FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended March 31,June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-11757
J.B. HUNT TRANSPORT SERVICES, INC.
(Exact name of registrant as specified in its charter)
Arkansas 71-0335111
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification No.)
organization)
615 J.B. Hunt Corporate Drive, Lowell, Arkansas 72745
(Address of principal executive offices, and Zip Code)
(501) 820-0000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been
subject to the filing requirements for at least the past 90 days.
Yes X No
--- ---
The number of shares of the Company's $.01 par value common stock outstanding on
March 31,June 30, 1996 was 38,046,42138,118,056
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
The interim consolidated financial statements contained herein reflect all
adjustments which, in the opinion of management, are necessary for a fair
statement of financial condition, results of operations and cash flows for the
periods presented. They have been prepared in accordance with Rule 10-01 of
Regulation S-X and do not include all the information and footnotes required by
generally accepted accounting principles for complete financial statements.
Operating results for the three and six month periodperiods ended March 31,June 30, 1996 are
not necessarily indicative of the results that may be expected for the entire
year ending December 31, 1996.
The interim consolidated financial statements have been reviewed by KPMG
Peat Marwick LLP, independent public accountants.
These interim consolidated financial statements should be read in
conjunction with the Company's latest annual report and Form 10-K for the year
ended December 31, 1995.
INDEX
Consolidated Statements of EarningsOperations for the Three and Six Months
Ended March 31,June 30, 1996 and 1995..................................1995........................................ Page 3
Consolidated Balance Sheets as of
March 31,June 30, 1996 and December 31,1995...................................31,1995.................................. Page 4
Consolidated Statements of Cash Flows for the
ThreeSix Months Ended March 31,June 30, 1996 and 1995............................1995............................. Page 5
Notes to Consolidated Financial Statements
as of March 31, 1996..................................................June 30, 1996................................................. Page 6
Review Report of KPMG Peat Marwick LLP....................................PageLLP.................................. Page 8
ITEM 2.
Management's Discussion and Analysis of Results of Operations
and Financial Condition...............................................Condition............................................. Page 9
2
J.B. HUNT TRANSPORT SERVICES, INC.
Consolidated Statements of EarningsCONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
- - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
THREE MONTHS ENDED MARCH 31SIX MONTHS ENDED
JUNE 30 JUNE 30
- - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1996 1995 1996 1995
- - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Operating revenues $ 354,014372,573 $ 309,424329,219 $ 726,587 $ 638,643
Operating expenses
Salaries, wages and employee benefits 116,436 105,117122,186 115,487 238,622 220,604
Purchased transportation 97,971 77,45298,857 83,362 196,828 160,814
Fuel and fuel taxes 40,134 35,58242,115 34,555 82,249 70,137
Depreciation 34,144 32,02329,867 33,755 64,011 65,778
Operating supplies and expenses 22,598 20,98723,905 26,331 46,503 47,318
Insurance and claims 13,165 10,54118,005 11,974 31,170 22,515
General and administrative expenses 7,463 6,3128,351 9,588 15,814 15,900
Operating taxes and licenses 7,162 5,8797,120 6,976 14,282 12,855
Communication and utilities 4,509 1,7934,731 3,977 9,240 5,770
- - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Total operating expenses 343,582 295,686355,137 326,005 698,719 621,691
- - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Operating income 10,432 13,73817,436 3,214 27,868 16,952
Interest expense 5,911 5,9766,362 6,609 12,273 12,585
- - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Earnings (loss) before income taxes 4,521 7,76211,074 (3,395) 15,595 4,367
Income taxes 1,718 2,8724,208 (1,256) 5,926 1,616
- - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Net earnings (loss) $ 2,8036,866 $ 4,890(2,139) $ 9,669 $ 2,751
- - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Common shares outstanding 38,074 38,55538,061 38,569 38,068 38,562
- - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Earnings (loss) per share $ 0.070.18 $ 0.13(0.06) $ 0.25 $ 0.07
- - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
- - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
3
J.B. HUNT TRANSPORT SERVICES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
(unaudited)
- - --------------------------------------------------------------------------------
MARCH 31, 1996 DECEMBER 31, 1995
- - --------------------------------------------------------------------------------
ASSETS
Current assets:
Cash and temporary investments $ -- $ 4,260
Accounts receivable 163,001 143,002
Prepaid expenses 22,193 29,645
Deferred income taxes 13,967 10,171
- - --------------------------------------------------------------------------------
Total current assets 199,161 187,078
- - --------------------------------------------------------------------------------
Property and equipment 1,197,091 1,184,808
Less accumulated depreciation 386,801 375,798
- - --------------------------------------------------------------------------------
Net property and equipment 810,290 809,010
- - --------------------------------------------------------------------------------
Other 18,815 20,694
- - --------------------------------------------------------------------------------
$ 1,028,266 $ 1,016,782- - --------------------------------------------------------------------------------
JUNE 30, 1996 DECEMBER 31, 1995
- - --------------------------------------------------------------------------------
ASSETS
Current assets:
Cash and cash equivalents $ 6,000 $ 4,260
Accounts receivable 167,743 143,002
Prepaid expenses 19,376 29,645
Deferred income taxes 11,987 10,171
- - --------------------------------------------------------------------------------
Total current assets 205,106 187,078
- - --------------------------------------------------------------------------------
Property and equipment 1,222,127 1,184,808
Less accumulated depreciation 403,149 375,798
- - --------------------------------------------------------------------------------
Net property and equipment 818,978 809,010
- - --------------------------------------------------------------------------------
Other assets 22,327 20,694
- - --------------------------------------------------------------------------------
$1,046,411 $1,016,782
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 61,870 $ 30,310
Trade accounts payable 86,986 86,466
Claims accruals 34,875 38,014
Accrued expenses 27,954 25,986
Other current liabilities 3,216 3,823
- - --------------------------------------------------------------------------------
Total current liabilities 214,901 184,599
- - --------------------------------------------------------------------------------
Long-term debt 334,357 339,015
Claims accruals 13,500 13,500
Deferred income taxes 123,312 122,729
Stockholders' equity 360,341 356,939
- - --------------------------------------------------------------------------------
$1,046,411 $1,016,782
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 43,250 $ 30,310
Trade accounts payable 88,001 86,466
Claims accruals 33,654 38,014
Accrued expenses 28,762 25,986
Other current liabilities 4,079 3,823
- - --------------------------------------------------------------------------------
Total current liabilities 197,746 184,599
- - --------------------------------------------------------------------------------
Long-term debt 339,392 339,015
Claims accruals 13,500 13,500
Deferred income taxes 123,377 122,729
Stockholders' equity 354,251 356,939
- - --------------------------------------------------------------------------------
$ 1,028,266 $ 1,016,782
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
4
J.B. HUNT TRANSPORT SERVICES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
- - --------------------------------------------------------------------------------
THREE MONTHS ENDED
MARCH 31
- - --------------------------------------------------------------------------------
1996 1995
- - --------------------------------------------------------------------------------
Cash flows from operating activities:
Net earnings $ 2,803 $ 4,890
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation 34,144 32,023
Deferred income taxes (3,148) (2,053)
Tax benefit of stock options exercised 162 264
Changes in assets and liabilities:
Accounts receivable (19,999) (6,842)
Prepaid expenses 7,452 6,355
Trade accounts payable 1,535 20,515
Claims accruals (4,360) 1,246
Accrued expenses and other current
liabilities 3,032 (230)
- - --------------------------------------------------------------------------------
Net cash provided by operating
activities 21,621 56,168
- - --------------------------------------------------------------------------------
Cash flows from investing activities:
Additions to property and equipment (50,601) (48,408)
Proceeds from sale of equipment 15,177 15,196
Increase in other assets 555 (4,149)
- - --------------------------------------------------------------------------------
Net cash used in investing activities (34,869) (37,361)
- - --------------------------------------------------------------------------------
Cash flows from financing activities:
Net borrowings (repayments) of short-term
obligations 13,317 (13,471)
Proceeds from sale of treasury stock 550 427
Repurchase of treasury stock (2,998) --
Dividends paid (1,881) (1,927)
- - --------------------------------------------------------------------------------
Net cash provided by (used in)
financing activities 8,988 (14,971)
- - --------------------------------------------------------------------------------
Net increase (decrease) in cash and temporary
investments (4,260) 3,836
- - --------------------------------------------------------------------------------
Cash and temporary investments at beginning
of period 4,260 2,142
- - --------------------------------------------------------------------------------
Cash and temporary investments at end of
period $ 0 $ 5,978- - --------------------------------------------------------------------------------
SIX MONTHS ENDED JUNE 30
- - --------------------------------------------------------------------------------
1996 1995
- - --------------------------------------------------------------------------------
Cash flows from operating activities:
Net earnings $ 9,669 $ 2,751
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation, net of gain on disposition of equipment 64,011 65,778
Deferred income taxes (1,233) (5,103)
Tax benefit of stock options exercised 386 287
Changes in assets and liabilities:
Accounts receivable (24,741) (6,703)
Prepaid expenses 10,269 6,441
Trade accounts payable 520 24,367
Claims accruals (3,139) 1,708
Accrued expenses and other current liabilities 1,361 (1,604)
- - --------------------------------------------------------------------------------
Net cash provided by operating activities 57,103 87,922
- - --------------------------------------------------------------------------------
Cash flows from investing activities:
Additions to property and equipment (95,786) (119,441)
Proceeds from sale of equipment 21,807 21,529
Increase in other assets (2,791) (5,765)
- - --------------------------------------------------------------------------------
Net cash used in investing activities (76,770) (103,677)
- - --------------------------------------------------------------------------------
Cash flows from financing activities:
Net borrowings of short-term obligations 26,902 20,338
Proceeds from sale of treasury stock 2,066 363
Repurchase of treasury stock (3,778) --
Dividends paid (3,783) (3,855)
- - --------------------------------------------------------------------------------
Net cash provided by financing activities 21,407 16,846
- - --------------------------------------------------------------------------------
Net increase in cash and cash equivalents 1,740 1,091
- - --------------------------------------------------------------------------------
Cash and cash equivalents at beginning of period 4,260 2,142
- - --------------------------------------------------------------------------------
Cash and cash equivalents at end of period $ 6,000 $ 3,233
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 12,418 $ 12,736
Income Taxes 789 3,645
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
Supplemental disclosure of cash flow
information:
Cash paid (refunded) during the period for:
Interest $ 5,255 $ 6,833
Income Taxes (1,114) 1,875
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
5
J.B. HUNT TRANSPORT SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) LONG-TERM DEBT
Long-term debt consists of (in thousands):
3/31/6/30/96 12/31/95
--------------- --------
Commercial paper $158,250$176,870 $145,310
Senior notes payable, interest at 6.25%
payable semiannually 100,000 100,000
Senior notes payable, interest at 7.75%
payable semiannually 5,000 5,000
Senior notes payable, interest at 7.84%
payable semiannually 20,00015,000 20,000
Senior subordinated notes, interest at 7.80%
payable semiannually 50,000 50,000
Senior notes payable, interest at 6.25%
payable semiannually 25,000 25,000
Senior notes payable, interest at 6.00%
payable semiannually 25,000 25,000
-------- --------
383,250396,870 370,310
Less current maturities (43,250)(61,870) (30,310)
Unamortized discount (608)(643) (985)
-------- --------
$339,392$334,357 $339,015
-------- --------
-------- --------
The Company is authorized to issue up to $250 million in notes under its
commercial paper note program. These notes are supported by two credit
agreements with a group of banks. One agreement for $125 million expires March
27, 1997 and $125 million expires March 31, 1999.
The 6.25% senior notes were issued on September 1, 1993 and are due on
September 1, 2003.
The 7.75% senior notes were issued on October 1, 1991 and are payable in
five equal annual installments beginning October 31, 1992.
The 7.84% senior notes were issued on March 31, 1992 and are payable in
five equal annual installments beginning March 31, 1995.
The 7.80% senior subordinated notes were issued on October 30, 1992 and are
payable in five equal annual installments beginning October 30, 2000.
6
The 6.25% senior notes were issued on November 17, 1995 and are payable at
maturity on November 17, 2000.
The 6.00% senior notes were issued on December 12, 1995 and are payable at
maturity on December 12, 2000.
2) CAPITAL STOCK
The Company maintains a Management Incentive Plan that provides various
vehicles to compensate key employees with Company common stock. A summary of
the restricted and non-statutory options to purchase Company common stock
follows:
Number of
Number of Option price shares
shares per share exercisable
------ --------- -------------- -----------
Outstanding at December 31, 1995 2,725,731 $ 9.33 - 24.63 415,606
-------
------------------
Granted 75,000 15.632,660,000 17.63 - 19.2521.25
Exercised (112,581) 6.00(188,656) 9.67 - 13.1718.75
Terminated (110,450) 13.17 -(205,850) 11.58- 22.75
-------- ---------------------- -------------- -----------
Outstanding at March 31,June 30, 1996 2,577,7004,991,225 $ 9.33 - 24.63 285,375328,900
--------- -------------- -------
--------- -------------- ------------------
On April 16,July 18, 1996, the Company's Board of Directors declared a regular
quarterly cash dividend of $.05 per share payable on May 20,August 19, 1996 to
stockholders of record on May 3,August 2, 1996.
7
INDEPENDENT AUDITORS' REPORT
The Board of Directors
J.B. Hunt Transport Services, Inc.:
We have reviewed the condensed consolidated balance sheet of J.B. Hunt Transport
Services, Inc. and subsidiaries as of March 31,June 30, 1996, and the related condensed
consolidated statements of earnings and cash flows for the three-month and six-
month periods ended March 31,June 30, 1996 and 1995, in accordance with standards
established by the American Institute of Certified Public Accountants.
A review of interim financial information consists principally of obtaining an
understanding of the system for the preparation of interim financial
information, applying analytical review procedures to financial data, and making
inquiries of persons responsible for financial and accounting matters. It is
substantially less in scope than an audit in accordance with generally accepted
auditing standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole. Accordingly, we do not
express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the condensed consolidated financial statements referred to above for
them to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of J.B. Hunt Transport Services, Inc.
and subsidiaries as of December 31, 1995, and the related consolidated
statements of operations, stockholders' equity, and cash flows for the year then
ended (not presented herein); and in our report dated February 9, 1996, we
expressed an unqualified opinion on those consolidated financial statements. In
our opinion, the information set forth in the accompanying condensed
consolidated balance sheet as of December 31, 1995, is fairly presented, in all
material respects, in relation to the consolidated balance sheet from which it
has been derived.
/s/ KPMG Peat Marwick LLP
-------------------------
Little Rock, Arkansas
AprilJuly 12, 1996
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
The following discussion should be read in conjunction with the attached
interim consolidated financial statements and notes thereto, and with the
Company's audited consolidated financial statements and notes thereto for the
calendar year ended December 31, 1995.
RESULTS OF OPERATIONS
The following table sets forth the change in amounts and percentage change
between the firstsecond quarter of 1996 and the comparable period in 1995 of certain
revenue, expense and operating items.
Three Months Ended March 31,June 30, 1996 vs. 1995
(in(In thousands except tractor data)
Increase
(Decrease)(decrease) %
in amounts Changechange
---------- ---------------
Operating revenues $43,354 13%
------------------------------------------------------------------
------------------------------------------------------------------
Average number of tractors in the fleet 273 4%
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
Operating revenues $44,590 14%
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------(110) (1%)
------------------------------------------------------------------
------------------------------------------------------------------
Operating expenses:
Salaries, wages and employee benefits $11,319 11%6,699 6%
Purchased transportation 20,519 26%
- - --------------------------------------------------------------------------------15,495 19%
------------------------------------------------------------------
Fuel and fuel taxes 4,552 13%7,560 22%
Depreciation 2,121 7%
- - --------------------------------------------------------------------------------(3,888) (12%)
------------------------------------------------------------------
Operating supplies and expenses 1,611 8%(2,426) (9%)
Insurance and claims 2,624 25%
- - --------------------------------------------------------------------------------6,031 50%
------------------------------------------------------------------
General and administrative expenses 1,151 18%(1,237) (13%)
Operating taxes and licenses 1,283 22%144 2%
Communication and utilities 2,716 151%
- - --------------------------------------------------------------------------------754 19%
------------------------------------------------------------------
Total operating expenses $47,896 16%
- - --------------------------------------------------------------------------------29,132 9%
------------------------------------------------------------------
Operating Income ($3,306) (24)%
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------income 14,222 443%
------------------------------------------------------------------
------------------------------------------------------------------
The following discussion relates to the table set forth above and the
attached interim consolidated financial statements for the quarter ended March
31,June
30, 1996 and 1995.
9
OPERATING REVENUES
Operating revenues for the firstsecond quarter of 1996 increased approximately
$45$43 million, or 1413 percent, to $354$372.6 million from $309$329.2 million in the firstsecond
quarter of
9
1995. The average number of total tractors in the fleet increased 4decreased 1 percent
during the same period. The increase in revenue between quarters includes the
following by type of freight:
Increase in Revenue
FirstSecond Quarter 1996 vs. FirstSecond Quarter 1995
(millions of dollars)
Intermodal $27$26
Logistics management 8
Dedicated Contract 8
Logistics Management 5contract 3
Other, net 5
----
$45
----
----6
---
$43
---
Intermodal volume continued to growincrease with loads up 2623 percent during the
firstsecond quarter of 1996. Business conditions and tractor productivity
measurements both showed positive improvement during the second quarter. The
market also continued to respond favorably tovan division's tractor utilization was at the Company's dedicated contract and logistics management service offerings.
Dedicated and logistics arrangements typically involve a written contract to
provide revenue equipment and/or management services for a period of one year or
more. Revenueshighest level in more than five
years. Operating revenues and earnings were negatively impacted during the
firstsecond quarter of 1996 by a two to threetwo and one-half percent decline in general
freight rates depending upon the type of service.
OPERATING EXPENSES
Total operating expenses for the firstsecond quarter of 1996 increased
approximately $48$29 million, or 169 percent over the comparable period of 1995.
Operating income declined $3.3increased by $14 million to $10.4$17.4 million from $3.2 million.
The significant increase in 1996 operating income, from an unusually low second
quarter of 1995, was due primarily to the higher tractor utilization mentioned
above. In addition, toa pretax gain of approximately $3 million was recognized
during the declinecurrent quarter, from the combination of the Company's parcel
management services operation into CTC Distribution Services, L.L.C. of St.
Paul, Minnesota. This transaction, which was announced in freight rates, operating incomeApril 1996, was
reduced by lower gainsaccounted for as an exchange of assets. Gains on the disposition of revenue
equipment, dispositions. Equipment gainswhich had been significant in some prior reporting periods, were
only $125,000approximately $115,000 in the firstsecond quarter of 1996 (excluding the parcel
management gain), compared with $1.6 million$912,000 in 1995. Although the Company plans to
continue trading and disposing of revenue equipment,Equipment gains are
not expected to
be significant during the remainderclassified as a reduction of 1996. Equipment gains offset depreciation expense in the Consolidated Statements
of Earnings.Operations.
Salaries, wages and employee benefits increased 116 percent during the firstsecond
quarter of 1996, reflecting a pay increase effective in April, 1995increases for the Company's least experienced
drivers.drivers effective in April, 1995 and increases for other employees during 1996.
Purchased transportation expense increased 26 percent. This increase primarily reflects19 percent, reflecting payments to
railroads and third-party companies for intermodal and transportation services
provided to the Company. Fuel and fuel taxes increased 1322 percent, primarily
due to a 913 percent increase in cost per gallon. FuelThis increase was partially
offset by additional fuel surcharge revenue billed to customers during the
current quarter. After a rapid increase in March, April and May of 1996, fuel
cost per gallon continueddeclined in June. Rapid changes in fuel costs can significantly
impact earnings.
10
The decline in depreciation expense was primarily due to the gain on the
parcel management combination described above. Lower tractor and trailing
equipment maintenance costs were the primary causes of the 9 percent decline in
operating supplies and expenses. The 50 percent increase rapidly
in Marchinsurance and
Aprilclaims costs was a result of 1996.significantly higher accident frequency and
severity. The Company initiatedannounced in June 1996, a fuel surchargedecision to limit the speed of
its tractors to 59 miles per hour in Aprilorder to help offset this cost increase, however, fuel costs will most likely reduce
earnings during the second quarter of 1996.
10
Insurance and claims expense increased 25 percent. Management was
disappointed with a significant increaseimprove safety. The 13 percent
decrease in the number of accidents and cargo
claims and has focused on preventative measures. Generalgeneral and administrative expense increased 18 percent, primarilywas due, in part, to higherlower driver
advertising and recruiting and
training expenses. Operating taxes and licenses increased 22 percent, partly
due to higher state licensing and use tax expense.costs. The significant increase in communication and utilities
expenses was primarily due to certain rate reductions and one-time credits
recognized during the firstsecond quarter of 1995.
LIQUIDITY AND CAPITAL RESOURCES
This discussion of corporate liquidity and capital resources should be read
in conjunction with information presented in the Consolidated Statements of Cash
Flows and the Consolidated Balance Sheets.
Net cash provided by operating activities was approximately $22$57 million duringfor
the first quarter ofsix months ended June 30, 1996 compared with $56$88 million in 1995. This
decrease in net cash provided was primarily due to an increase in accounts
receivable and certain cash payments made during the first quarter of 1996 for
claims accruals and payables for revenue equipment purchases.
SELECTED BALANCE SHEET DATA
As of
-------------------------------------------------
March 31,----------------------------------------------
June 30, 1996 December 31, 1995 March 31,June 30, 1995
-------------- ----------------- ------------------------------------------------------------
Working capital ratio .95 1.01 1.01 .97.82
Current maturities of long-
term debt (millions) $43 $30 $61$ 62 $ 30 $ 95
Total debt (millions) $383 $369 $354$ 396 $ 369 $ 388
Total debt to equity 1.081.10 1.03 .931.04
Total debt as a percentage
of total capital .52 .51 .48.51
Net additions to property and equipment during the first quartersix months of 1996
totaled $35.4$74.0 million compared with $33.2$97.9 million in 1995. While total debt
levels have increased slightly during the past year, the Company's liquidity has
not changed significantly. The Company generates significant cash from
operating activities and has borrowing capacity to meet its committed and
contemplated cash expenditures.
In July 1996, Moody's Investors Service changed its rating of the Company's
senior unsecured debt from A3 to Baa2 and the rating of subordinated debt from
Baa1 to Baa3.
11
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None applicable.
ITEM 2. CHANGES IN SECURITIES
None applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None applicable.The annual meeting of stockholders of J. B. Hunt Transport Services,
Inc. was held on May 9, 1996. Proxies for the meeting were solicited pursuant
to Regulation 14A of the Securities Exchange Act of 1934. At the meeting,
stockholders voted on the following resolutions with the vote tabulations so
indicated:
Votes
----------------------------------
For Against Abstained
----------------------------------
1. To elect ten (10) directors and to
fix the number of directors for
the ensuing year at ten (10). 36,138,344 0 175,503
2. To approve the Chairman's
Stock Option Incentive Plan. 29,575,982 4,080,030 49,676
3. To ratify the appointment of
KPMG Peat Marwick LLP as the
Company's independent public
accountants for the next fiscal
year. 36,279,495 12,452 21,900
There was no solicitation in opposition to management's nominees for
Directors as listed in the proxy statement and each nominee was elected with in
excess of ninety-nine percent of the shares entitled to vote. Stockholders also
granted discretionary authority to the proxies to vote for such other matters as
might properly come before the meeting or any adjournment thereof, however, no
such business came before the Annual Meeting.
ITEM 5. OTHER INFORMATION
The Company announced on April 22, 1996 the completion of a combination
of its Parcel Management Services division into CTC Distribution
Services, L.L.C. (CTC) of St. Paul Minnesota. The Company received a 5
percent ownership stake in CTC with warrants that allow an increase in
its ownership position in the future. The transaction will be
accounted for as a contribution of assets for CTC ownership units.None applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule
12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
J.B. HUNT TRANSPORT SERVICES, INC.
DATE: May 7,AUGUST 6, 1996 BY: /s/ Kirk Thompson
----------------------- ---------------------------------------------------------- -----------------------------
Kirk Thompson
President and
Chief Executive Officer
DATE: May 7,AUGUST 6, 1996 BY: /s/ Jerry W. Walton
----------------------- ----------------------------------------------------------- -----------------------------
Jerry W. Walton
Executive Vice President, Finance
and Chief Financial Officer
13