EX-99.1 2 ex_141043.htm EXHIBIT 99.1 ex_141043.htm

Exhibit 99.1

 

 

J.B. Hunt Transport Services, Inc. Contact: David G. Mee
615 J.B. Hunt Corporate Drive Executive Vice President, Finance/Administration
Lowell, Arkansas 72745 and Chief Financial Officer
(NASDAQ: JBHT) (479) 820-8363

          

 

FOR IMMEDIATE RELEASE

 

 

J.B. HUNT TRANSPORT SERVICES, INC. REPORTS REVENUES AND EARNINGS

FOR THE FIRST QUARTER 2019

 

 

  ■ First Quarter 2019 Revenue: $2.09 billion; up 7%
  ■ First Quarter 2019 Operating Income: $168 million; down 1%
  ■ First Quarter 2019 EPS:  $1.09 vs. $1.07

 

LOWELL, ARKANSAS, April 15, 2019 - J.B. Hunt Transport Services, Inc., (NASDAQ:JBHT) announced first quarter 2019 net earnings of $119.6 million, or diluted earnings per share of $1.09 vs. first quarter 2018 net earnings of $118.1 million, or $1.07 per diluted share.

 

Total operating revenue for the current quarter was $2.09 billion compared with $1.95 billion for the first quarter 2018. Current quarter total operating revenue, excluding fuel surcharges, increased 8% vs. first quarter 2018. Intermodal (JBI) revenue per load excluding fuel surcharges increased approximately 11% over first quarter 2018 levels partially offset by a 7% decline in volumes. Dedicated Contract Services (DCS) segment revenue increased by 22% over prior year primarily from additional customer contracts from a year ago and customer rate increases. Integrated Capacity Solutions (ICS) load growth was 15% partially offset by a 12% decrease in revenue per load over the same period in 2018. Truck (JBT) segment revenue increased 10% primarily from customer rate increases and a larger operating fleet compared to a year ago.

 

The operating revenue executed through the Marketplace for J.B Hunt 360° increased to $186 million in the first quarter 2019, vs. $96 million in the same period last year. ICS realized a 92% increase in revenue executed in the platform and JBI initiated the execution of third-party dray during the current period.

 

Operating income for the current quarter totaled $168 million vs. $169 million for the first quarter 2018. Benefits from higher customer rates and new customer contracts were offset by increased rail purchased transportation costs; lower intermodal network utilization; lower productivity in winter weather affected regions; higher driver and non-driver salaries, wages and benefits; higher Final Mile Services (FMS) network facilities costs; increased technology spend on the J.B. Hunt 360° platform and legacy system upgrades and increased equipment ownership and maintenance costs.

 

Net interest expense for the current quarter increased 43% from the same period in 2018 due to increased debt levels and higher effective interest rates on our debt.

 

The effective income tax rate decreased to 22.7% in the current quarter compared to 26.0% in the first quarter 2018 primarily from the favorable settlement of a state income tax audit. The annual tax rate for 2019 is estimated to be 24.0%.

 

 
 

 

Segment Information:

 

 

Intermodal (JBI)

■ First Quarter 2019 Segment Revenue:  $1.09 billion; up 2%
■ First Quarter 2019 Operating Income: $103 million; down 10%

 

JBI load volumes declined 7% from the same period 2018. Transcontinental loads declined 8% and the Eastern network load volume declined 7% compared to prior year. Volumes were affected by the expected rail lane closures and persistent severe winter weather events impacting Chicago operations. Combined, these events represented approximately one half of the volume decline. Revenue grew approximately 2% reflecting a 10% increase in revenue per load, which is determined by the combination of customer rates, fuel surcharges and freight mix and the 7% decline in volume. Revenue per load excluding fuel surcharges increased approximately 11% year over year.

 

Operating income decreased 10% from prior year. Benefits from customer rate increases and the execution of approximately $12 million of third-party dray in the Marketplace for J.B. Hunt 360° were more than offset by increases in rail purchased transportation costs; reduced network utilization and lower dray efficiency created from weather interruptions in the upper Midwest and Chicago areas, increased driver wages and recruiting costs; and higher equipment ownership and maintenance costs compared to the same period in 2018. The current period ended with approximately 95,800 units of trailing capacity and 5,671 power units assigned to the dray fleet.

 

 

Dedicated Contract Services (DCS)

■ First Quarter 2019 Segment Revenue:  $602 million; up 22%
■ First Quarter 2019 Operating Income: $50 million; up 24% 

 

DCS revenue increased 22% during the current quarter over the same period 2018. Productivity (revenue per truck per week) increased approximately 6% vs. 2018. Productivity excluding fuel surcharges increased approximately 4% primarily from customer rate increases and improved integration of assets between customer accounts. Included in the DCS revenue growth, Final Mile Services (FMS) recorded an increase in revenue of $26 million compared to first quarter 2018.

 

A net additional 1,644 revenue producing trucks, 440 net additions sequentially from fourth quarter 2018, were in the fleet by the end of the quarter compared to prior year. Approximately 41% of these additions represent private fleet conversions and 9% represent FMS vs. traditional dedicated capacity fleets. Customer retention rates remain above 98%.

 

Operating income increased 24% from a year ago primarily from increased productivity and additional trucks under new customer contracts, partially offset by higher facilities rent and costs to expand the FMS network, increased driver wages and higher recruiting costs including the length of time to fill open trucks in certain geographic regions.

 

 

Integrated Capacity Solutions (ICS)

■ First Quarter 2019 Segment Revenue: $301 million; up 2%
■ First Quarter 2019 Operating Income: $7 million; down 22% 

 

ICS revenue increased approximately 2% vs. first quarter 2018. Volumes increased 15% while revenue per load decreased approximately 12% primarily due to customer mix changes and lower spot priced revenue per load compared to the same period a year ago. Contractual business represents approximately 68% of total load volume and 51% of total revenue in the current period compared to 67% and 44%, respectively, in first quarter 2018. Of the total reported ICS revenue, approximately $186 million was executed through the Marketplace for J.B. Hunt 360° compared to $96 million in first quarter 2018.

 

 
 

 

Operating income decreased 22% over the same period in 2018. Gross profit margin increased to 16.5% in the current quarter vs. 14.4% last year primarily due to an adequate supply of carrier capacity to accommodate the customer demand during the period. The increase in gross profit margin was partially offset by higher personnel costs and increased spending on technology to expand the capacity and functionality of the Marketplace for J.B. Hunt 360° compared to first quarter 2018. ICS’s carrier base increased 29% and employee count increased approximately 18% compared to first quarter 2018.

 

 

Truck (JBT)

■ First Quarter 2019 Segment Revenue: $102 million; up 10%
■ First Quarter 2019 Operating Income: $7 million; up 41% 

 

JBT revenue increased 10% from the same quarter 2018. Revenue excluding fuel surcharge increased approximately 12% from first quarter 2018 primarily from customer rate increases and a 4% increase in load count. Volume was negatively impacted by the weather in the Midwest region by approximately 2,200 loads. Revenue per load excluding fuel surcharge increased 8% primarily from a 12% increase in rates per loaded mile and a 4% decrease in length of haul compared to the same period in 2018. At the end of the current quarter JBT operated 2,043 tractors compared to 1,926 in 2018.

 

Operating income for the current quarter increased 41% compared to first quarter 2018. Benefits from the higher revenue per load and lower equipment ownership costs were partially offset by higher driver and independent contractor costs per mile and higher recruiting costs per driver and independent contractor compared to first quarter 2018.

 

 

Cash Flow and Capitalization:

At March 31, 2019, we had a total of $1.28 billion outstanding on various debt instruments compared to $1 billion at March 31, 2018, and $1.15 billion at December 31, 2018. At March 31, 2019, we had cash and cash equivalents of $52 million.

 

Our net capital expenditures for the first quarter 2019 approximated $212 million compared to $179 million for the first quarter 2018.

 

We did not purchase any shares of our common stock during the quarter. At March 31, 2019, we had approximately $371 million remaining under our share repurchase authorization. Actual shares outstanding at March 31, 2019, approximated 108.7 million.

 

 

Conference Call Information:

The company will hold a conference call today at 4:00-5:00 p.m. CST to discuss the quarterly earnings. The call-in number for participants is (866) 439-5964 and a replay of the call will be posted on its website here later this evening.

 

 

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, 2018. 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 additional information will be available to interested parties on our website, 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

  
   

2019

    

2018

  
           

% Of

            

% Of

  
   

Amount

    

Revenue

    

Amount

    

Revenue

  
                                 

Operating revenues, excluding fuel surcharge revenues

   $ 1,855,341             $ 1,712,934          

Fuel surcharge revenues

     234,286               235,311          

Total operating revenues

     2,089,627       100.0 %     1,948,245       100.0 %
                                 

Operating expenses

                                

Rents and purchased transportation

     999,889       47.9 %     964,892       49.5 %

Salaries, wages and employee benefits

     516,326       24.7 %     450,265       23.1 %

Depreciation and amortization

     119,930       5.7 %     105,583       5.4 %

Fuel and fuel taxes

     112,125       5.4 %     107,881       5.5 %

Operating supplies and expenses

     78,172       3.7 %     70,681       3.6 %

General and administrative expenses, net of asset dispositions

     45,038       2.2 %     32,326       1.7 %

Insurance and claims

     28,994       1.4 %     28,499       1.5 %

Operating taxes and licenses

     13,160       0.6 %     11,588       0.6 %

Communication and utilities

     8,198       0.4 %     7,749       0.4 %

Total operating expenses

     1,921,832       92.0 %     1,779,464       91.3 %

Operating income

     167,795       8.0 %     168,781       8.7 %

Net interest expense

     13,033       0.6 %     9,152       0.5 %

Earnings before income taxes

     154,762       7.4 %     159,629       8.2 %

Income taxes

     35,161       1.7 %     41,487       2.1 %

Net earnings

   $ 119,601       5.7 %   $ 118,142       6.1 %

Average diluted shares outstanding

     109,664               110,863          

Diluted earnings per share

   $ 1.09             $ 1.07          

 

 
 

 

Financial Information By Segment

(in thousands)

(unaudited)

 

   

Three Months Ended March 31

 
   

2019

    

2018

  
           

% Of

            

% Of

  
   

Amount

    

Total

    

Amount

    

Total

  
                                 

Revenue

                                
                                 

Intermodal

   $ 1,088,099       52 %   $ 1,070,264       55 %

Dedicated

     601,912       29 %     494,480       25 %

Integrated Capacity Solutions

     300,811       14 %     296,105       15 %

Truck

     101,852       5 %     92,718       5 %

Subtotal

     2,092,674       100 %     1,953,567       100 %

Intersegment eliminations

     (3,047 )     (0% )     (5,322 )     (0% )

Consolidated revenue

   $ 2,089,627       100 %   $ 1,948,245       100 %
                                 
                                 

Operating income

                                
                                 

Intermodal

   $ 103,317       62 %   $ 114,242       68 %

Dedicated

     50,245       30 %     40,562       24 %

Integrated Capacity Solutions

     6,964       4 %     8,876       5 %

Truck

     7,239       4 %     5,130       3 %

Other (1)

     30       0 %     (29 )     (0% )

Operating income

   $ 167,795       100 %   $ 168,781       100 %

 

(1) Includes corporate support activity

 

 
 

 

Operating Statistics by Segment

(unaudited)

 

   

Three Months Ended March 31

  
   

2019

    

2018

  
                 

Intermodal

                
                 

Loads

     459,924       495,764  

Average length of haul

     1,652       1,661  

Revenue per load

   $ 2,366     $ 2,159  

Average tractors during the period *

     5,660       5,494  
                 

Tractors (end of period)

                

Company-owned

     5,005       4,763  

Independent contractor

     666       682  

Total tractors

     5,671       5,445  
                 

Net change in trailing equipment during the period

     910       883  

Trailing equipment (end of period)

     95,812       89,493  

Average effective trailing equipment usage

     83,229       87,265  
                 
                 

Dedicated

                
                 

Loads

     825,174       688,350  

Average length of haul

     173       182  

Revenue per truck per week**

   $ 4,589     $ 4,340  

Average trucks during the period***

     10,334       8,839  
                 

Trucks (end of period)

                

Company-owned

     10,054       8,383  

Independent contractor

     33       52  

Customer-owned (Dedicated operated)

     468       476  

Total trucks

     10,555       8,911  
                 

Trailing equipment (end of period)

     27,613       26,514  

Average effective trailing equipment usage

     27,597       27,069  
                 
                 

Integrated Capacity Solutions

                
                 

Loads

     288,933       251,521  

Revenue per load

   $ 1,041     $ 1,177  

Gross profit margin

     16.5 %     14.4 %

Employee count (end of period)

     1,147       971  

Approximate number of third-party carriers (end of period)

     77,300       59,800  

Marketplace for J.B. Hunt 360°:

                

Approximate carrier tractor count (end of period)

     585,400       368,600  

Revenue (millions)

   $ 186.5     $ 96.4  
                 
                 

Truck

                
                 

Loads

     84,929       81,499  

Average length of haul

     436       453  

Loaded miles (000)

     36,968       36,925  

Total miles (000)

     45,697       43,845  

Average nonpaid empty miles per load

     102.9       84.9  

Revenue per tractor per week**

   $ 3,888     $ 3,775  

Average tractors during the period *

     2,074       1,943  
                 

Tractors (end of period)

                

Company-owned

     1,035       1,267  

Independent contractor

     1,008       659  

Total tractors

     2,043       1,926  
                 

Trailers (end of period)

     6,785       7,036  

Average effective trailing equipment usage

     6,585       6,560  

 

* 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, 2019

    

December 31, 2018

  

ASSETS

                

Current assets:

                

Cash and cash equivalents

   $ 52,363     $ 7,600  

Accounts receivable, net

     1,002,099       1,051,698  

Prepaid expenses and other, net

     382,772       443,683  

Total current assets

     1,437,234       1,502,981  

Property and equipment

     5,452,111       5,329,243  

Less accumulated depreciation

     1,913,831       1,884,132  

Net property and equipment

     3,538,280       3,445,111  

Other assets, net

     348,679       143,555  
    $ 5,324,193     $ 5,091,647  
                 
                 

LIABILITIES & STOCKHOLDERS' EQUITY

                

Current liabilities:

                

Current debt

   $ -     $ 250,706  

Trade accounts payable

     594,704       709,736  

Claims accruals

     267,481       275,139  

Accrued payroll

     63,991       80,922  

Other accrued expenses

     68,974       35,845  

Total current liabilities

     995,150       1,352,348  
                 

Long-term debt

     1,284,550       898,398  

Other long-term liabilities

     172,239       96,056  

Deferred income taxes

     668,490       643,461  

Stockholders' equity

     2,203,764       2,101,384  
    $ 5,324,193     $ 5,091,647  

 

 
 

 

Supplemental Data

(unaudited)
             
   

March 31, 2019

    

December 31, 2018

  
                 

Actual shares outstanding at end of period (000)

     108,739       108,711  
                 

Book value per actual share outstanding at end of period

   $ 20.27     $ 19.33  

 

       
   

Three Months Ended March 31

  
   

2019

    

2018

  
                 

Net cash provided by operating activities (000)

   $ 245,430     $ 261,618  
                 

Net capital expenditures (000)

   $ 212,146     $ 179,045