J. B. Hunt Transport Services, Inc. Reports Revenues and Earnings for the First Quarter 2015

  • First Quarter 2015 Revenue: $1.44 billion; up 2%
  • First Quarter 2015 Operating Income: $155 million; up 32%
  • First Quarter 2015 EPS: 78 cents vs. 58 cents

LOWELL, Ark.--()--J. B. Hunt Transport Services, Inc., (NASDAQ:JBHT) announced first quarter 2015 net earnings of $91.9 million, or diluted earnings per share of 78 cents vs. first quarter 2014 net earnings of $68.7 million, or 58 cents per diluted share.

Total operating revenue for the current quarter was $1.44 billion, compared with $1.41 billion for the first quarter 2014. Current quarter total operating revenue, excluding fuel surcharges, increased 10% vs. first quarter 2014. Intermodal (JBI) load growth was 6% over first quarter 2014 levels. Dedicated Contract Services (DCS) segment revenue increased by 7% over prior year primarily from rate increases and more activity at customer accounts. Integrated Capacity Solutions (ICS) load growth was 17% over the same period in 2014 however lower revenue per load kept segment revenue flat from a year ago. Truck (JBT) segment revenue decreased 1% on lower revenue per tractor per week.

Operating income for the current quarter totaled $155 million vs. $117 million for the first quarter 2014. Benefits from customer rate increases, improved asset utilization, lower equipment maintenance costs, improved equipment fuel economy and more effective use of third-party carriers more than offset increases in rail purchase transportation rates, driver wage increases, higher equipment depreciation, increased insurance rates, higher equipment storage costs and higher toll expenses across all business segments. JBI operating income increased from first quarter 2014 primarily due to higher volumes and more efficient dray fleet operations. DCS operating income increased from the same period 2014 primarily due to less reliance on third-party carriers and improved asset utilization. ICS operating income increased primarily from improved gross profit margins and JBT operating income increased primarily from higher customer rates and more efficient operating costs of its newer equipment.

Net interest expense for the current quarter increased 5% from the same period in 2014 on higher debt levels. The effective income tax rate for both the current quarter and first quarter 2014 was 38.10%.

Segment Information:

Intermodal (JBI)

  • First Quarter 2015 Segment Revenue: $844 million; up 1%
  • First Quarter 2015 Operating Income: $104.3 million; up 12%

JBI load volumes grew 6% over the same period 2014. Eastern network realized load growth of 12% and Transcontinental loads grew 2% compared to prior year as the west coast port issues limited eastbound intermodal traffic. Overall revenue grew 1% reflecting the 6% volume growth and a 5% decrease in revenue per load, which is the combination of customer rate increases, lower fuel surcharges and freight mix. Revenue per load excluding fuel surcharge revenue increased 3% year over year.

Operating income increased 12% over prior year. Benefits from customer rate increases, improved dray network efficiency from improving western rail service, lower cargo claims costs, lower maintenance costs and less reliance on outsourced dray carriers were partially offset with increases in rail purchased transportation rates, equipment depreciation costs, equipment storage costs, driver recruiting and driver retention costs. The current period ended with approximately 74,200 units of trailing capacity and 4,900 power units available to the dray fleet.

Dedicated Contract Services (DCS)

  • First Quarter 2015 Segment Revenue: $345 million; up 7%
  • First Quarter 2015 Operating Income: $35.8 million; up 130%

DCS revenue increased 7% during the current quarter over the same period 2014. Productivity, defined as revenue per truck per week, was up approximately 1.4% vs. 2014 from customer rate increases and additional activity at customer accounts. A net additional 336 revenue producing trucks were in the fleet by the end of the quarter compared to prior year primarily from new contract implementations in the current and prior periods.

Operating income increased 130% from a year ago. The increase is primarily due to increased revenue, improved asset utilization, less reliance on third party carriers, lower equipment maintenance costs and the current period benefit of rapidly falling fuel prices. These benefits were partially offset by higher driver wage and recruiting costs and higher equipment depreciation costs.

Integrated Capacity Solutions (ICS)

  • First Quarter 2015 Segment Revenue: $163 million; flat
  • First Quarter 2015 Operating Income: $6.6 million; up 8%

ICS revenue was flat vs. first quarter 2014. Volumes increased 17% while revenue per load decreased 14.5% primarily due to lower fuel prices and less transactional customer demand from first quarter 2014. Contractual business load counts increased 49% from a year ago to approximately 74% of total load volume and 65% of total revenue in the current period compared to 59% and 50%, respectively, in first quarter 2014.

Operating income increased 8% over the same period in 2014 primarily from improved gross profit margin. Gross profit margin increased to 13.7% in the current quarter vs. 12.1% last year primarily due to rate increases on contractual business. Personnel costs increased as the total branch count grew to 30 compared to 24 at the end of the comparable period last year. ICS’s carrier base increased nearly 16% and employee count increased 21% compared to first quarter 2014.

Truck (JBT)

  • First Quarter 2015 Segment Revenue: $91 million; down 1%
  • First Quarter 2015 Operating Income: $8.5 million; up 248%

JBT revenue decreased 1% from the same quarter 2014. Revenue excluding fuel surcharge increased 6%. Increased truck count, better asset utilization, improved freight lane networks and core customer rate increases of approximately 9% contributed to the improved revenue, excluding fuel surcharge. At the end of the current quarter JBT operated 2,020 tractors compared to 1,917 in 2014.

Operating income for the current quarter increased by 248% compared to the same quarter of 2014. Benefits from increased rate per loaded mile, rapidly declining fuel prices, lower equipment maintenance costs, lower insurance and claims costs and improved asset utilization were partially offset by increased equipment depreciation costs, driver and independent contractor cost per mile and higher driver recruiting costs compared to first quarter 2014.

Cash Flow and Capitalization:

At March 31, 2015, we had a total of $878 million outstanding on various debt instruments compared to $852 million at March 31, 2014, and $934 million at December 31, 2014. At March 31, 2015, we had cash and cash equivalents of $5.6 million.

Our net capital expenditures for the first quarter 2015 approximated $160 million compared to $158 million for the first quarter 2014.

We purchased approximately 79,500 shares of our common stock during the quarter for approximately $6.4 million. At March 31, 2015, we had approximately $207 million remaining under our share repurchase authorization. Actual shares outstanding at March 31, 2015 approximated 116.6 million.

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, 2014. 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 March 31
2015 2014
% Of % Of
Amount   Revenue Amount   Revenue
 
Operating revenues, excluding fuel surcharge revenues $ 1,263,910 $ 1,152,349
Fuel surcharge revenues 176,270 254,559
Total operating revenues 1,440,180 100.0% 1,406,908 100.0%
 
Operating expenses
Rents and purchased transportation 693,685 48.2% 705,414 50.1%
Salaries, wages and employee benefits 330,510 22.9% 304,394 21.6%
Fuel and fuel taxes 81,813 5.7% 119,950 8.5%
Depreciation and amortization 81,378 5.7% 68,967 4.9%
Operating supplies and expenses 50,481 3.4% 50,788 3.6%
Insurance and claims 17,428 1.2% 15,832 1.1%
General and administrative expenses, net of asset dispositions 13,933 1.0% 9,925 0.7%
Operating taxes and licenses 10,088 0.7% 8,973 0.7%
Communication and utilities 5,644 0.4% 5,358 0.5%
Total operating expenses 1,284,960 89.2% 1,289,601 91.7%
Operating income 155,220 10.8% 117,307 8.3%
Net interest expense 6,703 0.5% 6,380 0.4%
Earnings before income taxes 148,518 10.3% 110,927 7.9%
Income taxes 56,585 3.9% 42,263 3.0%
Net earnings $ 91,932 6.4% $ 68,664 4.9%
Average diluted shares outstanding 117,800 118,943
Diluted earnings per share $ 0.78 $ 0.58
                   
Financial Information By Segment
(in thousands)
(unaudited)
     
 
Three Months Ended March 31
2015 2014
% Of % Of
Amount   Total Amount   Total
 

Revenue

 
Intermodal $ 843,889 59% $ 835,495 59%
Dedicated 345,189 24% 322,042 23%
Integrated Capacity Solutions 163,212 11% 162,630 11%
Truck 91,189 6% 92,470 7%
Subtotal 1,443,479 100% 1,412,637 100%
Intersegment eliminations (3,299) (0%) (5,729) (0%)
Consolidated revenue $ 1,440,180 100% $ 1,406,908 100%
 
 

Operating income

 
Intermodal $ 104,262 68% $ 93,171 80%
Dedicated 35,815 23% 15,600 13%
Integrated Capacity Solutions 6,628 4% 6,125 5%
Truck 8,529 5% 2,448 2%
Other (1) (14) (0%) (37) (0%)
Operating income $ 155,220 100% $ 117,307 100%
 
 

(1) Includes corporate support activity

 
Operating Statistics by Segment
(unaudited)
     
Three Months Ended March 31
2015       2014
 

Intermodal

 
Loads 410,297 385,986
Average length of haul 1,643 1,669
Revenue per load $ 2,057 $ 2,165
Average tractors during the period * 4,816 4,250
 
Tractors (end of period)
Company-owned 4,128 3,694
Independent contractor 776 644
Total tractors 4,904 4,338
 
Net change in trailing equipment during the period 895 1,585
Trailing equipment (end of period) 74,193 67,564
Average effective trailing equipment usage 68,692 65,201
 
 

Dedicated

 
Loads 530,762 486,671
Average length of haul 175 180
Revenue per truck per week** $ 3,966 $ 3,913
Average trucks during the period*** 6,854 6,491
 
Trucks (end of period)
Company-owned 6,422 5,995
Independent contractor 7 6
Customer-owned (Dedicated operated) 416 508
Total trucks 6,845 6,509
 
Trailing equipment (end of period) 20,819 19,188
Average effective trailing equipment usage 22,276 20,345
 
 

Integrated Capacity Solutions

 
Loads 120,962 103,083
Revenue per load $ 1,349 $ 1,578
Gross profit margin 13.7% 12.1%
Employee count (end of period) 605 499
Approximate number of third-party carriers (end of period) 40,441 35,000
 
 

Truck

 
Loads 86,243 89,998
Average length of haul 450 408
Loaded miles (000) 38,635 36,995
Total miles (000) 45,454 43,472
Average nonpaid empty miles per load 74.7 68.1
Revenue per tractor per week** $ 3,703 $ 3,856
Average tractors during the period * 1,944 1,892
 
Tractors (end of period)
Company-owned 1,462 1,245
Independent contractor 558 672
Total tractors 2,020 1,917
 
Trailers (end of period) 7,182 6,793
Average effective trailing equipment usage 6,024 5,831
 
 
* 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, 2015       December 31, 2014
ASSETS
Current assets:
Cash and cash equivalents $ 5,646 $ 5,961
Accounts Receivable 631,172 653,795
Prepaid expenses and other 148,063 201,743
Deferred income taxes     18,631       18,631
Total current assets     803,512       880,130
Property and equipment 3,801,192 3,719,757
Less accumulated depreciation     1,248,329       1,237,225
Net property and equipment     2,552,863       2,482,532
Other assets     72,622       34,455
    $ 3,428,997     $ 3,397,117
 
 
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Current debt $ 250,000 $ 250,000
Trade accounts payable 328,111 325,838
Claims accruals 99,196 96,719
Accrued payroll 72,106 80,547
Other accrued expenses     12,918       17,966
Total current liabilities     762,331       771,070
 
Long-term debt 628,203 683,539
Other long-term liabilities 60,565 59,561
Deferred income taxes 700,518 678,424
Stockholders' equity     1,277,380       1,204,523
    $ 3,428,997     $ 3,397,117
Supplemental Data
(unaudited)
               
      March 31, 2015     December 31, 2014
   
Actual shares outstanding at end of period (000)     116,556       116,575
 
Book value per actual share outstanding at end of period   $ 10.96     $ 10.33
 
 
               
Three Months Ended March 31
2015 2014
 
Net cash provided by operating activities (000)   $ 255,543     $ 159,045
 
Net capital expenditures (000)   $ 160,373     $ 158,212

Contacts

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

Contacts

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