EX-99.1 2 a07-19684_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 SECOND QUARTER OF 2007

 

·

 

Second Quarter 2007 Revenue:

 

$856 million; up 2%

 

 

·

 

Second Quarter 2007 Operating Income:

 

$96 million; up 1%

 

 

·

 

Second Quarter 2007 EPS:

 

45 cents* vs. 36 cents

 

 

 

 

* 2Q 2007 includes $10.3 million benefit, net of tax, (EPS impact 7 cents) for settlement of a
proposed IRS adjustment

 

LOWELL, ARKANSAS, July 17, 2007 - J. B. Hunt Transport Services, Inc., (NASDAQ:JBHT) announced second quarter 2007 net earnings of $63.9 million, or diluted earnings per share of 45 cents vs. 2006 second quarter earnings of $55.3 million, or 36 cents per diluted share.  Included in the second quarter 2007 results is a benefit of $10.3 million, net of income taxes, resulting from the settlement of a proposed tax adjustment by the IRS.

Total operating revenue for the current quarter was $856 million, a 2% increase from the $838 million for the second quarter 2006.  The increase in operating revenue was primarily attributable to growth in our Intermodal (JBI), Dedicated Contract Services (DCS) and Integrated Capacity Solutions (ICS) segments.  The combined tractor fleet declined from 11,993 in the second quarter 2006 to 11,760 in the second quarter 2007.  Containers and trailers grew from 50,738 to 55,821 over the same period.  The growth in the fleet, including containers and trailers, was primarily to support additional intermodal business.

Operating income for the current quarter increased slightly to $96.2 million vs. $95.4 million for the second quarter 2006.  Net interest expense increased significantly from $3.1 million in the second quarter 2006 to $10.8 million in the current quarter, primarily due to higher levels of debt.  These increased borrowings were related primarily to our purchases of company stock, payment of the IRS tax settlement and purchases of trailing equipment off operating leases.  Also contributing to the higher net interest expense was approximately $3 million of additional accrued interest expense as a result of the settlement of a proposed IRS adjustment.  This proposed income tax adjustment was related to a 1999 sale-and-leaseback transaction which had been disclosed previously.  The additional interest expense was included, net of tax benefit, in the $10.3 million net benefit previously mentioned.  Our effective income tax rate for the current quarter decreased to 24.8% in 2007, from 39.0% in 2006, reflecting the settlement of the proposed IRS adjustment.  We expect our effective income tax rate to approximate 35.5% for the full calendar year 2007.



“Thanks to healthy growth in volumes and higher prices in our Intermodal segment, we were able to withstand slower net growth in our DCS segment, and stagnant freight volumes and lower prices in our Truck segment to produce a solid operating performance for the second quarter 2007,” said Kirk Thompson, JBHT President and CEO.

Segment Information:

Intermodal (JBI)

·

 

Second Quarter 2007 Segment Revenue:

 

$387 million; up 10%

·

 

Second Quarter 2007 Operating Income:

 

$54.2 million; up 25%

 

Intermodal segment revenue continued its steady expansion with load growth of 14% over the same period in 2006.  The majority of the load growth came from shorter haul eastern lanes impacting our freight mix and length of haul.  Year over year price per mile comparisons remain positive, up 1.5%, while moderating fuel surcharge revenues grew at a slower pace than overall revenue.

Operating income improved by 25%, as we managed improvements in company dray expense, focused on reducing empty miles and reduced the use of outsourced dray carriers.  Improvements were also seen in the overall cost of the container fleet as maintenance costs were reduced and several hundred older, higher maintenance containers were retired.  We continue to re-invest in the container/chassis fleet as older chassis are refurbished to extend their life and new steel containers are acquired to replace the first generation containers.  Our 100% 53 foot container fleet ended the quarter at just under 30,000 units.

Dedicated Contract Services (DCS)

·

 

Second Quarter 2007 Segment Revenue:

 

$236 million; up 2%

·

 

Second Quarter 2007 Operating Income:

 

$24.8 million; down 4%

 

DCS revenue grew 2%, driven by a 100 unit increase in the average tractor fleet vs. the same quarter last year.  Revenue per truck per week was flat as an approximate 5% increase in revenue per loaded mile offset a decline in total utilization and an increase in empty miles.  Measured as a percent of gross revenue, operating expenses were generally in line with the same period last year except for a 60 basis point increase in casualty expense.

Demand for customized dedicated services remains strong.  As of the end of the second quarter 2007 we had 280 trucks operating at accounts opened within the past 90 days.  We continue to see a reduction in truck count at some accounts that provide more generic dedicated business.   We also experienced reductions in truck count at other fleets in response to changes in our customers’ business demand.  Reducing truck count to help our customers optimize capacity and reduce their transportation costs is an integral part of Customer Value Deliverytm.  5,213 tractors were assigned to DCS, which is a sequential increase of 29 units over the first quarter of 2007.

Truck (JBT)

·

 

Second Quarter 2007 Segment Revenue:

 

$222 million; down 10%

·

 

Second Quarter 2007 Operating Income:

 

$16.5 million; down 33%

 

Truck revenue declined 10% on a 6% reduction in loads hauled compared to the same quarter a year ago.  Demand was soft, especially early in the current quarter, but improved somewhat throughout the remainder of the quarter, and was on par with last year’s June demand as measured on a daily loads-per-tractor basis.  We continue to reduce the number of trucks in this segment according to customer demand and in response to continued softness in the market.  By the end of the second quarter, the tractor count was down by 412 trucks, or 8%, compared to the second quarter of 2006.  Demand slowly improved late in the current quarter and we welcomed a small, end-of-quarter spike in activity absent since last year at this time.

Overall, our rate per loaded mile, excluding fuel surcharges, decreased 2.3% during the current quarter.  We have been able to maintain much of our existing volume from consistent business without eroding previous rate gains, essentially holding rates steady, despite softer economic conditions and an exceptionally active bid season.  We believe our customers realize that once volumes return, over-the-road truck capacity will likely be insufficient to meet increased demand



and many have opted for dependable capacity at reasonable prices rather than chase the cheapest carrier.  Paid deadhead was notably smaller this year and contributed greatly to the decline in rate overall.  In previous periods paid deadhead had been a sizable portion of the total rate but declined by 95% in the second quarter 2007 vs. the same quarter a year ago.  Noteworthy, rates from spot market pricing increased late in the quarter.

Integrated Capacity Solutions (ICS)

·

 

Second Quarter 2007 Segment Revenue:

 

$17 million; up 53%

·

 

Second Quarter 2007 Operating Income:

 

$0.7 million; down 33%

 

Integrated Capacity Solutions provides non-asset and asset-light transportation solutions to customers through relationships with third-party carriers and integration with JBHT owned equipment. ICS services include flatbed, refrigerated, LTL, as well as a variety of dry van and intermodal solutions. ICS financial results in 2006 were reported as part of the Truck segment. Revenue for ICS increased 53% from 2006 on increased volume.  Operating income for the second quarter continued to reflect higher expenses of increasing ICS staff to invest in future growth and for deploying new technology. Our staff is 2.9 times the size it was in the second quarter 2006.

ICS revenue increased sequentially 31% from the first quarter 2007 on volume gains from new and existing customers.  Our third-party carrier base grew 25% during the second quarter to over 5,000 carriers.  Technology advances deployed during the second quarter allow ICS to quickly access available carrier capacity and enhance existing communication capabilities between us and contract carriers, providing better service to customers and increased productivity of our employees.

Cash Flow and Capitalization:

Approximately 6.8 million shares of company stock were purchased during the second quarter 2007 for just over $197 million.  Approximately $303 million remained authorized by our Board of Directors and available at June 30, 2007, for purchases of company stock.  As of June 30, 2007, we owed approximately $704 million on our various credit facilities vs. $396 million at December 31, 2006.  Approximately $187 million of this increase related to the purchase of trailing equipment off operating leases and settlement payment of the proposed IRS tax adjustment.

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, 2006. 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 June 30

 

 

 

2007

 

2006

 

 

 

 

 

% Of

 

 

 

% Of

 

 

 

Amount

 

Revenue

 

Amount

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

Operating revenues, excluding fuel surcharge revenues

 

$

742,573

 

 

 

$

724,041

 

 

 

Fuel surcharge revenues

 

113,287

 

 

 

114,213

 

 

 

Total operating revenues

 

855,860

 

100.0

%

838,254

 

100.0

%

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

Rents and purchased transportation

 

292,155

 

34.2

%

283,540

 

33.8

%

Salaries, wages and employee benefits

 

223,350

 

26.1

%

224,099

 

26.7

%

Fuel and fuel taxes

 

114,784

 

13.4

%

115,202

 

13.8

%

Depreciation and amortization

 

50,526

 

5.9

%

44,520

 

5.3

%

Operating supplies and expenses

 

38,880

 

4.5

%

36,662

 

4.4

%

Insurance and claims

 

16,774

 

2.0

%

15,338

 

1.8

%

General and administrative expenses, net of gains

 

9,517

 

1.1

%

9,253

 

1.1

%

Operating taxes and licenses

 

8,554

 

1.0

%

8,677

 

1.0

%

Communication and utilities

 

5,093

 

0.6

%

5,554

 

0.7

%

Total operating expenses

 

759,633

 

88.8

%

742,845

 

88.6

%

Operating income

 

96,227

 

11.2

%

95,409

 

11.4

%

Net interest expense

 

10,771

 

1.2

%

3,064

 

0.4

%

Equity in loss of associated companies

 

545

 

0.1

%

1,634

 

0.2

%

Earnings before income taxes

 

84,911

 

9.9

%

90,711

 

10.8

%

Income taxes

 

21,054

 

2.4

%

35,377

 

4.2

%

Net earnings

 

$

63,857

 

7.5

%

$

55,334

 

6.6

%

Average diluted shares outstanding

 

142,030

 

 

 

154,619

 

 

 

Diluted earnings per share

 

$

0.45

 

 

 

$

0.36

 

 

 

 

J.B. HUNT TRANSPORT SERVICES, INC.

Condensed Consolidated Statements of Earnings

(in thousands, except per share data)

(unaudited)

 

 

 

 

Six Months Ended June 30

 

 

 

2007

 

2006

 

 

 

 

 

% Of

 

 

 

% Of

 

 

 

Amount

 

Revenue

 

Amount

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

Operating revenues, excluding fuel surcharge revenues

 

$

1,449,045

 

 

 

$

1,414,076

 

 

 

Fuel surcharge revenues

 

204,266

 

 

 

204,078

 

 

 

Total operating revenues

 

1,653,311

 

100.0

%

1,618,154

 

100.0

%

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

Rents and purchased transportation

 

558,665

 

33.8

%

549,127

 

33.9

%

Salaries, wages and employee benefits

 

442,575

 

26.8

%

438,627

 

27.1

%

Fuel and fuel taxes

 

219,829

 

13.3

%

219,784

 

13.6

%

Depreciation and amortization

 

100,047

 

6.0

%

88,050

 

5.5

%

Operating supplies and expenses

 

75,441

 

4.6

%

71,571

 

4.4

%

Insurance and claims

 

34,076

 

2.1

%

27,800

 

1.7

%

General and administrative expenses, net of gains

 

18,593

 

1.1

%

17,875

 

1.1

%

Operating taxes and licenses

 

16,933

 

1.0

%

17,092

 

1.1

%

Communication and utilities

 

10,526

 

0.6

%

11,431

 

0.7

%

Total operating expenses

 

1,476,685

 

89.3

%

1,441,357

 

89.1

%

Operating income

 

176,626

 

10.7

%

176,797

 

10.9

%

Net interest expense

 

18,126

 

1.1

%

3,570

 

0.2

%

Equity in loss of associated companies

 

1,060

 

0.1

%

2,221

 

0.1

%

Earnings before income taxes

 

157,440

 

9.5

%

171,006

 

10.6

%

Income taxes

 

49,412

 

3.0

%

66,692

 

4.2

%

Net earnings

 

$

108,028

 

6.5

%

$

104,314

 

6.4

%

Average diluted shares outstanding

 

144,240

 

 

 

156,422

 

 

 

Diluted earnings per share

 

$

0.75

 

 

 

$

0.67

 

 

 

 



 

Financial Information By Segment

(unaudited)

 

 

 

Three Months Ended June 30

 

 

 

2007

 

2006

 

 

 

Dollar

 

 

 

Dollar

 

 

 

 

 

Amounts

 

% Of

 

Amounts

 

% Of

 

 

 

(000)

 

Total

 

(000)

 

Total

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intermodal

 

$

387,371

 

45

%

$

352,907

 

42

%

Dedicated

 

236,310

 

28

%

232,304

 

28

%

Truck

 

222,456

 

26

%

247,347

 

30

%

Integrated Capacity Solutions

 

16,942

 

2

%

11,102

 

1

%

Subtotal

 

863,079

 

101

%

843,660

 

101

%

Intersegment eliminations

 

(7,219

)

(1

%)

(5,406

)

(1

%)

Consolidated revenue

 

$

855,860

 

100

%

$

838,254

 

100

%

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intermodal

 

$

54,185

 

56

%

$

43,367

 

45

%

Dedicated

 

24,830

 

26

%

25,926

 

27

%

Truck

 

16,465

 

17

%

24,543

 

26

%

Integrated Capacity Solutions

 

678

 

1

%

1,015

 

1

%

Other (1)

 

69

 

0

%

558

 

1

%

Operating income

 

$

96,227

 

100

%

$

95,409

 

100

%

 

 

 

Six Months Ended June 30

 

 

 

2007

 

 

 

2006

 

 

 

Dollar

 

 

 

Dollar

 

 

 

 

 

Amounts

 

% Of

 

Amounts

 

% Of

 

 

 

(000)

 

Total

 

(000)

 

Total

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intermodal

 

$

741,691

 

45

%

$

676,831

 

42

%

Dedicated

 

460,597

 

28

%

443,181

 

28

%

Truck

 

436,768

 

26

%

487,845

 

30

%

Integrated Capacity Solutions

 

29,919

 

2

%

21,376

 

1

%

Subtotal

 

1,668,975

 

101

%

1,629,233

 

101

%

Intersegment eliminations

 

(15,664

)

(1

%)

(11,079

)

(1

%)

Consolidated revenue

 

$

1,653,311

 

100

%

$

1,618,154

 

100

%

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intermodal

 

$

100,747

 

57

%

$

79,293

 

45

%

Dedicated

 

46,796

 

26

%

48,760

 

27

%

Truck

 

27,890

 

16

%

45,945

 

26

%

Integrated Capacity Solutions

 

1,156

 

1

%

1,898

 

1

%

Other (1)

 

37

 

0

%

901

 

1

%

Operating income

 

$

176,626

 

100

%

$

176,797

 

100

%

(1)             Includes corporate support activity



Operating Statistics by Segment

(unaudited)

 

 

 

Three Months Ended June 30

 

 

 

2007

 

2006

 

 

 

 

 

 

 

Intermodal (JBI)

 

 

 

 

 

 

 

 

 

 

 

Loads

 

176,681

 

154,953

 

Length of haul

 

1,918

 

1,996

 

Revenue per load

 

$

2,192

 

$

2,278

 

Average tractors during the period *

 

1,651

 

1,469

 

Tractors (end of period)

 

 

 

 

 

Company-owned

 

1,680

 

1,506

 

Independent contractor

 

14

 

21

 

Total Tractors

 

1,694

 

1,527

 

Containers (end of period)

 

29,494

 

24,738

 

Average effective trailing equipment usage

 

28,524

 

24,307

 

 

 

 

 

 

 

Dedicated (DCS)

 

 

 

 

 

 

 

 

 

 

 

Loads

 

356,042

 

352,874

 

Length of haul

 

253

 

264

 

Revenue per truck per week**

 

$

3,518

 

$

3,523

 

Average trucks during the period***

 

5,215

 

5,115

 

Trucks (end of period)

 

 

 

 

 

Company-owned

 

5,060

 

4,990

 

Independent contractor

 

113

 

122

 

Customer-owned (DCS Operated)

 

40

 

89

 

Total Trucks

 

5,213

 

5,201

 

Trailers (end of period)

 

7,317

 

6,519

 

Average effective trailing equipment usage

 

13,235

 

12,522

 

 

 

 

 

 

 

Truck (JBT)

 

 

 

 

 

 

 

 

 

 

 

Loads

 

209,814

 

223,462

 

Length of haul

 

513

 

520

 

Loaded miles (000)

 

108,829

 

117,165

 

Total miles (000)

 

123,288

 

131,462

 

Average non-paid empty miles per load

 

68.3

 

61.1

 

Revenue per tractor per week**

 

$

3,709

 

$

3,772

 

Average tractors during the period *

 

5,022

 

5,330

 

Tractors (end of period)

 

 

 

 

 

Company-owned

 

3,854

 

4,269

 

Independent contractor

 

999

 

996

 

Total Tractors

 

4,853

 

5,265

 

Trailers (end of period)

 

19,010

 

19,481

 

Average effective trailing equipment usage

 

13,167

 

13,671

 

 

 

 

 

 

 

Integrated Capacity Solutions (ICS)

 

 

 

 

 

 

 

 

 

 

 

Loads

 

11,775

 

6,835

 

* 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

 

 

 

2007

 

2006

 

 

 

 

 

 

 

Intermodal (JBI)

 

 

 

 

 

 

 

 

 

 

 

Loads

 

337,539

 

303,582

 

Length of haul

 

1,936

 

1,997

 

Revenue per load

 

$

2,197

 

$

2,229

 

Average tractors during the period *

 

1,612

 

1,424

 

Tractors (end of period)

 

 

 

 

 

Company-owned

 

1,680

 

1,506

 

Independent contractor

 

14

 

21

 

Total Tractors

 

1,694

 

1,527

 

Containers (end of period)

 

29,494

 

24,738

 

Average effective trailing equipment usage

 

27,899

 

24,134

 

 

 

 

 

 

 

Dedicated (DCS)

 

 

 

 

 

 

 

 

 

 

 

Loads

 

693,983

 

673,615

 

Length of haul

 

256

 

267

 

Revenue per truck per week**

 

$

3,418

 

$

3,412

 

Average trucks during the period***

 

5,239

 

5,062

 

Trucks (end of period)

 

 

 

 

 

Company-owned

 

5,060

 

4,990

 

Independent contractor

 

113

 

122

 

Customer-owned (DCS Operated)

 

40

 

89

 

Total Trucks

 

5,213

 

5,201

 

Trailers (end of period)

 

7,317

 

6,519

 

Average effective trailing equipment usage

 

13,081

 

12,444

 

 

 

 

 

 

 

Truck (JBT)

 

 

 

 

 

 

 

 

 

 

 

Loads

 

411,552

 

439,461

 

Length of haul

 

520

 

538

 

Loaded miles (000)

 

216,481

 

238,578

 

Total miles (000)

 

245,759

 

267,002

 

Average non-paid empty miles per load

 

70.6

 

62.3

 

Revenue per tractor per week**

 

$

3,572

 

$

3,665

 

Average tractors during the period*

 

5,111

 

5,423

 

Tractors (end of period)

 

 

 

 

 

Company-owned

 

3,854

 

4,269

 

Independent contractor

 

999

 

996

 

Total Tractors

 

4,853

 

5,265

 

Trailers (end of period)

 

19,010

 

19,481

 

Average effective trailing equipment usage

 

13,231

 

13,708

 

 

 

 

 

 

 

Integrated Capacity Solutions (ICS)

 

 

 

 

 

 

 

 

 

 

 

Loads

 

20,136

 

12,695

 

* 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, 2007

 

December 31, 2006

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

6,174

 

$

7,371

 

Accounts receivable

 

351,001

 

346,251

 

Income tax receivable

 

0

 

11,824

 

Prepaid expenses and other

 

66,062

 

105,797

 

Total current assets

 

423,237

 

471,243

 

Property and equipment

 

2,064,146

 

1,884,318

 

Less accumulated depreciation

 

670,275

 

600,767

 

Net property and equipment

 

1,393,871

 

1,283,551

 

Other assets

 

14,763

 

15,263

 

 

 

$

1,831,871

 

$

1,770,057

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES & STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Current debt

 

$

234,000

 

$

214,000

 

Trade accounts payable

 

180,068

 

170,672

 

Claims accruals

 

18,079

 

20,042

 

Accrued payroll

 

36,650

 

42,352

 

Other accrued expenses

 

32,010

 

7,961

 

Deferred income taxes

 

14,398

 

23,703

 

Total current liabilities

 

515,205

 

478,730

 

 

 

 

 

 

 

Long-term debt

 

469,500

 

182,400

 

Other long-term liabilities

 

32,699

 

54,656

 

Deferred income taxes

 

257,971

 

294,534

 

Stockholders’ equity

 

556,496

 

759,737

 

 

 

$

1,831,871

 

$

1,770,057

 

 

Supplemental Data

(unaudited)

 

 

 

June 30, 2007

 

December 31, 2006

 

 

 

 

 

 

 

Actual shares outstanding at end of period (000)

 

135,222

 

144,555

 

 

 

 

 

 

 

Book value per actual share outstanding at end of period

 

$

4.12

 

$

5.26