EX-99.1 2 a05-6817_1ex99d1.htm EX-99.1

Exhibit 99.1

 

J.B. Hunt Transport Services, Inc.

Contact:

Kirk Thompson

615 J.B. Hunt Corporate Drive

 

President and

Lowell, Arkansas 72745

 

Chief Executive Officer

(NASDAQ: JBHT)

 

(479) 820-8110

 

FOR IMMEDIATE RELEASE

 

J. B. HUNT TRANSPORT SERVICES, INC. REPORTS RECORD REVENUES AND EARNINGS
FOR THE FIRST QUARTER OF 2005

 

 

LOWELL, ARKANSAS, April 14, 2005 - J. B. Hunt Transport Services, Inc., (NASDAQ:JBHT) announced record first quarter net earnings of $47 million for 2005, or diluted earnings per share of 57 cents, a 44% increase over 2004 first quarter earnings of $33 million, or 40 cents per diluted share.

 

Total operating revenue for the current quarter was $709 million, compared with $618 million during the first quarter of 2004. During the first quarter of 2005, Truck segment revenue, excluding fuel surcharges, increased 6%, while the Intermodal segment revenue, excluding fuel surcharges, rose 13% over the comparable period of 2004.  Dedicated segment (DCS) revenue, excluding fuel surcharge revenue, increased 10% during the current quarter.

 

Operating income rose 36% from $58 million in 2004 to $79 million in 2005 on a 10% rise in revenues net of fuel surcharges.  The overall operating ratio for the company improved 180 basis points to 88.8% compared to 90.6% in 2004.  Truck improved its operating ratio 350 basis points to 89.5% and DCS improved 190 basis points to 89.7%.  Intermodal recorded an operating ratio of 88.0% for both the first quarter of 2005 and the first quarter of 2004.  Operating income for Truck, Intermodal and DCS rose by 66%, 18% and 41% respectively.  Continued safe operations, higher freight rates and a lower effective income tax rate contributed to the net earnings improvement.

 

"We are delighted at the continued improvement in our profitability.  We were able to achieve a respectable margin in the typically difficult first quarter for the second year in a row, a feat which had been an elusive target for us prior to 2004.  While the demand for the first quarter of 2005 was not quite as strong as the record-setting pace for the same period of 2004, we did produce 44% more in net earnings during the first quarter of 2005.  Pricing in all three operating segments remains strong, reflecting the unchanged fundamentals in our business: namely, a serious driver shortage, tight rail capacity, a limited number of trucks and the resulting disequilibrium in the balance of supply and demand.  In describing the strength of freight demand we reported last year that the first quarter of 2004 produced ‘uncharacteristically brisk demand in January and February’ and, added that the results were at ‘profit levels that normally occur during the busier part of the year.’  We would characterize freight demand in the first quarter of 2005 as better than any year in the last ten years with the exception of the abnormally strong 2004.  Intense focus on SAFETY and service to our customers remains at the top of our objectives and we were pleased with results in both categories during the first three months of 2005.  Barring a downturn in the economy, something current forecasts are not suggesting, we would expect the remainder of 2005 to follow the normal seasonal patterns and to continue to reflect demand outpacing supply.

 

In fact, the early indications for demand in April have been quite encouraging and our expectations for the balance of 2005 remain strong," stated Kirk Thompson, President and Chief Executive Officer.

 


 

The Truck operating ratio was 89.5% for the quarter, a 350 basis point improvement versus the comparable period last year. This represents the sixteenth quarter in a row, relative to prior years, that the segment has shown improvement. Safety will always be at the top of our priorities and the intense focus yielded another quarter of relatively low claims cost.  Our service levels during the first quarter of 2005 bested last year’s first quarter by 73 basis points reflecting our commitment to provide best-in-class pick-up and delivery, flexibility and allocated capacity for our customers.  Rate yields continued to improve as the loaded rate per mile (excluding fuel surcharges) increased 8.2% relative to the first quarter of 2004, marking the highest rate increase percentage for a first quarter in company history.  Empty miles were 10.1% versus 9.7% for the first quarter a year ago. Freight demand in the quarter was slightly off the robust first quarter 2004 levels, but still remained strong when compared historically to other first quarters. Driver availability continues to be a serious concern for the segment, as well as the industry.  Increases in driver pay over the last few months have resulted in only marginal improvements in driver supply.  We see no signs of fundamental improvement in driver availability for the foreseeable future. Therefore, we do not anticipate significant capacity additions in the truckload marketplace in the near term. The average number of trucks in the Truck segment was 5,409 for the first quarter of 2005 and 5,438 for the first quarter or 2004.

 

In the Intermodal segment, the operating ratio was 88.0% for both the first quarter of 2005 and the same quarter of 2004.  Revenue for the quarter increased 19% to $288 million from $242 million in the first quarter of 2004, reflecting strong year-over-year pricing, including a sound process for recovering higher fuel costs through fuel surcharges.   Rates, excluding fuel surcharges, were up 7.1%, continuing the trend of recent quarters.  Volume for the period was up 4% over the same period a year ago. The rate increases, including higher fuel surcharges, growth in volume and freight mix changes that contributed to the 19% increase in revenue kept pace with costs that also increased 19% over the same period a year ago. Freight demand was slightly lower than expected and railroad service levels were also below year earlier levels contributing to lower productivity of our drivers and containers utilized in intermodal service.  Driver wage hikes and increased maintenance expenses due to an increase in the age of the fleet contributed to the higher costs, while safety related expenses showed a favorable year-over-year comparison.

 

The operating ratio for the DCS segment was 89.7% vs. 91.6% for the first quarter of 2004, a 190 basis point improvement over the same period a year ago.    Revenue, excluding fuel surcharge and purchased transportation in the current quarter, was up 12% compared to the first quarter of 2005.  Growth in revenue was driven by a 7.5% increase in the average number of tractors assigned to the segment and a 4.7% improvement in productivity.  Utilization for the first quarter of 2005 was down 1.4% but more than offset by an increase in net revenue excluding fuel surcharge per loaded mile of 7.3%.  Operating income was $20.1 million, a 41% increase over the same quarter of 2004.  Again, safety had a positive impact on operating income as combined casualty and workers compensation costs as a percent of net revenue, excluding fuel surcharge, was down 180 basis points versus the same quarter of last year.   DCS continues to address the driver shortage on an account-by-account basis.  Where increases in driver pay are necessary, we have been largely successful in recovering this cost from our customers who recognize the value of a stable driver base and superior service.  We continue our focus on achieving appropriate financial returns from our assets through revenue quality improvement and cost controls at existing accounts and disciplined pricing and contract structure for any new growth opportunities.  The average number of tractors in the unit was 5,032 for the first quarter of 2005 vs. 4,681 for the first quarter of 2004.

 

This report contains 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 7 of our Annual Report filed on Form 10-K for the year ended December 31, 2004.  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 related 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

 

 

 

2005

 

2004

 

 

 

Amount

 

% Of
Revenue

 

Amount

 

% Of
Revenue

 

 

 

 

 

 

 

 

 

 

 

Operating revenues

 

$

709,178

 

100.0

%

$

617,698

 

100.0

%

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

Salaries, wages and employee benefits

 

200,883

 

28.3

%

189,964

 

30.8

%

Rents and purchased transportation

 

239,076

 

33.7

%

203,708

 

33.0

%

Fuel and fuel taxes

 

82,871

 

11.7

%

63,856

 

10.3

%

Depreciation and amortization

 

39,232

 

5.5

%

37,045

 

6.0

%

Operating supplies and expenses

 

31,654

 

4.5

%

28,721

 

4.6

%

Insurance and claims

 

11,755

 

1.7

%

13,024

 

2.1

%

Operating taxes and licenses

 

8,885

 

1.3

%

8,725

 

1.4

%

General and administrative expenses, net of gain or loss on asset dispositions

 

9,789

 

1.4

%

8,570

 

1.4

%

Communication and utilities

 

5,866

 

0.8

%

5,868

 

0.9

%

Total operating expenses

 

630,011

 

88.8

%

559,481

 

90.6

%

Operating income

 

79,167

 

11.2

%

58,217

 

9.4

%

Interest income

 

151

 

0.0

%

345

 

0.1

%

Interest expense

 

1,233

 

0.2

%

2,674

 

0.4

%

Equity in loss of associated company

 

851

 

0.1

%

469

 

0.1

%

Earnings before income taxes

 

77,234

 

10.9

%

55,419

 

9.0

%

Income taxes

 

29,735

 

4.2

%

22,445

 

3.6

%

Net earnings

 

$

47,499

 

6.7

%

$

32,974

 

5.3

%

Average basic shares outstanding

 

80,352

 

 

 

80,165

 

 

 

Basic earnings per share

 

$

0.59

 

 

 

$

0.41

 

 

 

Average diluted shares outstanding

 

83,205

 

 

 

82,965

 

 

 

Diluted earnings per share

 

$

0.57

 

 

 

$

0.40

 

 

 

 


 

Financial Information By Segment

(dollars in thousands)

(unaudited)

 

 

 

Three Months Ended March 31

 

 

 

2005

 

2004

 

 

 

 

 

 

 

Gross revenue

 

 

 

 

 

 

 

 

 

 

 

Truck

 

$

231,874

 

$

210,016

 

 

 

 

 

 

 

Intermodal

 

287,528

 

242,199

 

 

 

 

 

 

 

Dedicated

 

194,678

 

169,560

 

 

 

 

 

 

 

Subtotal

 

714,080

 

621,775

 

 

 

 

 

 

 

Intersegment eliminations

 

(4,902

)

(4,077

)

 

 

 

 

 

 

Consolidated revenue

 

$

709,178

 

$

617,698

 

 

 

 

 

 

 

Operating income

 

 

 

 

 

 

 

 

 

 

 

Truck

 

$

24,357

 

$

14,706

 

 

 

 

 

 

 

 

 

Intermodal

 

34,528

 

29,146

 

 

 

 

 

 

 

Dedicated

 

20,124

 

14,258

 

 

 

 

 

 

 

Other (1)

 

158

 

107

 

 

 

 

 

 

 

Operating income

 

$

79,167

 

$

58,217

 

 

(1) Includes unallocated corporate support and insurance expenses.

 


 

Operating Statistics by Segment

(unaudited)

 

 

 

Three Months Ended March 31

 

 

 

2005

 

2004

 

 

 

 

 

 

 

Truck

 

 

 

 

 

Operating ratio

 

89.5

%

93.0

%

Loads

 

215,082

 

233,048

 

Net revenue (excl. fsc) per tractor per week*

 

$

2,945

 

$

2,765

 

Length of haul

 

549

 

526

 

RPLM (excl. fsc)

 

$

1.682

 

$

1.554

 

Loaded miles (000)

 

120,354

 

124,782

 

Total miles (000)

 

133,853

 

138,253

 

Empty miles %

 

10.1

%

9.7

%

Average tractors during the period

 

5,409

 

5,438

 

Tractors (end of period)

 

 

 

 

 

Company owned

 

4,391

 

4,429

 

Independent contractor

 

1,005

 

1,009

 

Total tractors

 

5,396

 

5,438

 

Trailers (end of period)

 

20,110

 

20,035

 

  Average effective trailing equipment usage

 

14,639

 

14,903

 

 

 

 

 

 

 

Intermodal

 

 

 

 

 

Operating ratio

 

88.0

%

88.0

%

Loads

 

141,873

 

135,996

 

Net change in revenue per loaded mile (excl. fsc)

 

7.1

%

0.0

%

Revenue per load (excl. fsc)

 

$

1,857

 

$

1,707

 

Tractors (end of period)

 

1,204

 

1,041

 

Containers (end of period)

 

22,468

 

21,226

 

  Average effective trailing equipment usage

 

22,222

 

20,849

 

 

 

 

 

 

 

Dedicated

 

 

 

 

 

Operating ratio

 

89.7

%

91.6

%

Loads

 

318,714

 

314,077

 

Net revenue (excl. fsc) per tractor per week*

 

$

2,885

 

$

2,815

 

Average tractors during the period**

 

5,032

 

4,681

 

Tractors (end of period)

 

 

 

 

 

Company owned

 

4,695

 

4,410

 

Independent contractor

 

193

 

124

 

Customer owned (DCS Operated)

 

129

 

179

 

Total tractors

 

5,017

 

4,713

 

Trailers (end of period)

 

6,195

 

5,708

 

  Average effective trailing equipment usage

 

11,752

 

11,117

 

 

* Using weighted work days

** Includes company owned, independent contractor and customer owned tractors

 


 

J.B. HUNT TRANSPORT SERVICES, INC.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

 

 

 

March 31, 2005

 

December 31, 2004

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

1,952

 

$

23,838

 

Accounts receivable

 

300,111

 

289,146

 

Income tax receivable

 

19,418

 

19,418

 

Prepaid expenses and other

 

122,929

 

131,640

 

Total current assets

 

444,410

 

464,042

 

 

 

 

 

 

 

Property and equipment

 

1,470,899

 

1,450,023

 

Less accumulated depreciation

 

460,402

 

438,644

 

Net property and equipment

 

1,010,497

 

1,011,379

 

 

 

 

 

 

 

Other assets

 

23,854

 

16,285

 

 

 

$

1,478,761

 

$

1,491,706

 

 

 

 

 

 

 

LIABILITIES & STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Current maturities of long-term debt

 

$

68,000

 

$

—

 

Trade accounts payable

 

144,999

 

180,018

 

Claims accruals

 

17,786

 

18,535

 

Accrued payroll

 

43,840

 

73,750

 

Other accrued expenses

 

10,158

 

10,504

 

Deferred income taxes

 

37,853

 

25,414

 

Total current liabilities

 

322,636

 

308,221

 

 

 

 

 

 

 

Claims accruals and other liabilities

 

41,583

 

40,294

 

Deferred income taxes

 

297,400

 

282,241

 

Stockholders’ equity

 

817,142

 

860,950

 

 

 

$

1,478,761

 

$

1,491,706

 

 

Supplemental Data
(unaudited)

 

 

 

 

 

 

 

 

March 31, 2005

 

December 31, 2004

 

 

 

 

 

 

 

Actual shares outstanding at end of period (000)

 

79,216

 

81,393

 

 

 

 

 

 

 

Book value per actual share outstanding at end of period

 

$

10.32

 

$

10.58