J.B. Hunt Transport Services, Inc. 3Q 2015 Results

Transcription

1 J.B. Hunt Transport Services, Inc. 3Q 2015 Results

2 Disclosure This presentation and discussion may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of Words such as expects, anticipates, intends, estimates, or similar expressions are intended to identify these forward-looking statements. These statements are based on J.B. Hunt s current plans and expectations and involve risks and uncertainties that could cause future activities and results of operations to be materially different from those set forth in the forward-looking statements. For further information, please refer to J.B. Hunt s reports and filings with the Securities and Exchange Commission. 2

3 Distinct Complementary Businesses Intermodal (JBI) 3 Largest, 100% 53 high-cube container fleet Largest drayage fleet in North America Priority loading and unloading at major rail terminals Dedicated Contract Services (DCS) Fleet creation, conversion and augmentation Design and implementation of value-driven supply chain solutions On-site management Integrated Capacity Solutions (ICS) Non-asset based offering of dry van, flatbed, refrigerated, expedited and LTL services 40- and 20-foot box domestic and international containers and international intermodal services Services to all 50 States, Canada and Mexico Truckload (JBT) One of the largest capacity networks in North America Instant tracking via the Internet GPS trailer tracking 80% 60% 40% 20% 0% 23% 65% 11% 3Q 2015 Revenue Mix 6% 23% 60% Percentage of 3Q 2015 Operating Income by Business Segment 6% 6% JBI DCS ICS JBT JBI DCS ICS JBT

4 3Q 2015 Results vs. 3Q Q 2015 Revenue: $1.59 billion; down 1% 3Q 2015 Revenue, excl FSC: $1.42 billion; up 8% 3Q 2015 Operating Income: $194 million; up 13% 3Q 2015 EPS: $0.99 vs. $0.87 Segment Performance Intermodal (JBI) Revenue: $949 million; down 2% Operating Income: $126.1 million; up 1% Dedicated Contract Services (DCS) Revenue: $370 million; up 3% Operating Income: $45.1 million; up 32% Integrated Capacity Solutions (ICS) Revenue: $173 million; down 7% Operating Income: $11.5 million; up 36% Truck (JBT) Revenue: $98 million; up 2% Operating Income: $11.2 million; up 159% 4

5 3Q 2015 Results - Consolidated Revenue (in millions) Operating Income (in millions) $7,000 $6,000 $5,000 $5,055 $5,585 $6,165 $700 $600 $500 $400 $300 $200 $358 $248 $348 $444 $530 $577 $632 $172 $194 $4,527 $100 $4,000 $3,732 $3,793 $ $3,203 Diluted EPS $3,000 $2,000 $1,000 $1,601 $1,586 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $1.56 $1.05 $1.56 $2.11 $2.59 $2.87 $3.16 $0.87 $0.99 $0.50 $ $

6 Key Points Industry leading Intermodal franchise Differentiated & specialized Dedicated business Independent brokerage/management services Lighter Truckload asset model 6

7 7 Segment Discussion

8 JBI - Intermodal $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $- 8 $1,952 $1,764 $2,141 JBI Revenue (in millions) $2,673 $3,071 $3,456 $3,687 $964 $ Overall volumes increased 3% over the same period in The Eastern network load growth slowed to 1% and Transcontinental loads grew 4% over the third quarter 2014 as eastern network loads were challenged with recovering rail service while west coast import volumes began to improve. Revenue decreased 2% reflecting the 3% volume growth and an approximate 4.4% decrease in revenue per load, which is the combination of changes in customer rate, freight mix and fuel surcharges. Benefits from customer rate increases, reduced reliance on third party dray carriers and lower dray fleet maintenance costs were partially offset by increases in rail purchased transportation rates, equipment ownership costs including lower box utilization and increased costs to attract and retain drivers.

9 JBI Performance JBI Revenue Growth JBI Operating Income Growth 30% 15% 15% 13% 7% 20% 24% 19% 5% 10% -5% -2% FY12/FY11 FY13/FY12 FY14/FY13 3Q Y/Y 0% FY12/FY11 FY13/FY12 FY14/FY13 3Q Y/Y 3% 1% 1,700 1,690 1,680 1,670 1,660 1,650 1,640 1,630 1,694 JBI Average Length of Haul 1,656 1,645 1,660 $2,200 $2,150 $2,100 $2,050 JBI Revenue per Load $2,169 $2,169 $2,163 $2,069 1,620 $2,000 9

10 DCS - Dedicated $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $- 10 $927 $757 $907 DCS Revenue (in millions) $1,031 $1,080 $1,231 $1,394 $361 $ Revenue increased 3% during the current quarter over the same period in Productivity excluding fuel surcharge revenue increased approximately 1.8% from a year ago primarily from customer rate increases and increased customer demand for capacity. A year-over-year net addition of 413 revenue producing trucks, 195 net additions compared to second quarter 2015, were in the fleet by the end of the quarter. Operating income increased by 32% from a year ago. Revenue from new accounts, higher productivity excluding fuel surcharge revenue, less reliance on third party carrier capacity and lower equipment maintenance costs were partially offset with higher driver wages, higher driver recruiting costs and higher equipment ownership costs compared to the same period in 2014.

11 DCS Performance DCS Revenue Growth DCS Operating Income Growth 15% 14% 13% 40% 30% 32% 10% 5% 5% 3% 20% 10% 0% 13% 6% 0% FY12/FY11 FY13/FY12 FY14/FY13 3Q Y/Y -10% -5% FY12/FY11 FY13/FY12 FY14/FY13 3Q Y/Y DCS Average Length of Haul ,500,000 2,000,000 1,835,872 DCS Loads 2,101, ,500,000 1,000, , , ,

12 ICS - Non-Asset Based $750 $700 $650 $600 $550 $500 $450 $400 $350 $300 $250 $200 $150 $100 $50 $- 12 $209 $259 $291 ICS Revenue (in millions) $356 $456 $537 $718 $185 $ Revenue decreased 7% in the current quarter vs. the third quarter Load volume increased 9% while revenue per load decreased 14% due to lower fuel prices and freight mix changes driven by customer demand including less transactional or spot business. Operating income increased 36% over the same period 2014 primarily due to improved gross profit margin. Gross profit margin increased to 15.9% in the current quarter vs. 13.3% in the prior year. The increase in operating income was partially offset by increased personnel costs as the total branch count grew to 33 compared to 28 at the end of third quarter last year. ICS s carrier base increased 17% and the employee count increased 13% vs. third quarter 2014.

13 ICS Performance 40% 35% 30% 25% 20% 15% 10% 5% 0% -5% -10% ICS Revenue Growth 34% 28% 18% -7% FY12/FY11 FY13/FY12 FY14/FY13 3Q Y/Y 90% 70% 50% 30% 10% -10% ICS Operating Income Change 90% 36% 23% -3% FY12/FY11 FY13/FY12 FY14/FY13 3Q Y/Y 20% ICS Gross Profit Margin 500, ,410 ICS Loads 15% 11.8% 13.0% 13.3% 15.9% 400, , ,987 10% 200,000 5% 100, , ,016 0% - 13

14 JBT - Truckload $800 $600 $400 $200 $676 $447 $479 JBT Revenue (in millions) $504 $484 $391 $386 $96 $98 Revenue for the current quarter increased 2% from the same period in Revenue excluding fuel surcharge increased 10%, primarily from increased truck count and core rate increases of approximately 4.5%, but was partially offset by lower asset utilization. At the end of the period, JBT operated 2,100 tractors compared to 1,843 a year ago. Operating income increased by 159% compared to third quarter Favorable changes in core rates, increased fleet count, lower equipment maintenance costs, lower safety and insurance costs and improved fuel economy were partially offset by increased driver and independent contractor costs per mile, increased driver hiring costs, and lower asset utilization compared to third quarter $

15 JBT Performance JBT Average Length of Haul JBT Average Nonpaid Empty Miles Per Load JBT Loads JBT Revenue per Tractor per Week 500, , , ,555 $5,000 $4,000 $3,828 $4,068 $4,109 $3, ,000 $3, ,000 $2, ,000 89,636 91,639 $1,000 - $- 15

16 Summary Competitively differentiated Unique intermodal network Distinct advantages in dedicated segments Network economics and brand strength to penetrate new markets Complemented by industry dynamics Shippers need to reduce costs Shippers demand on-time service Increasingly complex supply-chains 16 Positioned for growth Leading positions in large and consolidating markets Clear value proposition for our customers Best-in-class systems and technology

17 17 Balance Sheet