J. B. Hunt Transport Services, Inc. Reports Revenues and Earnings for the First Quarter of 2001

    LOWELL, Ark.--April 16, 2001--J. B. Hunt Transport Services, Inc., announced first quarter 2001 net earnings of $1.6 million, or diluted earnings per share of 5 cents, compared with 2000 first quarter earnings of $5.0 million, or 14 cents per diluted share. The Logistics segment contributed approximately 4 cents per share to net earnings in the first quarter of 2000. However, in the first quarter of 2001 the Company recorded a loss of approximately one cent per share for its successor, Transplace.com, recognized under the equity method of accounting.
    Total operating revenue for the current quarter was $495 million, compared with $534 million during the first quarter of 2000. 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 first quarter of 2001 was approximately 16%. 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 has been excluded from the Company's financial statements subsequent to June 30, 2000. During the first quarter of 2001, revenues of the Company's Truck segment grew 1%, while the Intermodal segment revenue rose 11% over the comparable period of 2000. Dedicated segment (DCS) revenue increased 30% during the current quarter.
    First quarter earnings were negatively impacted by the slowing U.S. economy. January and the first half of February were particularly slow, affecting each of the three business segments. In the Truck segment, truckloads per work day were down 3.0% in January vs. January, 2000, basically flat in the February timeframe, but turned up 8.4% in March vs. March a year ago. The average number of trucks was 6,001 for the first quarter 2001 and 5,846 for the first quarter 2000. The operating ratio for the Truck segment exceeded 100% in January and February, but turned profitable in March.
    In the Intermodal segment, loads per work day exceeded the prior year in each month vs. the corresponding month of 2000. January intermodal loads rose 12.4%, February 8.9% and March 8.5%. Because of the separation of Truck and Intermodal, the number of containers available exclusively for Intermodal increased more than 20%. This increase in available containers will allow the Company to dispose of approximately 2,000 older, 48 foot containers during the remainder of 2001. The Intermodal operating ratio was 95.6% for the current quarter.
    The Company's previously announced plan to operationally separate the Truck and Intermodal business units was completed during the first quarter of 2001. To accomplish the split, the Company has been involved in a several-quarter process of deploying a sufficient number of 53 foot van trailers to efficiently operate that segment of business. As a result, the Truck segment has what management believes to be one of the largest and newest fleets of Wabash Duraplate trailers in the nation. Currently, the Company operates 13,670 Wabash Duraplates with that number expected to increase to over 20,000 by the end of 2001. Associated with the conversion to the new fleet of trailers, the Company sold a group of older trailers and realized a gain of approximately $5.5 million during the current quarter.
    In spite of the slowing economy and weak freight activity, pricing remained firm. Overall truck revenue per mile, exclusive of fuel surcharges, rose 1.9% in the first quarter of 2001 vs. the same quarter in 2000. Intermodal rates were essentially flat when compared with the same period in 2000.
    The significant increase in DCS revenue was driven by growth in the fleet of almost 1,000 tractors, new contractual arrangements and growth with existing customers. Both new sales and demand from existing accounts mirrored the slowdown in Truck and Intermodal early in the quarter. And, as in Truck and Intermodal, both sales to new accounts and activity in current accounts registered an uptick in March. Although DCS, as a matter of policy, continually evaluates profitability by project site and eliminates lower margin projects, the number of discontinued fleets was higher than normal during the first quarter of 2001. The operating ratio for the DCS segment was 96.6% for the current quarter.
    Earnings from the Company's joint venture in Mexico were approximately $2.2 million lower, or 5 cents per diluted share, in the first quarter of 2001 vs. the same period of 2000.
    While March activity rebounded off the January/February lows, the economy, along with high fuel prices, remains a concern. Repairing the Truck segment profitability is the Company's chief focus. Re-deploying truck assets away from Truck to the more profitable Dedicated Contract Services unit will continue at a pace commensurate with profitable growth opportunities in that arena. Several cost saving and revenue enhancing strategies are on-going that management believes will return the unit to more historically acceptable returns. While the timing of improved freight activity is not clear, the success of some of those initiatives would be positively impacted by a strengthening economy. In addition, the Company has delayed the acquisition of approximately 500 trucks.
    Effective January 1, 2001, the Company adopted Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities," which was amended by Statement of Financial Accounting Standards No. 138. The Company has determined that adoption of these two statements did not have a material effect on the results of operations or financial position during the first quarter of 2001.
    This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based upon the Company's best estimates. Actual results may differ materially.
    This press release and related information will be available immediately to interested parties at the Company's web site: www.jbhunt.com.