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J.B. Hunt Transport Services Annual Report, Year Ended Dec 31, 1998

Filing Date
Filed March 3, 1999
Period End
December 31, 1998
Security
JBHT
In the record · 2016–202610-K1110-Q348-K102

JBHT filed 11 annual reports (10-K), 34 quarterly reports (10-Q) and 102 current reports (8-K) between 2016 and 2026.

  1. FY2016 annual report10-K · Feb ’17Feb ’17
  2. Leadership change8-K · Feb ’20Feb ’20
  3. Leadership change8-K · Jan ’22Jan ’22
  4. Material agreement8-K · Dec ’25Dec ’25

01—Abstract

Summary

Summary of the 10-K filed March 3, 1999. Cited figures are marked; the original filing is the authoritative source.

J.B.

Hunt Transport Services, Inc. reported record-level growth in its 1998 fiscal year, with operating revenues of $1.84 billiona, up 18.5% from $1.55 billion in 1997, and net earnings of $46.8 million, or $1.28 diluted earnings per share, compared with $11.4 million, or $.31 per diluted share, in 1997. Operating income rose to $103.0 million from $42.9 million, and the operating ratio improved to 94.4% from 97.2%. The Van/Intermodal segment drove most of the gain, with gross revenue of $1.38 billion (up 19%) and operating income of $81.1 million versus $28.2 million, while the JBHL logistics segment grew revenue 25% to $317 million and the DCS dedicated contract segment grew 41% to $212 million.

The company's balance sheet expanded during the year. Total assets rose to $1.17 billionb from $1.02 billion, and long-term debt increased to $417.0 million from $322.8 million, largely after the company sold $100 million of 7.00% senior notes due 2004 in September 1998. Net cash provided by operating activities was $183 million, while net cash used in investing activities was $261 million, mainly for new revenue equipment.

Total debt to equity was 1.15, and the company was in compliance with its financial covenants at year-end. Management highlighted several risks, including driver recruitment and retention, fuel prices, and Year 2000 readiness.

The company estimates total Year 2000 compliance costs of $1.5 millionc, excluding capitalized financial systems upgrades, and says it has not yet received enough responses from key customers and suppliers to fully assess their readiness. The Board declared a quarterly dividend of $.05 per share in January 1999.

02—Key points

Key Highlights

  1. Operating revenues rose 18.5% to $1,841.6 million in 1998 from $1,554.3 million in 1997.
  2. Net earnings increased to $46.8 million ($1.28 diluted EPS) from $11.4 million ($.31 diluted EPS) in 1997.
  3. Operating ratio improved to 94.4% from 97.2%, and operating income more than doubled to $103.0 million from $42.9 million.
  4. Van/Intermodal segment revenue grew 19% to $1,378.4 million, with operating income of $81.1 million versus $28.2 million; intermodal revenue rose 12%.
  5. Dedicated Contract Services revenue grew 41% to $211.9 million, and JBHL logistics revenue grew 25% to $317.3 million.
  6. Net cash from operations was $183 million, and $100 million of 7.00% senior notes were sold in September 1998, pushing long-term debt to $417.0 million.
  7. Year 2000 compliance cost is estimated at $1.5 million in total, with a contingency plan targeted for completion by June 30, 1999.

03—Questions

Frequently Asked Questions

  1. How did J.B. Hunt perform financially in 1998?

    Operating revenues were $1,841.6 million, up 18.5% from $1,554.3 million in 1997. Net earnings were $46.8 million, or $1.28 per diluted share, compared with $11.4 million, or $.31 per diluted share, in 1997. The operating ratio improved to 94.4% from 97.2%.

  2. Which business segments contributed most to growth?

    The Van/Intermodal segment contributed the largest share, with gross revenue of $1,378.4 million, up 19%, and operating income of $81.1 million, up from $28.2 million. Intermodal revenue rose 12%, and tractor utilization improved to 2,645 miles per week from 2,555. JBHL revenue rose 25% to $317.3 million, and DCS revenue rose 41% to $211.9 million.

  3. How is the company financing its growth and what is its debt position?

    The company sold $100 million of 7.00% senior notes due September 2004 in September 1998. Long-term debt, excluding current maturities, increased to $417.0 million from $322.8 million, and total debt was $433 million. Total debt to equity was 1.15, and the company said it was in compliance with all financial covenants at December 31, 1998. Capital spending for new revenue equipment is expected to be funded from operating cash flow and existing borrowing facilities.

  4. What are the main risks flagged in the filing?

    The filing cites driver shortages and turnover, which was 46% in the VAN business in 1998, as well as diesel fuel costs, adverse weather, and competitive rate fluctuations. It also notes Year 2000 risk, including dependence on third-party customers and suppliers whose readiness the company has not yet been able to fully assess. The company said it is developing a contingency plan to be completed by June 30, 1999.

  5. Is the company paying dividends and buying back stock?

    The Board declared a quarterly dividend of $.05 per share on January 28, 1999, payable February 24, 1999. The company paid $.20 per share in dividends in both 1998 and 1997. It repurchased $5.8 million of treasury stock in 1998, compared with $22.0 million in 1997.

04—Continue

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