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J.B. Hunt Transport Services Annual Report, Year Ended Dec 31, 2007

Filing Date
Filed February 29, 2008
Period End
December 31, 2007
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 February 29, 2008. Cited figures are marked; the original filing is the authoritative source.

J.B.

Hunt Transport Services, Inc. (NASDAQ: JBHT) reported 2007 total operating revenues of $3.49 billiona, up from $3.33 billion in 2006, and net earnings of $213.1 million, or $1.55 per diluted share, compared with $220.0 million, or $1.44 per diluted share, in 2006. Operating income was $368.8 million versus $372.7 million, and the consolidated operating ratio rose slightly to 89.4% from 88.8%. Fuel surcharge revenue grew to $480 million from $430 million, and management said the company recovered most higher fuel costs through surcharges.

Results were uneven across segments. Intermodal (JBI) operating income rose to $239 millionb from $182 million on a 17.3% increase in load volume. Dedicated contract services (DCS) operating income fell to $94 million from $104 million, and full-load dry-van (JBT) operating income dropped to $32 million from $84 million, including an $8.4 million pretax charge to write down assets held for sale.

Integrated Capacity Solutions (ICS) revenue more than doubled to $92 millionc. In December 2007 the company planned to sell about 700 tractors and 2,500 trailers in JBT during 2008 as part of its shift toward an asset-light model. Capital allocation was a major theme.

The company bought back 21.7 million shares for $603.4 milliond in 2007 and issued $400 million of senior notes. Total debt rose to $913.1 million from $396.4 million, and stockholders' equity fell to $343.2 million from $759.7 million. Operating cash flow was $457.8 million, and the quarterly dividend was raised to $0.10 for February 2008.

02—Key points

Key Highlights

  1. Total operating revenues of $3.49 billion in 2007, up from $3.33 billion in 2006; net earnings of $213.1 million, or $1.55 per diluted share, versus $1.44 in 2006.
  2. Operating ratio of 89.4% in 2007 compared with 88.8% in 2006; the company noted this was the fourth consecutive year below 90%.
  3. JBI intermodal operating income rose to $239 million from $182 million, while JBT operating income fell to $32 million from $84 million.
  4. ICS segment revenue grew to $92 million from $42 million, with load volume up 148.4%.
  5. Repurchased 21.7 million shares for $603.4 million in 2007; total debt increased to $913.1 million and stockholders' equity declined to $343.2 million.
  6. Issued $400 million of senior notes in 2007 (5.31% due 2011 and 6.08% due 2014).
  7. Dividend increased to $0.09 per quarter in 2007 and to $0.10 effective February 2008; 2007 dividends declared totaled $0.36 per share.

03—Questions

Frequently Asked Questions

  1. How did J.B. Hunt's profitability change in 2007?

    Net earnings were $213.1 million, or $1.55 per diluted share, down from $220.0 million, or $1.44 per diluted share, in 2006. Operating income was $368.8 million compared with $372.7 million, and the operating ratio rose to 89.4% from 88.8%. Revenue growth was offset by higher purchased transportation, depreciation and general and administrative costs, including an $8.4 million pretax charge on assets held for sale.

  2. Which business segments drove results in 2007?

    The intermodal (JBI) segment was the main driver, with revenue of $1.65 billion and operating income of $239 million, up from $182 million. Dedicated contract services (DCS) had revenue of $937 million and operating income of $94 million, down from $104 million. Full-load dry-van (JBT) revenue fell to $842 million and operating income fell to $32 million. Integrated Capacity Solutions (ICS) revenue rose to $92 million, with operating income of $4 million.

  3. What is the company's plan for its JBT fleet?

    In December 2007 the company planned to sell approximately 700 tractors and 2,500 trailers in the JBT segment during calendar 2008. The filing describes this as part of a strategy to move from a primarily asset-based truckload carrier to an asset-light transportation company. The company recorded a pretax charge of $8.4 million to reduce the carrying value of this equipment to estimated fair value less costs to sell.

  4. How did the company use its capital in 2007?

    The company purchased 21.7 million shares of common stock for $603.4 million and issued $400 million in senior notes. Total debt rose to $913.1 million from $396.4 million. Capital expenditures for additions to property and equipment were $363.6 million, and the company was committed to spend approximately $122.4 million on revenue equipment and facilities in 2008, net of expected sales proceeds and allowances.

  5. Does the company face a significant customer concentration risk?

    Yes. The top 10 customers accounted for approximately 38% of 2007 revenue, and Wal-Mart Stores, Inc. accounted for approximately 12%. The filing notes that the JBT and JBI segments typically do not have long-term contracts with their customers, and that a reduction in or termination of services by one or more major customers could have a material adverse effect.

04—Continue

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