Exhibit 99.1
J.B. Hunt Transport Services, Inc. | Contact: | Kirk Thompson |
615 J.B. Hunt Corporate Drive | President and |
Lowell, Arkansas 72745 | Chief Executive Officer |
(NASDAQ: JBHT) | (479) 820-8110 |
FOR IMMEDIATE RELEASE
J. B. HUNT TRANSPORT SERVICES, INC. REPORTS REVENUES AND EARNINGS
FOR THE FOURTH QUARTER AND YEAR ENDED DECEMBER 31, 2006
· Fourth Quarter 2006 Revenue: | | $852 million; down 1% |
· Fourth Quarter 2006 Operating Income: | | $95 million; down 11%* |
· Fourth Quarter 2006 EPS: | | 39 cents vs. 41 cents* |
| | |
· Full Year 2006 Revenue: | | $3.33 billion; up 6% |
· Full Year 2006 Operating Income: | | $373 million; up 8%* |
· Full Year 2006 EPS: | | $1.44 vs. $1.28* |
*4Q 2006 includes a $12.4 million charge for insurance costs
LOWELL, ARKANSAS, January 29, 2007 - J. B. Hunt Transport Services, Inc., (NASDAQ:JBHT) announced fourth quarter 2006 net earnings of $57.8 million, or diluted earnings per share of 39 cents vs. 2005 fourth quarter earnings of $65.3 million, or 41 cents per diluted share. Financial results for the current quarter include a $12.4 million pretax charge, or $.05 per diluted share, to increase casualty and workers’ compensation claims reserves. This $12.4 million pretax charge increased casualty and workers’ compensation claims reserves to reflect the full administrative and termination costs of insurance contracts as the claims are incurred, rather than in the year the contracts terminate.
Total operating revenue for the current quarter was $852 million, a slight decrease from the $858 million for the fourth quarter of 2005. This decrease in operating revenue was primarily attributable to a reduction in fuel surcharges related to the decline in fuel prices relative to the same period a year ago and moderating demand in our Truck segment. Current quarter operating revenue, excluding fuel surcharges, increased 1% over the same period of 2005. This increase in total operating revenue, excluding fuel surcharges, was partly the result of growth in the combined tractor fleet from 11,877 in the fourth quarter of 2005 to 12,127 in the fourth quarter of 2006. Containers and trailers grew from 49,733 to 52,881 over the same period. The growth in the fleet was to support additional intermodal and dedicated business.
Operating income for the current quarter declined to $95.4 million vs. $106.6 million for the fourth quarter of 2005. The $12.4 million charge included $4.7 million of workers’ compensation expense which is classified in salaries, wages and employee benefits costs, and $7.7 million of casualty expense which is classified in insurance and claims costs. These charges were recognized in each business segment.
“Once again the power and complimentary balance of our economic model was recognized in the fourth quarter. Outstanding results in both Intermodal and Dedicated Contract Services offset lower operating income from our Truck segment which was facing particularly tough comparisons from the extremely profitable fourth quarter of 2005. 72% of our revenue and 84% of our operating income in the current
quarter was derived from non-traditional truckload services. Demand for our Intermodal service was at record levels during the quarter and DCS continued to produce good growth and strong results while Truck performance was muted due to softening demand,” said Kirk Thompson, JBHT President and CEO.
Segment Information:
Intermodal (JBI) | | |
· Fourth Quarter 2006 Segment Revenue: | | $387 million; up 8% |
· Fourth Quarter 2006 Operating Income: | | $56.0 million; up 50% |
The 8% revenue growth in JBI was partially the result of continued steady increases in load volume totaling in excess of 6%. Reflecting our growth in traffic lanes of shorter distances, the average length of haul was down 2%. Fuel surcharge revenue declined relative to fourth quarter 2005, while freight rates improved by 4.5%. Intermodal generated a record $56.0 million of operating income, up 50%, when compared to the results of $37.4 million in the fourth quarter of 2005. JBI operating income for the current quarter reflects $0.4 million of workers’ compensation expense and $0.6 million of casualty costs, associated with the $12.4 million pretax charge. Our strategy for the busy season of 2006 and beyond is to reduce the usage of outsourced rented and leased equipment. By using less high cost, short term outsourced resources we have been able to positively impact our profitability despite higher rail costs paid to our rail partners. Railroad service was substantially improved compared to the same quarter a year ago.
Dedicated Contract Services (DCS) | | |
· Fourth Quarter 2006 Segment Revenue: | | $233 million; up 5% |
· Fourth Quarter 2006 Operating Income: | | $24.6 million; down 14% |
DCS continued to add contract business in the current quarter for existing and new customers, resulting in the addition of 91 units sequentially during the current quarter and increasing the total tractor fleet count by 348, compared to the fourth quarter of 2005. Revenue per truck per week was essentially flat compared to the same period last year as an increase in revenue per loaded mile of 4.8% offset a decline in total utilization and an increase in empty miles. Fuel surcharge revenue declined compared to the fourth quarter of 2005 due to the moderating cost of fuel. Operating income for the current quarter totaled $24.6 million, compared with $28.7 million in 2005. DCS operating income for the current quarter reflects $2.4 million of workers’ compensation expense and $3.4 million of casualty costs associated with the $12.4 million pretax charge.
Truck (JBT) | | |
· Fourth Quarter 2006 Segment Revenue: | | $239 million; down 16% |
· Fourth Quarter 2006 Operating Income: | | $14.9 million; down 63% |
Truck revenue declined 16% on a 4% decrease in loads hauled compared to the same quarter a year ago. At the end of the fourth quarter the fleet size was down 315 trucks, or 6%, compared to the end of the fourth quarter of 2005. Fuel surcharge revenue declined due to lower fuel costs. Demand was much softer than the fourth quarter of 2005 and year-over-year comparisons were even more difficult due to the absence of hurricane relief shipments that were prevalent last year. Rates from consistent shippers continued to increase, growing by 4.6 cents per mile or approximately 2.7%, while rates from unplanned activity (spot pricing, back-up pricing and paid deadhead) fell 33%, vs. the same quarter in 2005. JBT operating income for the current quarter totaled $14.9 million, compared with $40.2 million in 2005. JBT operating income for the current quarter reflects $1.9 million of workers’ compensation expense and $3.7 million of casualty costs associated with the $12.4 million pretax charge.
Cash Flow and Capitalization:
No shares of treasury stock were purchased during the fourth quarter of 2006. Approximately $103 million remained authorized by our Board of Directors and available at December 31, 2006, for purchases of treasury stock. As of December 31, 2006, approximately $396 million was owed on our various credit facilities.
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, 2005. 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 related information will be available immediately to interested parties at 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 | |
| | 2006 | | 2005 | |
| | Amount | | % Of
Revenue | | Amount | | % Of
Revenue | |
| | | | | | | | | |
Operating revenues, excluding fuel surcharge revenues | | $ | 749,602 | | | | $ | 742,234 | | | |
Fuel surcharge revenues | | 101,967 | | | | 116,142 | | | |
Total operating revenues | | 851,569 | | 100.0 | % | 858,376 | | 100.0 | % |
| | | | | | | | | |
Operating expenses | | | | | | | | | |
Rents and purchased transportation | | 287,510 | | 33.7 | % | 300,080 | | 35.0 | % |
Salaries, wages and employee benefits | | 223,771 | | 26.3 | % | 222,248 | | 25.9 | % |
Fuel and fuel taxes | | 107,863 | | 12.7 | % | 112,350 | | 13.1 | % |
Depreciation and amortization | | 49,742 | | 5.8 | % | 42,586 | | 5.0 | % |
Operating supplies and expenses | | 37,195 | | 4.4 | % | 34,497 | | 4.0 | % |
Insurance and claims | | 29,457 | | 3.5 | % | 16,319 | | 1.9 | % |
Operating taxes and licenses | | 8,526 | | 1.0 | % | 8,433 | | 1.0 | % |
General and administrative expenses, net of gains | | 6,875 | | 0.8 | % | 9,470 | | 1.1 | % |
Communication and utilities | | 5,262 | | 0.6 | % | 5,768 | | 0.7 | % |
Total operating expenses | | 756,201 | | 88.8 | % | 751,751 | | 87.6 | % |
Operating income | | 95,368 | | 11.2 | % | 106,625 | | 12.4 | % |
Net interest expense | | 6,434 | | 0.7 | % | 1,565 | | 0.2 | % |
Equity in loss of associated companies | | 437 | | 0.1 | % | 1,718 | | 0.2 | % |
Earnings before income taxes | | 88,497 | | 10.4 | % | 103,342 | | 12.0 | % |
Income taxes | | 30,693 | | 3.6 | % | 38,004 | | 4.4 | % |
Net earnings | | $ | 57,804 | | 6.8 | % | $ | 65,338 | | 7.6 | % |
Average diluted shares outstanding | | 147,865 | | | | 159,246 | | | |
Diluted earnings per share | | $ | 0.39 | | | | $ | 0.41 | | | |
J.B. HUNT TRANSPORT SERVICES, INC.
Condensed Consolidated Statements of Earnings
(in thousands, except per share data)
(unaudited)
| | Twelve Months Ended December 31 | |
| | 2006 | | 2005 | |
| | Amount | | % Of
Revenue | | Amount | | % Of
Revenue | |
| | | | | | | | | |
Operating revenues, excluding fuel surcharge revenues | | $ | 2,897,816 | | | | $ | 2,791,926 | | | |
Fuel surcharge revenues | | 430,171 | | | | 335,973 | | | |
Total operating revenues | | 3,327,987 | | 100.0 | % | 3,127,899 | | 100.0 | % |
| | | | | | | | | |
Operating expenses | | | | | | | | | |
Rents and purchased transportation | | 1,124,734 | | 33.8 | % | 1,058,406 | | 33.8 | % |
Salaries, wages and employee benefits | | 892,066 | | 26.8 | % | 855,272 | | 27.3 | % |
Fuel and fuel taxes | | 447,309 | | 13.4 | % | 388,962 | | 12.4 | % |
Depreciation and amortization | | 183,604 | | 5.5 | % | 163,034 | | 5.2 | % |
Operating supplies and expenses | | 145,794 | | 4.4 | % | 132,895 | | 4.2 | % |
Insurance and claims | | 71,582 | | 2.2 | % | 55,266 | | 1.8 | % |
Operating taxes and licenses | | 34,447 | | 1.0 | % | 35,827 | | 1.1 | % |
General and administrative expenses, net of gains | | 33,232 | | 1.0 | % | 45,939 | | 1.5 | % |
Communication and utilities | | 22,566 | | 0.7 | % | 22,597 | | 0.7 | % |
Arbitration Settlement | | — | | 0.0 | % | 25,801 | | 0.8 | % |
Total operating expenses | | 2,955,334 | | 88.8 | % | 2,783,999 | | 89.0 | % |
Operating income | | 372,653 | | 11.2 | % | 343,900 | | 11.0 | % |
Net interest expense | | 15,159 | | 0.5 | % | 5,565 | | 0.2 | % |
Equity in loss of associated companies | | 3,181 | | 0.1 | % | 4,709 | | 0.2 | % |
Earnings before income taxes | | 354,313 | | 10.6 | % | 333,626 | | 10.7 | % |
Income taxes | | 134,361 | | 4.0 | % | 126,315 | | 4.0 | % |
Net earnings | | $ | 219,952 | | 6.6 | % | $ | 207,311 | | 6.6 | % |
Average diluted shares outstanding | | 152,317 | | | | 162,559 | | | |
Diluted earnings per share | | $ | 1.44 | | | | $ | 1.28 | | | |
Financial Information By Segment
(unaudited)
| | Three Months Ended December 31 | |
| | 2006 | | 2005 | |
| | Dollar
Amounts
(000) | | % Of
Total | | Dollar
Amounts
(000) | | % Of
Total | |
Revenue | | | | | | | | | |
| | | | | | | | | |
Intermodal | | $ | 386,764 | | 45 | % | $ | 359,423 | | 42 | % |
Dedicated | | 233,468 | | 27 | % | 222,052 | | 26 | % |
Truck | | 239,188 | | 28 | % | 283,608 | | 33 | % |
Subtotal | | 859,420 | | 101 | % | 865,083 | | 101 | % |
Intersegment eliminations | | (7,851 | ) | (1 | )% | (6,707 | ) | (1 | )% |
Consolidated revenue | | $ | 851,569 | | 100 | % | $ | 858,376 | | 100 | % |
| | | | | | | | | |
Operating income | | | | | | | | | |
| | | | | | | | | |
Intermodal | | $ | 56,017 | | 59 | % | $ | 37,367 | | 35 | % |
Dedicated | | 24,603 | | 26 | % | 28,686 | | 27 | % |
Truck | | 14,880 | | 16 | % | 40,175 | | 38 | % |
Other (1) | | (132 | ) | (0 | )% | 397 | | 0 | % |
Operating income | | $ | 95,368 | | 100 | % | $ | 106,625 | | 100 | % |
| | Twelve Months Ended December 31 | |
| | 2006 | | 2005 | |
| | Dollar
Amounts
(000) | | % Of
Total | | Dollar
Amounts
(000) | | % Of
Total | |
Revenue | | | | | | | | | |
| | | | | | | | | |
Intermodal | | $ | 1,430,065 | | 43 | % | $ | 1,284,255 | | 41 | % |
Dedicated | | 915,225 | | 28 | % | 844,091 | | 27 | % |
Truck | | 1,007,556 | | 30 | % | 1,019,971 | | 33 | % |
Subtotal | | 3,352,846 | | 101 | % | 3,148,317 | | 101 | % |
Intersegment eliminations | | (24,859 | ) | (1 | )% | (20,418 | ) | (1 | )% |
Consolidated revenue | | $ | 3,327,987 | | 100 | % | $ | 3,127,899 | | 100 | % |
| | | | | | | | | |
Operating income | | | | | | | | | |
| | | | | | | | | |
Intermodal | | $ | 181,668 | | 49 | % | $ | 123,729 | | 36 | % |
Dedicated | | 104,180 | | 28 | % | 100,182 | | 29 | % |
Truck | | 86,863 | | 23 | % | 118,747 | | 35 | % |
Other (1) | | (58 | ) | (0 | )% | 1,242 | | 0 | % |
Operating income | | $ | 372,653 | | 100 | % | $ | 343,900 | | 100 | % |
(1) Includes corporate support activity
Operating Statistics by Segment
(unaudited)
| | Three Months Ended December 31 | |
| | 2006 | | 2005 | |
| | | | | |
Intermodal (JBI) | | | | | |
| | | | | |
Loads | | 167,763 | | 157,822 | |
Length of haul | | 1,981 | | 2,019 | |
Revenue per load | | $ | 2,305 | | $ | 2,277 | |
Average tractors during the period * | | 1,567 | | 1,333 | |
Tractors (end of period) | | | | | |
Company-owned | | 1,551 | | 1,341 | |
Independent contractor | | 23 | | 16 | |
Total Tractors | | 1,574 | | 1,357 | |
Containers (end of period) | | 27,622 | | 23,755 | |
Average effective trailing equipment usage | | 26,930 | | 23,523 | |
| | | | | |
Dedicated (DCS) | | | | | |
| | | | | |
Loads | | 349,545 | | 332,394 | |
Length of haul | | 261 | | 269 | |
Revenue per truck per week** | | $ | 3,483 | | $ | 3,498 | |
Average trucks during the period*** | | 5,351 | | 5,029 | |
Trucks (end of period) | | | | | |
Company-owned | | 5,177 | | 4,771 | |
Independent contractor | | 122 | | 152 | |
Customer-owned (DCS Operated) | | 59 | | 87 | |
Total Trucks | | 5,358 | | 5,010 | |
Trailers (end of period) | | 6,519 | | 6,352 | |
Average effective trailing equipment usage | | 12,369 | | 12,074 | |
| | | | | |
Truck (JBT) | | | | | |
| | | | | |
Loads | | 213,693 | | 221,526 | |
Length of haul | | 529 | | 580 | |
Loaded miles (000) | | 110,902 | | 126,400 | |
Total miles (000) | | 126,845 | | 143,618 | |
Average non-paid empty miles per load | | 76.8 | | 61.8 | |
Revenue per tractor per week** | | $ | 3,667 | | $ | 4,019 | |
Average tractors during the period * | | 5,242 | | 5,474 | |
Tractors (end of period) | | | | | |
Company-owned | | 4,233 | | 4,368 | |
Independent contractor | | 962 | | 1,142 | |
Total Tractors | | 5,195 | | 5,510 | |
Trailers (end of period) | | 18,740 | | 19,626 | |
Average effective trailing equipment usage | | 13,164 | | 14,070 | |
* Includes company-owned and independent contractor tractors
** Using weighted workdays
*** Includes company-owned, independent contractor, and customer-owned trucks
| | Twelve Months Ended December 31 | |
| | 2006 | | 2005 | |
| | | | | |
Intermodal (JBI) | | | | | |
| | | | | |
Loads | | 629,533 | | 598,857 | |
Length of haul | | 1,989 | | 2,010 | |
Revenue per load | | $ | 2,272 | | $ | 2,145 | |
Average tractors during the period * | | 1,485 | | 1,259 | |
Tractors (end of period) | | | | | |
Company-owned | | 1,551 | | 1,341 | |
Independent contractor | | 23 | | 16 | |
Total Tractors | | 1,574 | | 1,357 | |
Containers (end of period) | | 27,622 | | 23,755 | |
Average effective trailing equipment usage | | 25,152 | | 22,881 | |
| | | | | |
Dedicated (DCS) | | | | | |
| | | | | |
Loads | | 1,376,538 | | 1,346,480 | |
Length of haul | | 264 | | 265 | |
Revenue per truck per week** | | $ | 3,466 | | $ | 3,290 | |
Average trucks during the period*** | | 5,176 | | 5,012 | |
Trucks (end of period) | | | | | |
Company-owned | | 5,177 | | 4,771 | |
Independent contractor | | 122 | | 152 | |
Customer-owned (DCS Operated) | | 59 | | 87 | |
Total Trucks | | 5,358 | | 5,010 | |
Trailers (end of period) | | 6,519 | | 6,352 | |
Average effective trailing equipment usage | | 12,457 | | 11,909 | |
| | | | | |
Truck (JBT) | | | | | |
| | | | | |
Loads | | 890,654 | | 900,427 | |
Length of haul | | 533 | | 558 | |
Loaded miles (000) | | 465,366 | | 497,175 | |
Total miles (000) | | 524,565 | | 557,644 | |
Average non-paid empty miles per load | | 66.6 | | 62.0 | |
Revenue per tractor per week** | | $ | 3,704 | | $ | 3,671 | |
Average tractors during the period* | | 5,347 | | 5,430 | |
Tractors (end of period) | | | | | |
Company-owned | | 4,233 | | 4,368 | |
Independent contractor | | 962 | | 1,142 | |
Total Tractors | | 5,195 | | 5,510 | |
Trailers (end of period) | | 18,740 | | 19,626 | |
Average effective trailing equipment usage | | 13,504 | | 14,309 | |
* 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, 2006 | | December 31, 2005 | |
| | | | | |
ASSETS | | | | | |
Current assets: | | | | | |
Cash and cash equivalents | | $ | 7,371 | | $ | 7,412 | |
Accounts receivable | | 346,251 | | 343,501 | |
Income tax receivable | | 11,824 | | 0 | |
Prepaid expenses and other | | 105,797 | | 123,777 | |
Total current assets | | 471,243 | | 474,690 | |
Property and equipment | | 1,884,318 | | 1,591,561 | |
Less accumulated depreciation | | 600,767 | | 537,502 | |
Net property and equipment | | 1,283,551 | | 1,054,059 | |
Other assets | | 15,263 | | 20,125 | |
| | $ | 1,770,057 | | $ | 1,548,874 | |
| | | | | |
LIABILITIES & STOCKHOLDERS’ EQUITY | | | | | |
Current liabilities: | | | | | |
Current debt | | $ | 214,000 | | $ | — | |
Trade accounts payable | | 170,672 | | 162,749 | |
Claims accruals | | 20,042 | | 15,651 | |
Accrued Payroll | | 42,352 | | 61,001 | |
Other accrued expenses | | 7,961 | | 9,198 | |
Deferred income taxes | | 23,703 | | 27,487 | |
Total current liabilities | | 478,730 | | 276,086 | |
| | | | | |
Long-term debt | | 182,400 | | 124,000 | |
Other long-term liabilities | | 62,307 | | 45,834 | |
Deferred income taxes | | 294,534 | | 285,929 | |
Stockholders’ equity | | 752,086 | | 817,025 | |
| | $ | 1,770,057 | | $ | 1,548,874 | |
Supplemental Data
(unaudited)
| | December 31, 2006 | | December 31, 2005 | |
| | | | | |
Actual shares outstanding at end of period (000) | | 144,555 | | 153,813 | |
| | | | | |
Book value per actual share outstanding at end of period | | $ | 5.20 | | $ | 5.31 | |
| | | | | | | |
