Business Wire | Apr 15, 2021 04:06PM EDT

J.B. Hunt Transport Services, Inc. Reports Revenues and Earnings for the First Quarter 2021

Apr. 15, 2021

LOWELL, Ark.--(BUSINESS WIRE)--Apr. 15, 2021--J.B. Hunt Transport Services, Inc., (NASDAQ: JBHT) announced first quarter 2021 net earnings of $146.6 million, or diluted earnings per share of $1.37 vs. first quarter 2020 net earnings of $104.8 million, or $0.98 per diluted share.

Total operating revenue for the current quarter was $2.62 billion compared with $2.28 billion for the first quarter 2020. All segments contributed to the year-over-year increase in revenue. Integrated Capacity Solutions (ICS) and Truck (JBT) grew revenue 56% and 43%, respectively, as both segments were able to secure capacity in the Marketplace for J.B. Hunt 360(r) for customers, particularly following the weather-related disruptions in the quarter. Final Mile Services(r) (FMS) revenue grew 31% primarily from new contractual business onboarded over the past year. Dedicated Contract Services(r) (DCS(r)) revenue grew 7% driven primarily by a 6% improvement in fleet productivity and a modestly larger fleet. Intermodal (JBI) revenue grew 2%, as a 5% increase in gross revenue per load was partially offset by a 3% reduction in volumes. All segments experienced weather-related volume disruptions in the quarter, but the impact was the most significant in JBI. Current quarter total operating revenue, excluding fuel surcharges, increased approximately 17% vs. first quarter 2020.

Total freight transactions in the Marketplace for J.B. Hunt 360 increased to $443 million in the first quarter 2021 compared to $294 million in the prior year quarter. ICS revenue on the platform increased 53% to $359 million versus a year ago. JBI and JBT executed approximately $32 million and $51 million, respectively, of their third-party dray, independent contractor and power-only capacity costs through the platform during the quarter.

Operating income for the current quarter increased 34% to $207.7 million versus $154.7 million for the first quarter 2020. Prior year results included a $12.3 million charge for a one-time COVID-related bonus to frontline employees who kept the country's freight moving during the pandemic, an $8.2 million pre-tax accrual related to the revenue divisions owed to BNSF Railway Company, and $3.4 million of additional stock compensation expense related to the acceleration of equity award vesting for executive retirements. Current period operating income was negatively impacted by approximately $8 million from COVID-related expenses. The benefit from increased revenue was partially offset by higher purchased transportation expense, driver wages and recruiting costs, higher salary and wages for non-driver personnel, higher insurance premiums, continued investment in legacy IT systems upgrades, and new systems development costs.

Net interest expense for the current quarter was flat from first quarter 2020 with similar outstanding debt levels and interest rates.

The effective income tax rate decreased to 25.1% in the current quarter compared to 26.5% in the first quarter 2020. We continue to expect our 2021 annual tax rate to be between 24.0% and 25.0%.

Segment Information:

Intermodal (JBI)

* First Quarter 2021 Segment Revenue: $1.18 billion; up 2% * First Quarter 2021 Operating Income: $107.5 million; up 5%

Intermodal volumes decreased 3% over the same period in 2020. Eastern network loads declined 3%, while transcontinental loads declined by 2%. Volumes were impacted by severe weather-related events in the quarter, in addition to the challenges that were already present as a result of rail congestion and service issues stemming from elevated demand levels and labor challenges across the supply chain. Severe weather-related events are estimated to have negatively impacted volumes by approximately 25,000 loads, or 5%, primarily in the month of February, but network-related disruptions continued to impact service and volumes in March. Segment gross revenue increased 2% from the prior year period, reflecting the 3% decrease in volume offset by a 5% increase in gross revenue per load, which is a combination of freight mix, customer rates, and fuel surcharges. Excluding fuel, revenue per load increased 6%.

Operating income increased by 5% in the current quarter compared to prior year quarter. The prior year period included an $8.2 million accrual related to our adjusted calculation of the revenue divisions owed to BNSF and approximately $4.0 million for the one-time COVID-related bonus. Excluding these items, operating income decreased 6% primarily from disruptions stemming from severe weather-related events in the quarter that further deteriorated network fluidity and challenges already present as a result of rail congestion, strong demand, and a tight labor market. Higher driver wages and recruiting costs and higher salary and wages for non-driver personnel also contributed to the decline. The current period ended with approximately 99,000 units of trailing capacity and 5,740 power units in the dray fleet.

Dedicated Contract Services (DCS)

* First Quarter 2021 Segment Revenue: $580 million; up 7% * First Quarter 2021 Operating Income: $74.3 million; up 2%

DCS revenue increased 7% during the current quarter over the same period 2020. Productivity (revenue per truck per week) increased approximately 6% vs. 2020. Productivity excluding fuel surcharge revenue increased approximately 5% from a year ago primarily from higher utilization of assets, contracted indexed-based price escalators, and less equipment idled in the quarter. A net additional 203 revenue-producing trucks were in the fleet by the end of the quarter versus the prior year period. Customer retention rates remain above 98%.

Operating income increased by 2% from the prior year quarter. The prior year period included approximately $6.5 million of the one-time COVID-related bonus in the quarter. Excluding this expense, operating income decreased approximately 6% year-over-year. The benefits of higher productivity, which includes less idled equipment, were more than offset by increases in driver wages and recruiting costs and higher salaries and wages for non-driver personnel.

Integrated Capacity Solutions (ICS)

* First Quarter 2021 Segment Revenue: $525 million; up 56% * First Quarter 2021 Operating Income/(Loss): $7.3 million; compared to $(18.9) million

Operating Loss in Q1'20

ICS revenue increased 56% during the quarter compared to the first quarter 2020. Revenue growth was driven primarily from a 58% increase in revenue per load which was favorably impacted by higher spot and contractual rates as compared to the first quarter 2020. Segment volumes declined 1% from the prior year primarily due to customer freight mix changes, while truckload volumes increased 10% during the quarter. Contractual volumes represented approximately 49% of the total load volume and 35% of the total revenue in the current quarter compared to 67% and 54%, respectively, in first quarter 2020. Of the total reported ICS revenue, approximately $359 million was executed through the Marketplace for J.B. Hunt 360 platform compared to $235 million in first quarter 2020.

Operating income increased to $7.3 million compared to an operating loss of $18.9 million in the first quarter 2020. Benefits from increased scale in the Marketplace for J.B. Hunt 360 platform, combined with higher gross margins, were partially offset by investments in personnel expense and technology advancements compared to the same period in 2020. Gross profit margins increased to 12.4% in the current period versus 9.6%. ICS carrier base increased 24%.

Final Mile Services (FMS)

* First Quarter 2021 Segment Revenue: $202 million; up 31% * First Quarter 2021 Operating Income/(Loss): $8.5 million; compared to $(3.3) million

Operating Loss in Q1'20

FMS revenue increased 31% compared to the same period in 2020. Stop count within FMS increased 37% during the current quarter versus a year ago, primarily from the addition of multiple customer contracts implemented over the last year. Productivity (revenue per stop) decreased approximately 4% compared to the prior year period primarily from a shift in the mix of business between asset and asset-light operations.

Operating income increased to $8.5 million from the prior year's operating loss of $3.3 million driven primarily by increases in revenue, partially offset by investments in service quality performance controls across the network, higher salary and wages for non-driver personnel and increased purchased transportation costs. The prior year quarter included approximately $1.3 million of the one-time COVID-related bonus.

Truck (JBT)

* First Quarter 2021 Segment Revenue: $150 million; up 43% * First Quarter 2021 Operating Income: $10.2 million; up 472%

JBT revenue increased 43% from the same period in 2020. Revenue excluding fuel surcharges increased 46% as a result of a 6% increase in load count, a 38% increase in revenue per load excluding fuel surcharge revenue, and an 8% increase in average length of haul. Load count growth and the length of haul increase were primarily driven by the continued expansion of J.B. Hunt 360box(tm) which leverages the J.B. Hunt 360 platform to access drop-trailer capacity for customers across our transportation network. Revenue per loaded mile excluding fuel surcharge revenue increased approximately 28% year-over-year while comparable contractual customer rates were up approximately 14% compared to the same period 2020. The current period ended with 8,571 trailers and 1,716 tractors, compared to 7,391 and 1,887 respectively.

Operating income increased to $10.2 million from $1.8 million in the first quarter 2020. The prior year period included approximately $0.5 million of the one-time COVID-related bonus. Benefits from increased load counts and revenue per load were partially offset by increases in purchased transportation expense and higher salary and wage expenses for non-driving personnel related to the continued expansion of 360box and increased usage of non-asset power.

Cash Flow and Capitalization:

At March 31, 2021, we had a total of $1.30 billion outstanding on various debt instruments which is comparable to the total debt levels at December 31, 2020.

Our net capital expenditures for the first quarter 2021 approximated $86 million compared to $129 million for the first quarter 2020. At March 31, 2021, we had cash and cash equivalents of $553 million.

In the first quarter 2021, we purchased approximately 34,000 shares of common stock for approximately $5 million. At March 31, 2021, we had approximately $498 million remaining under our share repurchase authorization. Actual shares outstanding at March 31, 2021, approximated 105.7 million.

Conference Call Information:

The company will hold a conference call today at 4:00-5:00 p.m. CDT to discuss the quarterly earnings. To participate in the call, dial 1-833-397-0851 (domestic) or 516-575-8759 (international) 15 minutes prior to the start of the call and provide the following conference ID: 4345296. A replay of the call will be posted on its website here later this evening.

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, 2020. 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 to interested parties on our website, www.jbhunt.com.

About J.B. Hunt

J.B. Hunt Transport Services, Inc., an S&P 500 company, provides innovative supply chain solutions for a variety of customers throughout North America. Utilizing an integrated, multimodal approach, the company applies technology driven methods to create the best solution for each customer, adding efficiency, flexibility, and value to their operations. J.B. Hunt services include intermodal, dedicated, refrigerated, truckload, less-than-truckload, flatbed, single source, final mile, and more. J.B. Hunt Transport Services, Inc. stock trades on NASDAQ under the ticker symbol JBHT and is a component of the Dow Jones Transportation Average. J.B. Hunt Transport, Inc. is a wholly owned subsidiary of JBHT. For more information, visit 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

2021

2020

% Of

% Of

Amount

Revenue

Amount

Revenue

Operating revenues, excluding fuel surcharge revenues$2,388,034

$2,045,694

Fuel surcharge revenues230,115

235,132

Total operating revenues2,618,149

100.0

%

2,280,826

100.0

%

Operating expensesRents and purchased transportation1,352,301

51.7

%

1,136,151

49.8

%

Salaries, wages and employee benefits620,032

23.7

%

574,249

25.2

%

Depreciation and amortization137,545

5.3

%

130,095

5.7

%

Fuel and fuel taxes113,040

4.3

%

101,123

4.4

%

Operating supplies and expenses81,698

3.1

%

85,598

3.8

%

General and administrative expenses, net of asset dispositions44,891

1.7

%

45,165

1.9

%

Insurance and claims38,030

1.5

%

32,361

1.4

%

Operating taxes and licenses13,814

0.5

%

13,312

0.6

%

Communication and utilities9,146

0.3

%

8,031

0.4

%

Total operating expenses2,410,497

92.1

%

2,126,085

93.2

%

Operating income207,652

7.9

%

154,741

6.8

%

Net interest expense12,024

0.4

%

12,036

0.5

%

Earnings before income taxes195,628

7.5

%

142,705

6.3

%

Income taxes49,022

1.9

%

37,871

1.7

%

Net earnings$146,606

5.6

%

$104,834

4.6

%

Average diluted shares outstanding106,816

106,950

Diluted earnings per share$1.37

$0.98

J.B. HUNT TRANSPORT SERVICES, INC.Condensed Consolidated Statements of Earnings(in thousands, except per share data)(unaudited)

Three Months Ended March

2021 2020

% Of % Of

Amount Revenue Amount Revenue

Operating revenues, excluding $ 2,388,034 $ 2,045,694fuel surcharge revenuesFuel surcharge revenues 230,115 235,132

Total operating revenues 2,618,149 100.0 % 2,280,826 100.0 %

Operating expensesRents and purchased 1,352,301 51.7 % 1,136,151 49.8 %transportationSalaries, wages and employee 620,032 23.7 % 574,249 25.2 %benefitsDepreciation and amortization 137,545 5.3 % 130,095 5.7 %

Fuel and fuel taxes 113,040 4.3 % 101,123 4.4 %

Operating supplies and expenses 81,698 3.1 % 85,598 3.8 %

General and administrative 44,891 1.7 % 45,165 1.9 %expenses, net of assetdispositionsInsurance and claims 38,030 1.5 % 32,361 1.4 %

Operating taxes and licenses 13,814 0.5 % 13,312 0.6 %

Communication and utilities 9,146 0.3 % 8,031 0.4 %

Total operating expenses 2,410,497 92.1 % 2,126,085 93.2 %

Operating income 207,652 7.9 % 154,741 6.8 %

Net interest expense 12,024 0.4 % 12,036 0.5 %

Earnings before income taxes 195,628 7.5 % 142,705 6.3 %

Income taxes 49,022 1.9 % 37,871 1.7 %

Net earnings $ 146,606 5.6 % $ 104,834 4.6 %

Average diluted shares 106,816 106,950outstandingDiluted earnings per share $ 1.37 $ 0.98

Financial Information By Segment

(in thousands)

(unaudited)

Three Months Ended March

2021

2020

% Of

% Of

Amount

Total

Amount

Total

RevenueIntermodal$1,177,131

45

%

$1,149,720

50

%

Dedicated579,958

22

%

541,746

24

%

Integrated Capacity Solutions524,946

20

%

335,494

15

%

Final Mile Services201,883

8

%

153,629

7

%

Truck149,531

6

%

104,925

4

%

Subtotal2,633,449

101

%

2,285,514

100

%

Intersegment eliminations(15,300

)

(1

%)

(4,688

)

(0

%)

Consolidated revenue$2,618,149

100

%

$2,280,826

100

%

Operating incomeIntermodal$107,468

52

%

$102,275

66

%

Dedicated74,339

36

%

72,890

47

%

Integrated Capacity Solutions7,269

3

%

(18,898

)

(12

%)

Final Mile Services8,498

4

%

(3,300

)

(2

%)

Truck10,173

5

%

1,779

1

%

Other (1)(95

)

(0

%)

(5

)

(0

%)

Operating income$207,652

100

%

$154,741

100

%

(1) Includes corporate support activity Financial Information By Segment

(in thousands)

(unaudited)

Three Months Ended March

2021 2020

% Of % Of

Amount Total Amount Total

Revenue Intermodal $ 1,177,131 45 % $ 1,149,720 50 %

Dedicated 579,958 22 % 541,746 24 %

Integrated Capacity Solutions 524,946 20 % 335,494 15 %

Final Mile Services 201,883 8 % 153,629 7 %

Truck 149,531 6 % 104,925 4 %

Subtotal 2,633,449 101 % 2,285,514 100 %

Intersegment eliminations (15,300 ) (1 %) (4,688 ) (0 %)

Consolidated revenue $ 2,618,149 100 % $ 2,280,826 100 %

Operating income Intermodal $ 107,468 52 % $ 102,275 66 %

Dedicated 74,339 36 % 72,890 47 %

Integrated Capacity Solutions 7,269 3 % (18,898 ) (12 %)

Final Mile Services 8,498 4 % (3,300 ) (2 %)

Truck 10,173 5 % 1,779 1 %

Other (1) (95 ) (0 %) (5 ) (0 %)

Operating income $ 207,652 100 % $ 154,741 100 %

(1) Includes corporate support activityOperating Statistics by Segment(unaudited)Three Months Ended March

2021

2020

IntermodalLoads478,285

491,290

Average length of haul1,687

1,678

Revenue per load$2,461

$2,340

Average tractors during the period *5,718

5,487

Tractors (end of period) *5,744

5,492

Trailing equipment (end of period)99,043

96,480

Average effective trailing equipment usage94,603

85,032

DedicatedLoads942,220

879,009

Average length of haul162

163

Revenue per truck per week**$4,576

$4,326

Average trucks during the period***9,961

9,725

Trucks (end of period) ***9,951

9,748

Trailing equipment (end of period)27,283

27,673

Integrated Capacity SolutionsLoads292,365

295,747

Revenue per load$1,796

$1,134

Gross profit margin12.4

%

9.6

%

Employee count (end of period)936

1,166

Approximate number of third-party carriers (end of period)107,700

87,100

Marketplace for J.B. Hunt 360 revenue (millions)$359.0

$234.9

Final Mile ServicesStops1,676,025

1,224,442

Average trucks during the period***1,514

1,304

TruckLoads103,062

97,478

Loaded miles (000)46,140

40,564

Nonpaid empty mile percentage16.3

%

18.4

%

Revenue per tractor per week**$4,281

$4,012

Average tractors during the period *1,734

1,814

Tractors (end of period)Company-owned798

807

Independent contractor918

1,080

Total tractors1,716

1,887

Trailers (end of period)8,571

7,391

* Includes company-owned and independent contractor tractors** Using weighted workdays*** Includes company-owned, independent contractor, and customer-owned trucks Operating Statistics by Segment(unaudited) Three Months Ended March

2021 2020

Intermodal Loads 478,285 491,290

Average length of haul 1,687 1,678

Revenue per load $ 2,461 $ 2,340

Average tractors during the period * 5,718 5,487

Tractors (end of period) * 5,744 5,492

Trailing equipment (end of period) 99,043 96,480

Average effective trailing equipment usage 94,603 85,032

Dedicated Loads 942,220 879,009

Average length of haul 162 163

Revenue per truck per week** $ 4,576 $ 4,326

Average trucks during the period*** 9,961 9,725

Trucks (end of period) *** 9,951 9,748

Trailing equipment (end of period) 27,283 27,673

Integrated Capacity Solutions Loads 292,365 295,747

Revenue per load $ 1,796 $ 1,134

Gross profit margin 12.4 % 9.6 %

Employee count (end of period) 936 1,166

Approximate number of third-party carriers (end 107,700 87,100 of period)Marketplace for J.B. Hunt 360 revenue $ 359.0 $ 234.9 (millions) Final Mile Services Stops 1,676,025 1,224,442

Average trucks during the period*** 1,514 1,304

Truck Loads 103,062 97,478

Loaded miles (000) 46,140 40,564

Nonpaid empty mile percentage 16.3 % 18.4 %

Revenue per tractor per week** $ 4,281 $ 4,012

Average tractors during the period * 1,734 1,814

Tractors (end of period)Company-owned 798 807

Independent contractor 918 1,080

Total tractors 1,716 1,887

Trailers (end of period) 8,571 7,391

* Includes company-owned and independentcontractor tractors** Using weighted workdays*** Includes company-owned, independentcontractor, and customer-owned trucksJ.B. HUNT TRANSPORT SERVICES, INC.Condensed Consolidated Balance Sheets(in thousands)(unaudited)March 31, 2021

December 31, 2020

ASSETSCurrent assets:Cash and cash equivalents$552,970

$313,302

Accounts receivable, net1,219,162

1,124,403

Prepaid expenses and other359,867

404,412

Total current assets2,131,999

1,842,117

Property and equipment5,953,231

5,908,710

Less accumulated depreciation2,302,310

2,219,816

Net property and equipment3,650,921

3,688,894

Other assets, net379,686

397,337

$6,162,606

$5,928,348

LIABILITIES & STOCKHOLDERS' EQUITYCurrent liabilities:Trade accounts payable$641,887

$587,510

Claims accruals279,315

276,056

Accrued payroll and payroll taxes161,311

130,943

Other accrued expenses83,887

90,294

Total current liabilities1,166,400

1,084,803

Long-term debt1,301,430

1,305,424

Other long-term liabilities249,692

245,961

Deferred income taxes723,018

692,022

Stockholders' equity2,722,066

2,600,138

$6,162,606

$5,928,348

J.B. HUNT TRANSPORT SERVICES, INC.Condensed Consolidated Balance Sheets(in thousands)(unaudited) March 31, 2021 December 31, 2020

ASSETSCurrent assets:Cash and cash equivalents $ 552,970 $ 313,302

Accounts receivable, net 1,219,162 1,124,403

Prepaid expenses and other 359,867 404,412

Total current assets 2,131,999 1,842,117

Property and equipment 5,953,231 5,908,710

Less accumulated depreciation 2,302,310 2,219,816

Net property and equipment 3,650,921 3,688,894

Other assets, net 379,686 397,337

$ 6,162,606 $ 5,928,348

LIABILITIES & STOCKHOLDERS' EQUITYCurrent liabilities:Trade accounts payable $ 641,887 $ 587,510

Claims accruals 279,315 276,056

Accrued payroll and payroll taxes 161,311 130,943

Other accrued expenses 83,887 90,294

Total current liabilities 1,166,400 1,084,803

Long-term debt 1,301,430 1,305,424

Other long-term liabilities 249,692 245,961

Deferred income taxes 723,018 692,022

Stockholders' equity 2,722,066 2,600,138

$ 6,162,606 $ 5,928,348

Supplemental Data(unaudited)March 31, 2021

December 31, 2020

Actual shares outstanding at end of period (000)105,671

105,654

Book value per actual share outstanding at end of period$25.76

$24.61

Three Months Ended March

2021

2020

Net cash provided by operating activities (000)$364,658

$249,163

Net capital expenditures (000)$85,854

$128,736

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