J.B. Hunt Transport Services, Inc. Reports Revenues and Earnings for the First Quarter 2013

J.B. Hunt Transport Services, Inc. Reports Revenues and Earnings for the First Quarter 2013

  • First Quarter 2013 Revenue:$1.29 billion; up 11%

  • First Quarter 2013 Operating Income:$125 million; up 7%

  • First Quarter 2013 EPS:61 cents vs. 57 cents

LOWELL, Ark.--(BUSINESS WIRE)-- J. B. Hunt Transport Services, Inc., (NAS: JBHT) announced first quarter 2013 net earnings of $73.3 million, or diluted earnings per share of 61 cents vs. first quarter 2012 net earnings of $67.7 million, or 57 cents per diluted share.

Total operating revenue for the current quarter was $1.29 billion, compared with $1.17 billion for the first quarter 2012. Load growth of 13% in Intermodal (JBI) and 47% in Integrated Capacity Solutions (ICS), helped drive 15% and 26% increases in segment revenue, respectively. Dedicated Contract Services (DCS) segment increased operating revenue by 9%, primarily from new long-term contracts currently being implemented, while Truck (JBT) segment revenue declined primarily from a 21% reduction in fleet size.


Operating income for the current quarter totaled $125 million vs. $117 million for the first quarter 2012. Combined, JBI and ICS operating income increased by approximately $18 million on higher load volume, improved freight mix and overhead cost controls. The increase in operating income was partially offset by higher equipment costs in the asset-based business units, higher claims costs from two old claims shared by all business units, contract implementation costs related to new customers for DCS and higher employee costs with lower asset utilization for JBT.

Net interest expense for the current quarter decreased by $0.7 million due to lower debt levels. The effective income tax rate for the quarter was consistent with last year at 38.25%.

Segment Information:

Intermodal (JBI)

  • First Quarter 2013 Segment Revenue:$796 million; up 15%

  • First Quarter 2013 Operating Income:$ 96.8 million; up 22%

Steady first quarter demand drove load growth of 13% over the prior year. Improved service levels and tighter capacity in the truck market contributed to our Eastern network growth of 19% and transcontinental growth of 10% compared to the prior year. Overall revenue grew 15% as a result of the volume growth and higher revenue per load, which is a combination of customer rates, fuel surcharges and freight mix.

Operating income increased 22% over the prior year. Increased equipment and maintenance costs, increased dray costs and higher dray purchase transportation costs were offset with the combination of steady demand and load growth, consistent and improved rail service, improved execution on dray movements and increased revenue per load. The current period ended with approximately 60,300 units of trailing capacity and 3,700 power units available to the dray fleet.

Dedicated Contract Services (DCS)

  • First Quarter 2013 Segment Revenue:$279 million; up 9%

  • First Quarter 2013 Operating Income:$21.9 million; down 22%

DCS revenue increased 9% during the current quarter while revenue, excluding fuel surcharges, increased 10%. Productivity, revenue per truck per week, excluding fuel surcharges, was up approximately 2% vs. first quarter 2012. A net additional 633 revenue producing trucks were added over the same period 2012, primarily from new accounts.

Operating income decreased by 22% from a year ago primarily due to increased equipment and maintenance costs, lower gains on equipment sales, increased bad debt expense and approximately $1.7 million in contract implementation costs for new long-term customers. These implementation costs include, but are not limited to, driver and management hiring costs and relocation, personnel travel costs, equipment repositioning costs, technology design and integration, and telecommunication and operational system infrastructure. These exceptionally large private fleet conversions will take approximately 6 to 8 months to fully implement. Additional implementation costs expected to be expensed in the coming periods are estimated to be $2.5 million.

Integrated Capacity Solutions (ICS)

  • First Quarter 2013 Segment Revenue:$122 million; up 26%

  • First Quarter 2013 Operating Income:$5.2 million; up 27%

ICS revenue increased 26% vs. first quarter 2012, mostly due to a 47% increase in load volume and higher pricing in our transactional business. Volumes grew faster than revenue primarily due to a change in freight mix driven by customer demand. Both transactional and contractual business continued to grow, however the contractual business grew faster to become 69% of total volumes vs. 59% in first quarter 2012.

Operating income increased 27% over the same period in 2012 primarily from the increased revenue and improved overhead cost controls. Gross profit margin declined to 13.0% in the current quarter vs. 14.3% at the same time last year due to increased rates paid to carriers from tighter supply and a competitive brokerage environment. ICS's carrier base increased 9% and our employee count increased 16% compared to first quarter 2012.

Truck (JBT)

  • First Quarter 2013 Segment Revenue:$102 million; down 21%

  • First Quarter 2013 Operating Income:$1.1 million; down 78%

JBT revenue decreased 21% compared to the same quarter 2012 primarily from a 21% reduction in fleet size and lower utilization per truck. Excluding fuel surcharges, revenue for the current quarter decreased by 21%. Rate per loaded mile, excluding fuel surcharges, increased 3.8% over the same period last year but on a 9.8% shorter length of haul. Rates from consistent shippers improved 0.5% year-over-year. At the end of the current quarter, our tractor count was 2,011 compared to 2,561 in first quarter 2012.

Operating income for the current quarter decreased 78% compared to the same quarter of 2012. Increased rate per loaded mile, lower fuel costs and lower claims costs were offset by increases in driver and independent contractor costs per mile, higher office salaries per tractor, higher maintenance and equipment costs per unit, and fewer gains on equipment sales compared to the first quarter of 2012.

Cash Flow and Capitalization:

As of March 31, 2013, we had a total of $593 million outstanding on various debt instruments compared to $702 million on March 31, 2012, and $685 million on December 31, 2012.

Our net capital expenditures for the first quarter 2013 approximated $115 million compared to $84 million for the first quarter 2012. As of March 31, 2013, we had cash and cash equivalents of $5.7 million.

We did not purchase any shares of our common stock during the quarter. As of March 31, 2013, we had approximately $453 million remaining under our share repurchase authorization. Actual shares outstanding on March 31, 2013 approximated 117 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, 2012. We assume no obligation to update any forward-looking statement to the extent we become aware 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

2013

2012

% Of

% Of

Amount

Revenue

Amount

Revenue

Operating revenues, excluding fuel surcharge revenues

$

1,038,940

$

938,683

Fuel surcharge revenues

252,647

227,239

Total operating revenues

1,291,587

100.0

%

1,165,922

100.0

%

Operating expenses

Rents and purchased transportation

644,533

49.9

%

556,117

47.7

%

Salaries, wages and employee benefits

263,724

20.4

%

250,044

21.4

%

Fuel and fuel taxes

116,560

9.0

%

120,554

10.3

%

Depreciation and amortization

60,730

4.7

%

56,120

4.8

%

Operating supplies and expenses

44,914

3.5

%

39,811

3.4

%

Insurance and claims

12,770

1.0

%

11,045

1.0

%

General and administrative expenses, net of asset dispositions

10,985

0.8

%

3,995

0.4

%

Operating taxes and licenses

7,513

0.6

%

7,142

0.6

%

Communication and utilities

4,819

0.4

%

4,497

0.4

%

Total operating expenses

1,166,548

90.3

%

1,049,325

90.0

%

Operating income

125,039

9.7

%

116,597

10.0

%

Net interest expense

6,256

0.5

%

6,987

0.6

%

Earnings before income taxes

118,783

9.2

%

109,610

9.4

%

Income taxes

45,434

3.5

%

41,926

3.6

%

Net earnings

$

73,349

5.7

%

$

67,684

5.8

%

Average diluted shares outstanding

119,825

119,750

Diluted earnings per share

$

0.61

$

0.57

Financial Information By Segment

(in thousands)

(unaudited)

Three Months Ended March 31

2013

2012

% Of

% Of

Amount

Total

Amount

Total

Revenue

Intermodal

$

796,262

62

%

$

694,116

60

%

Dedicated

279,083

22

%

255,852

22

%

Integrated Capacity Solutions

122,321

9

%

97,052

8

%

Truck

101,845

8

%

128,156

11

%

Subtotal

1,299,511

101

%

1,175,176

101

%

Intersegment eliminations

(7,924

)

(1

%)

(9,254

)

(1

%)

Consolidated revenue

$

1,291,587

100

%

$

1,165,922

100

%

Operating income

Intermodal

$

96,794

77

%

$

79,430

68

%

Dedicated

21,946

18

%

28,149

24

%

Integrated Capacity Solutions

5,174

4

%

4,064

4

%

Truck

1,095

1

%

4,884

4

%

Other (1)

30

0

%

70

0

%

Operating income

$

125,039

100

%

$

116,597

100

%

(1) Includes corporate support activity

Operating Statistics by Segment

(unaudited)

Three Months Ended March 31

2013

2012

Intermodal

Loads

367,766

324,142

Average length of haul

1,691

1,704

Revenue per load

$

2,165

$

2,141

Average tractors during the period *

3,665

3,185

Tractors (end of period)

Company-owned

3,230

2,956

Independent contractor

482

299

Total tractors

3,712

3,255

Net change in trailing equipment during the period

1,343

331

Trailing equipment (end of period)

60,305

54,837

Average effective trailing equipment usage

55,938

50,596

Dedicated

Loads

398,299

351,187

Average length of haul

198

208

Revenue per truck per week**

$

4,149

$

4,069

Average trucks during the period***

5,322

4,881

Trucks (end of period)

Company-owned

5,119

4,600

Independent contractor

13

18

Customer-owned (Dedicated operated)

363

244

Total trucks

5,495

4,862

Trailing equipment (end of period)

17,466

11,163

Average effective trailing equipment usage

17,737

12,435

Integrated Capacity Solutions

Loads

99,923

68,138

Revenue per load

$

1,224

$

1,424

Gross profit margin

13.0

%

14.3

%

Employee count (end of period)

441

379

Approximate number of third-party carriers (end of period)

32,600

29,800

Truck

Loads