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

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1 J.B. Hunt Transport Services, Inc. Q 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) Largest, 100% 53 high-cube container fleet Largest drayage fleet in North America Priority loading and unloading at major rail terminals 14% 3Q 2016 Revenue Mix 6% JBI DCS ICS Dedicated Contract Services (DCS) JBT Fleet creation, conversion and augmentation Design and implementation of value-driven supply chain solutions On-site management 23% 57% Integrated Capacity Solutions (ICS) 3 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% Percentage of 3Q 2016 Operating Income by Business Segment 64% 28% 5% 3% JBI DCS ICS JBT

4 3Q 2016 Results vs. 3Q Q 2016 Revenue: $1.69 billion; up 7% 3Q 2016 Revenue, excl FSC: $1.54 billion; up 8% 3Q 2016 Operating Income: $183 million; down 6% 3Q 2016 EPS: $0.97 vs. $0.99; down 2% Segment Performance Intermodal (JBI) Revenue: $970 million; up 2% Operating Income: $116.9 million; down 7% Dedicated Contract Services (DCS) Revenue: $394 million; up 6% Operating Income: $52.5 million; up 16% Integrated Capacity Solutions (ICS) Revenue: $233 million; up 35% Operating Income: $8.5 million; down 26% Truck (JBT) Revenue: $97 million; flat Operating Income: $5.1 million; down 55% 4

5 3Q 2016 Results - Consolidated Revenue (in millions) Operating Income (in millions) $7,000 $6,000 $5,000 $4,000 $3,793 $4,527 $5,055 $5,585 $6,165 $6,188 $800 $700 $600 $500 $400 $300 $200 $100 $- $248 $348 $444 $530 $577 $632 $716 $194 $ $3,000 $2,000 $1,000 $3,203 $1,586 $1,691 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $1.05 $1.56 $2.11 Diluted EPS $2.59 $2.87 $3.16 $3.66 $0.99 $0.97 $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 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $- 8 $1,764 $2,141 $2,673 JBI Revenue (in millions) $3,071 $3,456 $3,687 $3,665 $949 $ Overall volumes increased 7% over the same period in The Eastern network realized load growth of 5% and Transcontinental loads grew 8% over the third quarter 2015 as west coast outbound freight growth outpaced the rest of the network and western rail service continued a year over year improvement trend. Revenue increased 2% reflecting the 7% volume growth and an approximate 4.2% decrease in revenue per load, which is the combination of changes in customer rate, freight mix and fuel surcharges. Benefits from improved volumes, improved operating efficiencies from network balance and reduced reliance on third party dray carriers were offset by lower customer rates, increases in rail purchased transportation rates, equipment ownership costs including lower box utilization, increased insurance and claims costs and increased costs to attract and retain drivers.

9 JBI Performance JBI Revenue Change JBI Operating Income Change 15% 13% 25% 19% 7% 15% 5% 2% 5% 3% 4% -5% -1% -7% -5% FY13/FY12 FY14/FY13 FY15/FY14 3Q Y/Y -15% FY13/FY12 FY14/FY13 FY15/FY14 3Q Y/Y 1,750 JBI Average Length of Haul $2,200 $2,169 JBI Revenue per Load $2,100 $2,067 $2,069 1,650 1,656 1,652 1,660 1,662 $2,000 $1,983 $1,900 1,550 $1,800 9

10 DCS - Dedicated $1,600 $1,400 $1,200 $1,000 $800 $757 $907 DCS Revenue (in millions) $1,031 $1,080 $1,231 $1,451 $1,394 Revenue increased 6% during the current quarter over the same period in Productivity (revenue per truck per week) increased by approximately 3% vs Productivity excluding fuel surcharge revenue increased approximately 4% from a year ago primarily from improved integration of assets between customer accounts, fewer unseated trucks, increased customer supply chain fluidity and customer rate increases. $600 $400 $200 $370 $394 Operating income increased by 16% from a year ago primarily from the increased revenue and improved asset utilization partially offset by higher driver wages and recruiting costs, increased salaries and benefits costs and higher equipment ownership costs compared to the same period in $

11 DCS Performance 15% 14% DCS Revenue Change 13% 50% 40% DCS Operating Income Change 40% 10% 30% 6% 20% 16% 5% 4% 10% 6% 0% 0% FY13/FY12 FY14/FY13 FY15/FY14 3Q Y/Y -10% -5% FY13/FY12 FY14/FY13 FY15/FY14 3Q Y/Y 4,200 4,100 4,000 4,098 Revenue Per Truck Per Week 4,028 3,998 4,120 2,500,000 2,000,000 2,101,707 DCS Loads 2,250,099 3,900 1,500,000 3,800 3,700 3,600 1,000, , , ,876 3,500-11

12 ICS - Non-Asset Based $750 $700 $650 $600 $550 $500 $450 $400 $350 $300 $250 $200 $150 $100 $50 $- 12 $259 $291 $356 ICS Revenue (in millions) $456 $537 $718 $699 $173 $ Revenue increased 35% in the current quarter vs. the third quarter Load volume increased 88% while revenue per load decreased 29% due to lower fuel prices, freight mix changes driven by customer demand and lower customer rates on contractual business. Operating income decreased 26% over the same period Gross profit margin decreased to 12.8% in the current quarter vs. 15.9% in the prior year primarily from new customer rates implemented during the quarter on contractual business and lower customer spot rates compared to third quarter ICS s carrier base increased 14% and the employee count increased 18% vs. third quarter 2015.

13 ICS Performance ICS Revenue Change ICS Operating Income Change 40% 35% 30% 25% 20% 15% 10% 5% 0% -5% 34% 35% 18% -3% FY13/FY12 FY14/FY13 FY15/FY14 3Q Y/Y 100% 85% 70% 55% 40% 25% 10% -5% -20% -35% 90% 20% -3% -26% FY13/FY12 FY14/FY13 FY15/FY14 3Q Y/Y ICS Gross Profit Margin ICS Loads 20% 15% 13.0% 15.3% 15.9% 12.8% 600, , , , ,947 10% 300, ,399 5% 200, , ,016 0% - 13

14 JBT - Truckload JBT Revenue (in millions) $600 Revenue was flat from the same period in $500 $400 $447 $479 $504 $484 $391 $386 $386 Revenue excluding fuel surcharge increased 2%, primarily from a 4% increased truck count a 2% increase in utilization offset with an approximate 4% decrease in rate per mile excluding fuel mostly from customer driven freight mix changes. $300 At the end of the period, JBT operated 2,183 tractors compared to 2,100 a year ago. Operating income decreased by 55% compared to third quarter $200 $100 $98 $97 Favorable changes from an increased fleet count and improved utilization were more than offset by lower customer rates per mile, increased equipment maintenance costs, higher safety and insurance costs and increased driver hiring costs 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 400, , , ,297 $5,000 $4,000 $4,068 $3,698 $3,630 $3, , ,000 91,639 97,052 $3,000 $2,000 $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 Positioned for growth 16 Leading positions in large and consolidating markets Clear value proposition for our customers Best-in-class systems and technology

17 17 Balance Sheet