J. B. Hunt Transport Services, Inc. Reports Record Revenues, Record Net Earnings and Record Earnings Per Share for Both the Fourth Quarter and Year Ended December 31, 2012

  • Fourth quarter 2012 Revenue: $1.34 billion; up 11%
  • Fourth quarter 2012 Operating Income: $143.3 million; up 17%
  • Fourth quarter 2012 EPS: 70 cents vs. 61 cents; up 15%
  • Full Year 2012 Revenue: $5.1 billion; up 12%
  • Full Year 2012 Operating Income: $530.2 million; up 19%
  • Full Year 2012 EPS: $2.59 vs. $2.11; up 23%

LOWELL, Ark.--()--J. B. Hunt Transport Services, Inc., (NASDAQ:JBHT) announced record fourth quarter 2012 net earnings of $84 million, or diluted earnings per share of 70 cents vs. fourth quarter 2011 net earnings of $72.6 million, or 61 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 $1.34 billion, compared with $1.2 billion for the fourth quarter 2011. Load growth of 11% in Intermodal (JBI) helped drive a 13% increase in segment revenue. Dedicated Contract Services (DCS) segment revenue increased by 9% primarily from the addition of new accounts. Integrated Capacity Solutions (ICS) segment revenue increased by 30% mostly from a 47% increase in load volume. Truck (JBT) segment revenue decreased 12% primarily from a 19% reduction in fleet size compared to a year ago. Current quarter total operating revenue, excluding fuel surcharges, increased approximately 10% vs. the comparable quarter 2011.

Operating income for the current quarter increased to $143.3 million vs. $122.3 million for the fourth quarter 2011. The increase is primarily from the higher revenue on greater load volumes and improved network balance in JBI, new incremental customer accounts in DCS, and greater load volumes and better gross margins in ICS. These improvements were partially offset by increased costs across almost all cost categories. Cost controls allowed for operating income to grow at a faster pace than revenues, improving overall margin.

Net earnings rose 16% to $84.0 million in the current quarter from $72.6 million in 2011, primarily due to the growth in revenue, effective cost controls and a lower cost of borrowing. Compared with the same period 2011, net interest expense in the current quarter was down $1 million, primarily due to a reduction in our average interest rate. The annual and fourth quarter effective tax rates in 2012 were 38.5% and 39.16%, respectively. The annual and fourth quarter effective tax rates in 2011 were 38.18% and 37.5%, respectively.

Segment Information:

Intermodal (JBI)

  • Fourth quarter 2012 Segment Revenue: $821 million; up 13%
  • Fourth quarter 2012 Operating Income: $104.2 million; up 24%

JBI revenue for the period grew 13% on volumes that increased 11% over the fourth quarter 2011. Eastern network loads increased 15% and transcontinental growth showed a 9% improvement during the quarter. Eastern network load growth moderated from a year ago due to a combination of factors including Hurricane Sandy, the closing of some rail service lanes and the loss of some incumbent business. Revenue per load, the combination of traffic mix, customer rate increases and changes in fuel surcharge revenue, increased 1.9% from the same period in 2011.

Operating income for the quarter grew 24%. Fourth quarter 2011 results include an approximate $2.8 million expense due to severance and charitable commitments. Improved network balance yielded positive results in container utilization, dray fleet utilization and a lower percentage of empty reposition moves. Cost increases in both rail and dray purchased transportation, driver wages and insurance and claims partially offset the improvements in productivity. The current period ended with approximately 59,000 units of trailing capacity and approximately 3,600 power units in the dray fleet.

Dedicated Contract Services (DCS)

  • Fourth quarter 2012 Segment Revenue: $284 million; up 9%
  • Fourth quarter 2012 Operating Income: $29.4 million; up 7%

DCS revenue increased 9% during the current quarter vs. 2011, while revenue, excluding fuel surcharges, increased 8%. The increase in revenue primarily resulted from 335 net additional revenue producing trucks, mostly due to converting customers’ private fleets. Productivity (revenue per truck per week) was up 1% compared with the fourth quarter 2011.

Operating income increased 7% vs. same quarter 2011. Fourth quarter 2011 results include an approximate $0.6 million expense due to severance and charitable commitments. The increase in operating income is primarily related to a higher truck count and improved productivity, but was partially offset by increases in insurance and claims expense, driver wages and employee health insurance expense.

Integrated Capacity Solutions (ICS)

  • Fourth Quarter 2012 Segment Revenue: $129 million; up 30%
  • Fourth Quarter 2012 Operating Income: $4.6 million; up 13%

ICS revenue increased 30% in the current quarter vs. the fourth quarter 2011 mostly due to a 47% increase in load volume. Volumes grew faster than revenue primarily due to a change in freight mix driven by customer demand. Both contractual and transactional business realized volume increases, however contractual business continues to grow at a faster pace. Contractual business comprised approximately 67% of the total load volume in the current quarter vs. 59% a year ago.

Operating income increased 13% over the same period in 2011. Fourth quarter 2011 results include an approximate $0.2 million expense for severance and charitable commitments. Gross profit margin increased slightly to 14.1% in the current period from 13.9% last year. Positive results from increased and steady load growth at higher margins and improved productivity of a more experienced workforce were partially offset with cost increases for additional headcount, branch network expansion and a single large claim settlement. ICS’s carrier base increased 12% and the employee count increased 18% from a year ago.

Truck (JBT)

  • Fourth quarter 2012 Segment Revenue: $113 million; down 12%
  • Fourth quarter 2012 Operating Income: $ 5.2 million; down 27%

JBT revenue for the current quarter decreased 12% from the same period in 2011 on an approximate 19% reduction in fleet size. Revenue, excluding fuel surcharges, decreased 12% from the comparable 2011 period. Rates per mile, excluding fuel surcharges, increased 8.9% overall due largely to Hurricane Sandy relief efforts during the quarter. Rates from consistent shippers improved 1.6% from a year ago. At the end of the period, JBT’s tractor count was 2,093 compared to 2,585 in the fourth quarter 2011.

Operating income for the current quarter decreased 27% compared to the same quarter of 2011. Fourth quarter 2011 results included an approximate $0.3 million expense for severance and charitable commitments. Short term pricing improvements were offset by a lower truck count, reduced utilization, increased driver and independent contractor pay and fewer gains on the sale of equipment compared to the same period 2011.

Cash Flow and Capitalization:

At December 31, 2012, we had total debt outstanding of $685 million on various debt instruments compared to $749 million at December 31, 2011 and $645 million at September 30, 2012.

Our net capital expenditures for 2012 approximated $370 million vs. $446 million in 2011. The decrease in capital expenditures was primarily due to purchasing fewer containers and chassis for JBI and trading fewer tractors across all business units. At December 31, 2012, we had cash and cash equivalents of $5.6 million.

In the fourth quarter 2012, we used $50 million to purchase approximately 849,000 shares of our common stock. At December 31, 2012, we had approximately $453 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, 2011. 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
2012 2011
% Of % Of
Amount     Revenue Amount     Revenue
 
Operating revenues, excluding fuel surcharge revenues $ 1,067,194 $ 974,009
Fuel surcharge revenues 270,942 230,928
Total operating revenues 1,338,136 100.0 % 1,204,937 100.0 %
 
Operating expenses
Rents and purchased transportation 666,745 49.8 % 579,910 48.1 %
Salaries, wages and employee benefits 270,706 20.2 % 258,483 21.5 %
Fuel and fuel taxes 117,542 8.8 % 116,567 9.7 %
Depreciation and amortization 59,046 4.4 % 55,632 4.6 %
Operating supplies and expenses 44,978 3.4 % 39,636 3.3 %
Insurance and claims 16,447 1.2 % 12,399 1.0 %
General and administrative expenses, net of asset dispositions 7,513 0.6 % 8,386 0.7 %
Operating taxes and licenses 7,545 0.6 % 7,246 0.6 %
Communication and utilities 4,279 0.3 % 4,391 0.4 %
Total operating expenses 1,194,801 89.3 % 1,082,650 89.9 %
Operating income 143,335 10.7 % 122,287 10.1 %
Net interest expense 5,296 0.4 % 6,214 0.5 %
Earnings before income taxes 138,039 10.3 % 116,073 9.6 %
Income taxes 54,062 4.0 % 43,508 3.6 %
Net earnings $ 83,977 6.3 % $ 72,565 6.0 %
Average diluted shares outstanding 120,019 119,363
Diluted earnings per share $ 0.70 $ 0.61
 
J.B. HUNT TRANSPORT SERVICES, INC.
Condensed Consolidated Statements of Earnings
(in thousands, except per share data)
(unaudited)
           
Twelve Months Ended December 31
2012 2011
% Of % Of
Amount     Revenue Amount     Revenue
 
Operating revenues, excluding fuel surcharge revenues $ 4,058,165 $ 3,677,679
Fuel surcharge revenues 996,815 849,163
Total operating revenues 5,054,980 100.0% 4,526,842 100.0%
 
Operating expenses
Rents and purchased transportation 2,485,635 49.2% 2,122,811 46.9%
Salaries, wages and employee benefits 1,037,526 20.5% 1,001,953 22.1%
Fuel and fuel taxes 465,874 9.2% 463,597 10.2%
Depreciation and amortization 229,166 4.5% 213,943 4.7%
Operating supplies and expenses 178,610 3.5% 160,425 3.6%
Insurance and claims 53,832 1.1% 44,929 1.0%
General and administrative expenses, net of asset dispositions 27,231 0.6% 28,900 0.7%
Operating taxes and licenses 29,461 0.6% 27,871 0.6%
Communication and utilities 17,445 0.3% 18,180 0.4%
Total operating expenses 4,524,780 89.5% 4,082,609 90.2%
Operating income 530,200 10.5% 444,233 9.8%
Net interest expense 25,559 0.5% 28,500 0.6%
Earnings before income taxes 504,641 10.0% 415,733 9.2%
Income taxes 194,287 3.9% 158,727 3.5%
Net earnings $ 310,354 6.1% $ 257,006 5.7%
Average diluted shares outstanding 120,022 121,922
Diluted earnings per share $ 2.59 $ 2.11
                         
 
Financial Information By Segment
(in thousands)
(unaudited)
           
 
Three Months Ended December 31
2012 2011
% Of % Of
Amount     Total Amount     Total
 

Revenue

 
Intermodal $ 821,208 61 % $ 728,795 60 %
Dedicated 283,722 21 % 260,019 22 %
Integrated Capacity Solutions 128,517 10 % 98,881 8 %
Truck 112,722   9 % 127,928   11 %
Subtotal 1,346,169 101 % 1,215,623 101 %
Intersegment eliminations (8,033 ) (1 %) (10,686 ) (1 %)
Consolidated revenue $ 1,338,136   100 % $ 1,204,937   100 %
 
 

Operating income

 
Intermodal $ 104,223 73 % $ 83,882 69 %
Dedicated 29,396 20 % 27,356 22 %
Integrated Capacity Solutions 4,614 3 % 4,072 3 %
Truck 5,150 4 % 7,076 6 %
Other (1) (48 ) (0 %) (99 ) (0 %)
Operating income $ 143,335   100 % $ 122,287   100 %
 
 
 
 
 
Twelve Months Ended December 31
2012 2011
% Of % Of
Amount     Total Amount     Total

Revenue

 
Intermodal $ 3,071,127 61 % $ 2,672,955 59 %
Dedicated 1,079,508 21 % 1,031,393 23 %
Integrated Capacity Solutions 456,331 9 % 355,817 8 %
Truck 483,757   10 % 504,132   11 %
Subtotal 5,090,723 101 % 4,564,297 101 %
Intersegment eliminations (35,743 ) (1 %) (37,455 ) (1 %)
Consolidated revenue $ 5,054,980   100 % $ 4,526,842   100 %
 
 

Operating income

 
Intermodal $ 374,965 71 % $ 301,439 68 %
Dedicated 116,335 22 % 103,087 23 %
Integrated Capacity Solutions 16,130 3 % 13,109 3 %
Truck 22,880 4 % 26,670 6 %
Other (1) (110 ) (0 %) (72 ) (0 %)
Operating income $ 530,200   100 % $ 444,233   100 %
 
 
(1) Includes corporate support activity
 
Operating Statistics by Segment
(unaudited)
       
Three Months Ended December 31
2012   2011  
 

Intermodal

 
Loads 368,022 333,000
Average length of haul 1,720 1,726
Revenue per load $ 2,231 $ 2,189
Average tractors during the period * 3,582 3,109
 
Tractors (end of period)
Company-owned 3,124 2,901
Independent contractor 472   213  
Total tractors 3,596 3,114
 
Net change in trailing equipment during the period 1,049 2,584
Trailing equipment (end of period) 58,962 54,506
Average effective trailing equipment usage 56,473 52,540
 
 

Dedicated

 
Loads 407,801 354,711
Average length of haul 196 210
Revenue per truck per week** $ 4,220 $ 4,172
Average trucks during the period*** 5,294 4,915
 
Trucks (end of period)
Company-owned 4,844 4,571
Independent contractor 15 17
Customer-owned (Dedicated operated) 394   330  
Total trucks 5,253 4,918
 
Trailing equipment (end of period) 13,448 11,211
Average effective trailing equipment usage 14,884 12,472
 
 

Integrated Capacity Solutions

 
Loads 94,315 64,267
Revenue per load $ 1,363 $ 1,539
Gross profit margin 14.1 % 13.9 %
Employee count (end of period) 453 384
Approximate number of third-party carriers (end of period) 32,300 28,800
 
 

Truck

 
Loads 104,694 113,893
Average length of haul 452 506
Loaded miles (000) 46,690 56,698
Total miles (000) 55,288 65,287
Average nonpaid empty miles per load 81.6 73.9
Revenue per tractor per week** $ 3,968 $ 3,960
Average tractors during the period * 2,258 2,597
 
Tractors (end of period)
Company-owned 1,192 1,637
Independent contractor 901   948  
Total tractors 2,093 2,585
 
Trailers (end of period) 8,954 9,302
Average effective trailing equipment usage 7,724 8,124
 
 
* 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
2012   2011  
 

Intermodal

 
Loads 1,415,663 1,248,302
Average length of haul 1,702 1,726
Revenue per load $ 2,169 $ 2,141
Average tractors during the period * 3,417 2,924
 
Tractors (end of period)
Company-owned 3,124 2,901
Independent contractor 472   213  
Total tractors 3,596 3,114
 
Net change in trailing equipment during the period 4,456 8,840
Trailing equipment (end of period) 58,962 54,506
Average effective trailing equipment usage 54,302 49,482
 
 

Dedicated

 
Loads 1,522,740 1,444,518
Average length of haul 201 205
Revenue per truck per week** $ 4,164 $ 4,175
Average trucks during the period*** 5,057 4,811
 
Trucks (end of period)
Company-owned 4,844 4,571
Independent contractor 15 17
Customer-owned (Dedicated operated) 394   330  
Total trucks 5,253 4,918
 
Trailing equipment (end of period) 13,448 11,211
Average effective trailing equipment usage 13,932 12,711
 
 

Integrated Capacity Solutions

 
Loads 326,574 253,344
Revenue per load $ 1,397 $ 1,404
Gross profit margin 13.0 % 13.5 %
Employee count (end of period) 453 384
Approximate number of third-party carriers (end of period) 32,300 28,800
 
 

Truck

 
Loads 449,366 444,851
Average length of haul 467 514
Loaded miles (000) 207,677 225,997
Total miles (000) 242,311 259,144
Average nonpaid empty miles per load 77.1 72.7
Revenue per tractor per week** $ 3,891 $ 3,869
Average tractors during the period* 2,435 2,557
 
Tractors (end of period)
Company-owned 1,192 1,637
Independent contractor 901   948  
Total tractors 2,093 2,585
 
Trailers (end of period) 8,954 9,302
Average effective trailing equipment usage 7,985 8,089
 
 
* 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, 2012         December 31, 2011
ASSETS
Current assets:
Cash and cash equivalents $ 5,589 $ 5,450
Accounts Receivable 466,011 411,479
Prepaid expenses and other     82,932         96,613
Total current assets     554,532         513,542
Property and equipment 2,904,706 2,658,143
Less accumulated depreciation     1,019,232         931,273
Net property and equipment     1,885,474         1,726,870
Other assets     24,635         26,920
    $ 2,464,641       $ 2,267,332
 
 
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Current debt $ 100,000 $ 50,000
Trade accounts payable 266,722 251,625
Claims accruals 47,442 42,364
Accrued payroll 70,647 77,107
Other accrued expenses 17,199 17,419
Deferred income taxes     750         -
Total current liabilities     502,760         438,515
 
Long-term debt 585,347 699,177
Other long-term liabilities 53,050 45,382
Deferred income taxes 531,624 516,715
Stockholders' equity     791,860         567,543
    $ 2,464,641       $ 2,267,332
 
 
 
Supplemental Data
(unaudited)
                 
      December 31, 2012         December 31, 2011
 
Actual shares outstanding at end of period (000)     117,529         116,932
 
Book value per actual share outstanding at end of period   $ 6.74       $ 4.85
 
 
                 
Twelve Months Ended December 31
2012 2011
 
Net cash provided by operating activities (000)   $ 548,044       $ 635,692
 
Net capital expenditures (000)   $ 369,679       $ 445,869

Contacts

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

Sharing

Contacts

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