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8-K - FORM 8-K - HUNT J B TRANSPORT SERVICES INCjbht20130412_8k.htm
 

Exhibit 99.1

 

 

J.B. Hunt Transport Services, Inc.

615 J.B. Hunt Corporate Drive

Lowell, Arkansas 72745

(NASDAQ: JBHT)

Contact:   

David G. Mee

EVP, Finance/Administration

and Chief Financial Officer

(479) 820-8111

     
     
     

 

 

FOR IMMEDIATE RELEASE

 

 

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

FOR THE FIRST QUARTER 2013

 

 

First Quarter 2013 Revenue:

$1.29 billion; up 11%

First Quarter 2013 Operating Income:

$125 million; up 7%

First Quarter 2013 EPS:

61 cents vs. 57 cents

 

 

LOWELL, ARKANSAS, April 11, 2013 - J. B. Hunt Transport Services, Inc., (NASDAQ:JBHT) announced first quarter 2013 net earnings of $73.3 million, or diluted earnings per share of 61 cents vs. first quarter 2012 net earnings of $67.7 million, or 57 cents per diluted share.

 

Total operating revenue for the current quarter was $1.29 billion, compared with $1.17 billion for the first quarter 2012. Load growth of 13% in Intermodal (JBI) and 47% in Integrated Capacity Solutions (ICS), helped drive 15% and 26% increases in segment revenue, respectively. Dedicated Contract Services (DCS) segment increased operating revenue by 9%, primarily from new long-term contracts currently being implemented, while Truck (JBT) segment revenue declined primarily from a 21% reduction in fleet size.

 

Operating income for the current quarter totaled $125 million vs. $117 million for the first quarter 2012. Combined, JBI and ICS operating income increased by approximately $18 million on higher load volume, improved freight mix and overhead cost controls. The increase in operating income was partially offset by higher equipment costs in the asset-based business units, higher claims costs from two old claims shared by all business units, contract implementation costs related to new customers for DCS and higher employee costs with lower asset utilization for JBT.

 

Net interest expense for the current quarter decreased by $0.7 million due to lower debt levels. The effective income tax rate for the quarter was consistent with last year at 38.25%.

 

Segment Information:

 

Intermodal (JBI)

First Quarter 2013 Segment Revenue:

$796 million; up 15%

First Quarter 2013 Operating Income:

$ 96.8 million; up 22%

 

Steady first quarter demand drove load growth of 13% over the prior year. Improved service levels and tighter capacity in the truck market contributed to our Eastern network growth of 19% and transcontinental growth of 10% compared to the prior year. Overall revenue grew 15% as a result of the volume growth and higher revenue per load, which is a combination of customer rates, fuel surcharges and freight mix.

 

 
 

 

 

Operating income increased 22% over the prior year. Increased equipment and maintenance costs, increased dray costs and higher dray purchase transportation costs were offset with the combination of steady demand and load growth, consistent and improved rail service, improved execution on dray movements and increased revenue per load. The current period ended with approximately 60,300 units of trailing capacity and 3,700 power units available to the dray fleet.

 

 

Dedicated Contract Services (DCS)

First Quarter 2013 Segment Revenue:

$279 million; up 9%

First Quarter 2013 Operating Income:

$21.9 million; down 22%

 

DCS revenue increased 9% during the current quarter while revenue, excluding fuel surcharges, increased 10%. Productivity, revenue per truck per week, excluding fuel surcharges, was up approximately 2% vs. first quarter 2012. A net additional 633 revenue producing trucks were added over the same period 2012, primarily from new accounts.

 

Operating income decreased by 22% from a year ago primarily due to increased equipment and maintenance costs, lower gains on equipment sales, increased bad debt expense and approximately $1.7 million in contract implementation costs for new long-term customers. These implementation costs include, but are not limited to, driver and management hiring costs and relocation, personnel travel costs, equipment repositioning costs, technology design and integration, and telecommunication and operational system infrastructure. These exceptionally large private fleet conversions will take approximately 6 to 8 months to fully implement. Additional implementation costs expected to be expensed in the coming periods are estimated to be $2.5 million.

 

Integrated Capacity Solutions (ICS)

First Quarter 2013 Segment Revenue:

$122 million; up 26%

First Quarter 2013 Operating Income:

$5.2 million; up 27%

 

ICS revenue increased 26% vs. first quarter 2012, mostly due to a 47% increase in load volume and higher pricing in our transactional business. Volumes grew faster than revenue primarily due to a change in freight mix driven by customer demand. Both transactional and contractual business continued to grow, however the contractual business grew faster to become 69% of total volumes vs. 59% in first quarter 2012.

 

Operating income increased 27% over the same period in 2012 primarily from the increased revenue and improved overhead cost controls. Gross profit margin declined to 13.0% in the current quarter vs. 14.3% at the same time last year due to increased rates paid to carriers from tighter supply and a competitive brokerage environment. ICS’s carrier base increased 9% and our employee count increased 16% compared to first quarter 2012.

 

Truck (JBT)

First Quarter 2013 Segment Revenue:

$102 million; down 21%

First Quarter 2013 Operating Income:

$1.1 million; down 78%

 

JBT revenue decreased 21% compared to the same quarter 2012 primarily from a 21% reduction in fleet size and lower utilization per truck. Excluding fuel surcharges, revenue for the current quarter decreased by 21%. Rate per loaded mile, excluding fuel surcharges, increased 3.8% over the same period last year but on a 9.8% shorter length of haul. Rates from consistent shippers improved 0.5% year-over-year. At the end of the current quarter, our tractor count was 2,011 compared to 2,561 in first quarter 2012.

 

Operating income for the current quarter decreased 78% compared to the same quarter of 2012. Increased rate per loaded mile, lower fuel costs and lower claims costs were offset by increases in driver and independent contractor costs per mile, higher office salaries per tractor, higher maintenance and equipment costs per unit, and fewer gains on equipment sales compared to the first quarter of 2012.

 

 
 

 

 

Cash Flow and Capitalization:

As of March 31, 2013, we had a total of $593 million outstanding on various debt instruments compared to $702 million on March 31, 2012, and $685 million on December 31, 2012.

 

Our net capital expenditures for the first quarter 2013 approximated $115 million compared to $84 million for the first quarter 2012. As of March 31, 2013, we had cash and cash equivalents of $5.7 million.

 

We did not purchase any shares of our common stock during the quarter. As of March 31, 2013, we had approximately $453 million remaining under our share repurchase authorization. Actual shares outstanding on March 31, 2013 approximated 117 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, 2012. We assume no obligation to update any forward-looking statement to the extent we become aware 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

 
 

2013

 

2012

 
         

% Of

       

% Of

 

Amount

Revenue

Amount

Revenue

                                 

Operating revenues, excluding fuel surcharge revenues

  $ 1,038,940           $ 938,683        

Fuel surcharge revenues

    252,647             227,239        

Total operating revenues

    1,291,587     100.0 %     1,165,922     100.0 %
                                 

Operating expenses

                               

Rents and purchased transportation

    644,533     49.9 %     556,117     47.7 %

Salaries, wages and employee benefits

    263,724     20.4 %     250,044     21.4 %

Fuel and fuel taxes

    116,560     9.0 %     120,554     10.3 %

Depreciation and amortization

    60,730     4.7 %     56,120     4.8 %

Operating supplies and expenses

    44,914     3.5 %     39,811     3.4 %

Insurance and claims

    12,770     1.0 %     11,045     1.0 %

General and administrative expenses, net of asset dispositions

    10,985     0.8 %     3,995     0.4 %

Operating taxes and licenses

    7,513     0.6 %     7,142     0.6 %

Communication and utilities

    4,819     0.4 %     4,497     0.4 %

Total operating expenses

    1,166,548     90.3 %     1,049,325     90.0 %

Operating income

    125,039     9.7 %     116,597     10.0 %

Net interest expense

    6,256     0.5 %     6,987     0.6 %

Earnings before income taxes

    118,783     9.2 %     109,610     9.4 %

Income taxes

    45,434     3.5 %     41,926     3.6 %

Net earnings

  $ 73,349     5.7 %   $ 67,684     5.8 %

Average diluted shares outstanding

    119,825             119,750        

Diluted earnings per share

  $ 0.61           $ 0.57        

 

 

                 

Financial Information By Segment

(in thousands)

(unaudited)


 

Three Months Ended March 31

 
 

2013

 

2012

 
         

% Of

       

% Of

 

Amount

Total

Amount

Total

                                 

Revenue

                               
                                 

Intermodal

  $ 796,262     62 %   $ 694,116     60 %

Dedicated

    279,083     22 %     255,852     22 %

Integrated Capacity Solutions

    122,321     9 %     97,052     8 %

Truck

    101,845     8 %     128,156     11 %

Subtotal

    1,299,511     101 %     1,175,176     101 %

Intersegment eliminations

    (7,924 )     (1% )     (9,254 )     (1% )

Consolidated revenue

  $ 1,291,587     100 %   $ 1,165,922     100 %
                                 
                                 

Operating income

                               
                                 

Intermodal

  $ 96,794     77 %   $ 79,430     68 %

Dedicated

    21,946     18 %     28,149     24 %

Integrated Capacity Solutions

    5,174     4 %     4,064     4 %

Truck

    1,095     1 %     4,884     4 %

Other (1)

    30     0 %     70     0 %

Operating income

  $ 125,039     100 %   $ 116,597     100 %

      (1) Includes corporate support activity

               

 

 

 
 

 

 

                 

Operating Statistics by Segment

(unaudited)


 

Three Months Ended March 31

 
 

2013

2012

                 

Intermodal

               
                 

Loads

    367,766     324,142

Average length of haul

    1,691     1,704

Revenue per load

  $ 2,165   $ 2,141

Average tractors during the period *

    3,665     3,185
                 

Tractors (end of period)

               

Company-owned

    3,230     2,956

Independent contractor

    482     299

Total tractors

    3,712     3,255
                 

Net change in trailing equipment during the period

    1,343     331

Trailing equipment (end of period)

    60,305     54,837

Average effective trailing equipment usage

    55,938     50,596
                 
                 

Dedicated

               
                 

Loads

    398,299     351,187

Average length of haul

    198     208

Revenue per truck per week**

  $ 4,149   $ 4,069

Average trucks during the period***

    5,322     4,881
                 

Trucks (end of period)

               

Company-owned

    5,119     4,600

Independent contractor

    13     18

Customer-owned (Dedicated operated)

    363     244

Total trucks

    5,495     4,862
                 

Trailing equipment (end of period)

    17,466     11,163

Average effective trailing equipment usage

    17,737     12,435
                 
                 

Integrated Capacity Solutions

               
                 

Loads

    99,923     68,138

Revenue per load

  $ 1,224   $ 1,424

Gross profit margin

    13.0 %     14.3 %

Employee count (end of period)

    441     379

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

    32,600     29,800
                 
                 

Truck

               
                 

Loads

    97,886     116,904

Average length of haul

    449     498

Loaded miles (000)

    43,606     57,551

Total miles (000)

    51,062     66,264

Average nonpaid empty miles per load

    75.4     73.8

Revenue per tractor per week**

  $ 3,886   $ 3,822

Average tractors during the period*

    2,083     2,615
                 

Tractors (end of period)

               

Company-owned

    1,190     1,563

Independent contractor

    821     998

Total tractors

    2,011     2,561
                 

Trailers (end of period)

    8,460     9,285

Average effective trailing equipment usage

    7,416     8,154

* 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, 2013

December 31, 2012

ASSETS

               

Current assets:

               

Cash and cash equivalents

  $ 5,747   $ 5,589

Accounts Receivable

    529,333     466,011

Prepaid expenses and other

    80,118     82,932

Total current assets

    615,198     554,532

Property and equipment

    2,982,697     2,904,706

Less accumulated depreciation

    1,041,271     1,019,232

Net property and equipment

    1,941,426     1,885,474

Other assets

    29,495     24,635
    $ 2,586,119   $ 2,464,641
                 
                 

LIABILITIES & STOCKHOLDERS' EQUITY

               

Current liabilities:

               

Current debt

  $ 200,000   $ 100,000

Trade accounts payable

    374,968     266,722

Claims accruals

    49,850     47,442

Accrued payroll

    54,485     70,647

Other accrued expenses

    47,168     17,199

Deferred income taxes

    750     750

Total current liabilities

    727,221     502,760
                 

Long-term debt

    393,289     585,347

Other long-term liabilities

    53,815     53,050

Deferred income taxes

    536,022     531,624

Stockholders' equity

    875,772     791,860
    $ 2,586,119   $ 2,464,641

 

 

 

Supplemental Data

(unaudited)

 

March 31, 2013

December 31, 2012

                 

Actual shares outstanding at end of period (000)

    117,583     117,529
                 

Book value per actual share outstanding at end of period

  $ 7.45   $ 6.74

                 
 

Three Months Ended March 31

 
 

2013

2012

                 

Net cash provided by operating activities (000)

  $ 206,759   $ 146,272
                 

Net capital expenditures (000)

  $ 115,058   $ 83,782