Attached files

file filename
8-K - FORM 8-K - HUNT J B TRANSPORT SERVICES INCjbht20150717_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 EARNINGS FOR THE SECOND QUARTER 2015 AND UPDATES FULL YEAR 2015 EXPECTATIONS

          

 

Second Quarter 2015 Revenue: 

  $1.54 billion; down 0.5%  
 

Second Quarter 2015 Operating Income:   

 

$174 million; up 9%  
 

Second Quarter 2015 EPS:

 

88 cents vs. 79 cents  

  

LOWELL, ARKANSAS, July 17, 2015 - J.B. Hunt Transport Services, Inc., (NASDAQ:JBHT) announced second quarter 2015 net earnings of $103.4 million, or diluted earnings per share of 88 cents vs. second quarter 2014 net earnings of $93.4 million, or 79 cents per diluted share.

 

Total operating revenue for the current quarter was $1.54 billion, compared with $1.55 billion for the second quarter 2014. Customer rate increases across all business units, load growth of 2% in Intermodal (JBI), a 6% increase in revenue producing trucks in Dedicated Contract Services (DCS) and load growth of 12% in Integrated Capacity Solutions (ICS) could not offset the decrease in fuel surcharge revenue, sluggish consumer freight demand and lower equipment utilization in our Truck (JBT) business segment resulting in flat consolidated revenue compared to prior year. Current quarter total operating revenue, excluding fuel surcharges, increased 7% vs. the comparable quarter 2014.

 

Operating income for the current quarter totaled $174 million vs. $159 million for the second quarter 2014. The increase in operating income was primarily from customer rate increases, less reliance on outsourced JBI drayage and DCS capacity coverage, load growth, freight mix changes and improved equipment fuel economy. The operating income increase was partially offset by an approximate $14.1 million charge for corporate wide streamlining and technology redevelopment costs, the benefits of which are expected to be realized over the next two fiscal years, lower box turns from slower train velocities, higher driver recruiting and retention costs, higher workers’ compensation costs and increased toll costs compared to second quarter 2014.

 

Interest expense in the current quarter decreased due to lower overall debt levels from the same period last year. The second quarter 2014 reflected the accelerated payment of $100 million of 6.08% fixed rate senior notes that would have matured in July 2014. The effective income tax rate for the quarter was 38.10% for both second quarter 2015 and 2014. The 2015 annual tax rate is expected to be approximately 38.10%.

 

The Company also posted revised full year 2015 Financial Expectations on its website under the Investors tab at www.jbhunt.com.

 

 
 

 

 

Segment Information:

  

Intermodal (JBI)

 

Second Quarter 2015 Segment Revenue:

$905 million; down 3%

 Second Quarter 2015 Operating Income:

$118.6 million; up 5%

 

Overall volumes increased 2% over the same period in 2014. Eastern network realized load growth of 3% and Transcontinental loads grew 1% over the second quarter 2014. The lingering effects of disruptive shipping patterns due to the west coast port issues, slow rail service recovery and a softer consumer driven freight demand all contributed to slower load volume growth. Revenue decreased 3% reflecting the 2% volume growth and an approximate 4.5% decrease in revenue per load, which is the combination of changes in customer rate, freight mix and fuel surcharges. Revenue per load excluding fuel surcharge increased approximately 4% over second quarter 2014.

 

Operating income increased 5% over prior year. Benefits from rate increases, reduced reliance on outsourced dray carriers, lower insurance and cargo claim costs and lower fleet maintenance costs were partially offset by approximately $6.4 million in corporate wide streamlining and technology redevelopment costs, increases in rail purchased transportation rates and slower rail service recovery that negatively impacted the network fluidity and decreased box turns. The current period ended with approximately 76,300 units of trailing capacity and 4,900 power units in the dray fleet.

  

Dedicated Contract Services (DCS)

 

■ Second Quarter 2015 Segment Revenue:

$367 million; up 5%

■ Second Quarter 2015 Operating Income:

$40.6 million; up 34%

 

DCS revenue increased 5% during the current quarter over the same period in 2014. Productivity (revenue per truck per week) decreased by approximately 1% vs. 2014 primarily from lower fuel surcharge revenue. Productivity excluding fuel surcharge increased 5% from a year ago primarily from customer rate increases and increased customer demand. A net additional 413 revenue producing trucks, approximately 58% representing private fleet conversions versus traditional dedicated capacity services, 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. Customer retention rates remain above 96% as value driven services continue to support necessary rate increases.

 

 

Operating income increased by 34% from a year ago. Revenues from new accounts, higher productivity excluding fuel surcharge, less reliance on third party carrier capacity and lower equipment maintenance costs were partially offset with approximately $2.6 million in corporate wide streamlining and technology redevelopment costs and higher driver wages and recruiting costs.

 

Integrated Capacity Solutions (ICS)

 

Second Quarter 2015 Segment Revenue:

$174 million; up 0.6%

Second Quarter 2015 Operating Income:

$4.9 million; down 21%

 

ICS revenue was flat compared to the second quarter 2014. Volumes increased 12% while revenue per load decreased 10%, primarily from lower fuel prices and less transactional customer demand versus second quarter 2014. Contractual volumes increased 32% to approximately 70% of total load volume and 62% of total revenue compared to 60% and 52%, respectively, in second quarter 2014.

 

 
 

 

  

Operating income decreased 21% over the same period 2014. Gross profit margin increased to 15.2% in the current quarter vs. 12.7% last year. Improvements in gross profit margin were offset by approximately $4.4 million in corporate wide streamlining and technology redevelopment costs and higher personnel costs as the total branch count increased to 31 from 26 compared to second quarter 2014. The carrier base increased 17% and the employee count increased 18% vs. second quarter 2014.

  

Truck (JBT)

 

Second Quarter 2015 Segment Revenue:

$98 million; down 3.5%

Second Quarter 2015 Operating Income:

$9.7 million; up 3%

 

JBT revenue for the current quarter was down 3.5% compared to the same period in 2014. Revenue excluding fuel surcharges increased 2%, primarily from increased truck count and core rate increases of approximately 6.5% partially offset by less spot activity and lower utilization per tractor. At the end of the period, JBT operated 2,073 tractors compared to 1,860 a year ago.

 

Operating income increased 3% compared to the same quarter 2014. Favorable changes in core rates, increased truck count, lower equipment maintenance costs and improved fuel economy were partially offset by increased driver and independent contractor costs per mile, increased driver hiring costs, approximately $2.6 million of lower equipment gains and approximately $700,000 in corporate wide streamlining and technology redevelopment costs compared to second quarter 2014.

  

 

Cash Flow and Capitalization:

 

At June 30, 2015, we had a total of $893 million outstanding on various debt instruments compared to $874 million at June 30, 2014 and $934 million at December 31, 2014.

  

Our net capital expenditures for the six months ended June 30, 2015 approximated $319 million compared to $353 million for the same period 2014. At June 30, 2015, we had cash and cash equivalents of $5.6 million.

  

We purchased approximately 331,000 shares of our common stock during the quarter for $28 million. At June 30, 2015 we had approximately $179 million remaining under our share repurchase authorization. Actual shares outstanding at June 30, 2015 approximated 116.3 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 June 30

 
   

2015

   

2014

 
           

% Of

           

% Of

 
   

Amount

   

Revenue

   

Amount

   

Revenue

 
                                 

Operating revenues, excluding fuel surcharge revenues

  $ 1,360,631             $ 1,268,636          

Fuel surcharge revenues

    179,326               279,231          

Total operating revenues

    1,539,957       100.0 %     1,547,867       100.0 %
                                 

Operating expenses

                               

Rents and purchased transportation

    730,851       47.5 %     775,485       50.1 %

Salaries, wages and employee benefits

    348,277       22.6 %     320,016       20.7 %

Fuel and fuel taxes

    84,891       5.5 %     116,999       7.6 %

Depreciation and amortization

    83,661       5.4 %     71,726       4.6 %

Operating supplies and expenses

    56,718       3.7 %     58,173       3.8 %

Insurance and claims

    18,207       1.2 %     19,886       1.3 %

General and administrative expenses, net of asset dispositions

    27,670       1.8 %     11,547       0.7 %

Operating taxes and licenses

    10,734       0.7 %     9,650       0.6 %

Communication and utilities

    5,213       0.3 %     5,155       0.3 %

Total operating expenses

    1,366,222       88.7 %     1,388,637       89.7 %

Operating income

    173,735       11.3 %     159,230       10.3 %

Net interest expense

    6,661       0.5 %     8,329       0.6 %

Earnings before income taxes

    167,074       10.8 %     150,901       9.7 %

Income taxes

    63,655       4.1 %     57,493       3.7 %

Net earnings

  $ 103,419       6.7 %   $ 93,408       6.0 %

Average diluted shares outstanding

    117,811               118,541          

Diluted earnings per share

  $ 0.88             $ 0.79          

   


J.B. HUNT TRANSPORT SERVICES, INC.                

Condensed Consolidated Statements of Earnings                

(in thousands, except per share data)

(unaudited)

 

   

Six Months Ended June 30

 
   

2015

   

2014

 
           

% Of

           

% Of

 
   

Amount

   

Revenue

   

Amount

   

Revenue

 
                                 

Operating revenues, excluding fuel surcharge revenues

  $ 2,624,541             $ 2,420,985          

Fuel surcharge revenues

    355,596               533,789          

Total operating revenues

    2,980,137       100.0 %     2,954,774       100.0 %
                                 

Operating expenses

                               

Rents and purchased transportation

    1,424,535       47.8 %     1,480,900       50.1 %

Salaries, wages and employee benefits

    678,786       22.8 %     624,410       21.1 %

Fuel and fuel taxes

    166,704       5.6 %     236,949       8.0 %

Depreciation and amortization

    165,038       5.5 %     140,693       4.8 %

Operating supplies and expenses

    107,199       3.6 %     108,961       3.7 %

Insurance and claims

    35,635       1.2 %     35,718       1.2 %

General and administrative expenses, net of asset dispositions

    41,606       1.4 %     21,470       0.7 %

Operating taxes and licenses

    20,822       0.7 %     18,623       0.6 %

Communication and utilities

    10,857       0.4 %     10,513       0.4 %

Total operating expenses

    2,651,182       89.0 %     2,678,237       90.6 %

Operating income

    328,955       11.0 %     276,537       9.4 %

Net interest expense

    13,364       0.4 %     14,710       0.5 %

Earnings before income taxes

    315,591       10.6 %     261,827       8.9 %

Income taxes

    120,240       4.0 %     99,756       3.4 %

Net earnings

  $ 195,351       6.6 %   $ 162,071       5.5 %

Average diluted shares outstanding

    117,805               118,740          

Diluted earnings per share

  $ 1.66             $ 1.36          

  

 
 

 

 

Financial Information By Segment

(in thousands)

(unaudited)

 

   

Three Months Ended June 30

 
   

2015

   

2014

 
           

% Of

           

% Of

 
   

Amount

   

Total

   

Amount

   

Total

 
                                 

Revenue

                               
                                 

Intermodal

  $ 904,868       59 %   $ 930,668       60 %

Dedicated

    366,716       24 %     347,730       22 %

Integrated Capacity Solutions

    173,879       11 %     172,894       11 %

Truck

    97,509       6 %     101,074       7 %

Subtotal

    1,542,972       100 %     1,552,366       100 %

Intersegment eliminations

    (3,015 )     (0 %)     (4,499 )     (0 %)

Consolidated revenue

  $ 1,539,957       100 %   $ 1,547,867       100 %
                                 
                                 

Operating income

                               
                                 

Intermodal

  $ 118,617       68 %   $ 113,394       71 %

Dedicated

    40,573       23 %     30,318       19 %

Integrated Capacity Solutions

    4,893       3 %     6,222       4 %

Truck

    9,675       6 %     9,363       6 %

Other (1)

    (23 )     (0 %)     (67 )     (0 %)

Operating income

  $ 173,735       100.0 %   $ 159,230       100 %

 

   

Six Months Ended June 30

 
   

2015

   

2014

 
           

% Of

           

% Of

 
   

Amount

   

Total

   

Amount

   

Total

 

Revenue

                               
                                 

Intermodal

  $ 1,748,757       59 %   $ 1,766,163       60 %

Dedicated

    711,905       24 %     669,771       23 %

Integrated Capacity Solutions

    337,090       11 %     335,524       11 %

Truck

    188,697       6 %     193,544       6 %

Subtotal

    2,986,449       100 %     2,965,002       100 %

Intersegment eliminations

    (6,312 )     (0 %)     (10,228 )     (0 %)

Consolidated revenue

  $ 2,980,137       100 %   $ 2,954,774       100 %
                                 
                                 

Operating income

                               
                                 

Intermodal

  $ 222,879       68 %   $ 206,566       75 %

Dedicated

    76,388       23 %     45,918       17 %

Integrated Capacity Solutions

    11,522       4 %     12,346       4 %

Truck

    18,204       5 %     11,811       4 %

Other (1)

    (38 )     (0 %)     (104 )     (0 %)

Operating income

  $ 328,955       100 %   $ 276,537       100 %

 

(1) Includes corporate support activity

  

 
 

 

 

Operating Statistics by Segment

 

(unaudited)

 
                 
   

Three Months Ended June 30

 
   

2015

   

2014

 
                 

Intermodal

               
                 

Loads

    436,466       429,438  

Average length of haul

    1,642       1,643  

Revenue per load

  $ 2,073     $ 2,167  

Average tractors during the period *

    4,915       4,447  
                 

Tractors (end of period)

               

Company-owned

    4,186       3,868  

Independent contractor

    701       678  

Total tractors

    4,887       4,546  
                 

Net change in trailing equipment during the period

    2,086       2,160  

Trailing equipment (end of period)

    76,279       69,724  

Average effective trailing equipment usage

    70,823       67,534  
                 
                 

Dedicated

               
                 

Loads

    562,017       522,117  

Average length of haul

    176       178  

Revenue per truck per week**

  $ 4,096     $ 4,117  

Average trucks during the period***

    6,921       6,538  
                 

Trucks (end of period)

               

Company-owned

    6,543       6,050  

Independent contractor

    7       6  

Customer-owned (Dedicated operated)

    422       503  

Total trucks

    6,972       6,559  
                 

Trailing equipment (end of period)

    20,989       19,696  

Average effective trailing equipment usage

    22,275       20,721  
                 
                 

Integrated Capacity Solutions

               
                 

Loads

    123,082       109,803  

Revenue per load

  $ 1,413     $ 1,575  

Gross profit margin

    15.2 %     12.7 %

Employee count (end of period)

    636       540  

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

    42,300       36,300  
                 
                 

Truck

               
                 

Loads

    93,225       101,044  

Average length of haul

    435       384  

Loaded miles (000)

    40,355       38,720  

Total miles (000)

    47,752       45,718  

Average nonpaid empty miles per load

    77.1       67.8  

Revenue per tractor per week**

  $ 3,802     $ 4,226  

Average tractors during the period *

    2,021       1,877  
                 

Tractors (end of period)

               

Company-owned

    1,510       1,215  

Independent contractor

    563       645  

Total tractors

    2,073       1,860  
                 

Trailers (end of period)

    7,479       6,576  

Average effective trailing equipment usage

    6,392       5,718  

 

* Includes company-owned and independent contractor tractors

** Using weighted workdays

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

 
 

 

 

Operating Statistics by Segment

 

(unaudited)

 
                 
   

Six Months Ended June 30

 
   

2015

   

2014

 
                 

Intermodal

               
                 

Loads

    846,763       815,424  

Average length of haul

    1,643       1,656  

Revenue per load

  $ 2,065     $ 2,166  

Average tractors during the period *

    4,866       4,348  
                 

Tractors (end of period)

               

Company-owned

    4,186       3,868  

Independent contractor

    701       678  

Total tractors

    4,887       4,546  
                 

Net change in trailing equipment during the period

    2,981       3,745  

Trailing equipment (end of period)

    76,279       69,724  

Average effective trailing equipment usage

    69,758       66,367  
                 
                 

Dedicated

               
                 

Loads

    1,092,779       1,008,788  

Average length of haul

    176       179  

Revenue per truck per week**

  $ 4,032     $ 4,016  

Average trucks during the period***

    6,887       6,514  
                 

Trucks (end of period)

               

Company-owned

    6,543       6,050  

Independent contractor

    7       6  

Customer-owned (Dedicated operated)

    422       503  

Total trucks

    6,972       6,559  
                 

Trailing equipment (end of period)

    20,989       19,696  

Average effective trailing equipment usage

    22,276       20,533  
                 
                 

Integrated Capacity Solutions

               
                 

Loads

    244,044       212,886  

Revenue per load

  $ 1,381     $ 1,576  

Gross profit margin

    14.5 %     12.4 %

Employee count (end of period)

    636       540  

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

    42,300       36,300  
                 
                 

Truck

               
                 

Loads

    179,468       191,042  

Average length of haul

    443       396  

Loaded miles (000)

    78,991       75,715  

Total miles (000)

    93,206       89,189  

Average nonpaid empty miles per load

    76.0       67.9  

Revenue per tractor per week**

  $ 3,754     $ 4,040  

Average tractors during the period*

    1,982       1,884  
                 

Tractors (end of period)

               

Company-owned

    1,510       1,215  

Independent contractor

    563       645  

Total tractors

    2,073       1,860  
                 

Trailers (end of period)

    7,479       6,576  

Average effective trailing equipment usage

    6,208       5,774  

 

* 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)

 

   

June 30, 2015

   

December 31, 2014

 

ASSETS

               

Current assets:

               

Cash and cash equivalents

  $ 5,586     $ 5,961  

Accounts Receivable

    665,241       653,795  

Prepaid expenses and other

    97,172       201,743  

Deferred income taxes

    18,631       18,631  

Total current assets

    786,630       880,130  

Property and equipment

    3,881,077       3,719,757  

Less accumulated depreciation

    1,254,973       1,237,225  

Net property and equipment

    2,626,104       2,482,532  

Other assets

    72,616       34,455  
    $ 3,485,350     $ 3,397,117  
                 
                 

LIABILITIES & STOCKHOLDERS' EQUITY

               

Current liabilities:

               

Current debt

  $ 250,000     $ 250,000  

Trade accounts payable

    341,520       325,838  

Claims accruals

    98,423       96,719  

Accrued payroll

    65,671       80,547  

Other accrued expenses

    20,991       17,966  

Total current liabilities

    776,605       771,070  
                 

Long-term debt

    643,202       683,539  

Other long-term liabilities

    59,197       59,561  

Deferred income taxes

    667,141       678,424  

Stockholders' equity

    1,339,205       1,204,523  
    $ 3,485,350     $ 3,397,117  

 

 

Supplemental Data        

(unaudited)

 

   

June 30, 2015

   

December 31, 2014

 
                 

Actual shares outstanding at end of period (000)

    116,251       116,575  
                 

Book value per actual share outstanding at end of period

  $ 11.52     $ 10.33  

  

 

   

Six Months Ended June 30

 
   

2015

   

2014

 
                 

Net cash provided by operating activities (000)

  $ 453,537     $ 301,001  
                 

Net capital expenditures (000)

  $ 319,343     $ 352,843