EX-99.1 2 ex_169766.htm EXHIBIT 99.1 ex_169766.htm

Exhibit 99.1

 

 

 

 

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

 

FOR IMMEDIATE RELEASE

 

 

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

PER SHARE FOR BOTH THE FOURTH QUARTER AND YEAR ENDED DECEMBER 31, 2019

 

 

  Fourth quarter 2019 Revenue: $2.45 billion; up 6%
  Fourth quarter 2019 Operating Income: $205.1 million; up 67%
  Fourth quarter 2019 EPS:   $1.35 vs. $0.81; up 67%
       
       
  Full Year 2019 Revenue: $9.17 billion; up 6%
  Full Year 2019 Operating Income:  $733.8 million; up 8%
  Full Year 2019 EPS:  $4.75 vs. $4.43; up 7%

 

LOWELL, Ark., January 17, 2020 - J.B. Hunt Transport Services, Inc. (NASDAQ: JBHT) announced fourth quarter 2019 net earnings of $144.7 million, or diluted earnings per share of $1.35 vs. fourth quarter 2018 net earnings of $88.7 million, or $0.81 per diluted share. Fourth quarter 2018 net earnings included pretax charges of $134.0 million for contingent liabilities related to the arbitration with BNSF Railway Company.

 

Total operating revenue for the current quarter was $2.45 billion, compared with $2.32 billion for the fourth quarter 2018. A 2% increase in load volume in Intermodal (JBI), partially offset with a lower revenue per load, contributed to a less than 1% increase in segment revenue. Dedicated Contract Services (DCS) segment revenue increased by 20%, primarily from the February 2019 acquisition and the addition of new customer accounts. Integrated Capacity Solutions (ICS) segment revenue increased by 9% primarily from a 3% increase in load growth and a favorable change in customer freight mix. Truck (JBT) segment revenue decreased 20% primarily from lower loaded miles and lower rates per loaded mile. Current quarter total operating revenue, excluding fuel surcharges, increased approximately 7% vs. the comparable quarter 2018.

 

Total freight transactions in the Marketplace for J.B. Hunt 360° increased to $289 million compared to $174 million in the prior year quarter. ICS revenue on the platform increased to $225 million with an approximate 60% increase in average monthly active carrier users vs. the year ago period. JBI and JBT executed approximately $47 million and $17 million, respectively, of their third-party dray and independent contractor costs through the platform during the quarter.

 

Operating income for the current quarter totaled $205.1 million vs. $122.7 million for the fourth quarter 2018. Operating income in fourth quarter 2018 included $134.0 million in charges for contingent liabilities related to the arbitration with BNSF Railway Company. Excluding these charges, operating income decreased 20% from fourth quarter 2018. The benefit from increased revenues was offset with cost increases in rail purchase transportation rates; higher building rental expense in the Final Mile Services network; lower gross margins in ICS; increased technology spend on new applications, primarily in ICS, and legacy system upgrades affecting all segments; increased driver wages; increased driver and independent contractor recruiting costs and higher salary and wage expenses for non-driving personnel.

 

 

 

 

Interest expense increased from fourth quarter 2018 primarily from increased debt levels at higher interest rates. The fourth quarter effective tax rates for 2019 and 2018 were 24.8% and 20.5%, respectively. The annual effective tax rates for 2019 and 2018 were 24.2% and 23.6%, respectively.

 

 

Segment Information:

 

Intermodal (JBI)

Fourth quarter 2019 Segment Revenue:   $1.27 billion; flat
Fourth quarter 2019 Operating Income:   $131.1 million; up 304%

 

JBI total volumes increased 2% over the same period in 2018. Eastern network loads decreased by 8% and transcontinental loads grew by 8% compared to the fourth quarter 2018. Revenue increased less than one percent, reflecting the 2% increase in volume offset by a 1% decrease in revenue per load, the combination of freight mix, customer rate increases, and fuel surcharges. Revenue per load excluding fuel surcharges was flat compared to a year ago.

 

Operating income increased 304% from the prior year. In fourth quarter 2018, JBI recorded $134.0 million in charges for contingent liabilities related to the arbitration. Excluding these charges, operating income decreased by $35.3 million or approximately 21% from the comparable quarter 2018. Benefits from increased volumes were offset by higher rail purchase transportation rates, increased box repositioning costs due to a lack of balance in the intermodal network, increased costs to recover from rail service interruptions including a derailment in Southern California and increased costs to attract and retain drivers. The current period ended with approximately 96,700 units of trailing capacity and approximately 5,560 power units in the dray fleet.

 

 

Dedicated Contract Services (DCS)

Fourth quarter 2019 Segment Revenue:   $717 million; up 20%
Fourth quarter 2019 Operating Income:   $79.6 million; up 34%

 

DCS revenue increased 20% during the current quarter over the same period 2018. Productivity (revenue per truck per week) increased approximately 9% vs. 2018. Productivity excluding fuel surcharge revenue increased approximately 11% from a year ago primarily from the February 2019 acquisition, customer rate increases, improved integration of assets between customer accounts, and increased customer supply chain fluidity. Included in the DCS revenue growth, Final Mile Services (FMS) recorded an increase in revenue of $59 million (primarily from the February 2019 acquisition) compared to fourth quarter 2018. A net additional 972 revenue producing trucks, 153 net additions sequentially from third quarter 2019, were in the fleet by the end of the quarter. Approximately 58% of these additions represent private fleet conversions and 15% represent FMS versus traditional dedicated capacity fleets. Customer retention rates remain above 98%.

 

Operating income increased by 34% from a year ago. The benefits from additional trucks under contract, higher productivity and more predictable and consistent start-up costs were partially offset by increased costs expanding the FMS network, increased driver wages and increased driver recruiting costs and an incremental $1.0 million in noncash amortization expense attributable to the February 2019 acquisition compared to the same period a year ago.

 

 

 

 

Integrated Capacity Solutions (ICS)

Fourth Quarter 2019 Segment Revenue:   $377 million; up 9%
Fourth Quarter 2019 Operating Loss:   $(11.8 million); compared to $16.1 million Operating Income in 2018

 

ICS revenue increased 9% in the current quarter vs. the fourth quarter 2018. Volume increased 3% and revenue per load increased 5.5%, mostly due to customer mix changes, compared to the prior year. Contractual volumes represent approximately 73% of the total load volume and 65% of the total revenue in the current quarter compared to 71% and 53%, respectively, in fourth quarter 2018. Of the total reported ICS revenue, approximately $225 million was executed through the Marketplace for J.B. Hunt 360 compared to $174 million in fourth quarter 2018.

 

Operating income decreased $28.0 million compared to the same period in 2018 primarily from a lower gross profit margin, a 150% increase in expenditures to expand capacity and functionality of the Marketplace for J.B. Hunt 360, higher personnel costs, and increased digital marketing and advertising costs. Gross profit margin decreased to 10.6% in the current period from 16.9% last year primarily from a competitive pricing environment in the contractual business and a softer overall spot market. ICS carrier base increased 15% and the employee count increased 6% from a year ago.

 

 

Truck (JBT)

Fourth quarter 2019 Segment Revenue:   $94 million; down 20%
Fourth quarter 2019 Operating Income:   $6.3 million; down 57%

 

JBT revenue decreased 20% from the same period in 2018. Revenue excluding fuel surcharges also decreased approximately 21% primarily from an 11% decrease in rates per loaded mile and a 9% decrease in load count compared to a year ago. Comparable contractual customer rates were flat compared to the same period 2018. At the end of the period, JBT operated 1,831 tractors compared to 2,112 a year ago.

 

Operating income decreased 57% from fourth quarter 2018. A decrease in spot market loads moved, an increase in empty miles and an overall lower load count compared to fourth quarter 2018 all contributed to lower operating income.

 

 

Cash Flow and Capitalization:

 

At December 31, 2019, we had total debt outstanding of $1.30 billion on various debt instruments compared to $1.15 billion at December 31, 2018, and $1.29 billion at September 30, 2019.

 

Our net capital expenditures for 2019 approximated $688 million vs. $885 million in 2018. At December 31, 2019, we had cash and cash equivalents of $35 million.

 

In the fourth quarter 2019, we purchased approximately 441,000 shares of our common stock for approximately $50 million. At December 31, 2019, we had approximately $95 million remaining under our share repurchase authorization. Actual shares outstanding at December 31, 2019, approximated 106.2 million.

 

 

Conference Call Information:

The company will hold a conference call today at 9:00 a.m.–10:00 a.m. CST to discuss the quarterly earnings. To receive a dial-in number and personal access code, participants must register here. A replay of the call will be posted on its website later today.

 

 

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 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

 
   

2019

   

2018

 
           

% Of

           

% Of

 
   

Amount

   

Revenue

   

Amount

   

Revenue

 
                                 

Operating revenues, excluding fuel surcharge revenues

  $ 2,168,497             $ 2,033,674          

Fuel surcharge revenues

    281,826               284,168          

Total operating revenues

    2,450,323       100.0%       2,317,842       100.0%  
                                 

Operating expenses

                               

Rents and purchased transportation

    1,246,130       50.9%       1,271,097       54.8%  

Salaries, wages and employee benefits

    561,507       22.9%       515,271       22.2%  

Depreciation and amortization

    128,418       5.2%       114,086       4.9%  

Fuel and fuel taxes

    118,269       4.8%       117,613       5.1%  

Operating supplies and expenses

    83,633       3.4%       77,178       3.3%  

General and administrative expenses, net of asset dispositions

    51,277       2.1%       51,191       2.3%  

Insurance and claims

    32,289       1.3%       26,941       1.2%  

Operating taxes and licenses

    14,345       0.6%       14,055       0.6%  

Communication and utilities

    9,381       0.4%       7,670       0.3%  

Total operating expenses

    2,245,249       91.6%       2,195,102       94.7%  

Operating income

    205,074       8.4%       122,740       5.3%  

Net interest expense

    12,776       0.6%       11,235       0.5%  

Earnings before income taxes

    192,298       7.8%       111,505       4.8%  

Income taxes

    47,622       1.9%       22,824       1.0%  

Net earnings

  $ 144,676       5.9%     $ 88,681       3.8%  

Average diluted shares outstanding

    107,529               109,940          

Diluted earnings per share

  $ 1.35             $ 0.81          

 

J.B. HUNT TRANSPORT SERVICES, INC.

Condensed Consolidated Statements of Earnings

(in thousands, except per share data)

(unaudited)

 

   

Twelve Months Ended December 31

 
   

2019

   

2018

 
           

% Of

           

% Of

 
   

Amount

   

Revenue

   

Amount

   

Revenue

 
                                 

Operating revenues, excluding fuel surcharge revenues

  $ 8,122,600             $ 7,557,648          

Fuel surcharge revenues

    1,042,658               1,057,226          

Total operating revenues

    9,165,258       100.0%       8,614,874       100.0%  
                                 

Operating expenses

                               

Rents and purchased transportation

    4,528,812       49.4%       4,434,540       51.5%  

Salaries, wages and employee benefits

    2,167,851       23.7%       1,926,213       22.4%  

Depreciation and amortization

    499,145       5.4%       435,893       5.1%  

Fuel and fuel taxes

    463,195       5.1%       459,011       5.3%  

Operating supplies and expenses

    333,113       3.6%       303,529       3.5%  

General and administrative expenses, net of asset dispositions

    191,933       2.1%       163,270       1.8%  

Insurance and claims

    157,251       1.7%       129,406       1.5%  

Operating taxes and licenses

    55,336       0.6%       51,080       0.6%  

Communication and utilities

    34,797       0.4%       30,911       0.4%  

Total operating expenses

    8,431,433       92.0%       7,933,853       92.1%  

Operating income

    733,825       8.0%       681,021       7.9%  

Net interest expense

    52,930       0.6%       40,203       0.5%  

Earnings before income taxes

    680,895       7.4%       640,818       7.4%  

Income taxes

    164,575       1.8%       151,233       1.7%  

Net earnings

  $ 516,320       5.6%     $ 489,585       5.7%  

Average diluted shares outstanding

    108,599               110,428          

Diluted earnings per share

  $ 4.75             $ 4.43          

 

 

 

 

 

Financial Information By Segment 

(in thousands)

(unaudited)

 

   

Three Months Ended December 31

 
   

2019

   

2018

 
           

% Of

           

% Of

 
   

Amount

   

Total

   

Amount

   

Total

 
                                 

Revenue

                               
                                 

Intermodal

  $ 1,267,142       52%     $ 1,263,469       54%  

Dedicated

    716,940       29%       595,809       26%  

Integrated Capacity Solutions

    376,537       15%       345,400       15%  

Truck

    93,640       4%       117,707       5%  

Subtotal

    2,454,259       100%       2,322,385       100%  

Intersegment eliminations

    (3,936 )     (0%)       (4,543 )     (0%)  

Consolidated revenue

  $ 2,450,323       100%     $ 2,317,842       100%  
                                 
                                 

Operating income

                               
                                 

Intermodal

  $ 131,097       64%     $ 32,445       27%  

Dedicated

    79,565       39%       59,416       48%  

Integrated Capacity Solutions

    (11,843 )     (6%)       16,142       13%  

Truck

    6,321       3%       14,737       12%  

Other (1)

    (66 )     0%       -       0%  

Operating income

  $ 205,074       100%     $ 122,740       100%  

  

   

Twelve Months Ended December 31

 
    2019    

2018

 
            % Of            

% Of

 
    Amount    

Total

   

Amount

   

Total

 

Revenue

                               
                                 
Intermodal   $ 4,744,636       52%     $ 4,716,649       55%  

Dedicated

    2,694,811       29%       2,163,155       25%  

Integrated Capacity Solutions

    1,348,336       15%       1,334,629       15%  

Truck

    389,301       4%       417,351       5%  

Subtotal

    9,177,084       100%       8,631,784       100%  

Intersegment eliminations

    (11,826 )     (0%)       (16,910 )     (0%)  

Consolidated revenue

  $ 9,165,258       100%     $ 8,614,874       100%  
                                 
                                 

Operating income

                               
                                 

Intermodal

  $ 447,479       61%     $ 400,999       59%  

Dedicated

    268,579       37%       193,419       29%  

Integrated Capacity Solutions

    (11,088 )     (2%)       50,167       7%  

Truck

    29,046       40%       36,568       5%  

Other (1)

    (191 )     (0%)       (132 )     (0%)  

Operating income

  $ 733,825       100%     $ 681,021       100%  

  

      (1) Includes corporate support activity

 

 

 

 

Operating Statistics by Segment

(unaudited)

 

   

Three Months Ended December 31

 
   

2019

   

2018

 
                 

Intermodal

               
                 

Loads

    520,898       512,935  

Average length of haul

    1,707       1,660  

Revenue per load

  $ 2,433     $ 2,463  

Average tractors during the period *

    5,587       5,632  
                 

Tractors (end of period)

               

Company-owned

    4,989       5,017  

Independent contractor

    570       633  

Total tractors

    5,559       5,650  
                 

Net change in trailing equipment during the period

    54       1,750  

Trailing equipment (end of period)

    96,743       94,902  

Average effective trailing equipment usage

    92,571       91,785  
                 

Dedicated

               
                 

Loads

    945,907       808,043  

Average length of haul

    166       173  

Revenue per truck per week**

  $ 5,128     $ 4,715  

Average trucks during the period***

    11,019       9,914  
                 

Trucks (end of period)

               

Company-owned

    10,542       9,652  

Independent contractor

    40       51  

Customer-owned (Dedicated operated)

    505       412  

Total trucks

    11,087       10,115  
                 

Trailing equipment (end of period)

    28,118       26,710  

Average effective trailing equipment usage

    28,300       27,014  
                 

Integrated Capacity Solutions

               
                 
Loads     328,060       317,512  

Revenue per load

  $ 1,148     $ 1,088  

Gross profit margin

    10.6 %     16.9 %

Employee count (end of period)

    1,213       1,142  

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

    84,400       73,100  

Marketplace for J.B. Hunt 360°:

               

Approximate carrier tractor count (end of period)

    682,000       529,000  

Revenue (millions)

    225.5       174.4  
                 

Truck

               
                 
Loads     86,891       95,747  

Average length of haul

    396       405  

Loaded miles (000)

    34,388       38,828  

Total miles (000)

    42,544       47,555  

Average nonpaid empty miles per load

    94.1       91.3  

Revenue per tractor per week**

  $ 4,017     $ 4,513  

Average tractors during the period *

    1,875       2,108  
                 

Tractors (end of period)

               

Company-owned

    845       1,139  

Independent contractor

    986       973  

Total tractors

    1,831       2,112  
                 

Trailers (end of period)

    6,975       6,800  

Average effective trailing equipment usage

    6,444       6,532  

 

* Includes company-owned and independent contractor tractors

** Using weighted workdays

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

 

 

 

 

Operating Statistics by Segment

(unaudited)

 

   

Twelve Months Ended December 31

 
   

2019

   

2018

 
                 

Intermodal

               
                 
Loads     1,979,169       2,049,014  

Average length of haul

    1,679       1,648  

Revenue per load

  $ 2,397     $ 2,302  

Average tractors during the period *

    5,635       5,551  
                 

Tractors (end of period)

               

Company-owned

    4,989       5,017  

Independent contractor

    570       633  

Total tractors

    5,559       5,650  
                 

Net change in trailing equipment during the period

    1,841       6,262  

Trailing equipment (end of period)

    96,743       94,902  

Average effective trailing equipment usage

    86,836       88,739  
                 

Dedicated

               
                 
Loads     3,615,580       2,981,344  

Average length of haul

    169       177  

Revenue per truck per week**

  $ 4,895     $ 4,534  

Average trucks during the period***

    10,725       9,264  
                 

Trucks (end of period)

               

Company-owned

    10,542       9,652  

Independent contractor

    40       51  

Customer-owned (Dedicated operated)

    505       412  

Total trucks

    11,087       10,115  
                 

Trailing equipment (end of period)

    28,118       26,710  

Average effective trailing equipment usage

    28,147       26,806  
                 

Integrated Capacity Solutions

               
                 
Loads     1,243,992       1,234,632  

Revenue per load

  $ 1,084     $ 1,081  

Gross profit margin

    13.1 %     15.4 %

Employee count (end of period)

    1,213       1,142  

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

    84,400       73,100  

Marketplace for J.B. Hunt 360°:

               

Approximate carrier tractor count (end of period)

    682,000       529,000  

Revenue (millions)

    839.8       557.8  
                 

Truck

               
                 

Loads

    346,459       355,038  

Average length of haul

    415       427  

Loaded miles (000)

    143,511       151,322  

Total miles (000)

    177,035       181,718  

Average nonpaid empty miles per load

    96.9       85.5  

Revenue per tractor per week**

  $ 3,917     $ 4,148  

Average tractors during the period*

    1,958       1,990  
                 

Tractors (end of period)

               

Company-owned

    845       1,139  

Independent contractor

    986       973  

Total tractors

    1,831       2,112  
                 

Trailers (end of period)

    6,975       6,800  

Average effective trailing equipment usage

    6,497       6,513  

 

* 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, 2019

   

December 31, 2018

 

ASSETS

               

Current assets:

               

Cash and cash equivalents

  $ 35,000     $ 7,600  

Accounts Receivable

    1,011,829       1,051,698  

Prepaid expenses and other

    434,470       443,683  

Total current assets

    1,481,299       1,502,981  

Property and equipment

    5,640,806       5,329,243  

Less accumulated depreciation

    2,019,940       1,884,132  

Net property and equipment

    3,620,866       3,445,111  

Other assets, net

    368,689       143,555  
    $ 5,470,854     $ 5,091,647  
                 
                 

LIABILITIES & STOCKHOLDERS' EQUITY

               

Current liabilities:

               

Current debt

  $ -     $ 250,706  

Trade accounts payable

    602,601       709,736  

Claims accruals

    279,590       275,139  

Accrued payroll

    68,220       80,922  

Other accrued expenses

    85,355       35,845  

Total current liabilities

    1,035,766       1,352,348  
                 

Long-term debt

    1,295,740       898,398  

Other long-term liabilities

    173,241       96,056  

Deferred income taxes

    699,078       643,461  

Stockholders' equity

    2,267,029       2,101,384  
    $ 5,470,854     $ 5,091,647  

 

Supplemental Data

(unaudited)

 

   

December 31, 2019

   

December 31, 2018

 
                 

Actual shares outstanding at end of period (000)

    106,213       108,711  
                 

Book value per actual share outstanding at end of period

  $ 21.34     $ 19.33  

 

   

Twelve Months Ended December 31

 
   

2019

   

2018

 
                 

Net cash provided by operating activities (000)

  $ 1,098,347     $ 1,087,841  
                 

Net capital expenditures (000)

  $ 688,197     $ 885,485