock on the date of grant. Stock options issued to employees are generally exercisable beginning
one year from the date of grant in cumulative amounts of 20% per year. Performance unit awards are subject to vesting
requirements over a five-year period, based on our earnings growth and service with us. Options exercised and performance
unit award shares issued represent newly issued shares.

At our 2019 Annual Meeting of Stockholders held on May 7, 2019, our stockholders approved an amendment to the
Marten Transport, Ltd. 2015 Equity Incentive Plan, which was previously approved and adopted by our Board of Directors,
subject to approval by our stockholders. The amendment increased the number of shares of common stock authorized for
issuance under the 2015 Plan by 1.3 million shares and the number of shares of common stock authorized for issuance
pursuant to full-value awards by 558,334 shares. The amendment also adjusted certain numbers to reflect the stock split that
occurred in July 2017.

On August 13, 2020, we effected a three-for-two stock split of our common stock, $0.01 par value, in the form of a
50% stock dividend. In July 2020, our Board of Directors approved an increase to reflect the three-for-two stock split in the
number of shares of common stock authorized for issuance under the 2015 plan, along with in the number of shares reserved
for issuance under all outstanding options and performance unit awards and shares held within our Deferred Compensation
Plan. As a result, the number of shares authorized for issuance under the 2015 Plan, as amended, increased to 3,950,000
shares.

As of December 31, 2024, there were 704,421 shares reserved for issuance under options outstanding and 298,791
shares reserved for issuance under outstanding performance unit awards under the 2015 Plan. The 2015 Plan replaced our
2005 Stock Incentive Plan (the “2005 Plan”), which expired by its terms in May 2015.

Under the 2005 Plan, officers, directors and employees were granted non-statutory stock options and performance
unit awards with similar terms to the options and awards under the 2015 Plan. As of December 31, 2024 and 2023, there were
no remaining shares reserved for issuance under options issued within the 2005 Plan. As of the same dates, there were also
no remaining shares reserved for issuance under performance unit awards issued within the 2005 Plan. No additional awards
will be granted under the 2005 Plan.

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:

2024

2023

2022

Expected option life in years(1)

6.0

6.0
6.0
Expected stock price volatility percentage(2)

27 %
28%
26%
Risk-free interest rate percentage(3)

4.3 %
4.1%
2.9%
Expected dividend yield(4)

1.38 %
1.14%
1.13%
Fair value as of the date of grant
$
5.26
$
6.63 $
5.79

(1)
Expected option life – We use historical employee exercise and option expiration data to estimate the expected life
assumption for the Black-Scholes grant-date valuation. We believe that this historical data is currently the best
estimate of the expected term of a new option. We use a weighted-average expected life for all awards.

(2)
Expected stock price volatility – We use our stock’s historical volatility for the same period of time as the expected
life. We have no reason to believe that its future volatility will differ from the past.

(3)
Risk-free interest rate – The rate is based on the U.S. Treasury yield curve in effect at the time of the grant for the
same period of time as the expected life.

47
(4)
Expected dividend yield – The calculation is based on the total expected annual dividend payout divided by the
average stock price.

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 2018, we granted 68,550 performance unit awards under our 2015 Equity Incentive Plan to certain
employees. This was our ninth grant of such awards. As of December 31, 2018 and each December 31st thereafter through
December 31, 2022, each award vested and became the right to receive a number of shares of common stock equal to a total
vesting percentage multiplied by the number of units subject to such award. The total vesting percentage for each of the five
years was equal to the sum of a performance vesting percentage, which was the percentage increase, if any, in our net income
for the year being measured over the prior year, and a service vesting percentage of ten percentage points. All payments were
made in shares of our common stock. One half of the vested performance units were paid to the employees immediately upon
vesting, with the other half being credited to the employees’ accounts within the Marten Transport, Ltd. Deferred
Compensation Plan, which restricted the sale of vested shares to the later of each employee’s termination of employment or
attainment of age 62. We also granted 42,000 performance unit awards in May 2018 and 3,000 awards in August 2018 with
similar terms to such awards, except that all vested performance units were paid to the employees immediately upon vesting.
We also granted 3,000 performance unit awards in December 2018 with similar terms to the awards granted in August 2018,
except that the awards vested from December 31, 2019 through 2023.

In May 2019, we granted 60,000 performance unit awards under our 2015 Equity Incentive Plan with similar terms
to the awards granted in 2018. We also granted 45,000 performance unit awards in May 2019 with similar terms to such
awards, except that all vested performance units were paid to the employees immediately upon vesting. These awards granted
in 2019 vested from December 31, 2019 through 2023.

In May 2020, we granted 73,205 performance unit awards under our 2015 Equity Incentive Plan with similar terms
to awards granted in 2018, except that all vested performance units were paid to the employees immediately upon vesting.
These awards granted in 2020 vested from December 31, 2020 through 2024.

In May 2021, we granted 98,400 performance unit awards under our 2015 Equity Incentive Plan with similar terms
to awards granted in 2020. These awards granted in 2021 vest from December 31, 2021 through 2025.

In May 2022, we granted 102,900 performance unit awards, and in August 2022, we granted 21,000 performance
unit awards, under our 2015 Equity Incentive Plan with similar terms to awards granted in 2020. These awards granted in
2022 vest from December 31, 2022 through 2026.

In May 2023, we granted 114,044 performance unit awards under our 2015 Equity Incentive Plan with similar terms
to awards granted in 2020. These awards granted in 2023 vest from December 31, 2023 through 2027.

In May 2024, we granted 125,464 performance unit awards under our 2015 Equity Incentive Plan with similar terms
to awards granted in 2020. These awards granted in 2024 vest from December 31, 2024 through 2028.

In May 2020, our Compensation Committee and Board of Directors approved the termination of our deferred
compensation plan. The termination was effective in May 2021. All shares of our common stock within the plan were
distributed by March 2022.

The fair value of each performance unit 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 units probable of achieving the vesting
requirements of the awards, net of an estimated forfeiture rate.

48
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 1.25% of unvested outstanding awards will be
forfeited each year. This analysis will be re-evaluated on a quarterly basis and the forfeiture rate will be adjusted as necessary.
Ultimately, the actual expense recognized over the vesting period will only be for those shares that vest.

Total share-based compensation expense recorded in 2024 was $2.2 million ($1.7 million net of income tax benefit,
$0.02 earnings per basic and diluted share), in 2023 was $2.3 million ($1.7 million net of income tax benefit, $0.02 earnings
per basic and diluted share) and in 2022 was $2.8 million ($2.2 million net of income tax benefit, $0.03 earnings per basic
and diluted share). All share-based compensation expense was recorded in salaries, wages and benefits expense.

As of December 31, 2024, there was a total of $1.2 million of unrecognized compensation expense related to
unvested service-based option awards, which is expected to be recognized over a weighted-average period of 2.4 years, and
$4.8 million of unrecognized compensation expense related to unvested performance unit awards, which will be recorded
based on the estimated number of units probable of achieving the vesting requirements of the awards through 2028.

Option activity in 2024 was as follows:

Weighted-
Average
Exercise Price

Outstanding at December 31, 2023

838,150 $
16.65
Granted

28,000
17.77
Exercised

(99,829)
13.05
Forfeited

(61,900)
17.26
Outstanding at December 31, 2024

704,421 $
17.17
Exercisable at December 31, 2024

441,921 $
16.23

The 704,421 options outstanding as of December 31, 2024 have a weighted-average remaining contractual life of
3.3 years and an aggregate intrinsic value based on our closing stock price on December 31, 2024 for in-the-money options
of $339,000. The 441,921 options exercisable as of the same date have a weighted-average remaining contractual life of 2.7
years and an aggregate intrinsic value, similarly calculated, of $332,000.

The fair value of options granted in 2024, 2023 and 2022 was $147,000, $258,000 and $819,000, respectively, for
service-based options. The total intrinsic value of options exercised in 2024, 2023 and 2022 was $521,000, $1.1 million and
$2.0 million, respectively. Intrinsic value is the difference between the fair value of the acquired shares at the date of exercise
and the exercise price, multiplied by the number of options exercised. Proceeds received from option exercises in 2024, 2023
and 2022 were $1.8 million, $2.4 million and $4.0 million, respectively.

Nonvested service-based option awards as of December 31, 2024 and changes during 2024 were as follows:

Shares
Weighted-
Average
Grant Date
Fair Value

Weighted-
Average
Remaining
Contractual
Life
(in Years)

Nonvested at December 31, 2023

406,300 $
4.88
5.0
Granted

28,000
5.26
6.6
Vested

(128,300 )
4.67
3.6
Forfeited

(43,500 )
4.57
4.2
Nonvested at December 31, 2024

262,500 $
5.07
4.4

The total fair value of options which vested during 2024, 2023 and 2022 was $599,000, $744,000 and $691,000,
respectively.

49
The following table summarizes our nonvested performance unit award activity in 2024:

Shares
Weighted-Average
Grant Date
Fair Value

Nonvested at December 31, 2023

188,400
$
19.51
Granted

125,464

17.54
Vested

(49,162) (1)
18.34
Forfeited
(9,148)
20.26
Nonvested at December 31, 2024

255,554
$
18.77
(1)
This number of performance unit award shares vested based on our financial performance in 2024 and will be
distributed in March 2025. The fair value of unit award shares that vested in 2024 was $901,000.

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 2024 was $23,000 for participants less than age 50 and $30,500 for participants age 50
and above. We contribute 35% of each participant’s contribution, up to a total of 6% contributed. Our contribution vests at
the rate of 20% per year for the first through fifth years of service. In addition, we may make elective contributions as
determined by the Board of Directors. No elective contributions were made in 2024, 2023 or 2022. Total expense recorded
for the plan was $3.4 million in 2024, $3.9 million in 2023 and $4.0 million in 2022.

Stock Purchase Plans - An Employee Stock Purchase Plan and an Independent Contractor Stock Purchase Plan are
sponsored to encourage employee and independent contractor ownership of our common stock. Eligible participants specify
the amount of regular payroll or contract payment deductions and voluntary cash contributions that are used to purchase
shares of our common stock. The purchases are made at the market price on the open market. We pay the broker’s
commissions and administrative charges for purchases of common stock under the plans.

11. Termination of Deferred Compensation Plan

In August 2010, our Board of Directors approved and adopted the Marten Transport, Ltd. Deferred Compensation
Plan. The deferred compensation plan was an unfunded, nonqualified deferred compensation plan designed to allow board
elected officers and other select members of our management designated by our Compensation Committee to save for
retirement on a tax-deferred basis.

Under the terms of the plan, each participant was eligible to defer portions of their base pay, annual bonus or receipt
of common stock otherwise payable under a vested performance unit award. Each participant could have elected a fixed
distribution date for the participant’s deferral account, other than certain required performance unit award deferrals credited
to the discretionary account, which were to be distributed after the later of the date of the participant’s termination of
employment or the date the participant attains age 62. Upon termination of a participant’s employment with us, the plan
required a lump-sum distribution of the deferral account, excluding the required performance unit award deferrals, unless the
participant had elected an installment distribution. Upon a participant’s death, the plan provided that a participant’s
distributions accelerate and be paid in a lump sum to the participant’s beneficiary. We had the ability to terminate the plan
and accelerate distributions to participants, but only to the extent and at the times permitted under Section 409A of the Internal
Revenue Code of 1986, as amended. We had the ability to terminate the plan and accelerate distributions upon a change in
control, which was not a payment event under the plan. In conjunction with the approval of the plan, our Board of Directors
also adopted an amendment to the Marten Transport, Ltd. 2005 Stock Incentive Plan to allow for deferral of receipt of income
from a performance unit award under the plan. Such deferral is also provided for within the Marten Transport, Ltd. 2015
Equity Incentive Plan.

50
12. 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.

13. Commitments and Contingencies

We are committed to new revenue equipment purchases of $191.2 million in 2025. Operating lease obligation
expenditures through 2028 total $627,000.

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 for per-incident and total losses in excess of these risk retention levels in amounts we consider adequate based upon
historical experience and our ongoing review, and 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 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 all litigation 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 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 to have a materially adverse effect on
our consolidated financial statements, however, any future liability claims or adverse developments in existing claims could
impact this analysis.

14. Revenue and Business Segments

We account for our revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers. We
combine our six current operating segments into four reporting segments (Truckload, Dedicated, Intermodal and Brokerage)
for financial reporting purposes. These four reporting segments are also the appropriate categories for the disaggregation of
our revenue under FASB ASC 606.

Our Dedicated segment provides customized transportation solutions tailored to meet individual customers’
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.

51
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 customer agreements are typically for one-year 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 $1.6 million and $2.1 million as of December 31, 2024 and December
31, 2023, respectively. We had no impairment losses on contract assets in 2024 or 2023. We bill our customers for loads after
delivery is complete with standard payment terms of 30 days.
.

52
The following table sets forth for the years indicated our operating revenue and operating income by segment.

(In thousands)

2024

2023

2022

Operating revenue:

Truckload revenue, net of fuel surcharge revenue
$
377,452 $
395,565 $
411,448
Truckload fuel surcharge revenue

62,340
69,910
89,014
Total Truckload revenue

439,792
465,475
500,462

Dedicated revenue, net of fuel surcharge revenue

267,077
334,962
336,973
Dedicated fuel surcharge revenue

52,058
73,310
92,119
Total Dedicated revenue

319,135
408,272
429,092

Intermodal revenue, net of fuel surcharge revenue

49,468
75,887
100,452
Intermodal fuel surcharge revenue

9,286
16,191
29,313
Total Intermodal revenue

58,754
92,078
129,765

Brokerage revenue

146,027
165,630
204,559

Total operating revenue
$
963,708 $
1,131,455 $
1,263,878

Operating income/(loss):

Truckload
$
3,283 $
24,835 $
59,392
Dedicated

23,037
48,377
50,566
Intermodal

(3,922)
(156)
10,639
Brokerage

10,822
17,054
22,747
Total operating income
$
33,220 $
90,110 $
143,344

The following segment operating results for the years indicated are provided monthly to our chief operating decision
maker, our 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.

2024 Segment Operating Results

(In thousands)

Truckload

Dedicated
Intermodal
Brokerage

Total
Operating revenue
$
439,792 $
319,135
$
58,754
$
146,027
$ 963,708
Operating expense (income):

Salaries, wages and benefits
185,871
137,340
11,028
7,493

341,732
Purchased transportation
4,520
10,568
31,612
122,442

169,142
Fuel and fuel taxes
88,868
52,925
5,350
-

147,143
Supplies and maintenance
39,925
20,141
3,285
(14 )

63,337
Depreciation
64,074
39,452
6,076
2,051

111,653
Operating taxes and licenses
5,577
4,066
330
329

10,302
Insurance and claims
29,693
21,025
1,617
774

53,109
Communications and utilities
5,121
2,861
223
824

9,029
Gain on disposition of revenue
equipment
(2,683)
(2,111 )
(177)
-

(4,971)
Other
15,543
9,831
3,332
1,306

30,012
Total operating expenses
436,509
296,098
62,676
135,205

930,488
Operating income/(loss)
$
3,283
$
23,037
$
(3,922) $
10,822
$
33,220

Operating ratio
99.3%
92.8 %
106.7%
92.6 %
96.6%
Operating ratio, net of fuel surcharges
99.1%
91.4 %
107.9%
92.6 %
96.0%

2023 Segment Operating Results

(In thousands)

Truckload

Dedicated
Intermodal
Brokerage

Total
Operating revenue
$
465,475 $
408,272
$
92,078
$
165,630
$ 1,131,455
Operating expense (income):

Salaries, wages and benefits
189,010
165,257
17,666
6,885

378,818
Purchased transportation
4,958
10,778
47,531
136,067

199,334
Fuel and fuel taxes
98,852
73,083
8,502
-

180,437
Supplies and maintenance
37,495
26,061
3,826
29

67,411
Depreciation
61,644
46,151
7,071
1,856

116,722
Operating taxes and licenses
5,483
4,881
470
219

11,053
Insurance and claims
28,460
24,503
2,341
710

56,014
Communications and utilities
5,064
3,727
359
999

10,149
Gain on disposition of revenue
equipment
(6,694)
(6,304 )
(614)
-

(13,612)
Other
16,368
11,758
5,082
1,811

35,019
Total operating expenses
440,640
359,895
92,234
148,576
1,041,345
Operating income/(loss)
$
24,835
$
48,377
$
(156) $
17,054
$
90,110

Operating ratio
94.7%
88.2 %
100.2%
89.7 %
92.0%
Operating ratio, net of fuel surcharges
93.7%
85.6 %
100.2%
89.7 %
90.7%

2022 Segment Operating Results

(In thousands)

Truckload

Dedicated
Intermodal
Brokerage

Total
Operating revenue
$
500,462 $
429,092
$
129,765
$
204,559
$ 1,263,878
Operating expense (income):

Salaries, wages and benefits
188,131
172,179
21,602
8,392

390,304
Purchased transportation
4,835
9,559
65,271
170,127

249,792
Fuel and fuel taxes
114,306
91,091
13,174
-

218,571
Supplies and maintenance
30,495
21,268
4,028
(91 )

55,700
Depreciation
56,365
45,630
7,493
1,526

111,014
Operating taxes and licenses
5,037
4,855
516
355

10,763
Insurance and claims
25,848
21,723
2,268
674

50,513
Communications and utilities
4,548
3,471
412
746

9,177
Gain on disposition of revenue
equipment
(6,308)
(6,386 )
(685)
-

(13,379)
Other
17,813
15,136
5,047
83

38,079
Total operating expenses
441,070
378,526
119,126
181,812
1,120,534
Operating income
$
59,392
$
50,566
$
10,639
$
22,747
$
143,344

Operating ratio
88.1%
88.2 %
91.8%
88.9 %
88.7%
Operating ratio, net of fuel surcharges
85.6%
85.0 %
89.4%
88.9 %
86.4%

54
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 Chief Executive Officer and our Executive Vice President and
Chief Financial Officer. Based upon that evaluation, our 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, 2024. 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 2024, none 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(a) of Securities and Exchange Commission Regulation S-K.

ITEM 9C.
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.

Not applicable.

55
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 2025 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 2025 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 2025 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 adopted a formal policy against insider trading which provides guidelines
to all of our directors, officers, employees and consultants with respect to trading in our securities, as well as the securities
of publicly traded companies with whom we have a business relationship. This policy has been designed to
prevent insider trading or even allegations of insider trading.

ITEM 11.
EXECUTIVE COMPENSATION

The information in the “Election of Directors--Director Compensation,” “Compensation and Other Benefits” and
“Compensation Discussion and Analysis” sections of our 2025 Proxy Statement is incorporated in this Report by reference.

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 2025 Proxy Statement is incorporated in this
Report by reference.

56
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 2025 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 2025 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 248)
32

Consolidated Balance Sheets as of December 31, 2024 and 2023
35

Consolidated Statements of Operations for the years ended December 31, 2024, 2023 and 2022
36

Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2024, 2023 and
2022
37

Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022
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.

57
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 7, 2025. 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
Amended and Restated Bylaws effective August
15, 2023
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
Amended and Restated Bylaws effective August
15, 2023
See Exhibit 3.5 above.
4.7
Description of Company’s Common Stock
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).

58
Item No.
Item

Filing Method
10.2
Credit Agreement, dated as of August 31, 2006, by
and among Marten Transport, Ltd., as borrower,
the banks party thereto as lenders, and U.S. Bank
National Association, as agent for the lenders

Incorporated by reference to Exhibit 10.1 of the
Company’s Current Report on Form 8-K filed
September 6, 2006.

10.3
First Amendment to Credit Agreement, effective as
of January 1, 2007, by and among Marten
Transport, Ltd., as borrower, the banks party
thereto as lenders, and U.S. Bank National
Association, as agent for the lenders

Incorporated by reference to Exhibit 10.1 of the
Company’s Current Report on Form 8-K filed
January 5, 2007.

10.4
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.

10.5
Second Amendment to Credit Agreement, effective
as of November 30, 2007, by and among Marten
Transport, Ltd., as borrower, the banks party
thereto as lenders, and U.S. Bank National
Association, as agent for the lenders

Incorporated by reference to Exhibit 10.14 of the
Company’s Annual Report on Form 10-K for the
year ended December 31, 2007 (File No. 0-15010).

10.6
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).

10.7
Form of Indemnification Agreement
*
Incorporated by reference to Exhibit 10.1 of the
Company’s Current Report on Form 8-K filed
February 22, 2010.

10.8
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).

10.9
Marten Transport, Ltd. Deferred Compensation
Plan
*
Incorporated by reference to Exhibit 10.18 of the
Company’s Quarterly Report on Form 10-Q for the
quarter ended September 30, 2010 (File No. 0-
15010).

10.10
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.
10.11
Third Amendment to Credit Agreement, dated as of
May 27, 2011, by and among Marten Transport,
Ltd. as borrower, the banks party thereto as lenders,
and U.S. Bank National Association, as agent for
the lenders

Incorporated by reference to Exhibit 10.1 of the
Company’s Current Report on Form 8-K filed May
31, 2011.

59
Item No.
Item

Filing Method

10.12
Executive Officer Performance Incentive Plan
*
Incorporated by reference to Exhibit 10.1 of the
Company’s Current Report on Form 8-K filed
March 5, 2012.
10.13
Fourth Amendment to Credit Agreement, dated as
of December 10, 2012, between Marten Transport,
Ltd. as borrower and U.S. Bank National
Association

Incorporated by reference to Exhibit 10.18 of the
Company’s Annual Report on Form 10-K for the
year ended December 31, 2012 (File No. 0-15010).

10.14
Fifth Amendment to Credit Agreement, dated as of
December 22, 2014, by and among Marten
Transport, Ltd., as borrower, the banks party
thereto as lenders, and U.S. Bank National
Association, as agent for the lenders

Incorporated by reference to Exhibit 10.1 of the
Company’s Current Report on Form 8-K filed
December 29, 2014.

10.15
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.

10.16
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.

10.17
Marten Transport, Ltd. 2015 Equity Incentive Plan *
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).

10.18
Sixth Amendment to Credit Agreement, dated as of
November 4, 2015, by and among Marten
Transport, Ltd., as borrower, the banks party
thereto as lenders, and U.S. Bank National
Association, as agent for the lenders

Incorporated by reference to Exhibit 10.1 of the
Company’s Current Report on Form 8-K filed
November 6, 2015.

10.19
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.

10.20
Seventh Amendment to Credit Agreement, dated as
of December 6, 2016, by and among Marten
Transport, Ltd., as borrower, the banks party
thereto as lenders, and U.S. Bank National
Association, as agent for the lenders

Incorporated by reference to Exhibit 10.1 of the
Company’s Current Report on Form 8-K filed
December 12, 2016.
10.21
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.
10.22
Eighth Amendment to Credit Agreement, dated as
of August 24, 2018, by and among Marten
Transport, Ltd., as borrower, the banks party
thereto as lenders, and U.S. Bank National
Association, as agent for the lenders

Incorporated by reference to Exhibit 10.1 of the
Company’s Current Report on Form 8-K filed
August 28, 2018.

60
Item No.
Item

Filing Method
10.23
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.
10.24
Ninth Amendment to Credit Agreement, dated as
of August 13, 2019, by and among Marten
Transport, Ltd., as borrower, the banks party
thereto as lenders, and U.S. Bank National
Association, as agent for the lenders
Incorporated by reference to Exhibit 10.1 of the
Company’s Current Report on Form 8-K filed
August 14, 2019.

10.25
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.
10.26
Tenth Amendment to Credit Agreement, dated as
of November 18, 2020, by and among Marten
Transport, Ltd., as borrower, the banks party
thereto as lenders, and U.S. Bank National
Association, as agent for the lenders
Incorporated by reference to Exhibit 10.1 of the
Company’s Current Report on Form 8-K filed
November 18, 2020.
10.27
Eleventh Amendment to Credit Agreement, dated
as of August 17, 2021, by and among Marten
Transport, Ltd., as borrower, the banks party
thereto as lenders, and U.S. Bank National
Association, as agent for the lenders
Incorporated by reference to Exhibit 10.1 of the
Company’s Current Report on Form 8-K filed
August 20, 2021.
10.28
Twelfth Amendment to Credit Agreement, dated as
of March 1, 2022, by and among Marten Transport,
Ltd., as borrower, the banks party thereto as
lenders, and U.S. Bank National Association, as
agent for the lenders
Incorporated by reference to Exhibit 10.1 of the
Company’s Current Report on Form 8-K filed
March 2, 2022.
10.29
Credit Agreement, dated as of August 16, 2022, by
and among Marten Transport, Ltd., as borrower,
the banks party thereto, and U.S. Bank National
Association, as agent for the banks
Incorporated by reference to Exhibit 10.1 of the
Company’s Current Report on Form 8-K filed
August 22, 2022.
10.30
Named Executive Officer Compensation
*
Incorporated by reference to Exhibit 10.1 of the
Company’s Current Report on Form 8-K filed May
8, 2023.
19.1
Code of Ethics (Insider Trading Policy)
Filed with this Report.
23.1
Consent of Grant Thornton LLP

Filed with this Report.

31.1
Certification pursuant to Item 601(b)(31) of
Regulation S-K, as adopted pursuant to Section 302
of the Sarbanes-Oxley Act of 2002, by Timothy M.
Kohl, the Registrant’s Chief Executive Officer
(Principal Executive Officer)

Filed with this Report.

61
Item No.
Item

Filing Method
31.2
Certification pursuant to Item 601(b)(31) of
Regulation S-K, as adopted pursuant to Section 302
of the Sarbanes-Oxley Act of 2002, by James J.
Hinnendael, the Registrant’s Executive Vice
President and Chief Financial Officer (Principal
Financial Officer)

Filed with this Report.
32.1
Certification pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002

Filed with this Report.
97.1
Marten Transport, Ltd. Clawback Policy
Incorporated by reference to Exhibit 97.1 of the
Company’s Annual Report on Form 10-K filed
February 28, 2024.
101
The following financial information from Marten
Transport, Ltd.’s Annual Report on Form 10-K for
the period ended December 31, 2024, filed with the
SEC on February 28, 2025, 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, 2024, 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.

62
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 28, 2025
MARTEN TRANSPORT, LTD.

By /s/ Timothy M. Kohl

Timothy M. Kohl

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
28, 2025, by the following persons on behalf of the Registrant and in the capacities indicated.

Signature
Title

/s/ Randolph L. Marten
Executive Chairman of the Board 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/ Thomas J. Winkel
Director
Thomas J. Winkel

/s/ Jerry M. Bauer
Director
Jerry M. Bauer

/s/ Robert L. Demorest
Director
Robert L. Demorest

/s/ Ronald R. Booth
Director
Ronald R. Booth

/s/ Kathleen P. Iverson
Director
Kathleen P. Iverson

/s/ Patricia L. Jones
Director
Patricia L. Jones

63
SCHEDULE II
MARTEN TRANSPORT, LTD.

Valuation and Qualifying Accounts and Reserves
(In thousands)

Balance at
Charged to

Beginning of
Costs and

Balance at
Description

Year

Expenses
Deductions
End of Year
Insurance and claims accruals:

Year ended December 31, 2024
$
47,017 $
62,868 $ (65,639 ) (1) $
44,246
Year ended December 31, 2023

45,747
71,230
(69,960 ) (1)
47,017
Year ended December 31, 2022

42,014
67,790
(64,057 ) (1)
45,747

Allowance for doubtful accounts:

Year ended December 31, 2024

497
-
(1 ) (2)
496
Year ended December 31, 2023

500
-
(3 ) (2)
497
Year ended December 31, 2022

348
350
(198 ) (2)
500

(1)
Claims payments
(2)
Write-off of bad debts, net of recoveries

See report of independent registered public accounting firm.