J.B. Hunt Transport Services, Inc. Reports Record Revenues, Net Earnings and Earnings Per Share for the Fourth Quarter and Year Ended December 31, 2011

  • Fourth quarter 2011 Revenue: $1.2 billion; up 18%
  • Fourth quarter 2011 Operating Income: $122 million; up 26%
  • Fourth quarter 2011 EPS: 61* cents vs. 46 cents
  • Full Year 2011 Revenue: $4.5 billion; up 19%
  • Full Year 2011 Operating Income: $444 million; up 28%
  • Full Year 2011 EPS: $2.11 vs. $1.56

*4Q 2011 results included $3.9 million of pretax expense (2 cents per diluted share) related to severance agreements for executive retirees and a charitable contribution.

LOWELL, Ark.--()--J.B. Hunt Transport Services, Inc., (NASDAQ:JBHT) announced fourth quarter 2011 net earnings of $72.6 million, or diluted earnings per share of 61 cents vs. fourth quarter 2010 net earnings of $57.9 million, or 46 cents per diluted share. Fourth quarter 2011 results included $3.9 million of pretax expense related to severance agreements for executive retirees and a charitable contribution, which reduced net earnings by 2 cents per diluted share.

Total operating revenue for the current quarter was $1.2 billion, compared with $1.02 billion for the fourth quarter 2010. All four segments contributed to this increase in operating revenue. Load growth of 17% in Intermodal (JBI) helped drive a 24% increase in segment revenue. Our Dedicated Contract Services (DCS) segment increased operating revenue by 9% primarily from new accounts. Our Truck (JBT) and Integrated Capacity Solutions (ICS) segments increased revenue 8% and 19%, respectively, due to higher rates and an increase in fuel surcharges. Current quarter total operating revenue, excluding fuel surcharges, increased 12% vs. the comparable quarter 2010.

Operating income for the current quarter increased to $122 million vs. $97 million for the fourth quarter 2010. The increase in operating income is primarily from the higher revenue on greater load volumes, a reduction in insurance and claims costs, and continued improvement in other general cost controls. Again, all four segments contributed to this increase in operating income with JBI and DCS accounting for nearly $22 million of the increase.

Net earnings rose 25% to $72.6 million in the current quarter from $57.9 million in 2010, primarily due to the growth in revenue, effective cost controls and a lower cost of borrowing. Compared with the same period 2010, net interest expense in the current quarter was down $2.0 million, primarily due to a reduction in our average interest rate. The effective income tax rate for the current quarter was 37.5% compared with 35.1% in 2010, which included the favorable resolution of uncertain tax positions in the prior year quarter.

“We are very pleased to close out the year with record revenues, net earnings and earnings per share in both the fourth quarter and the entire year of 2011. All four segments improved from 2010 in the fourth quarter and full year. During 2011, we began implementing improvements to the approach we take with our larger, more complex customers and we are satisfied so far with the results of these efforts. The primary objective in collaborating with customers is to find new ways to integrate our complementary business segments to drive out cost and create efficiency. We will continue to invest in customer centric services that produce sufficient rates of return and sustainable cycles of cash for further reinvestment and innovation in transportation solutions,” said John N. Roberts, JBHT President and CEO.

Segment Information:

Intermodal (JBI)

  • Fourth quarter 2011 Segment Revenue: $729 million; up 24%
  • Fourth quarter 2011 Operating Income: $83.9 million; up 20%

JBI load volume grew 17% during the quarter, compared with 13% growth in the year earlier quarter. Eastern network loads increased 35% and transcontinental growth showed a 9% improvement during the quarter. Overall revenue grew 24% as a result of volume growth, fuel surcharge increases and a 4.6% increase in rates.

Operating income for the quarter grew 20%. Peak season volumes were slightly less than anticipated; however, the demand for conversion from highway to rail continued to be strong. Cost increases in both rail and dray purchased transportation, container cost and fuel were offset with customer price increases, fuel surcharges, and a lower percentage of empty repositioning moves. The current period ended with more than 54,500 units of trailing capacity. JBI incurred approximately $2.8 million in expense due to the severance and charitable commitments.

Dedicated Contract Services (DCS)

  • Fourth quarter 2011 Segment Revenue: $260 million; up 9%
  • Fourth quarter 2011 Operating Income: $27.4 million; up 40%

DCS revenue increased 9% during the current quarter vs. 2010, while revenue, excluding fuel surcharges, increased 5%. The increase in revenue related to an increase in truck count as a result of new contracts awarded. Productivity (revenue per truck per week) was consistent with the fourth quarter 2010.

Operating income increased 40% vs. same quarter 2010. The increase in operating income primarily related to reductions in insurance and claims costs, the transfer of assets to more profitable accounts, improved cost controls, and the increase in revenue partly related to a higher truck count. In the current quarter, DCS incurred approximately $0.6 million in expense due to the severance and charitable commitments.

Truck (JBT)

  • Fourth quarter 2011 Segment Revenue: $128 million; up 8%
  • Fourth quarter 2011 Operating Income: $ 7.1 million; up 61%

JBT revenue for the current quarter increased 8% with a 4% reduction in average tractors over the same period in 2010. Excluding fuel surcharges, revenue increased 3% versus the same quarter in 2010. Rates per mile, excluding fuel surcharges, increased 4.1% overall due largely to favorable changes in freight mix. Rates from consistent shippers improved by 2.2% year-over-year. At the end of the period, JBT’s tractor count was 2,585 compared to 2,588 a year ago.

Operating income for the current quarter increased 61% compared to the same quarter of 2010. Lower maintenance costs; improvements in utilization and miles per gallon; better fuel surcharge recovery and an increase in gains on equipment sales were partially offset by increases in driver and independent contractor costs compared to the fourth quarter 2010. JBT incurred $0.3 million in expense related to the severance and charitable commitments.

Integrated Capacity Solutions (ICS)

  • Fourth Quarter 2011 Segment Revenue: $99 million; up 19%
  • Fourth Quarter 2011 Operating Income: $4.1 million; up 25%

ICS revenue increased 19% in the current quarter vs. the fourth quarter 2010 due to an increase in load volume, higher pricing in both our contractual and transactional business and an increase in the cost of fuel. Gross profit (gross revenue less purchased transportation expense) increased 20% to $13.7 million from fourth quarter 2010. Gross profit margin increased slightly to 13.9% in the current quarter vs. 13.8% last year. The operating leverage gained from a more experienced workforce contributed to the operating income increase compared to the fourth quarter of 2010. Our carrier base increased 13% and our employee count increased 17% vs. fourth quarter 2010. During the current quarter, ICS incurred approximately $0.2 million in expense due to the severance and charitable commitments.

Cash Flow and Capitalization:

At December 31, 2011, we had a total debt outstanding of $749 million on various debt instruments compared to $654 million at December 31, 2010 and $768 million at September 30, 2011.

Our net capital expenditures for the year ended 2011 approximated $446 million vs. $226 million in 2010. The increase in capital expenditures was primarily due to increases in containers and chassis for our intermodal growth. At December 31, 2011, we had cash and cash equivalents of $5.5 million.

In 2011, we used $246 million to purchase approximately 6.0 million shares of our common stock. During the current quarter, our Board of Directors authorized a $500 million share repurchase program. At December 31, 2011, we had approximately $503 million remaining under our share repurchase authorizations.

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, 2010. 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 immediately 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
2011 2010
% Of % Of
Amount   Revenue Amount   Revenue
 
Operating revenues, excluding fuel surcharge revenues $ 974,009 $ 873,522
Fuel surcharge revenues 230,928   146,490  
Total operating revenues 1,204,937 100.0 % 1,020,012 100.0 %
 
Operating expenses
Rents and purchased transportation 579,910 48.1 % 470,252 46.1 %
Salaries, wages and employee benefits 258,483 21.5 % 237,176 23.3 %
Fuel and fuel taxes 116,567 9.7 % 94,189 9.2 %
Depreciation and amortization 55,632 4.6 % 50,094 4.9 %
Operating supplies and expenses 39,636 3.3 % 37,987 3.7 %
Insurance and claims 12,399 1.0 % 13,538 1.3 %
General and administrative expenses, net of asset dispositions 8,386 0.7 % 8,389 0.8 %
Operating taxes and licenses 7,246 0.6 % 6,864 0.7 %
Communication and utilities 4,391   0.4 % 4,175   0.5 %
Total operating expenses 1,082,650   89.9 % 922,664   90.5 %
Operating income 122,287 10.1 % 97,348 9.5 %
Net interest expense 6,214   0.5 % 8,164   0.8 %
Earnings before income taxes 116,073 9.6 % 89,184 8.7 %
Income taxes 43,508   3.6 % 31,331   3.0 %
Net earnings $ 72,565   6.0 % $ 57,853   5.7 %
Average diluted shares outstanding 119,363   125,413  
Diluted earnings per share $ 0.61   $ 0.46  
 
 
 
 
 
J.B. HUNT TRANSPORT SERVICES, INC.
Condensed Consolidated Statements of Earnings
(in thousands, except per share data)
(unaudited)
 
Twelve Months Ended December 31
2011 2010
% Of % Of
Amount   Revenue Amount   Revenue
 
Operating revenues, excluding fuel surcharge revenues $ 3,677,679 $ 3,277,218
Fuel surcharge revenues 849,163   516,267  
Total operating revenues 4,526,842 100.0 % 3,793,485 100.0 %
 
Operating expenses
Rents and purchased transportation 2,122,811 46.9 % 1,711,204 45.1 %
Salaries, wages and employee benefits 1,001,953 22.1 % 911,028 24.0 %
Fuel and fuel taxes 463,597 10.2 % 343,700 9.1 %
Depreciation and amortization 213,943 4.7 % 197,062 5.2 %
Operating supplies and expenses 160,425 3.6 % 152,500 4.0 %
Insurance and claims 44,929 1.0 % 48,280 1.3 %
General and administrative expenses, net of asset dispositions 28,900 0.7 % 37,017 1.0 %
Operating taxes and licenses 27,871 0.6 % 26,895 0.7 %
Communication and utilities 18,180   0.4 % 18,174   0.4 %
Total operating expenses 4,082,609   90.2 % 3,445,860   90.8 %
Operating income 444,233 9.8 % 347,625 9.2 %
Net interest expense 28,500   0.6 % 27,931   0.8 %
Earnings before income taxes 415,733 9.2 % 319,694 8.4 %
Income taxes 158,727   3.5 % 120,077   3.1 %
Net earnings $ 257,006   5.7 % $ 199,617   5.3 %
Average diluted shares outstanding 121,922   127,767  
Diluted earnings per share $ 2.11   $ 1.56  
 
 
 
 
 
 
 
 
 
 
Financial Information By Segment
(in thousands)
(unaudited)
 
 
Three Months Ended December 31
2011 2010
% Of % Of
Amount   Total Amount   Total
 

Revenue

 
Intermodal $ 728,795 60 % $ 588,020 58 %
Dedicated 260,019 22 % 237,855 23 %
Truck 127,928 11 % 118,048 12 %
Integrated Capacity Solutions 98,881   8 % 82,929   8 %
Subtotal 1,215,623 101 % 1,026,852 101 %
Intersegment eliminations (10,686 ) (1 %) (6,840 ) (1 %)
Consolidated revenue $ 1,204,937   100 % $ 1,020,012   100 %
 
 

Operating income

 
Intermodal $ 83,882 69 % $ 69,884 72 %
Dedicated 27,356 22 % 19,614 20 %
Truck 7,076 6 % 4,397 5 %
Integrated Capacity Solutions 4,072 3 % 3,261 3 %
Other (1) (99 ) (0 %) 192   0 %
Operating income $ 122,287   100 % $ 97,348   100 %
 
 
 
 
 
Twelve Months Ended December 31
2011 2010
% Of % Of
Amount   Total Amount   Total

Revenue

 
Intermodal $ 2,672,955 59 % $ 2,141,200 56 %
Dedicated 1,031,393 23 % 906,760 24 %
Truck 504,132 11 % 479,475 13 %
Integrated Capacity Solutions 355,817   8 % 290,914   8 %
Subtotal 4,564,297 101 % 3,818,349 101 %
Intersegment eliminations (37,455 ) (1 %) (24,864 ) (1 %)
Consolidated revenue $ 4,526,842   100 % $ 3,793,485   100 %
 
 

Operating income

 
Intermodal $ 301,439 68 % $ 237,232 68 %
Dedicated 103,087 23 % 82,407 24 %
Truck 26,670 6 % 18,698 5 %
Integrated Capacity Solutions 13,109 3 % 9,275 3 %
Other (1) (72 ) (0 %) 13   0 %
Operating income $ 444,233   100 % $ 347,625   100 %
 
 
(1) Includes corporate support activity
 
 
 
 
 
 
 
Operating Statistics by Segment
(unaudited)
           
Three Months Ended December 31
2011 2010
 

Intermodal

 
Loads 333,000 285,581
Average length of haul 1,726 1,782
Revenue per load $ 2,189 $ 2,059

Average tractors during the period*

3,109 2,665
 
Tractors (end of period)
Company-owned 2,901 2,592
Independent contractor 213   81  
Total tractors 3,114 2,673
 
Net change in trailing equipment during the period 2,584 2,536
Trailing equipment (end of period) 54,506 45,666
Average effective trailing equipment usage 52,540 43,834
 
 

Dedicated

 
Loads 354,711 355,047
Average length of haul 210 197
Revenue per truck per week** $ 4,172 $ 4,076
Average trucks during the period*** 4,915 4,573
 
Trucks (end of period)
Company-owned 4,571 4,259
Independent contractor 17 23
Customer-owned (Dedicated operated) 330   357  
Total trucks 4,918 4,639
 
Trailing equipment (end of period) 11,211 10,688
Average effective trailing equipment usage 12,472 12,323
 
 

Truck

 
Loads 113,893 109,923
Average length of haul 506 530
Loaded miles (000) 56,698 57,451
Total miles (000) 65,287 65,901
Average nonpaid empty miles per load 73.9 74.9
Revenue per tractor per week** $ 3,960 $ 3,445

Average tractors during the period*

2,597 2,707
 
Tractors (end of period)
Company-owned 1,637 1,697
Independent contractor 948   891  
Total tractors 2,585 2,588
 
Trailers (end of period) 9,302 10,115
Average effective trailing equipment usage 8,124 8,739
 
 

Integrated Capacity Solutions

 
Loads 63,997 61,538
Revenue per load $ 1,545 $ 1,348
Gross profit margin 13.9 % 13.8 %
Employee count (end of period) 384 329
Approximate number of third-party carriers (end of period) 28,800 25,600
 
 
* 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
2011 2010
 

Intermodal

 
Loads 1,248,302 1,075,027
Average length of haul 1,726 1,777
Revenue per load $ 2,141 $ 1,992

Average tractors during the period*

2,924 2,531
 
Tractors (end of period)
Company-owned 2,901 2,592
Independent contractor 213   81  
Total tractors 3,114 2,673
 
Net change in trailing equipment during the period 8,840 5,496
Trailing equipment (end of period) 54,506 45,666
Average effective trailing equipment usage 49,482 41,434
 
 

Dedicated

 
Loads 1,444,518 1,383,565
Average length of haul 205 197
Revenue per truck per week** $ 4,175 $ 3,956
Average trucks during the period*** 4,811 4,468
 
Trucks (end of period)
Company-owned 4,571 4,259
Independent contractor 17 23
Customer-owned (Dedicated operated) 330   357  
Total trucks 4,918 4,639
 
Trailing equipment (end of period) 11,211 10,688
Average effective trailing equipment usage 12,711 12,297
 
 

Truck

 
Loads 444,851 465,493
Average length of haul 514 522
Loaded miles (000) 225,997 240,088
Total miles (000) 259,144 274,857
Average nonpaid empty miles per load 72.7 68.7
Revenue per tractor per week** $ 3,869 $ 3,370
Average tractors during the period* 2,557 2,788
 
Tractors (end of period)
Company-owned 1,637 1,697
Independent contractor 948   891  
Total tractors 2,585 2,588
 
Trailers (end of period) 9,302 10,115
Average effective trailing equipment usage 8,089 9,329
 
 

Integrated Capacity Solutions

 
Loads 253,575 230,726
Revenue per load $ 1,403 $ 1,261
Gross profit margin 13.5 % 14.2 %
Employee count (end of period) 384 329
Approximate number of third-party carriers (end of period) 28,800 25,600
 
 
* 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, 2011             December 31, 2010
ASSETS
Current assets:
Cash and cash equivalents $ 5,450 $ 7,651
Accounts Receivable 411,479 351,187
Prepaid expenses and other     96,613                 103,807  
Total current assets     513,542                 462,645  
Property and equipment 2,658,143 2,338,336
Less accumulated depreciation     931,273                 858,852  
Net property and equipment     1,726,870                 1,479,484  
Other assets     26,920                 19,531  
    $ 2,267,332               $ 1,961,660  
 
 
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Current debt $ 50,000 $ 200,000
Trade accounts payable 251,625 192,103
Claims accruals 42,364 32,641
Accrued payroll 77,107 57,149
Other accrued expenses 17,419 19,191
Deferred income taxes     -                 8,865  
Total current liabilities     438,515                 509,949  
 
Long-term debt 699,177 454,207
Other long-term liabilities 45,382 39,480
Deferred income taxes 516,715 385,003
Stockholders' equity     567,543                 573,021  
    $ 2,267,332               $ 1,961,660  
 
 
 
 
Supplemental Data
(unaudited)

 

     

December 31, 2011

             

December 31, 2010

 
Actual shares outstanding at end of period (000)     116,932                 121,490  
 
Book value per actual share outstanding at end of period   $ 4.85               $ 4.72  
 
 
                       
Twelve Months Ended December 31
2011 2010
 
Net cash provided by operating activities (000)   $ 635,692               $ 428,078  
 
Net capital expenditures (000)   $ 445,869               $ 225,932  
 
 
 
 

Contacts

J.B. Hunt Transport Services, Inc.
David G. Mee, 479-820-8363
Executive Vice President, Finance/Administration
and Chief Financial Officer

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Contacts

J.B. Hunt Transport Services, Inc.
David G. Mee, 479-820-8363
Executive Vice President, Finance/Administration
and Chief Financial Officer