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J.B. Hunt Transport Services, Inc. Reports Revenues, Net Earnings and Earnings Per Share for Both the Fourth Quarter and Year Ended December 31, 2020

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·18 min read
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  • Fourth Quarter 2020 Revenue: $2.74 billion; up 12%

  • Fourth Quarter 2020 Operating Income: $207.7 million; up 1%

  • Fourth Quarter 2020 EPS: $1.44 vs. $1.35; up 7%

  • Full Year 2020 Revenue: $9.64 billion; up 5%

  • Full Year 2020 Operating Income: $713.1 million; down 3%

  • Full Year 2020 EPS: $4.74 vs. $4.77; down 1%

J.B. Hunt Transport Services, Inc. (NASDAQ: JBHT) announced fourth quarter 2020 net earnings of $154.0 million, or diluted earnings per share of $1.44 vs. fourth quarter 2019 net earnings of $144.7 million, or $1.35 per diluted share.

Total operating revenue for the current quarter was $2.74 billion, compared with $2.45 billion for the fourth quarter 2019. Revenue growth in the quarter was driven primarily by our Integrated Capacity Solutions (ICS) and Truck (JBT) segments, which grew 56% and 50% respectively, as both segments were able to leverage capacity in the Marketplace for J.B. Hunt 360°® for our customers during the quarter. Final Mile Services (FMS) revenue grew 30%, driven by the December 2019 acquisition and new contractual business onboarded throughout 2020. Dedicated (DCS) revenue grew 3%, primarily from a 9% increase in loads and a modest increase in the fleet. Revenue growth was partially offset by a 1% decline in revenue in Intermodal (JBI), and a 34% decline in fuel surcharge revenue. Current quarter total operating revenue, excluding fuel surcharges, increased approximately 18% vs. the comparable quarter 2019.

Total freight transactions in the Marketplace for J.B. Hunt 360° increased to $468 million in the fourth quarter 2020 compared to $289 million in the prior year quarter. ICS revenue on the platform increased to $387 million with an approximate 27% increase in volume versus the year ago period. JBI and JBT executed approximately $40 million and $41 million, respectively, of their third-party dray and independent contractor costs through the freight platform during the quarter.

Operating income for the current quarter totaled $207.7 million vs. $205.1 million for the fourth quarter 2019. The benefit from increased revenue was offset with cost increases in rail and other third-party purchase transportation costs, including outsource dray costs; increases in driver wages and recruiting costs; investments in technology spend on new applications and legacy operating systems; higher salary and wage expenses for non-driving personnel; and higher group medical expense.

Interest expense in the current quarter decreased primarily from lower interest rates from fourth quarter 2019. The fourth quarter effective tax rates for 2020 and 2019 were 22.0% and 24.8%, respectively. The annual effective tax rates for 2020 and 2019 were 24.0% and 24.2%, respectively. We expect our 2021 annual tax rate to be between 24.0% and 25.0%.

Segment Information:

Intermodal (JBI)

  • Fourth Quarter 2020 Segment Revenue: $1.25 billion; down 1%

  • Fourth Quarter 2020 Operating Income: $110.8 million; down 16%

JBI total volumes increased 1% over the same period in 2019. Transcontinental loads grew by 1% and eastern network loads were flat compared to the fourth quarter 2019. Volumes in the quarter continued to be heavily constrained by rail congestion and service issues stemming from elevated demand levels and labor challenges in rail, truck and customer operations that escalated into the mid-to-late part of December. Segment revenue decreased 1%, reflecting the 1% increase in volume offset by a 2% decrease in revenue per load, which is a result of the combination of freight mix, customer rates, and fuel surcharges. Revenue per load excluding fuel surcharge revenue was up 4% year over year.

Operating income decreased 16% from the prior year period. The decline in operating income is primarily attributable to lost productivity and higher costs across rail, truck and customer operations associated with congestion and service disruptions stemming from strong demand, general labor tightness, and other challenges attributable to COVID-19. Specific to JBI, greater utilization and costs related to third party drayage capacity, higher costs to attract and retain drivers, and increased group medical expense also contributed to the decline. The current period ended with approximately 98,700 units of trailing capacity and approximately 5,660 power units in the dray fleet.

Dedicated Contract Services (DCS)

  • Fourth Quarter 2020 Segment Revenue: $568 million; up 3%

  • Fourth Quarter 2020 Operating Income: $77.6 million; up 4%

DCS revenue increased 3% during the current quarter over the same period 2019. Productivity (revenue per truck per week) increased approximately 1% vs. 2019. Productivity excluding fuel surcharge revenue increased approximately 4% 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 132 revenue producing trucks, 188 net additions sequentially from third quarter 2020, were in the fleet by the end of the quarter. Customer retention rates remain above 98%.

Operating income increased 4% over the prior year quarter. The benefits from increased productivity of assets, reduced driver turnover and lower travel and entertainment expenses were partially offset by increases in driver wages and recruiting costs partially related to recent customer start-up accounts, higher salary and wages for non-driver personnel, and group medical cost increases.

Integrated Capacity Solutions (ICS)

  • Fourth Quarter 2020 Segment Revenue: $587 million; up 56%

  • Fourth Quarter 2020 Operating Income: $5.6 million; compared to $(11.8) million Operating Loss in 4Q’19

ICS revenue increased 56% in the current quarter vs. the fourth quarter 2019. Revenue growth was driven primarily from a 39% increase in revenue per load which was favorably impacted by freight mix changes and higher spot and contractual rates as compared to the fourth quarter 2019. Segment volumes increased 13%, with truckload volumes increasing at a rate greater than 20% in the quarter vs. the prior year period. Contractual volumes represented approximately 51% of the total load volume and 35% of the total revenue in the current quarter compared to 66% and 54%, respectively, in fourth quarter 2019. Of the total reported ICS revenue, approximately $387 million was executed through the Marketplace for J.B. Hunt 360° compared to $225 million in fourth quarter 2019.

Operating income increased to $5.6 million compared to an operating loss of $11.8 million in the fourth quarter of 2019. Benefits from increased scale in the Marketplace for J.B Hunt 360° platform, combined with higher gross margins, were partially offset by higher personnel and technology investments as compared to the same period of 2019. Gross profit margins increased to 10.8% in the current period versus 10.6% in the prior year period. ICS carrier base increased 19% year over year.

Final Mile Services (FMS)

  • Fourth Quarter 2020 Segment Revenue: $213 million; up 30%

  • Fourth Quarter 2020 Operating Income: $5.5 million; up 12%

FMS revenue increased 30% compared to the same period 2019. Stop count within FMS increased 42% during the current quarter vs. a year ago, primarily from the December 2019 acquisition and the addition of multiple customer contracts implemented throughout 2020. Productivity, defined as revenue per stop, decreased approximately 9% compared to the prior year period primarily from a shift in the mix of business between asset and asset-light operations.

Operating income increased 12% over the prior year quarter driven primarily by increases in revenue, which was partially offset by investments in service quality performance controls across the network, increased insurance and claims costs, higher bad debt expense, and increases in group medical expense.

Truck (JBT)

  • Fourth Quarter 2020 Segment Revenue: $140 million; up 50%

  • Fourth Quarter 2020 Operating Income: $8.4 million; up 32%

JBT revenue increased 50% in the quarter compared to the same period in 2019. Revenue excluding fuel surcharge revenue increased 58% as a result of a 23% increase in load count and a 28% increase in revenue per load excluding fuel surcharge revenue compared to a year ago. Load count growth was primarily driven from the continued expansion of 360box which leverages the J.B. Hunt 360° platform to access a greater amount of capacity for customers. Revenue per loaded mile excluding fuel surcharge revenue increased approximately 19% year over year while comparable contractual customer rates were up approximately 5% compared to the same period 2019. At the end of the period, JBT operated 1,769 tractors and 8,567 trailers compared to 1,831 and 6,975 one year ago, respectively.

Operating income increased 32% compared to the same quarter 2019. Benefits from increased load counts and revenue per load were partially offset by increases in purchased transportation expense. In addition, higher salary and wage expenses for non-driving personnel and increased investment in technology, related to the expansion of 360box, weighed on operating income performance.

Cash Flow and Capitalization:

At December 31, 2020, we had total debt outstanding of $1.31 billion outstanding on various debt instruments which is comparable to the total debt levels at December 31, 2019, and September 30, 2020.

Our net capital expenditures for 2020 approximated $601 million vs. $688 million in 2019. At December 31, 2020, we had cash and cash equivalents of $313 million.

In the fourth quarter 2020, we purchased approximately 144,000 shares of our common stock for approximately $17 million. At December 31, 2020, we had approximately $503 million remaining under our share repurchase authorization. Actual shares outstanding at December 31, 2020, approximated 105.7 million.

Conference Call Information:

The Company will hold a conference call today from 4:00–5:15 pm CT 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: 2070198. 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, 2019 and Quarterly Report filed on Form 10-Q for the period ended September 30, 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 December 31

2020

2019

% Of

% Of

Amount

Revenue

Amount

Revenue

Operating revenues, excluding fuel surcharge revenues

$

2,551,777

$

2,168,497

Fuel surcharge revenues

185,875

281,826

Total operating revenues

2,737,652

100.0%

2,450,323

100.0%

Operating expenses

Rents and purchased transportation

1,486,341

54.3%

1,246,130

50.9%

Salaries, wages and employee benefits

625,168

22.8%

561,507

22.9%

Depreciation and amortization

134,589

4.9%

128,418

5.2%

Fuel and fuel taxes

93,551

3.4%

118,269

4.8%

Operating supplies and expenses

83,515

3.1%

83,633

3.4%

General and administrative expenses, net of asset dispositions

48,431

1.8%

51,277

2.1%

Insurance and claims

35,809

1.3%

32,289

1.3%

Operating taxes and licenses

13,757

0.5%

14,345

0.6%

Communication and utilities

8,800

0.3%

9,381

0.4%

Total operating expenses

2,529,961

92.4%

2,245,249

91.6%

Operating income

207,691

7.6%

205,074

8.4%

Net interest expense

10,344

0.4%

12,776

0.6%

Earnings before income taxes

197,347

7.2%

192,298

7.8%

Income taxes

43,340

1.6%

47,622

1.9%

Net earnings

$

154,007

5.6%

$

144,676

5.9%

Average diluted shares outstanding

106,738

107,529

Diluted earnings per share

$

1.44

$

1.35

(1) Includes corporate support activity

J.B. HUNT TRANSPORT SERVICES, INC.

Condensed Consolidated Statements of Earnings

(in thousands, except per share data)

(unaudited)

Twelve Months Ended December 31

2020

2019

% Of

% Of

Amount

Revenue

Amount

Revenue

Operating revenues, excluding fuel surcharge revenues

$

8,879,653

$

8,122,600

Fuel surcharge revenues

756,920

1,042,658

Total operating revenues

9,636,573

100.0%

9,165,258

100.0%

Operating expenses

Rents and purchased transportation

4,954,123

51.4%

4,528,812

49.4%

Salaries, wages and employee benefits

2,347,716

24.4%

2,167,851

23.7%

Depreciation and amortization

527,375

5.5%

499,145

5.4%

Fuel and fuel taxes

357,483

3.7%

463,195

5.1%

Operating supplies and expenses

334,350

3.5%

333,113

3.6%

General and administrative expenses, net of asset dispositions

180,083

1.8%

191,933

2.1%

Insurance and claims

134,482

1.4%

157,251

1.7%

Operating taxes and licenses

54,331

0.6%

55,336

0.6%

Communication and utilities

33,511

0.3%

34,797

0.4%

Total operating expenses

8,923,454

92.6%

8,431,433

92.0%

Operating income

713,119

7.4%

733,825

8.0%

Net interest expense

47,094

0.5%

52,930

0.6%

Earnings before income taxes

666,025

6.9%

680,895

7.4%

Income taxes

159,990

1.6%

164,575

1.8%

Net earnings

$

506,035

5.3%

$

516,320

5.6%

Average diluted shares outstanding

106,766

108,307

Diluted earnings per share

$

4.74

$

4.77

Financial Information By Segment

(in thousands)

(unaudited)

Three Months Ended December 31

2020

2019

% Of

% Of

Amount

Total

Amount

Total

Revenue

Intermodal

$

1,249,065

46%

$

1,267,142

52%

Dedicated

568,349

21%

552,712

22%

Integrated Capacity Solutions

587,277

21%

376,537

15%

Final Mile Services

213,161

8%

164,228

7%

Truck

140,384

5%

93,640

4%

Subtotal

2,758,236

101%

2,454,259

100%

Intersegment eliminations

(20,584)

(1%)

(3,936)

(0%)

Consolidated revenue

$

2,737,652

100%

$

2,450,323

100%

Operating income

Intermodal

$

110,751

53%

$

131,097

64%

Dedicated

77,564

37%

74,629

36%

Integrated Capacity Solutions

5,575

3%

(11,843)

(6%)

Final Mile Services

5,514

3%

4,936

3%

Truck

8,367

4%

6,321

3%

Other (1)

(80)

0%

(66)

0%

Operating income

$

207,691

100%

$

205,074

100%

Twelve Months Ended December 31

2020

2019

% Of

% Of

Amount

Total

Amount

Total

Revenue

Intermodal

$

4,675,074

48%

$

4,744,636

52%

Dedicated

2,196,200

23%

2,128,247

23%

Integrated Capacity Solutions

1,658,182

17%

1,348,336

15%

Final Mile Services

688,431

7%

566,564

6%

Truck

462,720

5%

389,301

4%

Subtotal

9,680,607

100%

9,177,084

100%

Intersegment eliminations

(44,034)

(0%)

(11,826)

(0%)

Consolidated revenue

$

9,636,573

100%

$

9,165,258

100%

Operating income

Intermodal

$

428,403

60%

$

447,479

61%

Dedicated

313,987

44%

277,376

38%

Integrated Capacity Solutions

(44,699)

(6%)

(11,088)

(2%)

Final Mile Services

(945)

(0%)

(8,797)

(1%)

Truck

16,574

2%

29,046

4%

Other (1)

(201)

(0%)

(191)

(0%)

Operating income

$

713,119

100%

$

733,825

100%

Operating Statistics by Segment

(unaudited)

Three Months Ended December 31

2020

2019

Intermodal

Loads

524,906

520,898

Average length of haul

1,711

1,707

Revenue per load

$

2,380

$

2,433

Average tractors during the period *

5,667

5,587

Tractors (end of period) *

5,663

5,559

Trailing equipment (end of period)

98,689

96,743

Average effective trailing equipment usage

97,267

92,571

Dedicated

Loads

949,757

874,892

Average length of haul

159

164

Revenue per truck per week**

$

4,544

$

4,481

Average trucks during the period***

9,833

9,721

Trucks (end of period) ***

9,911

9,779

Trailing equipment (end of period)

27,290

27,015

Integrated Capacity Solutions

Loads

369,188

328,060

Revenue per load

$

1,591

$

1,148

Gross profit margin

10.8%

10.6%

Employee count (end of period)

1,011

1,213

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

100,200

84,400

Marketplace for J.B. Hunt 360° revenue (millions)

$

387.1

$

225.5

Final Mile Services

Stops

1,849,215

1,299,691

Average trucks during the period***

1,537

1,298

Truck

Loads

107,253

86,891

Loaded miles (000)

45,423

34,388

Nonpaid empty mile percentage

18.4%

19.2%

Revenue per tractor per week**

$

4,410

$

4,017

Average tractors during the period *

1,772

1,875

Tractors (end of period)

Company-owned

798

845

Independent contractor

971

986

Total tractors

1,769

1,831

Trailers (end of period)

8,567

6,975

* Includes company-owned and independent contractor tractors

** Using weighted workdays

*** Includes company-owned, independent contractor, and customer-owned trucks

Operating Statistics by Segment

(unaudited)

Twelve Months Ended December 31

2020

2019

Intermodal

Loads

2,019,391

1,979,169

Average length of haul

1,690

1,679

Revenue per load

$

2,315

$

2,397

Average tractors during the period *

5,530

5,635

Tractors (end of period) *

5,663

5,559

Trailing equipment (end of period)

98,689

96,743

Average effective trailing equipment usage

90,514

86,836

Dedicated

Loads

3,676,212

3,353,553

Average length of haul

160

168

Revenue per truck per week**

$

4,373

$

4,378

Average trucks during the period***

9,743

9,471

Trucks (end of period) ***

9,911

9,779

Trailing equipment (end of period)

27,290

27,015

Integrated Capacity Solutions

Loads

1,265,897

1,243,992

Revenue per load

$

1,310

$

1,084

Gross profit margin

9.9%

13.1%

Employee count (end of period)

1,011

1,213

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

100,200

84,400

Marketplace for J.B. Hunt 360° revenue (millions)

$

1,142.2

$

839.8

Final Mile Services

Stops

5,771,533

4,432,591

Average trucks during the period***

1,405

1,254

Truck

Loads

406,550

346,459

Loaded miles (000)

171,141

143,511

Nonpaid empty mile percentage

18.8%

18.9%

Revenue per tractor per week**

$

3,978

$

3,917

Average tractors during the period*

1,837

1,958

Tractors (end of period)

Company-owned

798

845

Independent contractor

971

986

Total tractors

1,769

1,831

Trailers (end of period)

8,567

6,975

* 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, 2020

December 31, 2019

ASSETS

Current assets:

Cash and cash equivalents

$

313,302

$

35,000

Accounts Receivable

1,124,403

1,011,829

Prepaid expenses and other

423,269

434,470

Total current assets

1,860,974

1,481,299

Property and equipment

5,908,710

5,640,806

Less accumulated depreciation

2,219,816

2,019,940

Net property and equipment

3,688,894

3,620,866

Other assets, net

397,337

368,689

$

5,947,205

$

5,470,854

LIABILITIES & STOCKHOLDERS' EQUITY

Current liabilities:

Trade accounts payable

$

587,510

$

602,601

Claims accruals

276,056

279,590

Accrued payroll

172,327

68,220

Other accrued expenses

90,294

85,355

Total current liabilities

1,126,187

1,035,766

Long-term debt

1,305,424

1,295,740

Other long-term liabilities

204,577

173,241

Deferred income taxes

710,879

699,078

Stockholders' equity

2,600,138

2,267,029

$

5,947,205

$

5,470,854

Supplemental Data

(unaudited)

December 31, 2020

December 31, 2019

Actual shares outstanding at end of period (000)

105,654

106,213

Book value per actual share outstanding at end of period

$

24.61

$

21.34

Twelve Months Ended December 31

2020

2019

Net cash provided by operating activities (000)

$

1,122,859

$

1,098,347

Net capital expenditures (000)

$

600,769

$

688,197

View source version on businesswire.com: https://www.businesswire.com/news/home/20210119006061/en/

Contacts

J.B. Hunt Transport Services, Inc.
A. Brad Delco
Vice President – Finance & Investor Relations
(479) 820-2723