01—Abstract
Summary
Summary of the 10-K filed February 24, 2023. Cited figures are marked; the original filing is the authoritative source.
J.B.
Hunt Transport Services, Inc. (NASDAQ: JBHT) reported strong 2022 results in its Form 10-K for the fiscal year ended December 31, 2022. Total operating revenues rose 21.7% to $14.81 billiona from $12.17 billion in 2021, driven by higher revenue per load and volumes in JBI and JBT, increased DCS productivity, and FMS growth aided by the Zenith Freight Lines acquisition. Fuel surcharge revenues increased 94.2% to $2.43 billion.
Operating income rose 27.4% to $1.33 billionb, and the operating ratio improved to 91.0% from 91.4%. Net earnings increased 27.4% to $969.4 million, or $9.21 per diluted share, compared with $7.14 per diluted share in 2021. By segment, Intermodal (JBI) generated $7.02 billion in revenue and $800 million in operating income, and Dedicated Contract Services (DCS) produced $3.38 billion in revenue and $345 million in operating income.
Insurance and claims expense rose 92.7% to $318.1 millionc, including $94.0 million of additional casualty claim reserves recorded in 2022, a key pressure point for investors. Cash flow from operations reached $1.78 billion, while capital expenditures on equipment were $1.54 billion and the company committed approximately $2.37 billion for equipment purchases in 2023 and 2024. The company returned capital to shareholders through $300.0 million of share repurchases and $166.7 million of dividends in 2022.
On January 19, 2023, it announced a quarterly dividend increase from $0.40 to $0.42d per share. At December 31, 2022, the company had $551.1 million remaining under its repurchase authorizations and reported $1.26 billion of long-term debt.
02—Key points
Key Highlights
- Total operating revenues increased 21.7% to $14.81 billion in 2022, from $12.17 billion in 2021.
- Operating income rose 27.4% to $1.33 billion, and the operating ratio improved to 91.0% from 91.4%.
- Net earnings increased 27.4% to $969.4 million; diluted EPS was $9.21 versus $7.14 in 2021.
- JBI segment revenue reached $7.02 billion with operating income of $800 million; DCS revenue was $3.38 billion with operating income of $345 million.
- Insurance and claims expense increased 92.7% to $318.1 million, including $94.0 million of additional casualty claim reserves recorded in 2022.
- Net cash provided by operating activities was $1.78 billion, against $1.54 billion of equipment additions and a commitment of approximately $2.37 billion for 2023 and 2024.
- Quarterly dividend was raised to $0.42 per share from $0.40, and $300.0 million of stock was repurchased in 2022, leaving $551.1 million available under authorizations.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2022filed February 24, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $14.81B$12.17B | +21.7% |
| Operating Expenses | $13.48B$11.12B | +21.2% |
| Operating Income | $1.33B$1.05B | +27.4% |
| Interest Expense | $51.25M$46.25M | +10.8% |
| Net Income | $969.35M$760.81M | +27.4% |
| EPS (Basic) | $9.31$7.22 | +28.9% |
| EPS (Diluted) | $9.21$7.14 | +29.0% |
| Shares Outstanding (Basic) | 104.14M105.36M | −1.2% |
| Shares Outstanding (Diluted) | 105.28M106.59M | −1.2% |
05—Questions
Frequently Asked Questions
What drove the increase in revenue and profitability in 2022?
Revenue growth was primarily due to higher revenue per load and increased load volumes within JBI and JBT, increased average revenue-producing trucks and productivity within DCS, and increased FMS revenue driven by a business acquisition. Fuel surcharge revenue rose 94.2% to $2.43 billion. Excluding fuel surcharges, revenue increased 13.4%.
What were the main cost pressures in 2022?
Fuel and fuel taxes rose 75.6%, insurance and claims rose 92.7%, and salaries, wages and employee benefits rose 22.1%, reflecting driver pay, office personnel compensation and headcount. Insurance and claims included $94.0 million of additional casualty claim reserves for claims subject to coverage-layer aggregated limits.
How is the company's capital spending and liquidity position?
Additions to property and equipment totaled $1.54 billion in 2022, and the company is committed to approximately $2.37 billion, net of sales or trade-ins, during 2023 and 2024, mainly for tractors, containers, chassis and trailing equipment. At year-end, cash was $51.9 million, $317.5 million was outstanding on the revolving line of credit at an average rate of 5.32%, and the company stated it was in compliance with all covenants.
How concentrated is the customer base?
The top 10 customers accounted for approximately 38% of 2022 revenue, and one customer accounted for approximately 14%. JBI, ICS and JBT typically do not have long-term contracts with their customers, while DCS and FMS may involve longer-term written contracts that may contain cancellation clauses.
What is the company's shareholder return policy?
In 2022 the company paid $1.60 per share in dividends totaling $166.7 million and repurchased $300.0 million of common stock. On January 19, 2023, it increased the quarterly dividend to $0.42 per share from $0.40, payable February 24, 2023. The company stated it intends to continue paying cash dividends quarterly, but no assurance can be given that future dividends will be paid.
06—Continue