J. B. Hunt Transport Services, Inc. Reports Revenues and Earnings for the Fourth Quarter and Year Ended December 31, 2000
LOWELL, Ark.--Jan. 29, 2001--J. B. Hunt Transport Services, Inc., announced fourth quarter 2000 net earnings of $10.9 million, or diluted earnings per share of 31 cents, compared with 1999 fourth quarter earnings of $5.6 million, or 16 cents per diluted share. The Logistics segment contributed approximately 7 cents per share to net earnings in the fourth quarter of 1999, while its successor, Transplace.com, contributed approximately one cent to fourth quarter 2000 earnings, recognized under the equity method of accounting.Total operating revenue for the current quarter was $534.0 million, compared with $553.4 million during the fourth quarter of 1999. The lower revenue reflects the previously announced contribution of all the Company's non-asset based logistics business to a jointly owned logistics company, Transplace.com. Adjusted for this logistics business, which was contributed effective July 1, 2000, the Company's revenue growth for the fourth quarter of 2000 was approximately 18%. Transplace.com is jointly owned by six of the largest publicly-held truckload transportation companies and its Chief Executive Officer, Dr. Jun-Sheng Li. While the Company will share approximately 27% of Transplace.com's net results of operations, all logistics revenue will be excluded from the Company's financial statements subsequent to June 30, 2000. During the fourth quarter of 2000, revenues of the Company's Truck segment grew 11%, while the Intermodal segment revenue rose 9% over the comparable period of 1999. Dedicated segment revenue surged 49% during the current quarter.
High fuel prices continue to negatively impact the transportation industry. For the fourth quarter of 2000, fuel prices averaged 27% higher than the year ago quarter, impacting all three segments of the Company. In addition, economic activity continued to show weakness, as it has for the entire year of 2000. Safety and insurance costs remained relatively low for both the quarter and the full year, as the Company experienced its best year in history in reducing serious accidents and injury. The supply of drivers was at an all time high by the end of the year. In fact, the Company has implemented a hiring cap as applications for driving employment reached all time highs and turnover remained in-check and near the best in the industry.
While the Company noted the improvement in earnings is significant relative to the fourth quarter a year ago, earnings remain less than satisfactory, particularly in the Truck segment. Industry conditions remained severe in the fourth quarter due to extremely high fuel prices, a slowdown in the freight-moving economy, collapsing used truck values and sky-rocketing insurance costs. The Company has been able to mitigate the effect of some of these circumstances as evidenced by improvement in the overall earnings. Significant operating leverage exists for the Company, particularly again in the Truck segment. A small improvement in the operating ratio leads to a disproportionate increase in earnings. During the fourth quarter, while freight shipments remained weaker than the normal peak season, the Company was able to achieve some operating leverage, primarily in the October and November periods. As freight began to slow again in December and severe winter weather hampered operations, some of the improvement witnessed in October and November was erased. Freight conditions remained weak in January and current projections indicate a continuing slow growth for shipments at least through the first quarter of 2001. Adding to the uncertainty of 2001 is the growing number of trucking bankruptcies that could produce a capacity shortage in the truckload arena sometime in 2001. The Company is unable to predict when demand will exceed the available capacity, but anticipates growing truckload scarcity later in 2001. Accordingly, the Company expects rising freight rates to reflect the demand/supply imbalance and return some of the onerous cost increases that have plagued the industry for the last several years. The Company's focus is on improving the margins in the Truck segment while maintaining profitable growth in the Dedicated Contract Services and Intermodal segments. No growth in capacity is planned for 2001 for the Truck segment although, the Company does expect to add some number of independent contractors.
This press release contains statements that might be considered as forward-looking statements or predictions of future operations. Such statements are based on management's belief or interpretation of information currently available. These statements and assumptions involve certain risks and uncertainties. Actual events may differ from these expectations as specified from time to time in filings with the Securities and Exchange Commission.
This press release and related information will be available immediately to interested parties at the Company's web site, www.jbhunt.com.
J. B. HUNT TRANSPORT SERVICES, INC.
Comparative Condensed Statement of Earnings
(In thousands, except per share data)
(Unaudited)
Three Months Ended Years Ended
December 31 December 31
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2000 1999 2000 1999
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Operating revenues $533,969 $553,374 $2,160,447 $2,045,073
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Operating income $17,694 $13,846 $63,411 $74,289
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Net earnings $10,885 $5,581 $36,075 $31,909
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Average number of common
shares outstanding 35,178 35,638 35,313 35,628
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Diluted shares outstanding 35,250 35,663 35,417 35,802
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Basic earnings per share $0.31 $0.16 $1.02 $0.90
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Diluted earnings per share $0.31 $0.16 $1.02 $0.89
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