J.B. Hunt Transport Services, Inc. Reports Revenues, Net Earnings and Earnings Per Share for Both the Fourth Quarter and Year Ended December 31, 2014

  • Fourth quarter 2014 Revenue: $1.61 billion; up 9%
  • Fourth quarter 2014 Operating Income: $182.9 million; up 19%
  • Fourth quarter 2014 EPS: 93 cents vs. 77 cents; up 21%
  • Full Year 2014 Revenue: $6.2 billion; up 10%
  • Full Year 2014 Operating Income: $631.5 million; up 10%
  • Full Year 2014 EPS: $3.16 vs. $2.87; up 10%

LOWELL, Ark.--()--J.B. Hunt Transport Services, Inc., (NASDAQ:JBHT) announced fourth quarter 2014 net earnings of $110 million, or diluted earnings per share of 93 cents vs. fourth quarter 2013 net earnings of $92 million, or 77 cents per diluted share.

Total operating revenue for the current quarter was $1.61 billion, compared with $1.47 billion for the fourth quarter 2013. Load growth of 6% in Intermodal (JBI) was the primary reason for a 5% increase in segment revenue. Dedicated Contract Services (DCS) segment revenue increased by 10%, primarily from the addition of new customer accounts and rate increases implemented in the current and earlier periods. Integrated Capacity Solutions (ICS) segment revenue increased by 36%, mostly from a higher load count and an increase in revenue per load. Truck (JBT) segment revenue increased 6% primarily from customer rate increases and a 2% increase in fleet size compared to a year ago. Current quarter total operating revenue, excluding fuel surcharges, increased 12% vs. the comparable quarter 2013.

Operating income for the current quarter increased to $182.9 million vs. $153.5 million for the fourth quarter 2013. The increase primarily reflects higher revenue in all business segments and the current benefit of rapidly falling fuel prices during the quarter, net of lower fuel surcharge revenue primarily in DCS and JBT. These benefits were partially offset by increased costs paid to hire and retain drivers; higher workers’ compensation and accident costs; and higher costs of equipment ownership.

Net earnings rose 20% to $110 million in the current quarter from $92 million in 2013, due to the increased operating income partially offset by higher net interest expense. Compared with the same period 2013, net interest expense in the current quarter increased approximately 16% on a higher average debt balance primarily from higher capital expenditures in the year. The annual and fourth quarter effective tax rates in 2014 were 38.01% and 37.79%, respectively. The annual and fourth quarter effective tax rates in 2013 were 38.15% and 38.23%, respectively.

Segment Information:

Intermodal (JBI)

  • Fourth quarter 2014 Segment Revenue: $958 million; up 5%
  • Fourth quarter 2014 Operating Income: $128.8 million; up 6%

JBI total volumes grew 6% over the same period in 2013. Inconsistent rail service and limited dray fleet capacity continued during the quarter. Eastern network loads increased 14% and transcontinental loads increased 1% compared to the fourth quarter 2013. Revenue increased 5%, reflecting volume growth of 6% and a 1% decrease in revenue per load which is the combination of freight mix, customer rate increases and fuel surcharges. Revenue per load excluding fuel surcharges increased 1% compared to a year ago.

Operating income for the quarter grew 6%. Benefits from customer rate increases, a smaller percentage of empty repositioning moves and a smaller percentage of outsourced dray usage were substantially offset by cost increases in rail and dray purchased transportation, driver recruiting and retention costs and insurance and claims costs. The current period ended with approximately 73,300 units of trailing capacity and approximately 4,700 power units in the dray fleet.

Dedicated Contract Services (DCS)

  • Fourth quarter 2014 Segment Revenue: $363 million; up 10%
  • Fourth quarter 2014 Operating Income: $37.0 million; up 25%

DCS revenue increased 10% during the current quarter over the same period 2013 primarily from rate increases implemented during the past 9 months and more activity at customer accounts. Revenue excluding fuel surcharges increased 11% compared to fourth quarter 2013. A net additional 473 revenue producing trucks were in the fleet by the end of the quarter compared to prior year primarily reflecting new contract implementations in the current and prior periods.

Operating income was up 25% from a year ago. The increase is primarily due to the increase in revenue, improved asset utilization, less reliance on outsourced power units and the current period benefit of rapidly declining fuel costs, but was partially offset by continued higher costs for driver hiring and retention, increased insurance and claims costs and higher workers’ compensation costs.

Integrated Capacity Solutions (ICS)

  • Fourth Quarter 2014 Segment Revenue: $197 million; up 36%
  • Fourth Quarter 2014 Operating Income: $9.1 million; up 158%

ICS revenue increased 36% in the current quarter vs. the fourth quarter 2013 mostly due to a 25% increase in load volume and a 9% increase in revenue per load. Both contractual and transactional business realized volume increases. Contractual business was approximately 66% of the total load volume but only 57% of the total revenue in the current quarter compared to 65% of the total load volume and 61% of the total revenue in fourth quarter 2013.

Operating income increased 158% over the same period in 2013 primarily from increased revenue and higher gross profit margin. Gross profit margin increased to 13.7% in the current period from 12.0% last year primarily from customer rate increases in contractual business and maintaining margin discipline in the transactional business. Personnel costs increased from the comparable period last year as we continued to on-board and train staff to expand our branch network. Total branches at the end of the period grew to 29 from 24 at the end of the same period in 2013. ICS’s carrier base increased 13% and the employee count increased 16% from a year ago.

Truck (JBT)

  • Fourth quarter 2014 Segment Revenue: $ 96 million; up 6%
  • Fourth quarter 2014 Operating Income: $ 8.1 million; compared to an Operating Loss of $1.0 million in 2013

JBT revenue for the current quarter increased 6% from the same period in 2013 on a 2% larger fleet size. Revenue excluding fuel surcharges increased 10% primarily from increased asset utilization, intentional freight mix change and core customer rate increases of approximately 9% compared to fourth quarter 2013. At the end of the period, JBT operated 1,886 tractors compared to 1,857 a year ago.

Operating income increased $9.1 million from fourth quarter 2013 levels. Favorable changes from increased rates per loaded mile, rapidly declining fuel prices and higher utilization of company owned assets were partially offset by increased driver and independent contract costs per mile, increased hiring costs and higher safety and insurance costs compared to fourth quarter 2013.

Cash Flow and Capitalization:

At December 31, 2014, we had total debt outstanding of $934 million on various debt instruments compared to $708 million at December 31, 2013 and $837 million at September 30, 2014.

Our net capital expenditures for 2014 approximated $660 million vs. $443 million in 2013. The increase in capital expenditures was primarily due to purchasing additional containers and chassis for JBI and additional and replacement tractors and trailers across all asset business units. At December 31, 2014, we had cash and cash equivalents of $6.0 million.

In the fourth quarter 2014, we purchased approximately 615,000 shares of our common stock for $50 million. At December 31, 2014, we had approximately $213 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, 2013. 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
2014 2013
% Of % Of
Amount     Revenue Amount     Revenue
 
Operating revenues, excluding fuel surcharge revenues $ 1,344,891 $ 1,202,168
Fuel surcharge revenues   264,620   272,108
Total operating revenues 1,609,511 100.0 % 1,474,276 100.0 %
 
Operating expenses
Rents and purchased transportation 802,284 49.8 % 742,824 50.4 %
Salaries, wages and employee benefits 338,888 21.1 % 302,448 20.5 %
Fuel and fuel taxes 101,467 6.3 % 114,939 7.8 %
Depreciation and amortization 78,386 4.9 % 66,077 4.5 %
Operating supplies and expenses 52,600 3.3 % 52,782 3.6 %
Insurance and claims 23,440 1.5 % 16,400 1.1 %
General and administrative expenses, net of asset dispositions 14,071 0.8 % 11,884 0.8 %
Operating taxes and licenses 10,279 0.6 % 8,585 0.6 %
Communication and utilities   5,191 0.3 %   4,804 0.3 %
Total operating expenses   1,426,606 88.6 %   1,320,743 89.6 %
Operating income 182,905 11.4 % 153,533 10.4 %
Net interest expense   5,583 0.4 %   4,820 0.3 %
Earnings before income taxes 177,322 11.0 % 148,713 10.1 %
Income taxes   67,016 4.1 %   56,849 3.9 %
Net earnings $ 110,306 6.9 % $ 91,864 6.2 %
Average diluted shares outstanding   118,078   118,960
Diluted earnings per share $ 0.93 $ 0.77
 
 
J.B. HUNT TRANSPORT SERVICES, INC.
Condensed Consolidated Statements of Earnings
(in thousands, except per share data)
(unaudited)
 
Twelve Months Ended December 31
2014 2013
% Of % Of
Amount     Revenue Amount     Revenue
 
Operating revenues, excluding fuel surcharge revenues $ 5,082,827 $ 4,527,238
Fuel surcharge revenues   1,082,614   1,057,333
Total operating revenues 6,165,441 100.0 % 5,584,571 100.0 %
 
Operating expenses
Rents and purchased transportation 3,085,276 50.0 % 2,805,568 50.2 %
Salaries, wages and employee benefits 1,290,404 20.9 % 1,138,213 20.4 %
Fuel and fuel taxes 453,919 7.4 % 455,926 8.2 %
Depreciation and amortization 294,496 4.8 % 253,380 4.5 %
Operating supplies and expenses 218,539 3.5 % 202,700 3.6 %
Insurance and claims 81,062 1.3 % 55,158 1.0 %
General and administrative expenses, net of asset dispositions 50,596 0.8 % 45,469 0.8 %
Operating taxes and licenses 38,796 0.7 % 32,307 0.7 %
Communication and utilities   20,811 0.4 %   19,142 0.3 %
Total operating expenses   5,533,899 89.8 %   5,007,863 89.7 %
Operating income 631,542 10.2 % 576,708 10.3 %
Net interest expense   26,941 0.4 %   23,140 0.4 %
Earnings before income taxes 604,601 9.8 % 553,568 9.9 %
Income taxes   229,809 3.7 %   211,186 3.8 %
Net earnings $ 374,792 6.1 % $ 342,382 6.1 %
Average diluted shares outstanding   118,445   119,404
Diluted earnings per share $ 3.16 $ 2.87
 
 
Financial Information By Segment
(in thousands)
(unaudited)
               
Three Months Ended December 31
2014 2013
% Of % Of
Amount     Total Amount     Total
 

Revenue

Intermodal $ 957,714 59 % $ 915,071 62 %
Dedicated 362,966 23 % 330,684 23 %
Integrated Capacity Solutions 197,417 12 % 145,293 10 %
Truck   96,306   6 %   91,213   6 %
Subtotal 1,614,403 100 % 1,482,261 101 %
Intersegment eliminations   (4,892 ) (0 %)   (7,985 ) (1 %)
Consolidated revenue $ 1,609,511   100 % $ 1,474,276   100 %
 

 

Operating income

Intermodal $ 128,767 70 % $ 121,523 79 %
Dedicated 37,031 20 % 29,532 19 %
Integrated Capacity Solutions 9,092 5 % 3,518 3 %
Truck 8,079 5 % (1,041 ) (1 %)
Other (1)   (64 ) (0 %)   1   0 %
Operating income $ 182,905   100 % $ 153,533   100 %
 
 
Twelve Months Ended December 31
2014 2013
% Of % Of
Amount     Total Amount     Total

Revenue

Intermodal $ 3,687,444 60 % $ 3,456,164 62 %
Dedicated 1,393,768 22 % 1,231,342 22 %
Integrated Capacity Solutions 718,076 12 % 536,844 10 %
Truck   385,603   6 %   391,086   7 %
Subtotal 6,184,891 100 % 5,615,436 101 %
Intersegment eliminations   (19,450 ) (0 %)   (30,865 ) (1 %)
Consolidated revenue $ 6,165,441   100 % $ 5,584,571   100 %
 

 

Operating income

Intermodal $ 460,377 73 % $ 447,030 77 %
Dedicated 117,243 18 % 110,438 19 %
Integrated Capacity Solutions 29,880 5 % 15,693 3 %
Truck 24,223 4 % 3,658 1 %
Other (1)   (181 ) (0 %)   (111 ) (0 %)
Operating income $ 631,542   100 % $ 576,708   100 %
 
 

(1) Includes corporate support activity

 
 
Operating Statistics by Segment
(unaudited)
 
    Three Months Ended December 31
2014     2013
 

Intermodal

 
Loads 439,565 415,601
Average length of haul 1,666 1,703
Revenue per load $ 2,179 $ 2,202
Average tractors during the period * 4,697 4,084
 
Tractors (end of period)
Company-owned 3,916 3,448
Independent contractor   761     646  
Total tractors 4,677 4,094
 
Net change in trailing equipment during the period 1,620 2,059
Trailing equipment (end of period) 73,298 65,979
Average effective trailing equipment usage 71,481 63,914
 
 

Dedicated

 
Loads 548,615 504,738
Average length of haul 174 179
Revenue per truck per week** $ 4,184 $ 4,198
Average trucks during the period*** 6,885 6,271
 
Trucks (end of period)
Company-owned 6,425 5,805
Independent contractor 7 10
Customer-owned (Dedicated operated)   448     592  
Total trucks 6,880 6,407
 
Trailing equipment (end of period) 20,516 19,062
Average effective trailing equipment usage 21,589 20,099
 
 

Integrated Capacity Solutions

 
Loads 124,123 99,444
Revenue per load $ 1,590 $ 1,461
Gross profit margin 13.7 % 12.0 %
Employee count (end of period) 582 503
Approximate number of third-party carriers (end of period) 39,100 34,600
 
 

Truck

 
Loads 89,877 89,663
Average length of haul 433 432
Loaded miles (000) 38,337 38,629
Total miles (000) 45,411 45,422
Average nonpaid empty miles per load 78.3 74.7
Revenue per tractor per week** $ 4,086 $ 3,804
Average tractors during the period * 1,887 1,921
 
Tractors (end of period)
Company-owned 1,296 1,200
Independent contractor   590     657  
Total tractors 1,886 1,857
 
Trailers (end of period) 7,215 6,828
Average effective trailing equipment usage 6,201 6,114
 
 
* 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
2014 2013
 

Intermodal

 
Loads 1,700,374 1,593,511
Average length of haul 1,656 1,694
Revenue per load $ 2,169 $ 2,169
Average tractors during the period * 4,502 3,916
 
Tractors (end of period)
Company-owned 3,916 3,448
Independent contractor   761     646  
Total tractors 4,677 4,094
 
Net change in trailing equipment during the period 7,319 7,017
Trailing equipment (end of period) 73,298 65,979
Average effective trailing equipment usage 68,683 60,612
 
 

Dedicated

 
Loads 2,101,707 1,835,872
Average length of haul 177 190
Revenue per truck per week** $ 4,098 $ 4,109
Average trucks during the period*** 6,641 5,865
 
Trucks (end of period)
Company-owned 6,425 5,805
Independent contractor 7 10
Customer-owned (Dedicated operated)   448     592  
Total trucks 6,880 6,407
 
Trailing equipment (end of period) 20,516 19,062
Average effective trailing equipment usage 20,927 19,229
 
 

Integrated Capacity Solutions

 
Loads 453,410 388,987
Revenue per load $ 1,584 $ 1,380
Gross profit margin 13.0 % 11.8 %
Employee count (end of period) 582 503
Approximate number of third-party carriers (end of period) 39,100 34,600
 
 

Truck

 
Loads 370,555 386,875
Average length of haul 411 431
Loaded miles (000) 151,725 165,543
Total miles (000) 179,036 194,046
Average nonpaid empty miles per load 71.8 73.3
Revenue per tractor per week** $ 4,068 $ 3,828
Average tractors during the period* 1,868 2,007
 
Tractors (end of period)
Company-owned 1,296 1,200
Independent contractor   590     657  
Total tractors 1,886 1,857
 
Trailers (end of period) 7,215 6,828
Average effective trailing equipment usage 5,891 6,877
 
 
* 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, 2014     December 31, 2013
ASSETS
Current assets:
Cash and cash equivalents $ 5,961 $ 5,831
Accounts Receivable 653,795 568,519
Prepaid expenses and other 201,743 105,853
Deferred income taxes       18,631       -
Total current assets       880,130       680,203
Property and equipment 3,719,757 3,259,814
Less accumulated depreciation       1,237,225       1,147,610
Net property and equipment       2,482,532       2,112,204
Other assets       34,455       26,997
      $ 3,397,117     $ 2,819,404
 
 

LIABILITIES & STOCKHOLDERS’ EQUITY

Current liabilities:
Current debt $ 250,000 $ 250,000
Trade accounts payable 325,838 305,465
Claims accruals 96,719 68,221
Accrued payroll 80,547 72,063
Other accrued expenses 17,966 14,062
Deferred income taxes       -       2,485
Total current liabilities       771,070       712,296
 
Long-term debt 683,539 458,417
Other long-term liabilities 59,561 58,274
Deferred income taxes 678,424 577,965

Stockholders’ equity

      1,204,523       1,012,452
      $ 3,397,117     $ 2,819,404
 
 
Supplemental Data
(unaudited)
             
      December 31, 2014     December 31, 2013
 
Actual shares outstanding at end of period (000)       116,575       117,241
 
Book value per actual share outstanding at end of period     $ 10.33     $ 8.64
 
 
             
Twelve Months Ended December 31
2014 2013
 
Net cash provided by operating activities (000)     $ 646,779     $ 574,351
 
Net capital expenditures (000)     $ 659,710     $ 442,504

Contacts

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

Contacts

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