-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MpSIwejhtWYKXPNSJ+9L0gom2S4xpPFh9EkYakLrSE7QgtK+zWdstwlzqKaSIuzN BNKkShf/0fvyWbyz/f6NGQ== 0000912057-97-026965.txt : 19970812 0000912057-97-026965.hdr.sgml : 19970812 ACCESSION NUMBER: 0000912057-97-026965 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970811 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: HUNT J B TRANSPORT SERVICES INC CENTRAL INDEX KEY: 0000728535 STANDARD INDUSTRIAL CLASSIFICATION: TRUCKING (NO LOCAL) [4213] IRS NUMBER: 710335111 STATE OF INCORPORATION: AR FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-11757 FILM NUMBER: 97655585 BUSINESS ADDRESS: STREET 1: 615 JB HUNT CORPORATE DR CITY: LOWELL STATE: AR ZIP: 72745 BUSINESS PHONE: 5018200000 10-Q 1 FORM 10-Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (MARK ONE) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF --- THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended June 30, 1997 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF --- THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 0-11757 J.B. HUNT TRANSPORT SERVICES, INC. (Exact name of registrant as specified in its charter) ARKANSAS 71-0335111 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 615 J.B. HUNT CORPORATE DRIVE, LOWELL, ARKANSAS 72745 (Address of principal executive offices, and Zip Code) (501) 820-0000 (Registrant's telephone number, including area code) 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 the filing requirements for at least the past 90 days. Yes X No --- --- The number of shares of the Company's $.01 par value common stock outstanding on June 30, 1997 was 36,456,278. PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS The interim consolidated financial statements contained herein reflect all adjustments which, in the opinion of management, are necessary for a fair statement of financial condition, results of operations and cash flows for the periods presented. They have been prepared in accordance with Rule 10-01 of Regulation S-X and do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. Operating results for the three and six month periods ended June 30, 1997 are not necessarily indicative of the results that may be expected for the entire year ending December 31, 1997. The interim consolidated financial statements have been reviewed by KPMG Peat Marwick LLP, independent public accountants. These interim consolidated financial statements should be read in conjunction with the Company's latest annual report and Form 10-K for the year ended December 31, 1996. INDEX ----- Consolidated Statements of Earnings for the Three and Six Months Ended June 30, 1997 and 1996 . . . . . . . . . . . . . . . . Page 3 Consolidated Balance Sheets as of June 30, 1997 and December 31,1996. . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 4 Consolidated Statements of Cash Flows for the Six Months Ended June 30, 1997 and 1996. . . . . . . . . . . . . . . . . . . . . . Page 5 Notes to Consolidated Financial Statements as of June 30, 1997 . . . . . Page 6 Review Report of KPMG Peat Marwick LLP . . . . . . . . . . . . . . . . . Page 8 ITEM 2. - ------- Management's Discussion and Analysis of Results of Operations and Financial Condition . . . . . . . . . . . . . . . . . . . . . . . . . . Page 9 2 J.B. HUNT TRANSPORT SERVICES, INC. CONSOLIDATED STATEMENTS OF EARNINGS (in thousands, except per share data) (unaudited) - ------------------------------------------------------------------------------------------------------- THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30 JUNE 30 - ------------------------------------------------------------------------------------------------------- 1997 1996 1997 1996 - ------------------------------------------------------------------------------------------------------- Operating revenues $ 385,198 $ 372,573 $ 750,599 $ 726,587 Operating expenses Salaries, wages and employee benefits 133,288 122,186 254,732 238,622 Purchased transportation 124,182 98,857 240,962 196,828 Fuel and fuel taxes 36,039 42,115 74,096 82,249 Depreciation 33,228 29,867 66,478 64,011 Operating supplies and expenses 23,679 23,905 45,825 46,503 Insurance and claims 9,842 18,005 19,955 31,170 General and administrative expenses 5,322 8,351 11,364 15,814 Operating taxes and licenses 6,349 7,120 12,427 14,282 Communication and utilities 4,015 4,731 8,186 9,240 - ------------------------------------------------------------------------------------------------------- Total operating expenses 375,944 355,137 734,025 698,719 - ------------------------------------------------------------------------------------------------------- Operating income 9,254 17,436 16,574 27,868 Interest expense 6,246 6,362 12,650 12,273 - ------------------------------------------------------------------------------------------------------- Earnings before income taxes 3,008 11,074 3,924 15,595 Income taxes 1,143 4,208 1,491 5,926 - ------------------------------------------------------------------------------------------------------- Net earnings $ 1,865 $ 6,866 $ 2,433 $ 9,669 - ------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------- Common shares outstanding 36,456 38,061 36,603 38,068 - ------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------- Earnings per share $ 0.05 $ 0.18 $ 0.07 $ 0.25 - ------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements. 3 J.B. HUNT TRANSPORT SERVICES, INC. CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited) JUNE 30, 1997 DECEMBER 31, 1996 - ------------------------------------------------------------------------ ASSETS Current assets: Cash and cash equivalents $ 5,335 $ 3,786 Accounts receivable 150,398 151,357 Prepaid expenses 18,929 35,964 Deferred income taxes 11,000 11,000 - ------------------------------------------------------------------------ Total current assets 185,662 202,107 - ------------------------------------------------------------------------ Property and equipment 1,213,238 1,218,245 Less accumulated depreciation 423,667 404,992 - ------------------------------------------------------------------------ Net property and equipment 789,571 813,253 - ------------------------------------------------------------------------ Other assets 21,948 25,565 - ------------------------------------------------------------------------ $ 997,181 $1,040,925 - ------------------------------------------------------------------------ - ------------------------------------------------------------------------ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current maturities of long-term debt $ 13,300 $ 49,750 Trade accounts payable 96,483 83,846 Claims accruals 30,817 33,693 Accrued payroll 17,267 12,852 Other accrued expenses 14,733 15,999 - ------------------------------------------------------------------------ Total current liabilities 172,600 196,140 - ------------------------------------------------------------------------ Long-term debt 322,770 332,571 Claims accruals 12,800 12,800 Deferred income taxes 142,740 142,159 Stockholders' equity 346,271 357,255 - ------------------------------------------------------------------------ $ 997,181 $1,040,925 - ------------------------------------------------------------------------ - ------------------------------------------------------------------------ See accompanying notes to consolidated financial statements. 4 J.B. HUNT TRANSPORT SERVICES, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) - ------------------------------------------------------------------------------------ SIX MONTHS ENDED JUNE 30 - ------------------------------------------------------------------------------------ 1997 1996 - ------------------------------------------------------------------------------------ Cash flows from operating activities: Net earnings $ 2,433 $ 9,669 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation, net of gain on disposition of equipment 66,478 64,011 Deferred income taxes 581 (1,233) Tax benefit (expense) of stock options exercised (36) 386 Changes in assets and liabilities: Accounts receivable 959 (24,741) Prepaid expenses 17,035 10,269 Trade accounts payable 12,637 520 Claims accruals (2,876) (3,139) Accrued payroll and other accrued expenses 3,149 1,361 - ------------------------------------------------------------------------------------ Net cash provided by operating activities 100,360 57,103 - ------------------------------------------------------------------------------------ Cash flows from investing activities: Additions to property and equipment (79,113) (95,786) Proceeds from sale of equipment 36,317 21,807 Increase in other assets 4,364 (2,791) - ------------------------------------------------------------------------------------ Net cash used in investing activities (38,432) (76,770) - ------------------------------------------------------------------------------------ Cash flows from financing activities: Repayment of long-term debt (5,000) -- Net borrowings under commercial paper program (41,251) 26,902 Proceeds from sale of treasury stock 34 2,066 Repurchase of treasury stock (10,479) (3,778) Dividends paid (3,683) (3,783) - ------------------------------------------------------------------------------------ Net cash provided by (used in) financing activities (60,379) 21,407 - ------------------------------------------------------------------------------------ Net increase in cash and cash equivalents 1,549 1,740 - ------------------------------------------------------------------------------------ Cash and cash equivalents at beginning of period 3,786 4,260 - ------------------------------------------------------------------------------------ Cash and cash equivalents at end of period $ 5,335 $ 6,000 - ------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------ Supplemental disclosure of cash flow information: Cash paid (refunded) during the period for: Interest $ 12,755 $ 12,418 Income taxes (6,754) 789 - ------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements. 5 J.B. HUNT TRANSPORT SERVICES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (1) LONG-TERM DEBT Long-term debt consists of (in thousands): 6/30/97 12/31/96 -------- -------- Commercial paper $128,300 $169,750 Senior notes payable, interest at 6.25% payable semiannually, due 9/1/03 98,260 98,260 Senior notes payable, interest at 7.84% payable semiannually 10,000 15,000 Senior subordinated notes, interest at 7.80% payable semiannually 50,000 50,000 Senior notes payable, interest at 6.25% payable semiannually, due 11/17/00 25,000 25,000 Senior notes payable, interest at 6.00% payable semiannually 25,000 25,000 -------- -------- 336,560 383,010 Less current maturities (13,300) (49,750) Unamortized discount (490) (689) -------- -------- $322,770 $332,571 -------- -------- -------- -------- The Company is authorized to issue up to $240 million in notes under its commercial paper note program. These notes are supported by two credit agreements with a group of banks. One agreement for $120 million expires March 19, 1998 and $120 million expires March 20, 2002. The 6.25% senior notes were issued on September 1, 1993 and are due on September 1, 2003. The 7.84% senior notes were issued on March 31, 1992 and are payable in five equal annual installments beginning March 31, 1995. The 7.80% senior subordinated notes were issued on October 30, 1992 and are payable in five equal annual installments beginning October 30, 2000. The 6.25% senior notes were issued on November 17, 1995 and are payable at maturity on November 17, 2000. The 6.00% senior notes were issued on December 12, 1995 and are payable at maturity on December 12, 2000. 6 2) CAPITAL STOCK The Company maintains a Management Incentive Plan that provides various vehicles to compensate key employees with Company common stock. A summary of the restricted and non-statutory options to purchase Company common stock follows: Number of Number of Option price shares shares per share exercisable ------ --------- ----------- Outstanding at December 31, 1996 2,740,925 $ 11.58-24.63 294,950 ------- ------- Granted 143,000 13.88-15.00 Exercised (3,000) 11.58 Terminated (32,750) 12.83-23.00 --------- ------------- Outstanding at June 30, 1997 2,848,175 $ 11.58-24.63 443,975 --------- ------------- ------- --------- ------------- ------- On July 17, 1997, the Company's Board of Directors declared a regular quarterly cash dividend of $.05 per share payable on August 19, 1997 to stockholders of record on August 1, 1997. 3) NEW ACCOUNTING STATEMENT The Financial Accounting Standards Board issued Statement No.128, Earnings per Share, in February of 1997, which the Company is required to adopt as of December 31, 1997. At that time the method of computing earnings per share will change and all prior periods which are presented will be restated to conform with Statement 128. Under the new requirements "basic earnings per share" will replace the current term of "primary earnings per share" and "diluted earnings per share" will replace the current term of "fully diluted earnings per share". The Company expects basic earnings per share for the three and six month periods ended June 30, 1997 and June 30, 1996 to be unchanged when compared to primary earnings per share for those same periods. 7 INDEPENDENT AUDITORS' REPORT The Board of Directors J.B. Hunt Transport Services, Inc.: We have reviewed the condensed consolidated balance sheet of J.B. Hunt Transport Services, Inc. and subsidiaries as of June 30, 1997, and the related condensed consolidated statements of earnings and cash flows for the three-month and six-month periods ended June 30, 1997 and 1996, in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of obtaining an understanding of the system for the preparation of interim financial information, applying analytical review procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of J.B. Hunt Transport Services, Inc. and subsidiaries as of December 31, 1996, and the related consolidated statements of operations, stockholders' equity, and cash flows for the year then ended (not presented herein); and in our report dated February 7, 1997, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of December 31, 1996, is fairly presented, in all material respects, in relation to the consolidated balance sheet from which it has been derived. /s/ KPMG Peat Marwick LLP Little Rock, Arkansas July 15, 1997 8 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION The following discussion should be read in conjunction with the attached interim consolidated financial statements and notes thereto, and with the Company's audited consolidated financial statements and notes thereto for the calendar year ended December 31, 1996. RESULTS OF OPERATIONS COMPARISON OF SECOND QUARTER 1997 TO SECOND QUARTER 1996 The following table sets forth items in the Consolidated Statements of Earnings as a percentage of operating revenues and the percentage increase or decrease of those items as compared with the prior period. Three Months Ended June 30 Percentage of Percentage Operating Revenues Change ------------------ ------------- 1997 1996 1997 vs. 1996 ------ ------ ------------- Operating revenues 100.0% 100.0% 3.4% Operating expenses Salaries, wages and employee benefits 34.6% 32.8% 9.1% Purchased transportation 32.2% 26.5% 25.6% Fuel and fuel taxes 9.4% 11.3% (14.4%) Depreciation 8.6% 8.0% 11.3% Operating supplies and expenses 6.1% 6.4% (0.9%) Insurance and claims 2.6% 4.8% (45.3%) General and administrative expenses 1.4% 2.3% (36.3%) Operating taxes and licenses 1.7% 1.9% (10.8%) Communication and utilities 1.0% 1.3% (15.1%) ------ ------ Total operating expenses 97.6% 95.3% 5.9% ------ ------ Operating income 2.4% 4.7% (46.9%) Interest expense 1.6% 1.7% (1.8%) ------ ------ Earnings before income taxes 0.8% 3.0% (72.8%) Income taxes 0.3% 1.2% (72.8%) ------ ------ Net earnings 0.5% 1.8% (72.8%) ------ ------ ------ ------ 9 Operating revenues for the second quarter of 1997 increased $12.6 million, or 3 percent, to $385.2 million from $372.6 million in the second quarter of 1996. The revenue comparison was affected by the fact that $12.3 million of revenue was generated during the second quarter of 1996 by the special commodities and parcel management businesses which were sold later in 1996. Revenue increased 2 percent in dry van operations, which includes intermodal; 21 percent in dedicated and 79 percent in logistics. Dry van load count grew by 7 percent during the current quarter. Truck only dry van rates, excluding fuel surcharges, increased 1.2 percent, while intermodal rates declined .7 percent. The continued growth of dedicated equipment and logistics operations was due to additional customer contracts which were signed during the period and increased levels of business under existing contracts. Significant numbers of shippers continue to request transportation services whereby equipment is assigned or dedicated to a particular operation or where all transportation needs are managed by one party (i.e. logistics). Typically these services are provided in accordance with longer term contracts or other written agreements. Total operating expenses for the second quarter of 1997 increased to 97.6 percent of operating revenue from 95.3 percent in 1996. The second quarter of 1997 was the first full quarter of the pay increase awarded to over-the-road van drivers which was effective on February 28, 1997. This pay increase, announced in September of 1996, increased wages by approximately thirty percent for certain over-the-road drivers and reduced net earnings in the current quarter by $8.1 million, or 22 cents per share. This increase in operating costs was partly offset by lower accident, cargo claims, driver training and driver recruiting expenses. The new compensation package has been successful in attracting and retaining experienced, professional drivers. It has taken longer than anticipated to increase the driver work force to the levels desired. Therefore, tractor utilization declined 4 percent during the current quarter from a strong second quarter of 1996. The increase in purchased transportation expense was consistent with trends in recent periods and reflects payments to railroads and other third-parties for transportation services provided to the Company. Fuel and fuel taxes reflect approximately 6 cents lower cost per gallon and significantly higher fuel miles per gallon. The increase in depreciation expense was primarily due to a gain recognized on disposition of the parcel management business during the second quarter of 1996. Gains on asset disposition reduce depreciation expense and totaled $3.3 million in 1996 compared with a small net loss of less than $.1 million during the current quarter. The significant decrease in insurance and claims reflects the decline in accidents associated with more experienced drivers and the elimination of student drivers. Accident costs were also unusually high during the second quarter of 1996. The Company announced a decision in June of 1996 to limit the speed of its tractors to 59 miles per hour. The lower level of general and administrative expense was primarily due to reduced driver training and recruiting costs. Operating taxes and licenses decreased, partly due to a decrease in the size of the tractor fleet. Lower communication and utilities expense was due, in part, to lower communication rates during the current quarter. 10 As a result of the above, net earnings declined to $1.9 million, or 5 cents per share, in 1997 compared with $6.9 million, or 18 cents per share, in 1996. The average number of shares outstanding during the second quarter of 1997 declined to 36.5 million from 38.1 million in 1996. The primary reason for this decrease was acquisition of treasury stock by the Company. COMPARISON OF SIX MONTHS ENDED JUNE 30, 1997 TO SIX MONTHS ENDED JUNE 30, 1996 The following table sets forth items in the Consolidated Statements of Earnings as a percentage of operating revenues and the percentage increase or decrease of those items as compared with the prior period. Six Months Ended June 30 Percentage of Percentage Operating Revenues Change ------------------ ------------- 1997 1996 1997 vs. 1996 ------ ------ ------------- Operating revenues 100.0% 100.0% 3.3% Operating expenses Salaries, wages and employee benefits 33.9% 32.8% 6.8% Purchased transportation 32.1% 27.1% 22.4% Fuel and fuel taxes 9.9% 11.3% (9.9%) Depreciation 8.8% 8.8% 3.9% Operating supplies and expenses 6.1% 6.4% (1.5%) Insurance and claims 2.7% 4.3% (36.0%) General and administrative expenses 1.5% 2.2% (28.1%) Operating taxes and licenses 1.7% 2.0% (13.0%) Communication and utilities 1.1% 1.3% (11.4%) ------ ------ Total operating expenses 97.8% 96.2% 5.1% ------ ------ Operating income 2.2% 3.8% (40.5%) Interest expense 1.7% 1.7% 3.1% ------ ------ Earnings before income taxes 0.5% 2.1% (74.8%) Income taxes 0.2% 0.8% (74.8%) ------ ------ Net earnings 0.3% 1.3% (74.8%) ------ ------ ------ ------ 11 Operating revenues for the six months ended June 30, 1997 increased $24.0 million, or 3 percent, to $750.6 million from $726.6 million in 1996. The revenue comparison was affected by the fact that $30.1 million of revenue was generated during the first six months of 1996 by the special commodities and parcel management businesses which were sold later in 1996. Revenue increased 2 percent in dry van operations, which includes intermodal; 19 percent in dedicated and 85 percent in logistics. Dry van load count grew by 8 percent during the first six months of 1997. Truck only dry van rates, excluding fuel surcharge, increased .7 percent, while intermodal rates declined by .7 percent. Total operating expenses for the six months ended June 30, 1997 increased to 97.8 percent of operating revenue from 96.2 percent in 1996. The increase in operating expenses was due, in part, to the driver pay increase which was effective on February 28, 1997. This pay increase reduced net earnings by $11.1 million, or 30 cents per share, for the first six months of 1997. This increase in operating expenses was partly offset by lower accident, cargo claims, driver training and driver recruiting costs. Tractor utilization declined 3 percent during the first six months of 1997 from a relatively strong 1996. The significant increase in purchased transportation expense reflects payments to railroads and other third-party companies for transportation services. The decrease in fuel and fuel taxes reflects slightly higher cost per gallon, more than offset by significantly higher fuel miles per gallon. The increase in depreciation expense was primarily due to gain on disposition of assets which was $.1 million in 1997 and $3.4 million in 1996. Gain on disposition is accounted for as a reduction of depreciation expense. The significant decrease in insurance and claims reflects lower accident rates in 1997 associated with a higher level of experienced drivers and the decision to limit tractor speed to 59 miles per hour. In addition, the level of accidents and related costs was unusually high during the first six months of 1996. The decrease in general and administrative expenses was primarily due to lower driver training and recruiting costs. Operating taxes and licenses expense reflected slightly lower tractor fleet size. Communication and utilities declined, partly due to lower communication rates in 1997. As a result of the above, net earnings for the six months ended June 30, 1997 were $2.4 million, or 7 cents per share, compared with $9.7 million, or 25 cents per share, in 1996. The average number of shares outstanding during the first six months of 1997 declined to 36.6 million from 38.1 million in 1996. The primary reason for this decrease was acquisition of treasury stock by the Company. 12 LIQUIDITY AND CAPITAL RESOURCES This discussion of corporate liquidity and capital resources should be read in conjunction with information presented in the Consolidated Statements of Cash Flows and the Consolidated Balance Sheets. Net cash provided by operating activities was approximately $100 million for the six months ended June 30, 1997 compared with $57 million in 1996. This increase in net cash provided was primarily due to improved accounts receivable aging, a reduction of prepaid expenses and an increase in accounts payable related to timing of vendor and other cash disbursements. Net cash used in investing activities was approximately $38 million in 1997 compared with $77 million in 1996. This decrease was due primarily to fewer net additions to the trailing fleet during 1997. The increase in cash provided by operating activities in 1997 and reduced level of cash invested allowed the Company to reduce debt by $46 million during the first six months of 1997. In addition, approximately $10.5 million was invested in purchases of treasury stock during 1997 compared with $3.8 million in 1996. SELECTED BALANCE SHEET DATA As of ----------------------------------------------- June 30, 1997 December 31, 1996 June 30, 1996 ------------- ----------------- ------------- Working capital ratio 1.08 1.03 .95 Current maturities of long- term debt (millions) $ 13 $ 50 $ 62 Total debt (millions) $336 $382 $396 Total debt to equity .97 1.07 1.10 Total debt as a percentage of total capital .49 .52 .52 During the first six months of 1997 the Company renewed its commercial paper note program and reduced the total amount of authorized borrowing from $250 million to $240 million. The Company generates significant cash from operating activities and has borrowing capacity to meet its committed and contemplated cash requirements. FORWARD-LOOKING STATEMENTS This report may contain statements that may be considered as forward-looking or predictions concerning future operations. Such statements are based on management's belief or interpretation of information currently available. These statements and assumptions involve certain risks and uncertainties and management can give no assurance that such expectations will be realized. Among all the factors and events that are not within the Company's control and could have a material impact on future operating results are general economic conditions, cost and availability of diesel fuel, adverse weather conditions and competitive rate fluctuations. In addition, the ultimate net cost of the new driver compensation package will be dependent on the mix of experienced drivers attracted to the Company and on future accident, cargo and worker's compensation claims, as well as other factors. 13 PART II OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS None applicable. ITEM 2. CHANGES IN SECURITIES None applicable. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None applicable. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None applicable. ITEM 5. OTHER INFORMATION On July 30, 1997 the Company announced that it had completed the sale of its flatbed division to existing management personnel for $40 million in net cash proceeds. The cash was initially used to reduce debt. This sale was part of the Company's continuing intention to focus the majority of its resources on three types of operations; dry van truckload/intermodal, dedicated equipment and complete logistics services. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 27 Financial Data Schedule 14 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. J.B. HUNT TRANSPORT SERVICES, INC. DATE: August 8, 1997 BY: /s/ Kirk Thompson -------------------- --------------------------------- Kirk Thompson President and Chief Executive Officer DATE: August 8, 1997 BY: /s/ Jerry W. Walton -------------------- --------------------------------- Jerry W. Walton Executive Vice President, Finance and Chief Financial Officer 15
EX-27 2 EXHIBIT 27
5 6-MOS DEC-31-1997 JAN-01-1997 JUN-30-1997 5,335 0 150,398 0 0 185,662 1,213,238 423,667 997,181 172,600 0 0 0 390 0 997,181 750,599 750,599 0 734,025 0 0 12,650 3,924 1,491 2,433 0 0 0 2,433 .07 .07
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