EX-99.1 2 a08-10820_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 FIRST QUARTER 2008

 

·

 

First Quarter 2008 Revenue:

 

$878 million; up 10%

·

 

First Quarter 2008 Operating Income:

 

$72 million; down 10%

·

 

First Quarter 2008 EPS:

 

28 cents vs. 30 cents

 

LOWELL, ARKANSAS, April 14, 2008 - J. B. Hunt Transport Services, Inc., (NASDAQ:JBHT) announced first quarter 2008 net earnings of $36.4 million, or diluted earnings per share of 28 cents vs. 2007 first quarter earnings of $44.2 million, or 30 cents per diluted share.

 

Total operating revenue for the current quarter was $878 million, a 10% increase over the $797 million for the first quarter 2007.  The increase in operating revenue was partially attributable to higher Intermodal volumes and significant growth in our Integrated Capacity Solutions (ICS) segment, which more than offset a reduction of revenue in our Truck segment. The significant decline in this random, truckload business was primarily due to our actions to reduce the size of the applicable tractor fleet and weaker demand.  Revenue in our Dedicated segment was up slightly in the current quarter vs. the comparable period 2007.  Significantly higher fuel surcharge revenues in the current quarter vs. the same period 2007, also increased revenue.   Current quarter operating revenue, excluding fuel surcharges, increased 3% over the first quarter 2007.

 

Operating income for the current quarter declined to $72.1 million vs. $80.4 million for the first quarter 2007.  This decline was primarily due to an $11.5 million decline in our Truck segment operating income.  Net earnings declined in the current quarter vs. 2007 due to lower operating income and an increase in net interest expense.  Diluted earnings per share for the current quarter reflect an approximate 13% reduction in diluted shares outstanding, related to our purchases of company stock during 2007.  Total debt was $865 million at March 31, 2008 vs. $449 million at March 31, 2007.  The proceeds from these increased borrowings were used primarily for purchases of company stock.

 

“Given the unprecedented rise in fuel prices during the first quarter 2008 and extreme weakness in freight demand in our Truck segment, we are actually quite pleased with the relative performance of our Company.  In what may be recorded as the worst freight recession in a long time, our diversified transportation model of providing excellent service and value creation to our customers has held up exceptionally well.  We continue to move further away from an asset-heavy truckload model to a more variable cost structure, which should produce free-cash flow and feature transportation services that reflect our competitive advantages,” said Kirk Thompson, JBHT President and CEO.

 


 

Segment Information:

 

Intermodal (JBI)

 

·

 

First Quarter 2008 Segment Revenue:

 

$437 million; up 23%

·

 

First Quarter 2008 Operating Income:

 

$51.8 million; up 11%

 

JBI results for the first quarter continue to show improvement in spite of a challenging economy and tough year over year comparable results.  Intermodal load growth was up 19% with continued strong growth in the short haul lanes as shippers continue to seek alternatives to the high cost of fuel.  Current quarter revenue growth over the first quarter 2007 was 14%, excluding fuel surcharge revenue.

 

Operating income was up $5.3 million over the comparable quarter.  Driver productivity and container productivity measurements showed continued improvement.  Current quarter dray costs were slightly higher due to driver wage and fuel increases.  In addition, lane and customer mix changes drove rail empty moves slightly higher and the higher cost of fuel also increased dray and purchased transportation expenses.  JBI took delivery of more than 600 new containers and chassis in the current quarter, as well as more than 80 additional tractors to support new growth that is anticipated later this year.

 

Dedicated Contract Services (DCS)

 

·

 

First Quarter 2008 Segment Revenue:

 

$228 million; up 2%

·

 

First Quarter 2008 Operating Income:

 

$18.3 million; down 17%

 

DCS revenue grew 2% vs. the first quarter last year.  Excluding the effect of fuel surcharges, revenue declined 4%.  This decline was driven primarily by a 367 unit reduction in the average truck fleet, compared to the first quarter 2007.  Partially offsetting this decline in fleet size was a 3% increase in revenue per truck per week, excluding the effect of fuel surcharges.  The decline in the segment’s truck count reflected reductions in fleets that provide more generic dedicated business.  We also experienced reduced truck counts at existing fleets in response to changes in our customers’ business demand.

 

Operating income declined $3.6 million and the operating ratio increased 180 basis points to 92.0%.  Measured as a percent of gross revenue, operating expenses were generally in line with the same period last year, except for the cost of fuel.  We have fuel surcharge programs in place at the majority of our accounts that allow us to substantially recover increases in the cost of fuel.  However, there is a timing lag between when the cost is incurred and when it is recovered from our customer.  In periods of rapidly rising fuel costs, this lag can create unfavorable comparisons with periods of more stable costs, as experienced in the first quarter 2007.

 

Truck (JBT)

 

·

 

First Quarter 2008 Segment Revenue:

 

$185 million; down 14%

·

 

First Quarter 2008 Operating Income:

 

$(.05) million; down 100%

 

JBT revenue declined 14%, primarily due to a 16% reduction in loads, compared to first quarter 2007.  Current quarter revenue declined 20%, excluding fuel surcharges.  We have continued to right-size our random tractor fleet, which has resulted in a 22% reduction of our fleet size, compared to the tractor counts at the end of the first quarter 2007.  In total, we have reduced our fleet by 1,149 tractors compared to the end of the first quarter a year ago.  During the current quarter we made progress selling the JBT segment revenue equipment that was held for sale at December 31, 2007.  The continued reduction in the number of tractors in this segment is based on our assessment of longer term demand, with the ultimate goal for JBT to be a fleet that is right-sized in relation to customers’ needs, price elasticity and return on investment.  Overall, JBT’s rate per loaded mile, excluding fuel surcharges, decreased 0.5% during the current quarter, compared to the prior year period.

 

The division continues to be challenged by a depressed freight economy, compounded by a steep rise in fuel prices.  As fuel made it’s climb of almost $0.70 per gallon, to nearly $4.00, between mid-February and

 


 

the end of March, this year, customer fuel surcharges were constantly lagging fuel cost increases.  Higher fuel costs, net of fuel surcharge revenues, reduced JBT operating income by approximately $5.7 million, compared to the first quarter last year.

 

Integrated Capacity Solutions (ICS)

 

·

 

First Quarter 2008 Segment Revenue:

 

$37 million; up 189%

·

 

First Quarter 2008 Operating Income:

 

$2.0 million; up 308%

 

Current quarter segment revenue increased 189% from the first quarter 2007.  We continued to see steady revenue growth from new and existing customers, with revenues increasing 4% from the fourth quarter 2007.  Current quarter net operating revenue (gross revenue less purchased transportation) increased 227% year over year.  Growth was driven by both increased margins and increased volumes.

 

Operating expenses increased 200% over the first quarter 2007, primarily due to employee growth throughout 2007.  Year over year employee growth increased 130% from 2007.  We continued to grow our workforce during the first quarter 2008, in anticipation of, and ahead of, continued growth in the segment, with average employees growing 23% from the fourth quarter 2007.  As a percentage of net operating revenue, operating expenses decreased to 69% in the first quarter 2008 from 75% in the first quarter 2007.  Our third party carrier base grew 24% during the current quarter to over 10,500 carriers by quarter-end.

 

Cash Flow and Capitalization:

 

At March 31, 2008, we had cash and cash equivalents of $16.2 million.  During 2007 we completed all stock purchases previously authorized by our Board of Directors.  We reduced our total debt to $865 million at March 31, 2008 from $913 million at December 31, 2007.  In addition, our net capital expenditures for the current quarter approximated $60 million, primarily for the acquisition of new containers and chassis for our Intermodal business segment.

 

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, 2007. 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 March 31

 

 

 

2008

 

2007

 

 

 

 

 

% Of

 

 

 

% Of

 

 

 

Amount

 

Revenue

 

Amount

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

Operating revenues, excluding fuel surcharge revenues

 

$

724,170

 

 

 

$

706,472

 

 

 

Fuel surcharge revenues

 

154,213

 

 

 

90,979

 

 

 

Total operating revenues

 

878,383

 

100.0

%

797,451

 

100.0

%

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

Rents and purchased transportation

 

330,676

 

37.6

%

266,510

 

33.4

%

Salaries, wages and employee benefits

 

213,635

 

24.3

%

219,225

 

27.5

%

Fuel and fuel taxes

 

134,001

 

15.3

%

105,045

 

13.2

%

Depreciation and amortization

 

50,539

 

5.8

%

49,520

 

6.2

%

Operating supplies and expenses

 

36,797

 

4.2

%

36,561

 

4.6

%

Insurance and claims

 

17,802

 

2.0

%

17,303

 

2.2

%

Operating taxes and licenses

 

8,053

 

0.9

%

8,379

 

1.1

%

General and administrative expenses, net of gains

 

9,531

 

1.1

%

9,076

 

1.1

%

Communication and utilities

 

5,294

 

0.6

%

5,433

 

0.7

%

Total operating expenses

 

806,328

 

91.8

%

717,052

 

89.9

%

Operating income

 

72,055

 

8.2

%

80,399

 

10.1

%

Net interest expense

 

11,506

 

1.3

%

7,355

 

0.9

%

Equity in loss of associated companies

 

855

 

0.1

%

515

 

0.1

%

Earnings before income taxes

 

59,694

 

6.8

%

72,529

 

9.1

%

Income taxes

 

23,281

 

2.7

%

28,359

 

3.6

%

Net earnings

 

$

36,413

 

4.1

%

$

44,170

 

5.5

%

Average diluted shares outstanding

 

127,914

 

 

 

146,474

 

 

 

Diluted earnings per share

 

$

0.28

 

 

 

$

0.30

 

 

 

 


 

Financial Information By Segment

(unaudited)

 

 

 

Three Months Ended March 31

 

 

2008

 

2007

 

 

 

Dollar

 

 

 

Dollar

 

 

 

 

 

Amounts

 

% Of

 

Amounts

 

% Of

 

 

 

(000)

 

Total

 

(000)

 

Total

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

Intermodal

 

$

436,804

 

50

%

$

354,320

 

44

%

Dedicated

 

228,356

 

26

%

224,287

 

28

%

Truck

 

184,983

 

21

%

214,312

 

27

%

Integrated Capacity Solutions

 

37,493

 

4

%

12,977

 

2

%

Subtotal

 

887,636

 

101

%

805,896

 

101

%

Intersegment eliminations

 

(9,253

)

(1

)%

(8,445

)

(1

)%

Consolidated revenue

 

$

878,383

 

100

%

$

797,451

 

100

%

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

 

 

 

 

 

 

 

Intermodal

 

$

51,842

 

72

%

$

46,562

 

58

%

Dedicated

 

18,322

 

25

%

21,966

 

27

%

Truck

 

(46

)

(0

)%

11,425

 

14

%

Integrated Capacity Solutions

 

1,951

 

3

%

478

 

1

%

Other (1)

 

(14

)

(0

)%

(32

)

(0

)%

Operating income

 

$

72,055

 

100

%

$

80,399

 

100

%

 

(1) Includes corporate support activity

 


 

Operating Statistics by Segment

(unaudited)

 

 

 

Three Months Ended March 31

 

 

 

2008

 

2007

 

 

 

 

 

 

 

Intermodal (JBI)

 

 

 

 

 

 

 

 

 

 

 

Loads

 

191,020

 

160,858

 

Average length of haul

 

1,879

 

1,954

 

Revenue per load

 

$

2,287

 

$

2,203

 

Average tractors during the period *

 

1,834

 

1,573

 

 

 

 

 

 

 

Tractors (end of period)

 

 

 

 

 

Company-owned

 

1,879

 

1,565

 

Independent contractor

 

6

 

16

 

Total tractors

 

1,885

 

1,581

 

 

 

 

 

 

 

Containers (end of period)

 

34,190

 

28,648

 

Average effective trailing equipment usage

 

32,402

 

27,987

 

 

 

 

 

 

 

Dedicated (DCS)

 

 

 

 

 

 

 

 

 

 

 

Loads

 

330,841

 

337,941

 

Average length of haul

 

233

 

260

 

Revenue per truck per week**

 

$

3,632

 

$

3,318

 

Average trucks during the period***

 

4,897

 

5,264

 

 

 

 

 

 

 

Trucks (end of period)

 

 

 

 

 

Company-owned

 

4,631

 

5,016

 

Independent contractor

 

87

 

120

 

Customer-owned (DCS-operated)

 

90

 

48

 

Total trucks

 

4,808

 

5,184

 

 

 

 

 

 

 

Trailers (end of period)

 

8,182

 

7,044

 

Average effective trailing equipment usage

 

13,120

 

12,926

 

 

 

 

 

 

 

Truck (JBT)

 

 

 

 

 

 

 

 

 

 

 

Loads

 

170,294

 

201,738

 

Average length of haul

 

492

 

526

 

Loaded miles (000)

 

84,921

 

107,652

 

Total miles (000)

 

96,925

 

122,471

 

Average nonpaid empty miles per load

 

73.0

 

70.4

 

Revenue per tractor per week**

 

$

3,443

 

$

3,439

 

Average tractors during the period *

 

4,197

 

5,201

 

 

 

 

 

 

 

Tractors (end of period)

 

 

 

 

 

Company-owned

 

3,298

 

4,132

 

Independent contractor

 

759

 

1,074

 

Subtotal

 

4,057

 

5,206

 

 

 

 

 

 

 

Trailers (end of period)

 

17,228

 

19,122

 

Average effective trailing equipment usage

 

12,370

 

13,294

 

 

 

 

 

 

 

Integrated Capacity Solutions (ICS)

 

 

 

 

 

 

 

 

 

 

 

Loads

 

28,080

 

8,361

 

 

* 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)

 

 

 

March 31, 2008

 

December 31, 2007

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

16,218

 

$

14,957

 

Accounts receivable

 

340,420

 

330,202

 

Assets held for sale

 

33,214

 

39,747

 

Prepaid expenses and other

 

81,805

 

103,988

 

Total current assets

 

471,657

 

488,894

 

Property and equipment

 

2,103,202

 

2,080,893

 

Less accumulated depreciation

 

727,682

 

722,170

 

Net property and equipment

 

1,375,520

 

1,358,723

 

Other assets

 

10,892

 

15,129

 

 

 

$

1,858,069

 

$

1,862,746

 

 

 

 

 

 

 

LIABILITIES & STOCKHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Current debt

 

$

164,000

 

$

234,000

 

Trade accounts payable

 

189,164

 

189,987

 

Claims accruals

 

18,768

 

19,402

 

Accrued payroll

 

44,120

 

34,310

 

Other accrued expenses

 

20,719

 

26,663

 

Deferred income taxes

 

20,039

 

20,070

 

Total current liabilities

 

456,810

 

524,432

 

 

 

 

 

 

 

Long-term debt

 

701,200

 

679,100

 

Other long-term liabilities

 

36,391

 

34,453

 

Deferred income taxes

 

295,226

 

281,564

 

Stockholders’ equity

 

368,442

 

343,197

 

 

 

$

1,858,069

 

$

1,862,746

 

 

Supplemental Data

(unaudited)

 

 

 

March 31, 2008

 

December 31, 2007

 

 

 

 

 

 

 

Actual shares outstanding at end of period (000)

 

124,724

 

124,572

 

 

 

 

 

 

 

Book value per actual share outstanding at end of period

 

$

2.95

 

$

2.76

 

 

 

 

Three Months Ended March 31

 

 

 

2008

 

2007

 

 

 

 

 

 

 

Net cash provided by operating activities (000)

 

$

119,643

 

$

154,195

 

 

 

 

 

 

 

Net capital expenditures (000)

 

$

60,453

 

$

94,558

 

 

 

 

 

 

 

Purchases of common stock (000)

 

$

—

 

$

103,371