JBHT J. B. Hunt Transport Services, Inc. (NASDAQ: ):
-- First Quarter 2006 EPS - 31 cents
-- First Quarter Operating Ratio, including fuel surcharges -
89.6%
-- First Quarter Operating Ratio, excluding impact of fuel
surcharges - 88.2%
J. B. Hunt Transport Services, Inc. (NASDAQ: JBHT) announced
record first quarter net earnings of $49 million for 2006, or diluted
earnings per share of 31 cents vs. 2005 first quarter earnings of $47
million, or 29 cents per diluted share.
Total operating revenue, including fuel surcharges, for the
current quarter was $780 million, compared with $709 million during
the first quarter of 2005, or $690 million for the first quarter of
2006 vs. $652 million for the same quarter a year ago, excluding fuel
surcharges. We believe that meaningful analysis of our financial
performance and revenue growth requires that fuel surcharge revenue,
which can fluctuate significantly between reporting periods, be
excluded when making revenue comparisons. During the first quarter of
2006, Intermodal segment revenue, excluding fuel surcharges, increased
8%, while the Dedicated segment (DCS) revenue, excluding fuel
surcharges, rose 5% over the comparable period of 2005. Truck segment
revenue, excluding fuel surcharge revenue, increased 4% during the
current quarter.
Operating income rose 3% from $79 million in 2005 to $81 million
in 2006 on a 6% rise in revenues net of fuel surcharges. The overall
operating ratio for the Company was 89.6% compared to 88.8% in 2005.
Segment operating ratios were as follows (calculated including
fuel surcharges):
-0-
*T
First Quarter 2006 First Quarter 2005
Intermodal 88.9% 88.0%
DCS 89.2% 89.7%
Truck 91.1% 89.5%
*T
Continued safe operations, higher freight rates, and lower legal
fees contributed to the net earnings improvement. Negative factors
impacting the quarter included higher purchased transportation expense
paid to our rail partners, an approximate $900,000 unexpected
write-off for the recent bankruptcy of a customer, a slightly higher
effective income tax rate and the effect of recognized stock
compensation expense as required by generally accepted accounting
principles.
Total stock compensation expense for the current quarter was $1.9
million, which includes the cost of restricted shares and the
amortization of expense related to stock options as required by
Financial Accounting Standards Board (FASB) number 123R.
"For the third consecutive year, we were able to achieve a
respectable margin in the typically difficult first quarter, a feat
which had been an elusive target for us prior to 2004. After two years
of less impact from seasonality in the first quarters of 2004 and
2005, the first quarter of 2006 returned to what we would consider a
more 'normal' pattern. Fundamentally, we see little change in the
major variables of our business: namely, a stable economy, continued
growth in the demand for intermodal and dedicated value-added
services, a serious driver shortage and a limited number of
over-the-road trucks. Intense focus on SAFETY and service to our
customers remains at the top of our objectives and we were pleased
with results in both categories during the first three months of 2006.
In the first quarter of 2006, our accident rate per million miles
declined 12%, our Department of Transportation reportable accidents
per million miles improved 20% and our injuries per 100 drivers was
down 19%. This is tremendous improvement on an already good record.
Barring a downturn in the economy, something current forecasts are not
suggesting, we would expect the remainder of 2006 to mirror the recent
past and to continue to reflect demand outpacing supply. The first
quarter, while a little shy on the Truck side, met our internal
overall profitability expectations created in the fall of 2005 and we
remain confident in our ability to grow our earnings for the balance
of 2006," stated Kirk Thompson, President and Chief Executive Officer.
Segment Information:
Intermodal
The operating ratio for the Intermodal segment was 88.9% for the
first quarter compared to 88.0% for the same quarter a year ago.
Importantly, the 88.9% operating ratio represents a 70 basis point
sequential improvement over the fourth quarter of 2005. Intermodal
revenue, excluding fuel surcharges, was up 8% over the comparable
quarter of 2005. Rate per loaded mile, excluding fuel surcharges, was
up 3.3% and load volumes increased 5% over the first quarter of 2005.
A number of volume records were recorded during the month of March,
including the single busiest month in our 16 year history.
As a result of joint service initiatives with our rail partners,
we began to see improvements in intermodal service and reductions in
overall transit time during the first quarter. These improvements are
both the result of schedule changes made by our rail partners to
relieve congestion, as well as changes we have made in our dray fleet
to accommodate longer drays and to facilitate rail interchanges. We
have a strong focus on cost reduction opportunities in our dray
operations, as well as other cost areas to offset rising driver wages
and rail costs. This segment also continues to see positive results
from our focus on revenue quality, lane and customer mix, and network
balance.
Dedicated Contract Services (DCS)
The operating ratio for the DCS segment was 89.2% vs. 89.7% for
the first quarter of 2005. Revenue, excluding fuel surcharges in the
current quarter, was up 5% compared to the same quarter of 2005.
Revenue growth continues to be driven by improvements in productivity.
Miles per tractor per weighted work day, increased 3.3% and revenue
per loaded mile, excluding fuel surcharges, was up 3.8%. Average
tractors assigned to the segment declined slightly from 5,032 in the
first quarter of 2005 to 5,008 in the first quarter of 2006.
Operating income was $22.8 million, an improvement of 13.5% over
the first quarter of 2005. Continued focus on controlling costs
allowed us to drive productivity improvements to the operating income
line and expand our operating margins year-over-year by 50 basis
points. Measured as a percentage of revenue, excluding fuel
surcharges, driver pay and independent contractor settlements,
declined 40 basis points. Maintenance costs increased only 20 basis
points even as the average age of our Company tractors increased 27%
to 2.96 years. Safety also had a positive impact on operating income
as combined casualty and workers compensation costs improved over the
same quarter last year. Negatively impacting the first quarter 2006
operating results was an increase in bad debt expense which was
primarily the result of one customer who filed for bankruptcy
protection.
Truck
The Truck operating ratio was 91.1% for the first quarter vs.
89.5% for the comparable period a year ago. Revenue, excluding fuel
surcharges in the current quarter, was up 4% compared to the same
quarter of 2005. While freight demand for the first quarter is
typically the lowest of the year, the seasonally slower first quarter
this year was compounded by a correction of inventory levels by some
retail customers. Our major customers in the sector indicate that this
was a one-time adjustment and expect a return to normal freight flows
with a focus on velocity in the retail supply chain for the balance of
2006.
Rate yields continued to improve as the loaded rate per mile
during the current quarter, excluding fuel surcharges, increased 4.6
cents or 2.7% relative to a year ago. Length of haul increased 1.5%
making revenue per load higher by 4%. Rate per loaded mile is a
combination of consistent business, freight mix changes, and spot
pricing opportunities that are obviously more plentiful in times of
higher freight activity. A key measure of our success in improving
rate yields compares rates on customers and lanes moved in both the
current period and the corresponding period one year ago. Within this
segment of "consistent" freight, rates improved at a respectable 3.8%,
or 6.1 cents per mile, even as other more volatile components like
paid deadhead and spot quote revenues declined.
Our commitment and intense focus on Safety has yielded another
relatively low cost quarter as we strive to maintain our industry
leading position in safe operations. Driver and independent contractor
availability continues to be seriously limited for the segment, as
well as the industry and we see no signs of fundamental improvement
for the foreseeable future. The average number of trucks in the
segment was 5,515 for the first quarter of 2006 vs. 5,409 a year ago.
The slight capacity increase is temporary, due to the timing of
tractor trade-ins, and we anticipate the fleet size will be reduced
below prior year levels in the second quarter.
Cash Flow and Capitalization:
During the first quarter of 2006, we did not repurchase any shares
of our stock. As a result, we have approximately $360 million
remaining on our current Board authorization. On February 20, 2006 we
raised our regular quarterly cash dividend to $.08 per outstanding
share. We believe paying a dividend similar to the average yield of
the companies comprising the Standard & Poors 500 and repurchasing our
stock, as circumstances dictate, are the current best uses of cash. At
the beginning of the quarter we owed $124 million on our bank revolver
which represents our only long-term debt on the balance sheet. As of
March 31, 2006, we owed $47 million on that revolver.
This press release contains 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 7 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.
-0-
*T
J.B. HUNT TRANSPORT SERVICES, INC.
Condensed Consolidated Statements of Earnings
(in thousands, except per share data)
(unaudited)
Three Months Ended March 31
---------------------------------
2006 2005
---------------- ----------------
% Of % Of
Amount Revenue Amount Revenue
---------------- ----------------
Operating revenues, excluding fuel
surcharge revenues 690,035 651,999
Fuel surcharge revenues 89,865 57,179
-------- --------
Total operating revenues $779,900 100.0%$709,178 100.0%
Operating expenses
Salaries, wages and employee
benefits 214,528 27.5% 200,883 28.3%
Rents and purchased
transportation 265,587 34.0% 239,076 33.7%
Fuel and fuel taxes 104,582 13.4% 82,871 11.7%
Depreciation and amortization 43,530 5.6% 39,232 5.5%
Operating supplies and expenses 34,909 4.5% 31,654 4.5%
Insurance and claims 12,462 1.6% 11,755 1.7%
Operating taxes and licenses 8,415 1.1% 8,885 1.2%
General and administrative
expenses, net of gains 8,622 1.1% 9,789 1.4%
Communication and utilities 5,877 0.8% 5,866 0.8%
-------- ------- -------- -------
Total operating expenses 698,512 89.6% 630,011 88.8%
-------- ------- -------- -------
Operating income 81,388 10.4% 79,167 11.2%
Interest income 199 0.0% 151 0.0%
Interest expense 705 0.1% 1,233 0.2%
Equity in loss of associated
companies 587 0.0% 851 0.1%
-------- ------- -------- -------
Earnings before income taxes 80,295 10.3% 77,234 10.9%
Income taxes 31,315 4.0% 29,735 4.2%
-------- ------- -------- -------
Net earnings $ 48,980 6.3%$ 47,499 6.7%
======== ======= ======== =======
Average basic shares outstanding 154,050 160,704
======== ========
Basic earnings per share $ 0.32 $ 0.30
======== ========
Average diluted shares outstanding 158,245 166,409
======== ========
Diluted earnings per share $ 0.31 $ 0.29
======== ========
----------------------------------------------------------------------
Financial Information By Segment
----------------------------------------------------------------------
(dollars in thousands)
(unaudited)
Three Months Ended
March 31
-------------------
2006 2005
-------- --------
Gross revenue
-------------
Truck $250,771 $231,874
Intermodal 323,924 287,528
Dedicated 210,877 194,678
-------- --------
Subtotal 785,572 714,080
Intersegment eliminations (5,672) (4,902)
-------- --------
Consolidated revenue $779,900 $709,178
======== ========
Operating income
----------------
Truck $ 22,285 $ 24,357
Intermodal 35,926 34,528
Dedicated 22,834 20,124
Other (1) 343 158
-------- --------
Operating income $ 81,388 $ 79,167
======== ========
(1) Includes corporate support activity
----------------------------------------------------------------------
Operating Statistics by Segment
----------------------------------------------------------------------
(unaudited)
Three Months Ended
March 31
-------------------
2006 2005
-------- --------
Truck
-----
Operating ratio 91.1% 89.5%
Loads 221,859 219,708
Net revenue (excl. fuel surcharge) per
tractor per week(1) $ 2,959 $ 2,945
Length of haul 557 549
RPLM (excl.fsc) $ 1.731 $ 1.685
Loaded miles (000) 121,413 120,354
Total miles (000) 135,540 133,853
Empty miles % 10.4% 10.1%
Average tractors during the period 5,515 5,409
Tractors (end of period)
Company owned 4,361 4,391
Independent contractor 1,103 1,005
-------- --------
Total tractors 5,464 5,396
Trailers (end of period) 19,516 20,110
Average effective trailing equipment usage 13,744 14,639
Intermodal
----------
Operating ratio 88.9% 88.0%
Loads 148,629 141,873
Net change in revenue per loaded mile
(excl. fsc) ` 3.3% 7.1%
Revenue per load (excl. fsc) 1,907 1,857
Tractors (end of period)
Company owned 1,396 1,204
Independent contractor 14 -
-------- --------
Total tractors 1,410 1,204
Containers (end of period) 24,351 22,468
Average effective trailing equipment usage 23,961 22,222
Dedicated
---------
Operating ratio 89.2% 89.7%
Loads 320,741 318,714
Net revenue (excl. fuel surcharge) per
tractor per week (1) $ 2,974 $ 2,806
Average tractors during the period (2) 5,008 5,032
Tractors (end of period)
Company owned 4,811 4,695
Independent contractor 133 193
Customer owned (DCS Operated) 107 129
-------- --------
Total tractors 5,051 5,017
Trailers (end of period) 6,348 6,195
Average effective trailing equipment usage 12,365 11,752
(1) Using weighted work days
(2) Includes company owned, independent contractor and
customer owned tractors
J.B. HUNT TRANSPORT SERVICES, INC.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
----------------------------------------------------------------------
March 31, 2006 December 31, 2005
----------------------------------------------------------------------
ASSETS
Current assets:
Cash and equivalents $ 8,821 $ 7,412
Accounts receivable 307,313 343,501
Prepaid expenses and other 108,639 123,777
----------------------------------------------------------------------
Total current assets 424,773 474,690
----------------------------------------------------------------------
Property and equipment 1,631,545 1,591,561
Less accumulated depreciation 552,839 537,502
----------------------------------------------------------------------
Net property and equipment 1,078,706 1,054,059
----------------------------------------------------------------------
Other assets 19,422 20,125
----------------------------------------------------------------------
$ 1,522,901 $ 1,548,874
======================================================================
LIABILITIES & STOCKHOLDER'S EQUITY
Current liabilities:
Trade accounts payable $ 167,934 $ 162,749
Claims accruals 12,773 15,651
Accrued payroll 45,576 61,001
Other accrued expenses 11,286 9,198
Deferred income taxes 30,339 27,487
----------------------------------------------------------------------
Total current liabilities 267,908 276,086
----------------------------------------------------------------------
Long-term debt 47,400 124,000
Other long-term liabilities 51,934 45,834
Deferred income taxes 295,188 285,929
Stockholders' equity 860,471 817,025
----------------------------------------------------------------------
$ 1,522,901 $ 1,548,874
======================================================================
Supplemental Data
(unaudited)
----------------------------------------------------------------------
March 31, 2006 December 31, 2005
----------------------------------------------------------------------
Actual shares outstanding at end of
period (000) 154,408 153,813
======================================================================
Book value per actual share
outstanding at end of period $ 5.57 $ 5.31
======================================================================
*T
KEYWORD: NORTH AMERICA ARKANSAS UNITED STATES
INDUSTRY KEYWORD: GOVERNMENT ELECTIONS/CAMPAIGNS TRANSPORT AIR TRUCKING MANUFACTURING AEROSPACE AUTOMOTIVE MANUFACTURING CHEMICALS/PLASTICS ENGINEERING STEEL TEXTILES NATURAL RESOURCES AGRICULTURE FOREST PRODUCTS MINING/MINERALS RETAIL COMMUNICATIONS ADVERTISING FASHION MARKETING HOME GOODS RESTAURANT CONSTRUCTION & PROPERTY SUPERMARKET COMMERCIAL BUILDING & REAL ESTATE EARNINGS
SOURCE: J. B. Hunt Transport Services, Inc.
CONTACT INFORMATION:
J. B. Hunt Transport Services Inc., Lowell
Kirk Thompson, 479-820-8110
www.jbhunt.com
