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

    LOWELL, Ark.--Oct. 15, 2001--J. B. Hunt Transport Services, Inc., announced third quarter 2001 net earnings of $4.5 million, or earnings per diluted share of 12 cents, compared with 2000 third quarter net earnings of $9.1 million, or 26 cents per diluted share. Earnings per share in the quarter, while significantly below a year ago, exceeded management expectations and earlier guidance due primarily to better than anticipated earnings in September.
    Total revenue for the third quarter of 2001 was $537.2 million, compared with $509.4 million during the third quarter of 2000. During the third quarter of 2001, revenues of the Company's Truck segment grew 1%, while Intermodal segment revenue rose 9% over the comparable period of 2000. Dedicated segment revenue rose 8% during the third quarter of 2001.
    As management has noted on numerous occasions, there is significant operating leverage embedded within the Company's operations. While July and August actual results projected a shortfall in earnings for the quarter, the deficit was partially erased by a strong showing in September. Both the Truck and Intermodal segments recorded substantial improvement in operations relative to previous periods. In fact, the increase in Intermodal operating income out-paced the growth in Intermodal revenues when compared to the third quarter of 2000. Likewise, Truck operations recorded the best operating ratio, at 97.7%, since separating Truck and Intermodal at the beginning of 2000. This improvement comes despite intense cost pressures and economic woes impacting the entire transportation industry as outlined in the Company's press release dated September 18, 2001. Management continues to focus intently on continued improvement in the Truck operating ratio. As an example, September recorded the lowest empty miles per load in over a year and the best tractor utilization so far in 2001. Additionally, truck rates (excluding fuel surcharges) increased 3.4% for the quarter vs. a year ago. Going forward, management believes the economy will remain challenging for some time and would therefore expect continued volatility in monthly and quarterly earnings given the aforementioned operating leverage. Freight volumes in early October, for example, have shown weakness not typical of previous years.
    The weak economy has had a particularly severe impact on Dedicated Contract Services (DCS) in the form of reduced freight volumes with key customers. Additionally, as outlined in the Company press release of September 18, 2001, the DCS business unit has incurred unusually high start-up costs related to a number of new projects. These factors, along with the continuing increases in insurance and equipment costs, have had an adverse impact on the earnings in DCS. As a result, the earnings shortfall for the Company as a whole can be largely attributed to a decline in the operating results of the DCS unit. While an economic recovery will certainly aid the profitability of the DCS unit, additional corrective action is underway from both a revenue and expense perspective.
    While the overall financial results are disappointing and economic uncertainty clouds the near-term future, the Company is encouraged by the earnings consistency of its Intermodal business and the earnings improvement and trends in the Truck segment. Additional rate increases will be necessary as rising costs continue to press upon the entire trucking industry in a number of areas. Management is also confident it will be able to show improvement in DCS earnings through cost, efficiency and pricing initiatives and as economic conditions improve.
    Operating revenues for the nine months ended September 30, 2001 totaled $1.554 billion, compared with $1.626 billion in 2000. Revenue growth for 2001 was 11%, adjusted for the Logistics segment business, which was contributed to a jointly owned logistics company, Transplace. For the current nine months, Truck segment revenue was up 2%, Intermodal revenue grew 9%, and Dedicated revenue was up 16%. Net earnings for the nine months ended September 30, 2001 were $14.8 million, or 41 cents per diluted share, compared with $25.2 million, or 71 cents per diluted share in 2000. The Logistics segment contributed approximately 17 cents per share to net earnings during the first nine months of 2000. However, the Company recorded a loss of approximately 4 cents per share for the comparable period of 2001 for its successor, Transplace, under the equity method of accounting. In addition, the Company recognized net earnings of 8 cents per share from Mexican operations in 2000, compared with 2 cents during the first nine months of 2001.
    This press release may contain 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.