J. B. Hunt Transport Services, Inc. Reports Record Revenues, Record Net Earnings and Record Earnings
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:70cents 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.--(BUSINESS WIRE)-- J. B. Hunt Transport Services, Inc., (NAS: 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 | % | ||||||||
