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8-K - FORM 8-K - HUNT J B TRANSPORT SERVICES INCjbht20150414_8k.htm

 

Exhibit 99.1

 

J.B. Hunt Transport Services, Inc.

 

Contact: David G. Mee

615 J.B. Hunt Corporate Drive

 

Executive Vice President, Finance/Administration

Lowell, Arkansas 72745

 

and Chief Financial Officer

(NASDAQ: JBHT)

 

(479) 820-8363

 

 

FOR IMMEDIATE RELEASE

 

 

J. B. HUNT TRANSPORT SERVICES, INC. REPORTS REVENUES AND EARNINGS

FOR THE FIRST QUARTER 2015

 

 

■     First Quarter 2015 Revenue:  

 

$1.44 billion; up 2%

 

 

■     First Quarter 2015 Operating Income:  

 

$155 million; up 32%

 

  ■     First Quarter 2015 EPS:       78 cents vs. 58 cents  

 

LOWELL, ARKANSAS, April 14, 2015 - J. B. Hunt Transport Services, Inc., (NASDAQ:JBHT) announced first quarter 2015 net earnings of $91.9 million, or diluted earnings per share of 78 cents vs. first quarter 2014 net earnings of $68.7 million, or 58 cents per diluted share.

 

Total operating revenue for the current quarter was $1.44 billion, compared with $1.41 billion for the first quarter 2014. Current quarter total operating revenue, excluding fuel surcharges, increased 10% vs. first quarter 2014. Intermodal (JBI) load growth was 6% over first quarter 2014 levels. Dedicated Contract Services (DCS) segment revenue increased by 7% over prior year primarily from rate increases and more activity at customer accounts. Integrated Capacity Solutions (ICS) load growth was 17% over the same period in 2014 however lower revenue per load kept segment revenue flat from a year ago. Truck (JBT) segment revenue decreased 1% on lower revenue per tractor per week.

 

Operating income for the current quarter totaled $155 million vs. $117 million for the first quarter 2014. Benefits from customer rate increases, improved asset utilization, lower equipment maintenance costs, improved equipment fuel economy and more effective use of third-party carriers more than offset increases in rail purchase transportation rates, driver wage increases, higher equipment depreciation, increased insurance rates, higher equipment storage costs and higher toll expenses across all business segments. JBI operating income increased from first quarter 2014 primarily due to higher volumes and more efficient dray fleet operations. DCS operating income increased from the same period 2014 primarily due to less reliance on third-party carriers and improved asset utilization. ICS operating income increased primarily from improved gross profit margins and JBT operating income increased primarily from higher customer rates and more efficient operating costs of its newer equipment.

 

Net interest expense for the current quarter increased 5% from the same period in 2014 on higher debt levels. The effective income tax rate for both the current quarter and first quarter 2014 was 38.10%.

 

 

Segment Information:

 

 

Intermodal (JBI)

■    First Quarter 2015 Segment Revenue:  

$844 million; up 1%

■    First Quarter 2015 Operating Income:           $104.3 million; up 12     

 

JBI load volumes grew 6% over the same period 2014. Eastern network realized load growth of 12% and Transcontinental loads grew 2% compared to prior year as the west coast port issues limited eastbound intermodal traffic. Overall revenue grew 1% reflecting the 6% volume growth and a 5% decrease in revenue per load, which is the combination of customer rate increases, lower fuel surcharges and freight mix. Revenue per load excluding fuel surcharge revenue increased 3% year over year.

 

 
 

 

 

Operating income increased 12% over prior year. Benefits from customer rate increases, improved dray network efficiency from improving western rail service, lower cargo claims costs, lower maintenance costs and less reliance on outsourced dray carriers were partially offset with increases in rail purchased transportation rates, equipment depreciation costs, equipment storage costs, driver recruiting and driver retention costs. The current period ended with approximately 74,200 units of trailing capacity and 4,900 power units available to the dray fleet.

 

 

Dedicated Contract Services (DCS)

■     First Quarter 2015 Segment Revenue:     $345 million; up 7%
■     First Quarter 2015 Operating Income:  $35.8 million; up 130%

 

DCS revenue increased 7% during the current quarter over the same period 2014. Productivity, defined as revenue per truck per week, was up approximately 1.4% vs. 2014 from customer rate increases and additional activity at customer accounts. A net additional 336 revenue producing trucks were in the fleet by the end of the quarter compared to prior year primarily from new contract implementations in the current and prior periods.

 

Operating income increased 130% from a year ago. The increase is primarily due to increased revenue, improved asset utilization, less reliance on third party carriers, lower equipment maintenance costs and the current period benefit of rapidly falling fuel prices. These benefits were partially offset by higher driver wage and recruiting costs and higher equipment depreciation costs.

 

 

Integrated Capacity Solutions (ICS)

●     First Quarter 2015 Segment Revenue:     $163 million; flat
●     First Quarter 2015 Operating Income:     $6.6 million; up 8%

 

ICS revenue was flat vs. first quarter 2014. Volumes increased 17% while revenue per load decreased 14.5% primarily due to lower fuel prices and less transactional customer demand from first quarter 2014. Contractual business load counts increased 49% from a year ago to approximately 74% of total load volume and 65% of total revenue in the current period compared to 59% and 50%, respectively, in first quarter 2014.

 

Operating income increased 8% over the same period in 2014 primarily from improved gross profit margin. Gross profit margin increased to 13.7% in the current quarter vs. 12.1% last year primarily due to rate increases on contractual business. Personnel costs increased as the total branch count grew to 30 compared to 24 at the end of the comparable period last year. ICS’s carrier base increased nearly 16% and employee count increased 21% compared to first quarter 2014.

 

 

Truck (JBT)

■     First Quarter 2015 Segment Revenue:    $91 million; down 1%

■     First Quarter 2015 Operating Income:

$8.5 million; up 248%

 

JBT revenue decreased 1% from the same quarter 2014. Revenue excluding fuel surcharge increased 6%. Increased truck count, better asset utilization, improved freight lane networks and core customer rate increases of approximately 9% contributed to the improved revenue, excluding fuel surcharge. At the end of the current quarter JBT operated 2,020 tractors compared to 1,917 in 2014.

 

Operating income for the current quarter increased by 248% compared to the same quarter of 2014. Benefits from increased rate per loaded mile, rapidly declining fuel prices, lower equipment maintenance costs, lower insurance and claims costs and improved asset utilization were partially offset by increased equipment depreciation costs, driver and independent contractor cost per mile and higher driver recruiting costs compared to first quarter 2014.

 

 
 

 

 

Cash Flow and Capitalization:

At March 31, 2015, we had a total of $878 million outstanding on various debt instruments compared to $852 million at March 31, 2014, and $934 million at December 31, 2014. At March 31, 2015, we had cash and cash equivalents of $5.6 million.

 

Our net capital expenditures for the first quarter 2015 approximated $160 million compared to $158 million for the first quarter 2014.

 

We purchased approximately 79,500 shares of our common stock during the quarter for approximately $6.4 million. At March 31, 2015, we had approximately $207 million remaining under our share repurchase authorization. Actual shares outstanding at March 31, 2015 approximated 116.6 million.

 

This press release may contain forward-looking statements, which are based on information currently available. Actual results may differ materially from those currently anticipated due to a number of factors, including, but not limited to, those discussed in Item 1A of our Annual Report filed on Form 10-K for the year ended December 31, 2014. We assume no obligation to update any forward-looking statement to the extent we become aware that it will not be achieved for any reason. This press release and additional information will be available immediately to interested parties on our web site, www.jbhunt.com.

 

 
 

 

 

J.B. HUNT TRANSPORT SERVICES, INC.

 

Condensed Consolidated Statements of Earnings

 

(in thousands, except per share data)

 

(unaudited)

 
   

 

   

Three Months Ended March 31

   

2015

 

2014

           

% Of

         

% Of

   

Amount

   

Revenue

 

Amount

   

Revenue

                                 

Operating revenues, excluding fuel surcharge revenues

  $ 1,263,910             $ 1,152,349          

Fuel surcharge revenues

    176,270               254,559          

Total operating revenues

    1,440,180       100.0 %     1,406,908       100.0 %
                                 

Operating expenses

                               

Rents and purchased transportation

    693,685       48.2 %     705,414       50.1 %

Salaries, wages and employee benefits

    330,510       22.9 %     304,394       21.6 %

Fuel and fuel taxes

    81,813       5.7 %     119,950       8.5 %

Depreciation and amortization

    81,378       5.7 %     68,967       4.9 %

Operating supplies and expenses

    50,481       3.4 %     50,788       3.6 %

Insurance and claims

    17,428       1.2 %     15,832       1.1 %

General and administrative expenses, net of asset dispositions

    13,933       1.0 %     9,925       0.7 %

Operating taxes and licenses

    10,088       0.7 %     8,973       0.7 %

Communication and utilities

    5,644       0.4 %     5,358       0.5 %

Total operating expenses

    1,284,960       89.2 %     1,289,601       91.7 %

Operating income

    155,220       10.8 %     117,307       8.3 %

Net interest expense

    6,703       0.5 %     6,380       0.4 %

Earnings before income taxes

    148,518       10.3 %     110,927       7.9 %

Income taxes

    56,585       3.9 %     42,263       3.0 %

Net earnings

  $ 91,932       6.4 %   $ 68,664       4.9 %

Average diluted shares outstanding

    117,800               118,943          

Diluted earnings per share

  $ 0.78             $ 0.58          

 

 
 

 

  

Financial Information By Segment

(in thousands)

(unaudited)

 

 

   

Three Months Ended March 31

   

2015

 

2014

           

% Of

         

% Of

   

Amount

   

Total

 

Amount

   

Total

                                 

Revenue

                               
                                 

Intermodal

  $ 843,889       59 %   $ 835,495       59 %

Dedicated

    345,189       24 %     322,042       23 %

Integrated Capacity Solutions

    163,212       11 %     162,630       11 %

Truck

    91,189       6 %     92,470       7 %

Subtotal

    1,443,479       100 %     1,412,637       100 %

Intersegment eliminations

    (3,299 )     (0 %)     (5,729 )     (0 %)

Consolidated revenue

  $ 1,440,180       100 %   $ 1,406,908       100 %
                                 
                                 

Operating income

                               
                                 

Intermodal

  $ 104,262       68 %   $ 93,171       80 %

Dedicated

    35,815       23 %     15,600       13 %

Integrated Capacity Solutions

    6,628       4 %     6,125       5 %

Truck

    8,529       5 %     2,448       2 %

Other (1)

    (14 )     (0 %)     (37 )     (0 %)

Operating income

  $ 155,220       100 %   $ 117,307       100 %

 

 

(1) Includes corporate support activity

 

 
 

 

 

Operating Statistics by Segment

(unaudited)

 

   

Three Months Ended March 31

 
   

2015

   

2014

 

Intermodal

               
                 

Loads

    410,297       385,986  

Average length of haul

    1,643       1,669  

Revenue per load

  $ 2,057     $ 2,165  

Average tractors during the period *

    4,816       4,250  
                 

Tractors (end of period)

               

Company-owned

    4,128       3,694  

Independent contractor

    776       644  

Total tractors

    4,904       4,338  
                 

Net change in trailing equipment during the period

    895       1,585  

Trailing equipment (end of period)

    74,193       67,564  

Average effective trailing equipment usage

    68,692       65,201  
                 
                 

Dedicated

               
                 

Loads

    530,762       486,671  

Average length of haul

    175       180  

Revenue per truck per week**

  $ 3,966     $ 3,913  

Average trucks during the period***

    6,854       6,491  
                 

Trucks (end of period)

               

Company-owned

    6,422       5,995  

Independent contractor

    7       6  

Customer-owned (Dedicated operated)

    416       508  

Total trucks

    6,845       6,509  
                 

Trailing equipment (end of period)

    20,819       19,188  

Average effective trailing equipment usage

    22,276       20,345  
                 
                 

Integrated Capacity Solutions

               
                 

Loads

    120,962       103,083  

Revenue per load

  $ 1,349     $ 1,578  

Gross profit margin

    13.7 %     12.1 %

Employee count (end of period)

    605       499  

Approximate number of third-party carriers (end of period)

    40,441       35,000  
                 
                 

Truck

               
                 

Loads

    86,243       89,998  

Average length of haul

    450       408  

Loaded miles (000)

    38,635       36,995  

Total miles (000)

    45,454       43,472  

Average nonpaid empty miles per load

    74.7       68.1  

Revenue per tractor per week**

  $ 3,703     $ 3,856  

Average tractors during the period *

    1,944       1,892  
                 

Tractors (end of period)

               

Company-owned

    1,462       1,245  

Independent contractor

    558       672  

Total tractors

    2,020       1,917  
                 

Trailers (end of period)

    7,182       6,793  

Average effective trailing equipment usage

    6,024       5,831  

 

* Includes company-owned and independent contractor tractors

   

** Using weighted workdays

   

*** Includes company-owned, independent contractor, and customer-owned trucks

   

 

 
 

 

 

J.B. HUNT TRANSPORT SERVICES, INC.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

 

   

March 31, 2015

   

December 31, 2014

 

ASSETS

               

Current assets:

               

Cash and cash equivalents

  $ 5,646     $ 5,961  

Accounts Receivable

    631,172       653,795  

Prepaid expenses and other

    148,063       201,743  

Deferred income taxes

    18,631       18,631  

Total current assets

    803,512       880,130  

Property and equipment

    3,801,192       3,719,757  

Less accumulated depreciation

    1,248,329       1,237,225  

Net property and equipment

    2,552,863       2,482,532  

Other assets

    72,622       34,455  
    $ 3,428,997     $ 3,397,117  
                 
                 

LIABILITIES & STOCKHOLDERS' EQUITY

               

Current liabilities:

               

Current debt

  $ 250,000     $ 250,000  

Trade accounts payable

    328,111       325,838  

Claims accruals

    99,196       96,719  

Accrued payroll

    72,106       80,547  

Other accrued expenses

    12,918       17,966  

Total current liabilities

    762,331       771,070  
                 

Long-term debt

    628,203       683,539  

Other long-term liabilities

    60,565       59,561  

Deferred income taxes

    700,518       678,424  

Stockholders' equity

    1,277,380       1,204,523  
    $ 3,428,997     $ 3,397,117  

 

 

Supplemental Data

(unaudited)

 

             
   

March 31, 2015

   

December 31, 2014

 
                 

Actual shares outstanding at end of period (000)

    116,556       116,575  
                 

Book value per actual share outstanding at end of period

  $ 10.96     $ 10.33  

 

 

       
   

Three Months Ended March 31

 
   

2015

   

2014

 
                 

Net cash provided by operating activities (000)

  $ 255,543     $ 159,045  
                 

Net capital expenditures (000)

  $ 160,373     $ 158,212