- Third Quarter 2016 Revenue:
$1.69 billion; up 7%
- Third Quarter 2016 Operating
Income: $183 million; down 6%
- Third Quarter 2016 EPS: 97
cents vs. 99 cents
J.B. Hunt Transport Services, Inc., (NASDAQ:JBHT) announced
third quarter 2016 net earnings of $109.4 million, or diluted
earnings per share of 97 cents vs. third quarter 2015 net earnings
of $115.1 million, or 99 cents per diluted share.
Total operating revenue for the current quarter was $1.69
billion, compared with $1.59 billion for the third quarter 2015.
Load growth of 7% in Intermodal (JBI), a 2.9% increase in revenue
producing trucks and improved asset productivity in Dedicated
Contract Services (DCS)™, an 88% increase in load volume in
Integrated Capacity Solutions (ICS) and a 4% increase in truck
count in our Truck (JBT) business segment, partially offset by
lower customer rates in JBI, ICS and JBT and tepid customer demand,
contributed to the increase in consolidated revenue compared to
prior year. Current quarter total operating revenue, excluding fuel
surcharges, increased 8.4% vs. the comparable quarter 2015.
Operating income for the current quarter totaled $183 million
vs. $194 million for the third quarter 2015. Operating income
decreased from third quarter 2015 primarily from lower customer
rates in JBI, ICS and JBT, increased rail purchase transportation
rates, lower box turns, increases in driver wages and recruiting
costs, losses on the sale of used equipment (versus gains in 2015),
increased legal and consulting costs and higher equipment
maintenance and ownership costs.
Interest expense in the current quarter decreased primarily from
the timing effect of the issuance of the senior notes that occurred
in the third quarter 2015. The effective income tax rate for the
current quarter is 38%, compared to 38.1% in the third quarter
2015. We expect our 2016 annual tax rate to be approximately
38%.
Segment Information:
Intermodal (JBI)
- Third Quarter 2016 Segment
Revenue: $970 million; up 2%
- Third Quarter 2016 Operating
Income: $116.9 million; down 7%
Overall volumes increased 7% over the same period in 2015. The
Eastern network realized load growth of 5% and Transcontinental
loads grew 8% over the third quarter 2015 as west coast outbound
freight growth outpaced the rest of the network and western rail
service continued a year over year improvement trend. Revenue
increased 2% reflecting the 7% volume growth and an approximate
4.2% decrease in revenue per load, which is the combination of
changes in customer rate, freight mix and fuel surcharges. Revenue
per load excluding fuel surcharges decreased approximately 2%
compared to third quarter 2015.
Operating income decreased 7% over prior year. Benefits from
improved volumes, improved operating efficiencies from network
balance and reduced reliance on third party dray carriers were
offset by lower customer rates, increases in rail purchased
transportation rates, equipment ownership costs including lower box
utilization, increased insurance and claims costs and increased
costs to attract and retain drivers. The current period ended with
approximately 82,800 units of trailing capacity and 5,280 power
units assigned to the dray fleet.
Dedicated Contract Services (DCS)
- Third Quarter 2016 Segment
Revenue: $394 million; up 6%
- Third Quarter 2016 Operating
Income: $52.5 million; up 16%
DCS revenue increased 6% during the current quarter over the
same period in 2015. Productivity (revenue per truck per week)
increased by approximately 3% vs. 2015. Productivity excluding fuel
surcharge revenue increased approximately 4% from a year ago
primarily from improved integration of assets between customer
accounts, fewer unseated trucks, increased customer supply chain
fluidity and customer rate increases. A year-over-year net addition
of 205 revenue producing trucks, 50 net additions sequentially from
second quarter 2016, were in the fleet by the end of the quarter.
Approximately 75% of these additions represent private fleet
conversions versus traditional dedicated capacity services and
primarily reflect new contract implementations in this and prior
periods. Customer retention rates remain above 98%.
Operating income increased by 16% from a year ago primarily from
the increased revenue and improved asset utilization partially
offset by higher driver wages and recruiting costs, increased
salaries and benefits costs and higher equipment ownership costs
compared to the same period in 2015.
Integrated Capacity Solutions (ICS)
- Third Quarter 2016 Segment
Revenue: $233 million; up 35%
- Third Quarter 2016 Operating
Income: $8.5 million; down 26%
ICS revenue increased 35% in the current quarter vs. the third
quarter 2015. Load volume increased 88% while revenue per load
decreased 28.5% due to lower fuel prices, freight mix changes
driven by customer demand and lower customer rates on contractual
business. Contractual volumes represented approximately 75% of
total load volume and 64% of total revenue in the current quarter
compared to 66% and 60%, respectively, in third quarter 2015.
Operating income decreased 26% over the same period 2015. Gross
profit margin decreased to 12.8% in the current quarter vs. 15.9%
in the prior year primarily from new customer rates implemented
during the quarter on contractual business and lower customer spot
rates compared to third quarter 2015. Personnel costs increased
compared to a year ago as the total branch count grew to 40
compared to 33 at the end of third quarter last year. ICS’s carrier
base increased 14% and the employee count increased 18% vs. third
quarter 2015.
Truck (JBT)
- Third Quarter 2016 Segment
Revenue: $97 million; flat
- Third Quarter 2016 Operating
Income: $5.1 million; down 55%
JBT revenue was flat from the same period in 2015. Revenue
excluding fuel surcharge increased 2%, primarily from a 4%
increased truck count and a 2% increase in utilization offset with
an approximate 4% decrease in rate per mile excluding fuel mostly
from customer driven freight mix changes. Core customer rates were
flat compared to the same period in 2015. At the end of the period,
JBT operated 2,183 tractors compared to 2,100 a year ago.
Operating income decreased by 55% compared to third quarter
2015. Favorable changes from an increased fleet count and improved
utilization were more than offset by lower customer rates per mile,
increased equipment maintenance costs, higher safety and insurance
costs and increased driver hiring costs compared to third quarter
2015.
Cash Flow and Capitalization:
At September 30, 2016, we had a total of $944 million
outstanding on various debt instruments compared to $989 million at
September 30, 2015 and $998 million at December 31, 2015.
Our net capital expenditures for the nine months ended September
30, 2016 approximated $359 million compared to $431 million for the
same period 2015. At September 30, 2016, we had cash and cash
equivalents of approximately $5.5 million.
We purchased approximately 922,000 shares of our common stock
during the quarter for $74.8 million. At September 30, 2016 we had
approximately $276 million remaining under our share repurchase
authorization. Shares outstanding at September 30, 2016
approximated 112.2 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, 2015. 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
September 30 2016 2015 %
Of % Of Amount
Revenue Amount Revenue
Operating revenues, excluding fuel surcharge revenues $ 1,538,701 $
1,419,451 Fuel surcharge revenues 151,958 167,043 Total operating
revenues 1,690,659 100.0 % 1,586,494 100.0 % Operating
expenses Rents and purchased transportation 846,238 50.1 % 770,148
48.5 % Salaries, wages and employee benefits 374,517 22.2 % 351,651
22.2 % Depreciation and amortization 91,001 5.4 % 86,201 5.4 % Fuel
and fuel taxes 74,179 4.4 % 76,755 4.8 % Operating supplies and
expenses 62,191 3.7 % 57,299 3.6 % General and administrative
expenses, net of asset dispositions 21,025 1.1 % 14,866 1.0 %
Insurance and claims 21,862 1.3 % 20,078 1.3 % Operating taxes and
licenses 11,665 0.7 % 10,683 0.7 % Communication and utilities
5,004 0.3 % 4,967 0.3 % Total operating expenses 1,507,682 89.2 %
1,392,648 87.8 % Operating income 182,977 10.8 % 193,846 12.2 % Net
interest expense 6,485 0.4 % 7,838 0.5 % Earnings before income
taxes 176,492 10.4 % 186,008 11.7 % Income taxes 67,067 3.9 %
70,869 4.4 % Net earnings $ 109,425 6.5 % $ 115,139 7.3 % Average
diluted shares outstanding 113,363 116,282 Diluted earnings per
share $ 0.97 $ 0.99
J.B. HUNT TRANSPORT SERVICES, INC. Condensed
Consolidated Statements of Earnings (in thousands, except per
share data) (unaudited)
Nine Months Ended September
30 2016 2015 % Of % Of
Amount Revenue Amount
Revenue Operating revenues, excluding fuel
surcharge revenues $ 4,448,709 $ 4,043,991 Fuel surcharge revenues
385,688 522,640 Total operating revenues 4,834,397 100.0 %
4,566,631 100.0 % Operating expenses Rents and purchased
transportation 2,381,547 49.3 % 2,194,683 48.1 % Salaries, wages
and employee benefits 1,108,997 22.9 % 1,030,438 22.6 %
Depreciation and amortization 269,717 5.6 % 251,239 5.5 % Fuel and
fuel taxes 205,082 4.2 % 243,459 5.3 % Operating supplies and
expenses 173,222 3.6 % 164,497 3.6 % General and administrative
expenses, net of asset dispositions 61,570 1.3 % 56,471 1.3 %
Insurance and claims 58,384 1.2 % 55,714 1.2 % Operating taxes and
licenses 34,156 0.7 % 31,505 0.7 % Communication and utilities
15,063 0.3 % 15,824 0.3 % Total operating expenses 4,307,738 89.1 %
4,043,830 88.6 % Operating income 526,659 10.9 % 522,801 11.4 % Net
interest expense 19,347 0.4 % 21,202 0.4 % Earnings before income
taxes 507,312 10.5 % 501,599 11.0 % Income taxes 192,778 4.0 %
191,109 4.2 % Net earnings $ 314,534 6.5 % $ 310,490 6.8 % Average
diluted shares outstanding 113,709 117,293 Diluted earnings per
share $ 2.77 $ 2.65
Financial Information By
Segment (in thousands) (unaudited)
Three Months Ended September 30
2016 2015 % Of % Of Amount
Total Amount Total
Revenue
Intermodal $ 969,654 57 % $ 948,779 60 % Dedicated 393,770
23 % 370,360 23 % Integrated Capacity Solutions 233,022 14 %
172,894 11 % Truck 97,154 6 % 97,521 6 % Subtotal
1,693,600 100 % 1,589,554 100 % Intersegment eliminations (2,941 )
(0 %) (3,060 ) (0 %) Consolidated revenue $ 1,690,659 100 %
$ 1,586,494 100 %
Operating
income
Intermodal $ 116,885 64 % $ 126,077 65 % Dedicated 52,463 28
% 45,123 23 % Integrated Capacity Solutions 8,516 5 % 11,453 6 %
Truck 5,080 3 % 11,244 6 % Other (1) 33 0 % (51 ) (0 %)
Operating income $ 182,977 100 % $ 193,846 100 %
Nine Months Ended September
30 2016 2015 % Of %
Of Amount Total Amount
Total
Revenue
Intermodal $ 2,798,284 58 % $ 2,697,537 59 % Dedicated
1,134,861 23 % 1,082,264 24 % Integrated Capacity Solutions 619,956
13 % 509,985 11 % Truck 291,468 6 % 286,218 6 %
Subtotal 4,844,569 100 % 4,576,004 100 % Intersegment eliminations
(10,172 ) (0 %) (9,373 ) (0 %) Consolidated revenue $ 4,834,397
100 % $ 4,566,631 100 %
Operating
income
Intermodal $ 325,625 62 % $ 348,955 67 % Dedicated 147,700
28 % 121,511 23 % Integrated Capacity Solutions 30,186 6 % 22,974 4
% Truck 23,112 4 % 29,448 6 % Other (1) 36 0 % (87 ) (0 %)
Operating income $ 526,659 100 % $ 522,801 100 %
(1) Includes corporate support
activity
Operating Statistics by Segment (unaudited)
Three Months Ended September 30 2016
2015
Intermodal
Loads 489,109 458,584 Average length of haul 1,662 1,660
Revenue per load $ 1,983 $ 2,069 Average tractors during the period
* 5,279 4,977 Tractors (end of period) Company-owned 4,568
4,292 Independent contractor 714 750 Total tractors
5,282 5,042 Net change in trailing equipment during the
period 1,578 1,658 Trailing equipment (end of period) 82,821 77,937
Average effective trailing equipment usage 79,107 74,669
Dedicated
Loads 607,876 578,628 Average length of haul 177 174 Revenue
per truck per week** $ 4,120 $ 3,998 Average trucks during the
period*** 7,357 7,098 Trucks (end of period) Company-owned
6,936 6,758 Independent contractor 22 9 Customer-owned (Dedicated
operated) 414 400 Total trucks 7,372 7,167
Trailing equipment (end of period) 22,391 21,141 Average effective
trailing equipment usage 22,939 22,420
Integrated
Capacity Solutions
Loads 239,399 127,016 Revenue per load $ 973 $ 1,361 Gross
profit margin 12.8 % 15.9 % Employee count (end of period) 769 650
Approximate number of third-party carriers (end of period) 50,100
44,000
Truck
Loads 97,052 91,639 Average length of haul 453 454 Loaded
miles (000) 43,865 41,376 Total miles (000) 52,317 49,213 Average
nonpaid empty miles per load 87.2 85.6 Revenue per tractor per
week** $ 3,468 $ 3,630 Average tractors during the period * 2,162
2,080 Tractors (end of period) Company-owned 1,384 1,471
Independent contractor 799 629 Total tractors 2,183
2,100 Trailers (end of period) 7,572 7,740 Average effective
trailing equipment usage 7,083 6,610 * Includes
company-owned and independent contractor tractors ** Using weighted
workdays *** Includes company-owned, independent contractor, and
customer-owned trucks
Operating Statistics by Segment (unaudited)
Nine
Months Ended September 30 2016 2015
Intermodal
Loads 1,424,733 1,305,347 Average length of haul 1,648 1,648
Revenue per load $ 1,964 $ 2,067 Average tractors during the period
* 5,206 4,903 Tractors (end of period) Company-owned 4,568
4,292 Independent contractor 714 750 Total tractors
5,282 5,042 Net change in trailing equipment during the
period 3,864 4,639 Trailing equipment (end of period) 82,821 77,937
Average effective trailing equipment usage 75,702 71,395
Dedicated
Loads 1,794,432 1,671,407 Average length of haul 175 175
Revenue per truck per week** $ 4,021 $ 4,021 Average trucks during
the period*** 7,280 6,957 Trucks (end of period)
Company-owned 6,936 6,758 Independent contractor 22 9
Customer-owned (Dedicated operated) 414 400 Total
trucks 7,372 7,167 Trailing equipment (end of period) 22,391
21,141 Average effective trailing equipment usage 22,657 22,324
Integrated
Capacity Solutions
Loads 614,334 371,060 Revenue per load $ 1,009 $ 1,374 Gross
profit margin 14.9 % 15.0 % Employee count (end of period) 769 650
Approximate number of third-party carriers (end of period) 50,100
44,000
Truck
Loads 288,392 271,107 Average length of haul 460 446 Loaded
miles (000) 132,562 120,366 Total miles (000) 157,526 142,419
Average nonpaid empty miles per load 86.6 81.3 Revenue per tractor
per week** $ 3,432 $ 3,711 Average tractors during the period*
2,202 2,015 Tractors (end of period) Company-owned 1,384
1,471 Independent contractor 799 629 Total tractors
2,183 2,100 Trailers (end of period) 7,572 7,740 Average
effective trailing equipment usage 6,846 6,342 *
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)
September 30, 2016
December 31, 2015
ASSETS Current assets: Cash and cash equivalents $ 5,481 $
5,566 Accounts Receivable 775,020 654,542 Prepaid expenses and
other 61,900 197,817
Total current assets 842,401
857,925 Property and equipment 4,209,080 4,019,451 Less
accumulated depreciation 1,400,339
1,318,122 Net property and equipment
2,808,741 2,701,329 Other assets
78,852 70,290 $
3,729,994 $ 3,629,544
LIABILITIES & STOCKHOLDERS' EQUITY Current liabilities:
Trade accounts payable $ 402,913 $ 340,332 Claims accruals 104,243
104,220 Accrued payroll 72,920 59,420 Other accrued expenses
20,769 28,445 Total current
liabilities 600,845
532,417 Long-term debt 943,696 998,003 Other long-term
liabilities 69,302 58,552 Deferred income taxes 731,068 740,220
Stockholders' equity 1,385,083
1,300,352 $ 3,729,994 $
3,629,544
Supplemental Data (unaudited)
September 30, 2016 December
31, 2015 Actual shares outstanding at end of period
(000) 112,185 113,948
Book value per actual share outstanding at end of period
$ 12.35 $ 11.41
Nine
Months Ended September 30 2016 2015 Net
cash provided by operating activities (000) $ 683,963
$ 696,960 Net capital expenditures (000)
$ 358,754 $ 430,660
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version on businesswire.com: http://www.businesswire.com/news/home/20161017005228/en/
J.B. Hunt Transport Services, Inc.David G. Mee,
479-820-8363Executive Vice President, Finance/Administrationand
Chief Financial Officer
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