EX-99.1 2 a07-2960_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 REVENUES AND EARNINGS

FOR THE FOURTH QUARTER AND YEAR ENDED DECEMBER 31, 2006

·       Fourth Quarter 2006 Revenue:

 

$852 million; down 1%

·       Fourth Quarter 2006 Operating Income:

 

$95 million; down 11%*

·       Fourth Quarter 2006 EPS:

 

39 cents vs. 41 cents*

 

 

 

·       Full Year 2006 Revenue:

 

$3.33 billion; up 6%

·       Full Year 2006 Operating Income:

 

$373 million; up 8%*

·       Full Year 2006 EPS:

 

$1.44 vs. $1.28*

 

*4Q 2006 includes a $12.4 million charge for insurance costs

LOWELL, ARKANSAS, January 29, 2007 - J. B. Hunt Transport Services, Inc., (NASDAQ:JBHT) announced fourth quarter 2006 net earnings of $57.8 million, or diluted earnings per share of 39 cents vs. 2005 fourth quarter earnings of $65.3 million, or 41 cents per diluted share.  Financial results for the current quarter include a $12.4 million pretax charge, or $.05 per diluted share, to increase casualty and workers’ compensation claims reserves.   This $12.4 million pretax charge increased casualty and workers’ compensation claims reserves to reflect the full administrative and termination costs of insurance contracts as the claims are incurred, rather than in the year the contracts terminate.

Total operating revenue for the current quarter was $852 million, a slight decrease from the $858 million for the fourth quarter of 2005.  This decrease in operating revenue was primarily attributable to a reduction in fuel surcharges related to the decline in fuel prices relative to the same period a year ago and moderating demand in our Truck segment.  Current quarter operating revenue, excluding fuel surcharges, increased 1% over the same period of 2005.  This increase in total operating revenue, excluding fuel surcharges, was partly the result of growth in the combined tractor fleet from 11,877 in the fourth quarter of 2005 to 12,127 in the fourth quarter of 2006.  Containers and trailers grew from 49,733 to 52,881 over the same period.  The growth in the fleet was to support additional intermodal and dedicated business.

Operating income for the current quarter declined to $95.4 million vs. $106.6 million for the fourth quarter of 2005.  The $12.4 million charge included $4.7 million of workers’ compensation expense which is classified in salaries, wages and employee benefits costs, and $7.7 million of casualty expense which is classified in insurance and claims costs.  These charges were recognized in each business segment.

“Once again the power and complimentary balance of our economic model was recognized in the fourth quarter.  Outstanding results in both Intermodal and Dedicated Contract Services offset lower operating income from our Truck segment which was facing particularly tough comparisons from the extremely profitable fourth quarter of 2005.  72% of our revenue and 84% of our operating income in the current



quarter was derived from non-traditional truckload services.  Demand for our Intermodal service was at record levels during the quarter and DCS continued to produce good growth and strong results while Truck performance was muted due to softening demand,” said Kirk Thompson, JBHT President and CEO.

Segment Information:

Intermodal (JBI)

 

 

·       Fourth Quarter 2006 Segment Revenue:

 

$387 million; up 8%

·       Fourth Quarter 2006 Operating Income:

 

$56.0 million; up 50%

 

The 8% revenue growth in JBI was partially the result of continued steady increases in load volume totaling in excess of 6%.   Reflecting our growth in traffic lanes of shorter distances, the average length of haul was down 2%.  Fuel surcharge revenue declined relative to fourth quarter 2005, while freight rates improved by 4.5%.  Intermodal generated a record $56.0 million of operating income, up 50%, when compared to the results of $37.4 million in the fourth quarter of 2005.  JBI operating income for the current quarter reflects $0.4 million of workers’ compensation expense and $0.6 million of casualty costs, associated with the $12.4 million pretax charge.  Our strategy for the busy season of 2006 and beyond is to reduce the usage of outsourced rented and leased equipment.  By using less high cost, short term outsourced resources we have been able to positively impact our profitability despite higher rail costs paid to our rail partners.  Railroad service was substantially improved compared to the same quarter a year ago.

Dedicated Contract Services (DCS)

 

 

·       Fourth Quarter 2006 Segment Revenue:

 

$233 million; up 5%

·       Fourth Quarter 2006 Operating Income:

 

$24.6 million; down 14%

 

DCS continued to add contract business in the current quarter for existing and new customers, resulting in the addition of 91 units sequentially during the current quarter and increasing the total tractor fleet count by 348, compared to the fourth quarter of 2005.  Revenue per truck per week was essentially flat compared to the same period last year as an increase in revenue per loaded mile of 4.8% offset a decline in total utilization and an increase in empty miles.  Fuel surcharge revenue declined compared to the fourth quarter of 2005 due to the moderating cost of fuel.  Operating income for the current quarter totaled $24.6 million, compared with $28.7 million in 2005.  DCS operating income for the current quarter reflects $2.4 million of workers’ compensation expense and $3.4 million of casualty costs associated with the $12.4 million pretax charge.

Truck (JBT)

 

 

·       Fourth Quarter 2006 Segment Revenue:

 

$239 million; down 16%

·       Fourth Quarter 2006 Operating Income:

 

$14.9 million; down 63%

 

Truck revenue declined 16% on a 4% decrease in loads hauled compared to the same quarter a year ago.  At the end of the fourth quarter the fleet size was down 315 trucks, or 6%, compared to the end of the fourth quarter of 2005.  Fuel surcharge revenue declined due to lower fuel costs.  Demand was much softer than the fourth quarter of 2005 and year-over-year comparisons were even more difficult due to the absence of hurricane relief shipments that were prevalent last year.  Rates from consistent shippers continued to increase, growing by 4.6 cents per mile or approximately 2.7%, while rates from unplanned activity (spot pricing, back-up pricing and paid deadhead) fell 33%, vs. the same quarter in 2005.  JBT operating income for the current quarter totaled $14.9 million, compared with $40.2 million in 2005.  JBT operating income for the current quarter reflects $1.9 million of workers’ compensation expense and $3.7 million of casualty costs associated with the $12.4 million pretax charge.

Cash Flow and Capitalization:

No shares of treasury stock were purchased during the fourth quarter of 2006.  Approximately $103 million remained authorized by our Board of Directors and available at December 31, 2006, for purchases of treasury stock.  As of December 31, 2006, approximately $396 million was owed on our various credit facilities.



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, 2005. 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 at 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 December 31

 

 

 

2006

 

2005

 

 

 

Amount

 

% Of
Revenue

 

Amount

 

% Of
Revenue

 

 

 

 

 

 

 

 

 

 

 

Operating revenues, excluding fuel surcharge revenues

 

$

749,602

 

 

 

$

742,234

 

 

 

Fuel surcharge revenues

 

101,967

 

 

 

116,142

 

 

 

Total operating revenues

 

851,569

 

100.0

%

858,376

 

100.0

%

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

Rents and purchased transportation

 

287,510

 

33.7

%

300,080

 

35.0

%

Salaries, wages and employee benefits

 

223,771

 

26.3

%

222,248

 

25.9

%

Fuel and fuel taxes

 

107,863

 

12.7

%

112,350

 

13.1

%

Depreciation and amortization

 

49,742

 

5.8

%

42,586

 

5.0

%

Operating supplies and expenses

 

37,195

 

4.4

%

34,497

 

4.0

%

Insurance and claims

 

29,457

 

3.5

%

16,319

 

1.9

%

Operating taxes and licenses

 

8,526

 

1.0

%

8,433

 

1.0

%

General and administrative expenses, net of gains

 

6,875

 

0.8

%

9,470

 

1.1

%

Communication and utilities

 

5,262

 

0.6

%

5,768

 

0.7

%

Total operating expenses

 

756,201

 

88.8

%

751,751

 

87.6

%

Operating income

 

95,368

 

11.2

%

106,625

 

12.4

%

Net interest expense

 

6,434

 

0.7

%

1,565

 

0.2

%

Equity in loss of associated companies

 

437

 

0.1

%

1,718

 

0.2

%

Earnings before income taxes

 

88,497

 

10.4

%

103,342

 

12.0

%

Income taxes

 

30,693

 

3.6

%

38,004

 

4.4

%

Net earnings

 

$

57,804

 

6.8

%

$

65,338

 

7.6

%

Average diluted shares outstanding

 

147,865

 

 

 

159,246

 

 

 

Diluted earnings per share

 

$

0.39

 

 

 

$

0.41

 

 

 

 

J.B. HUNT TRANSPORT SERVICES, INC.

Condensed Consolidated Statements of Earnings

(in thousands, except per share data)

(unaudited)

 

 

 

Twelve Months Ended December 31

 

 

 

2006

 

2005

 

 

 

Amount

 

% Of
Revenue

 

Amount

 

% Of
Revenue

 

 

 

 

 

 

 

 

 

 

 

Operating revenues, excluding fuel surcharge revenues

 

$

2,897,816

 

 

 

$

2,791,926

 

 

 

Fuel surcharge revenues

 

430,171

 

 

 

335,973

 

 

 

Total operating revenues

 

3,327,987

 

100.0

%

3,127,899

 

100.0

%

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

Rents and purchased transportation

 

1,124,734

 

33.8

%

1,058,406

 

33.8

%

Salaries, wages and employee benefits

 

892,066

 

26.8

%

855,272

 

27.3

%

Fuel and fuel taxes

 

447,309

 

13.4

%

388,962

 

12.4

%

Depreciation and amortization

 

183,604

 

5.5

%

163,034

 

5.2

%

Operating supplies and expenses

 

145,794

 

4.4

%

132,895

 

4.2

%

Insurance and claims

 

71,582

 

2.2

%

55,266

 

1.8

%

Operating taxes and licenses

 

34,447

 

1.0

%

35,827

 

1.1

%

General and administrative expenses, net of gains

 

33,232

 

1.0

%

45,939

 

1.5

%

Communication and utilities

 

22,566

 

0.7

%

22,597

 

0.7

%

Arbitration Settlement

 

—

 

0.0

%

25,801

 

0.8

%

Total operating expenses

 

2,955,334

 

88.8

%

2,783,999

 

89.0

%

Operating income

 

372,653

 

11.2

%

343,900

 

11.0

%

Net interest expense

 

15,159

 

0.5

%

5,565

 

0.2

%

Equity in loss of associated companies

 

3,181

 

0.1

%

4,709

 

0.2

%

Earnings before income taxes

 

354,313

 

10.6

%

333,626

 

10.7

%

Income taxes

 

134,361

 

4.0

%

126,315

 

4.0

%

Net earnings

 

$

219,952

 

6.6

%

$

207,311

 

6.6

%

Average diluted shares outstanding

 

152,317

 

 

 

162,559

 

 

 

Diluted earnings per share

 

$

1.44

 

 

 

$

1.28

 

 

 

 



 

Financial Information By Segment

(unaudited)

 

 

 

Three Months Ended December 31

 

 

 

2006

 

2005

 

 

 

Dollar
Amounts
(000)

 

% Of
Total

 

Dollar
Amounts
(000)

 

% Of
Total

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intermodal

 

$

386,764

 

45

%

$

359,423

 

42

%

Dedicated

 

233,468

 

27

%

222,052

 

26

%

Truck

 

239,188

 

28

%

283,608

 

33

%

Subtotal

 

859,420

 

101

%

865,083

 

101

%

Intersegment eliminations

 

(7,851

)

(1

)%

(6,707

)

(1

)%

Consolidated revenue

 

$

851,569

 

100

%

$

858,376

 

100

%

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intermodal

 

$

56,017

 

59

%

$

37,367

 

35

%

Dedicated

 

24,603

 

26

%

28,686

 

27

%

Truck

 

14,880

 

16

%

40,175

 

38

%

Other (1)

 

(132

)

(0

)%

397

 

0

%

Operating income

 

$

95,368

 

100

%

$

106,625

 

100

%

 

 

 

Twelve Months Ended December 31

 

 

 

2006

 

2005

 

 

 

Dollar
Amounts
(000)

 

% Of
Total

 

Dollar
Amounts
(000)

 

% Of
Total

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intermodal

 

$

1,430,065

 

43

%

$

1,284,255

 

41

%

Dedicated

 

915,225

 

28

%

844,091

 

27

%

Truck

 

1,007,556

 

30

%

1,019,971

 

33

%

Subtotal

 

3,352,846

 

101

%

3,148,317

 

101

%

Intersegment eliminations

 

(24,859

)

(1

)%

(20,418

)

(1

)%

Consolidated revenue

 

$

3,327,987

 

100

%

$

3,127,899

 

100

%

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intermodal

 

$

181,668

 

49

%

$

123,729

 

36

%

Dedicated

 

104,180

 

28

%

100,182

 

29

%

Truck

 

86,863

 

23

%

118,747

 

35

%

Other (1)

 

(58

)

(0

)%

1,242

 

0

%

Operating income

 

$

372,653

 

100

%

$

343,900

 

100

%

(1) Includes corporate support activity



Operating Statistics by Segment

(unaudited)

 

 

Three Months Ended December 31

 

 

 

2006

 

2005

 

 

 

 

 

 

 

Intermodal (JBI)

 

 

 

 

 

 

 

 

 

 

 

Loads

 

167,763

 

157,822

 

Length of haul

 

1,981

 

2,019

 

Revenue per load

 

$

2,305

 

$

2,277

 

Average tractors during the period *

 

1,567

 

1,333

 

Tractors (end of period)

 

 

 

 

 

Company-owned

 

1,551

 

1,341

 

Independent contractor

 

23

 

16

 

Total Tractors

 

1,574

 

1,357

 

Containers (end of period)

 

27,622

 

23,755

 

  Average effective trailing equipment usage

 

26,930

 

23,523

 

 

 

 

 

 

 

Dedicated (DCS)

 

 

 

 

 

 

 

 

 

 

 

Loads

 

349,545

 

332,394

 

Length of haul

 

261

 

269

 

Revenue per truck per week**

 

$

3,483

 

$

3,498

 

Average trucks during the period***

 

5,351

 

5,029

 

Trucks (end of period)

 

 

 

 

 

Company-owned

 

5,177

 

4,771

 

Independent contractor

 

122

 

152

 

Customer-owned (DCS Operated)

 

59

 

87

 

Total Trucks

 

5,358

 

5,010

 

Trailers (end of period)

 

6,519

 

6,352

 

  Average effective trailing equipment usage

 

12,369

 

12,074

 

 

 

 

 

 

 

Truck (JBT)

 

 

 

 

 

 

 

 

 

 

 

Loads

 

213,693

 

221,526

 

Length of haul

 

529

 

580

 

Loaded miles (000)

 

110,902

 

126,400

 

Total miles (000)

 

126,845

 

143,618

 

Average non-paid empty miles per load

 

76.8

 

61.8

 

Revenue per tractor per week**

 

$

3,667

 

$

4,019

 

Average tractors during the period *

 

5,242

 

5,474

 

Tractors (end of period)

 

 

 

 

 

Company-owned

 

4,233

 

4,368

 

Independent contractor

 

962

 

1,142

 

Total Tractors

 

5,195

 

5,510

 

Trailers (end of period)

 

18,740

 

19,626

 

  Average effective trailing equipment usage

 

13,164

 

14,070

 

 

* Includes company-owned and independent contractor tractors

** Using weighted workdays

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



 

 

 

Twelve Months Ended December 31

 

 

 

2006

 

2005

 

 

 

 

 

 

 

Intermodal (JBI)

 

 

 

 

 

 

 

 

 

 

 

Loads

 

629,533

 

598,857

 

Length of haul

 

1,989

 

2,010

 

Revenue per load

 

$

2,272

 

$

2,145

 

Average tractors during the period *

 

1,485

 

1,259

 

Tractors (end of period)

 

 

 

 

 

Company-owned

 

1,551

 

1,341

 

Independent contractor

 

23

 

16

 

Total Tractors

 

1,574

 

1,357

 

Containers (end of period)

 

27,622

 

23,755

 

  Average effective trailing equipment usage

 

25,152

 

22,881

 

 

 

 

 

 

 

Dedicated (DCS)

 

 

 

 

 

 

 

 

 

 

 

Loads

 

1,376,538

 

1,346,480

 

Length of haul

 

264

 

265

 

Revenue per truck per week**

 

$

3,466

 

$

3,290

 

Average trucks during the period***

 

5,176

 

5,012

 

Trucks (end of period)

 

 

 

 

 

Company-owned

 

5,177

 

4,771

 

Independent contractor

 

122

 

152

 

Customer-owned (DCS Operated)

 

59

 

87

 

Total Trucks

 

5,358

 

5,010

 

Trailers (end of period)

 

6,519

 

6,352

 

Average effective trailing equipment usage

 

12,457

 

11,909

 

 

 

 

 

 

 

Truck (JBT)

 

 

 

 

 

 

 

 

 

 

 

Loads

 

890,654

 

900,427

 

Length of haul

 

533

 

558

 

Loaded miles (000)

 

465,366

 

497,175

 

Total miles (000)

 

524,565

 

557,644

 

Average non-paid empty miles per load

 

66.6

 

62.0

 

Revenue per tractor per week**

 

$

3,704

 

$

3,671

 

Average tractors during the period*

 

5,347

 

5,430

 

Tractors (end of period)

 

 

 

 

 

Company-owned

 

4,233

 

4,368

 

Independent contractor

 

962

 

1,142

 

Total Tractors

 

5,195

 

5,510

 

Trailers (end of period)

 

18,740

 

19,626

 

  Average effective trailing equipment usage

 

13,504

 

14,309

 

 

* 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)

 

 

December 31, 2006

 

December 31, 2005

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

7,371

 

$

7,412

 

Accounts receivable

 

346,251

 

343,501

 

Income tax receivable

 

11,824

 

0

 

Prepaid expenses and other

 

105,797

 

123,777

 

Total current assets

 

471,243

 

474,690

 

Property and equipment

 

1,884,318

 

1,591,561

 

Less accumulated depreciation

 

600,767

 

537,502

 

Net property and equipment

 

1,283,551

 

1,054,059

 

Other assets

 

15,263

 

20,125

 

 

 

$

1,770,057

 

$

1,548,874

 

 

 

 

 

 

 

LIABILITIES & STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Current debt

 

$

214,000

 

$

—

 

Trade accounts payable

 

170,672

 

162,749

 

Claims accruals

 

20,042

 

15,651

 

Accrued Payroll

 

42,352

 

61,001

 

Other accrued expenses

 

7,961

 

9,198

 

Deferred income taxes

 

23,703

 

27,487

 

Total current liabilities

 

478,730

 

276,086

 

 

 

 

 

 

 

Long-term debt

 

182,400

 

124,000

 

Other long-term liabilities

 

62,307

 

45,834

 

Deferred income taxes

 

294,534

 

285,929

 

Stockholders’ equity

 

752,086

 

817,025

 

 

 

$

1,770,057

 

$

1,548,874

 

 

Supplemental Data
(unaudited)

 

 

December 31, 2006

 

December 31, 2005

 

 

 

 

 

 

 

Actual shares outstanding at end of period (000)

 

144,555

 

153,813

 

 

 

 

 

 

 

Book value per actual share outstanding at end of period

 

$

5.20

 

$

5.31