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J.B. Hunt Transport Services, Inc.
Q3 2016 Results
2
This presentation and discussion may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. 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.
Disclosure
3
• Intermodal (JBI)• 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
Distinct Complementary Businesses
57%
23%
14%
6%
3Q 2016 Revenue Mix
JBI
DCS
ICS
JBT
64%
28%
5% 3%0%
20%
40%
60%
80%
JBI DCS ICS JBT
Percentage of 3Q 2016 Operating Income by Business Segment
4
• 3Q 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%
3Q 2016 Results vs. 3Q 2015
5
3Q 2016 Results - Consolidated
$3,203
$3,793
$4,527
$5,055
$5,585
$6,165 $6,188
$1,586 $1,691
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
2009 2010 2011 2012 2013 2014 2015 3Q 15 3Q 16
Revenue(in millions)
$248
$348 $444
$530 $577
$632
$716
$194 $183
$-
$100
$200
$300
$400
$500
$600
$700
$800
2009 2010 2011 2012 2013 2014 2015 3Q 15 3Q 16
Operating Income(in millions)
$1.05
$1.56
$2.11
$2.59
$2.87 $3.16
$3.66
$0.99 $0.97
$-
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
2009 2010 2011 2012 2013 2014 2015 3Q 15 3Q 16
Diluted EPS
6
• Industry leading Intermodal franchise
• Differentiated & specialized Dedicated business
• Independent brokerage/management services
• Lighter Truckload asset model
Key Points
7
Segment Discussion
8
JBI - Intermodal
• Overall volumes increased 7% over the same period in 2015.
• 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.
$1,764
$2,141
$2,673
$3,071
$3,456
$3,687 $3,665
$949 $970
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
2009 2010 2011 2012 2013 2014 2015 3Q 15 3Q 16
JBI Revenue(in millions)
9
JBI Performance
13%
7%
-1%
2%
-5%
5%
15%
FY13/FY12 FY14/FY13 FY15/FY14 3Q Y/Y
JBI Revenue Change
19%
3% 4%
-7%
-15%
-5%
5%
15%
25%
FY13/FY12 FY14/FY13 FY15/FY14 3Q Y/Y
JBI Operating Income Change
$2,169
$2,067 $2,069
$1,983
$1,800
$1,900
$2,000
$2,100
$2,200
2014 2015 3Q 15 3Q 16
JBI Revenue per Load
1,656 1,652 1,660 1,662
1,550
1,650
1,750
2014 2015 3Q 15 3Q 16
JBI Average Length of Haul
10
DCS - Dedicated
• Revenue increased 6% during the current quarter over the same period in 2015.
• Productivity (revenue per truck per week) increased by approximately 3% vs. 2015. 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.
• 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 2015.
$757
$907
$1,031 $1,080
$1,231
$1,394 $1,451
$370 $394
$-
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
2009 2010 2011 2012 2013 2014 2015 3Q 15 3Q 16
DCS Revenue(in millions)
11
DCS Performance14%
13%
4%
6%
0%
5%
10%
15%
FY13/FY12 FY14/FY13 FY15/FY14 3Q Y/Y
DCS Revenue Change
-5%
6%
40%
16%
-10%
0%
10%
20%
30%
40%
50%
FY13/FY12 FY14/FY13 FY15/FY14 3Q Y/Y
DCS Operating Income Change
2,101,707 2,250,099
578,628 607,876
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
2014 2015 3Q 15 3Q 16
DCS Loads
4,098
4,028 3,998
4,120
3,500
3,600
3,700
3,800
3,900
4,000
4,100
4,200
2014 2015 3Q 15 3Q 16
Revenue Per Truck Per Week
12
ICS - Non-Asset Based
• Revenue increased 35% in the current quarter vs. the third quarter 2015.
• 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 2015.
• 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 2015.
• ICS’s carrier base increased 14% and the employee count increased 18% vs. third quarter 2015.
$259
$291
$356
$456
$537
$718 $699
$173
$233
$-
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
$550
$600
$650
$700
$750
2009 2010 2011 2012 2013 2014 2015 3Q 15 3Q 16
ICS Revenue(in millions)
13
ICS Performance
18%
34%
-3%
35%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
FY13/FY12 FY14/FY13 FY15/FY14 3Q Y/Y
ICS Revenue Change
13.0%
15.3% 15.9%
12.8%
0%
5%
10%
15%
20%
2014 2015 3Q 15 3Q 16
ICS Gross Profit Margin
453,410
542,947
127,016
239,399
-
100,000
200,000
300,000
400,000
500,000
600,000
2014 2015 3Q 15 3Q 16
ICS Loads
-3%
90%
20%
-26%-35%
-20%
-5%
10%
25%
40%
55%
70%
85%
100%
FY13/FY12 FY14/FY13 FY15/FY14 3Q Y/Y
ICS Operating Income Change
14
JBT - Truckload
• Revenue was flat from the same period in 2015.
• 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.
• 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 2015.
• 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 2015.
$447
$479
$504 $484
$391 $386 $386
$98 $97
$-
$100
$200
$300
$400
$500
$600
2009 2010 2011 2012 2013 2014 2015 3Q 15 3Q 16
JBT Revenue(in millions)
15
JBT Performance
411
448 454 453
0
100
200
300
400
500
2014 2015 3Q 15 3Q 16
JBT Average Length of Haul
73.9
83.8
85.6
87.2
70
72
74
76
78
80
82
84
86
88
90
2014 2015 3Q 15 3Q 16
JBT Average Nonpaid Empty Miles Per Load
370,555 366,297
91,639 97,052
-
100,000
200,000
300,000
400,000
2014 2015 3Q 15 3Q 16
JBT Loads
$4,068 $3,698
$3,630
$3,468
$-
$1,000
$2,000
$3,000
$4,000
$5,000
2014 2015 3Q 15 3Q 16
JBT Revenue per Tractor per Week
16
• 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• Leading positions in large and consolidating
markets
• Clear value proposition for our customers
• Best-in-class systems and technology
Summary
17
Balance Sheet