FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington,WASHINGTON, D.C. 20549

(Mark One)(MARK ONE)

    X          QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
  - -----                THE SECURITIES EXCHANGE ACT OF 1934

For the Quarter Ended September 30, 1998FOR THE QUARTER ENDED MARCH 31, 1999

                                       OR

               TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
  - -----                THE SECURITIES EXCHANGE ACT OF 1934

Commission file numberCOMMISSION FILE NUMBER 0-11757

                       J.B. HUNT TRANSPORT SERVICES, INC.
             (Exact name of registrant as specified in its charter)

               Arkansas(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

             ARKANSAS                                           71-0335111
    (State or other jurisdiction(STATE OR OTHER JURISDICTION                            (I.R.S. Employer
         of incorporation or                 Identification No.EMPLOYER
       OF INCORPORATION OR                                  IDENTIFICATION NO.)
         organization)ORGANIZATION)

              615 J.B. Hunt Corporate Drive, Lowell, ArkansasHUNT CORPORATE DRIVE, LOWELL, ARKANSAS 72745
             (Address of principal executive offices, and Zip Code)(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(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

         INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) has filed all reports
required to be filed by SectionHAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 orOR 15(d) of the Securities Exchange Act ofOF THE SECURITIES EXCHANGE ACT OF
1934 during the precedingDURING THE PRECEDING 12 months (or for such shorter period that the
registrant was required to file such reports)MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), andAND (2) has been subject to the
filing requirements for at least the pastHAS BEEN SUBJECT TO THE
FILING REQUIREMENTS FOR AT LEAST THE PAST 90 days.

                         YesDAYS.

                           YES   X        NoNO  
                               -----          -----

         The number of shares of the Company'sTHE NUMBER OF SHARES OF THE COMPANY'S $.01 par value common stock
outstanding on September 30, 1998 was 35,603,156.PAR VALUE COMMON STOCK
OUTSTANDING ON MARCH 31, 1999 WAS 35,622,449.



                                     PART 1

                              FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

         The interim condensed 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 nine-month periodsmonth period ended September 30, 1998March
31, 1999 are not necessarily indicative of the results that may be expected for
the entire year ending December 31, 1998.1999. 

         The interim condensed consolidated financial statements have been 
reviewed by KPMG Peat Marwick LLP, independent public accountants. 

         These interim condensed 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, 1997.1998.

                                    INDEX

Condensed Consolidated Statements of Earnings for the Three and Nine Months Ended September 30, 1998March 31, 1999 and 1997 . . . . . . . . . . . Page1998..................................Page 3 Condensed Consolidated Balance Sheets as of September 30, 1998March 31, 1999 and December 31,1997 . . . . . . . . . . . . . . Page31, 1998..................................Page 4 Condensed Consolidated Statements of Cash Flows for the NineThree Months Ended September 30, 1998March 31, 1999 and 1997 . . . . . . . . . . . Page1998............................Page 5 Notes to Condensed Consolidated Financial Statements as of September 30, 1998. . . . . . . . . . . . . . . . . . . . . . PageMarch 31, 1999........................................................Page 6 Review Report of KPMG Peat Marwick LLP . . . . . . . . . . . . . . . . . Page 8LLP.................................................Page 9 ITEM 2. Management's Discussion and Analysis of Results of Operations and Financial Condition . . . . . . . . . . . . . . . . . . . . . . Page 9Condition....................................Page 10 ITEM 3. Quantitative and Qualitative Disclosures About Market Risk . . . Not ApplicableRisk................Page 14
2 J.B. HUNT TRANSPORT SERVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (in thousands, except per share data) (unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------------------------------------------- THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30 SEPTEMBER 30MARCH 31 - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 1999 1998 1997 1998 1997 - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Operating revenues $ 473,388 $ 388,460 $ 1,347,839 $ 1,139,059$470,244 $413,466 Operating expenses Salaries, wages and employee 165,722 135,394 470,561 390,126benefits 172,688 145,988 Purchased transportation 161,354 131,700 453,746 372,661144,350 137,307 Fuel and fuel taxes 34,537 32,968 101,895 107,06436,710 33,416 Depreciation 35,655 31,709 101,133 98,18737,910 32,430 Operating supplies and expenses 24,508 23,237 69,849 69,06327,550 21,347 Insurance and claims 8,803 9,780 23,408 29,893 General and administrative 7,298 4,447 17,568 15,6539,781 7,972 Operating taxes and licenses 5,891 6,137 17,901 18,5646,502 5,376 General and administrative expenses 5,026 3,700 Communication and utilities 5,195 4,050 14,083 12,2365,553 4,272 - ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- Total operating expenses 448,963 379,422 1,270,144 1,113,447446,070 391,808 - ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- Operating income 24,425 9,038 77,695 25,61224,174 21,658 Interest expense 7,207 5,938 21,012 18,5887,504 6,606 - ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- Earnings before income taxes 17,218 3,100 56,683 7,02416,670 15,052 Income taxes 6,371 1,178 20,728 2,6696,084 5,569 - ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- Net earnings $ 10,84710,586 $ 1,922 $ 35,955 $ 4,3559,483 - ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- Average common shares outstanding 35,597 36,387 35,574 36,53035,615 35,613 - ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- Basic earnings per share $ 0.30 $ 0.05 $ 1.01 $ 0.120.27 - ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- Average diluted shares outstanding 36,702 36,469 36,775 36,56336,555 36,648 - ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- Diluted earnings per share $ 0.300.29 $ 0.05 $ 0.98 $ 0.120.26 - ---------------------------------------------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements. 3 J.B. HUNT TRANSPORT SERVICES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) (unaudited)
- ------------------------------------------------------------------------------- SEPTEMBER 30,----------------------------------------------------------------------------------------- MARCH 31, 1999 DECEMBER 31, 1998 1997 - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------ ASSETASSETS Current assets: Cash and cash equivalents $ 5,1333,892 $ 3,7019,227 Accounts receivable 192,836 169,198190,366 184,367 Prepaid expenses 20,720 24,71626,863 30,402 Deferred income taxes 2,337 2,3371,275 1,275 - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Total current assets 221,026 199,952222,396 225,271 - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Property and equipment 1,376,223 1,217,4781,447,309 1,418,033 Less accumulated depreciation 461,874 420,671529,635 492,633 - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Net property and equipment 914,349 796,807917,674 925,400 - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Other assets 21,646 25,16027,549 20,808 - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------ $ 1,157,0211,167,619 $ 1,021,9191,171,479 - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current maturities of long-term debt $ 15,60021,900 $ 17,50016,350 Trade accounts payable 136,534 138,509117,134 147,967 Claims accruals -- 22,3063,868 6,131 Accrued payroll 32,607 16,09634,986 23,684 Other accrued expenses 20,643 10,67710,479 11,909 - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Total current liabilities 205,384 205,088188,367 206,041 - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------ Long-term debt 417,292 322,790417,361 417,045 Claims accruals 18,182 15,1686,772 7,166 Deferred income taxes 149,690 140,909170,373 165,570 Stockholders' equity 366,473 337,964384,746 375,657 - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------ $ 1,157,0211,167,619 $ 1,021,9191,171,479 - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements. 4 J.B. HUNT TRANSPORT SERVICES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited)
- ---------------------------------------------------------------------------------------------------- NINE------------------------------------------------------------------------------------------- THREE MONTHS ENDED SEPTEMBER 30MARCH 31 - ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- 1999 1998 1997 - ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Cash flows from operating activities: Net earnings $ 35,95510,586 $ 4,3559,483 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation net of gain on disposition of equipment 101,133 98,187 Deferred37,910 32,430 Provision for noncurrent deferred income taxes 8,781 1,0504,803 2,096 Tax benefit of stock options exercised 63 60 Termination of restricted stock (23) -- Tax benefit (expense)(18) (15) Amortization of stock options exercised 919 (33)discount, net 316 (475) Changes in assets and liabilities: AccountsTrade accounts receivable (23,638) (424) Prepaid expenses 3,996 16,700(5,999) (6,840) Other current assets 3,539 4,241 Trade accounts payable (1,975) 10,511(30,833) (19,379) Claims accruals (19,292) (2,616)(2,657) (9,770) Accrued payroll and other accrued expenses 26,477 4,6069,872 8,577 - ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Net cash provided by operating activities 132,333 132,33627,582 20,408 - ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Cash flows from investing activities: Additions to property and equipment (253,980) (147,655)(30,783) (93,307) Proceeds from sale of equipment 35,305 108,972599 15,480 Decrease (increase) in other assets 3,514 (1,014)(6,876) 3,207 - ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Net cash used in investing activities (215,161) (39,697)(37,060) (74,620) - ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Cash flows from financing activities: Net borrowings (repayments) of long-term debt 95,000 (5,000) Net payments under commercial paper program (2,398) (62,736)10,550 71,150 Net payments of long-term debt (5,000) (5,000) Repurchase of treasury stock 0 (5,139) Proceeds from sale of treasury stock 2,792 296 Repurchase of treasury stock (5,814) (10,481)374 629 Dividends paid (5,320) (5,502)(1,781) (1,766) - ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Net cash provided by (used in) financing activities 84,260 (83,423)4,143 59,874 - ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Net increase (decrease) in cash and cash equivalents 1,432 9,216(5,335) 5,662 - ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Cash and cash equivalents at beginning of period 9,227 3,701 3,786 - ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Cash and cash equivalents at end of period $ 5,1333,892 $ 13,0029,363 - ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Supplemental disclosure of cash flow information: Cash paid (refunded) during the period for: Interest $ 20,3129,042 $ 18,4216,597 Income taxes (1,193) (6,895)45 1,474 - ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- - -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements. 5 J.B. HUNT TRANSPORT SERVICES, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (1) LONG-TERM DEBT Long-term debt consists of (in thousands):
9/30/3/31/99 12/31/98 12/31/97 --------------- -------- Commercial paper $130,600 $132,500 Senior notes payable, interest at 7.00% payable semiannually, due 9/15/04 100,000 -- Senior notes payable, interest at 6.25% payable semiannually, due 9/1/03 98,260 98,260$141,900 $131,350 Senior notes payable, interest at 7.84% payable semiannually -- 5,000 10,000 Senior notes payable, interest at 6.25% payable semiannually, due 11/17/002000 25,000 25,000 Senior notes payable, interest at 6.00% payable semiannually, due 12/12/002000 25,000 25,000 Senior notes payable, interest at 6.25% payable semiannually, due 9/1/2003 98,260 98,260 Senior notes payable, interest at 7.00% payable semiannually, due 9/15/2004 100,000 100,000 Senior subordinated notes, interest at 7.80% payable semiannually 50,000 50,000 -------- -------- 433,860 340,760440,160 434,610 Less current maturities (15,600) (17,500)(21,900) (16,350) Unamortized discount (968) (470)(899) (1,215) -------- -------- $417,292 $322,790$417,361 $417,045 -------- -------- -------- --------
TheUnder its commercial paper note program, the Company is authorized to issue up to $240 million in notes under its commercial paper note program.notes. These notes are supported by two credit agreements, which aggregate $240 million, with a group of banks. One agreement forbanks, of which $120 million expires March 12, 19997, 2000 and $120 million expires March 20, 2002. The 7.00% senior notes were issued on September 10, 1998 and are due on September 15, 2004. The 6.25% senior notes were issued on September 1, 1993 and are due on September 1, 2003. The 7.84% senior notes were issued on March 31, 1992 and are payable in five equal annual installments commencing on March 31, 1995. The 6.25% senior notes were issued on November 17, 1995 and are due on November 17, 2000. The 6.00% senior notes were issued on December 12, 1995 and are due on December 12, 2000. 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 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:
Weighted average Number of Number of exercise price shares shares per share exercisable ------ --------- ---------------- ----------- Outstanding at December 31, 1997 3,039,925 $16.70 274,225 -------1998 3,349,890 $16.98 323,390 Granted 202,000 26.6022,000 23.66 ------- Exercised (174,735) 16.73(16,100) 12.32 ------- Terminated (151,200) 16.64(7,700) 13.20 --------- ------ Outstanding at September 2,915,990 $17.50 328,165March 31, 1999 3,348,090 $17.06 307,290 --------- ------ ------- --------- ------ -------
On OctoberApril 15, 1998,1999, the Company's Board of Directors declared a regular quarterly cash dividend of $.05 per share payable on November 23, 1998May 19, 1999 to stockholders of record on NovemberMay 3, 1998.1999. 3) NEW ACCOUNTING PRONOUNCEMENTS The Company adopted Financial Accounting Standards Board Statement No. 128, Earnings Per Share (SFAS 128), asEARNINGS PER SHARE A reconciliation of December 31, 1997. Accordingly,the numerator and denominator of basic and diluted earnings per share amounts for the three and nine months ended September 30, 1998 and 1997 have been computed based on the following:is shown below:
Three Months Ended March 31 (in thousands, except per share data) ------------------------------------- Three Months Ended Nine Months Ended September 30 September 30 ----------------- -----------------1999 1998 1997 1998 1997 ------- ------- ------- ----------- ---- Numerator (net earnings) $10,847$10,586 $ 1,922 $35,955 $ 4,3559,483 Denominator - Basic earnings per share Weighted average shares outstanding 35,597 36,387 35,574 36,530 ------- ------- ------- -------35,615 35,613 ------- ------- ------- ------- Basic earnings per share $ .30 $ .05 $ 1.01 $ .12 ------- ------- ------- -------.27 ------- ------- ------- ------- Denominator - Diluted earnings per share Weighted average share outstanding 35,597 36,387 35,574 36,53035,615 35,613 Effect of common stock options 1,105 82 1,201 33 ------- -------940 1,035 ------- ------- Weighted average shares assuming dilution 36,702 36,469 36,775 36,563 ------- ------- ------- -------36,555 36,648 ------- ------- ------- ------- Diluted earnings per share $ .30.29 $ .05 $ .98 $ .12 ------- ------- ------- -------.26 ------- ------- ------- -------
Options which were outstanding to purchase shares of common stock which were outstanding during the periods indicated above,first quarter of 1999 and 1998, but were not included inexcluded from the computation of diluted earnings per share because the option price was greater than the average market price of the common shares are shown below.were:
Three Months Ended Nine Months Ended September 30 September 30 ----------------------------- -----------------------------1999 1998 1997 1998 1997 ------------- ------------- ------------- ----------------- ---- Number of shares under option 162,000 4,428,750 144,500 4,457,750238,500 3,100 Range of exercise price $26.00-$23.00-$37.50 $16.75-$24.63 $28.13-$37.50 $15.63-$24.63$24.63
7 The4) COMPREHENSIVE INCOME On January 1, 1998, the Company adopted Financial Accounting Standards Board StatementSFAS No. 130, Reporting Comprehensive Income (SFAS 130), as of January 1, 1998.REPORTING COMPREHENSIVE INCOME. SFAS No. 130 establishes standards for reporting and displayingpresentation of comprehensive income and its components in a financial statement that is displayed with the same prominence as other financial statements. SFAS No. 130 also requires the accumulated balancecomponents. Comprehensive income consists of other comprehensive income to be displayed separately in the equity section of the consolidated balance sheet. The accumulated balance of other comprehensive income of each of September 30, 1998 and December 31, 1997 was $5.6 million. The adoption of this Statement had no material impact on net earnings or stockholders' equity. Comprehensiveand foreign currency translation adjustments. During the first quarter of 1999, comprehensive income was equal to (in thousands):
Net earnings $10,586 Foreign currency translation loss (135) ------- Comprehensive income $10,451 ------- -------
During 1998, comprehensive income and net earnings duringwere the threesame. 5) SEGMENTS A summary of segment information is presented below (in millions):
Revenues -------------------------------- March 31, 1999 March 31, 1998 -------------- -------------- Van/Intermodal $337 $317 Logistics 80 66 Dedicated Contract Services 70 42 Other -- 4 ---- ---- Subtotal 487 429 Inter-segment eliminations (17) (16) ---- ---- Total $470 $413 ---- ---- ---- ---- Operating Income -------------------------------- March 31, 1999 March 31, 1998 -------------- -------------- Van/Intermodal $15 $16 Logistics 3 1 Dedicated Contract Services 5 3 Other 1 2 ---- ---- Total $24 $22 ---- ---- ---- ---- Net Depreciation Expense -------------------------------- March 31, 1999 March 31, 1998 -------------- -------------- Van/Intermodal $32 $28 Dedicated Contract Services 6 4 ---- ---- Total $38 $32 ---- ---- ---- ----
8 6) PROSPECTIVE ACCOUNTING PRONOUNCEMENTS In June 1998, the FASB issued Statement No. 133, ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES. This statement requires the recognition of all derivatives in the statement of financial position as either assets or liabilities and nine months ended September 30, 1998 and 1997. 4)their measurement at fair value. Statement No. 133 is effective for fiscal years beginning after June 15, 1999. The Company has not determined what impact, if any, Statement No. 133 will have on its financial statements. 7) RECLASSIFICATIONS Certain amounts for 19971998 have been reclassified to conform to the 19981999 classifications. INDEPENDENT ACCOUNTANT'SACCOUNTANTS' REVIEW REPORT The Board of Directors J.B. Hunt Transport Services, Inc.: We have reviewed the accompanying condensed consolidated balance sheet of J.B. Hunt Transport Services, Inc. and subsidiaries as of September 30, 1998,March 31, 1999, and the related condensed consolidated statements of earnings for the three-month and nine-month periods ended September 30, 1998 and 1997 and the condensed consolidated statements of cash flows for the nine-monththree-month periods ended September 30, 1998March 31, 1999 and 1997.1998. These condensed consolidated financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical 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, 1997,1998, and the related consolidated statements of operations,earnings, stockholders' equity, and cash flows for the year then ended (not presented herein); and in our report dated January 30, 1998,February 5, 1999, 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, 1997,1998, 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 October 14, 1998 8April 15, 1999 9 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 condensed 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, 1997.1998. RESULTS OF OPERATIONS COMPARISON OF THIRDFIRST QUARTER 1999 TO FIRST QUARTER 1998 TO THIRD QUARTER 1997SUMMARY Operating revenues for the first quarter of 1999 increased nearly 14%, to $470.2 million, from $413.5 in the comparable period of 1998. Revenue in the Van segment grew 6%, with truck business up 8% and intermodal increasing 5%. The Logistics segment revenue increased 20% and Dedicated segment revenues rose 66%. The increase in Van revenue was primarily due to 3% growth of the road truck fleet and intermodal load count advancing 5%. Overall truck freight rates in Van were essentially flat compared with the first quarter of 1998, while intermodal rates declined 1.3%. The increase in Logistics revenue was due to the addition of new account relationships and growth with existing customers. The significant increase in Dedicated revenue was driven by a 64% increase in the tractor fleet, a portion of which were transferred from Van, new contractual arrangements and growth with existing customers. Other revenue in 1998 was generated by a small subsidiary, Lake City Express, which was sold in June of 1998. Operating income in the Van segment declined slightly during the first quarter of 1999 to $15.3 million, from $16.5 million in the first quarter of 1998. This decline was due, in part, to increased costs for office salaries and wages, driver compensation and tractor and trailer maintenance. Lower fuel expense in 1999 enhanced Van operating income. The increase in 1999 Logistics operating income was due primarily to the 20% growth of revenue and improved margins on new and existing business. The higher level of Dedicated operating income during 1999 was primarily due to the significant growth of segment revenue.
Operating Segments For Three Months Ended March 31 (dollars in millions) Gross Revenue Operating Income ---------------------------------- ------------------- 1999 1998 % Change 1999 1998 ---- ---- -------- ---- ---- Van/Intermodal $337.0 $316.7 6% $15.3 $16.5 Logistics 80.2 66.6 20% 2.8 .9 Dedicated Contract Services 70.2 42.2 66% 4.6 3.0 Other -- 3.9 -- 1.5 1.3 ------ ------ ---- ----- ----- Subtotal 487.4 429.4 14% 24.2 21.7 Inter-segment eliminations (17.2) (15.9) -- -- -- ------ ------ ---- ----- ----- Total $470.2 $413.5 14% $24.2 $21.7 ------ ------ ---- ----- ----- ------ ------ ---- ----- -----
10 The following table sets forth items in the Condensed Consolidated Statements of Earnings as a percentage of operating revenues and the percentage increase or decrease of those items as compared with the prior period.
Three Months Ended September 30 --------------------------------------March 31 ----------------------------------------------- Percentage of Percentage Change Operating Revenues Between Quarters ------------------------------------- ----------------- 1999 1998 19971999 vs. 1998 vs. 1997 ------ ------------- -------- ----------------- Operating revenues 100.0% 100.0% 21.9%13.7% Operating expenses Salaries, wages and employee benefits 35.0% 34.9% 22.4%36.7% 35.3% 18.3% Purchased transportation 34.1% 33.9% 22.5%30.7% 33.2% 5.1% Fuel and fuel taxes 7.3% 8.5% 4.8%7.8% 8.1% 9.9% Depreciation 7.5% 8.2% 12.4%8.1% 7.8% 16.9% Operating supplies and expenses 5.9% 5.2% 6.0% 5.5%29.1% Insurance and claims 2.1% 1.9% 2.5% (10.0%)22.7% Operating taxes and licenses 1.4% 1.3% 20.9% General and administrative expenses 1.5% 1.1% 64.1% Operating taxes and licenses 1.2% 1.6% (4.0%)0.9% 35.8% Communication and utilities 1.1% 1.0% 28.3% ------------------ ------30.0% ---------------------- ----------------- Total operating expenses 94.9% 94.8% 97.7% 18.3% ------------------ ------13.8% ---------------------- ----------------- Operating income 5.1% 5.2% 2.3% 170.2%11.6% Interest expense 1.6% 1.5% 21.4% ------------------ ------1.6% 13.6% ---------------------- ----------------- Earnings before income taxes 3.5% 3.6% .8% 455.4%10.7% Income taxes 1.2% 1.3% .3% 440.8% ------------------ ------9.3% ---------------------- ----------------- Net earnings 2.3% .5% 464.4% ------------------ ------ ------------------ ------2.3% 11.6% ---------------------- ----------------- ---------------------- -----------------
Operating revenues for the third quarter of 1998 increased approximately 22%, to $473.4 million from $388.5 million in the third quarter of 1997. Revenues in the dry-van business, which includes intermodal, grew 21% during the third quarter. Revenues in the logistics business, which includes dedicated contract services, increased 36%, compared with the third quarter of 1997. The growth of dry-van revenues was primarily due to a 16% increase in the size of the tractor fleet. The size of the dry-van trailing fleet increased nearly 28% during the current quarter, compared with the third quarter of 1997. While intermodal load volume grew 17% in the current quarter vs. 1997, revenue and earnings growth were negatively impacted by rail service that deteriorated beginning in June of 1998. As a result of reduced rail service and other factors, the utilization of the dry-van trailing fleet during the third quarter of 1998 was 9% below the second quarter of 1998 9 and 7% below the third quarter of 1997. Dry-van truck rates during the third quarter of 1998 were approximately equal to the comparable period of 1997. Intermodal rates declined approximately 2.7% in 1998, compared with 1997. The 36% growth of the logistics business during the third quarter of 1998 was driven by strong demand from existing customers and contracts, and from new business generated during the current quarter. Total operating expenses for the thirdfirst quarter of 19981999 increased approximately 18%nearly 14% over the comparable period of 1997.1998. Total operating expenses expressed as a percentage of operating revenues (operating ratio) were 94.8%94.9% for the thirdfirst quarter of 1998,1999, compared with 97.7%94.8% in 1997.1998. Salaries, wages and employee benefits expense increased approximately 22%18%, which was in relative proportion with revenue growth. A 33% pay increase awardedprimarily due to certain over-the-road van drivers in February of 1997 does not impact the quarter to quarter comparison. The nearly 23% increase in purchasedhigher driver compensation and office salary and wage costs. Purchased transportation expense was also comparable to the increase in revenuesincreased 5% from 1998 and consistent with intermodal and logistics growth, reflects payments to railroads and third-party providers of truck line-haul transportation services. The decline of fuel and fuel taxesdeclined as a percentage of revenue wasprimarily due to an approximate 12% declineimproved margins in Logistics, lower trailer rental and drayage expense and the 1998 sale of Lake City Express, which compensated its drivers as independent contractors. Fuel and fuel cost per gallon and a slight improvement in fuel miles per gallon. This decrease of fueltax expense declined slightly as a percentage of revenue, wasreflecting an approximate 10% lower fuel cost per gallon in 1999, partly offset by lower miles per gallon. However, fuel surcharge revenue.cost per gallon began increasing in March of 1999. Depreciation expense increased approximately 12%nearly 17%, but declined as a percentagereflecting the growth of revenue. The increase in the dollar amount was primarily due to the increase in theVan and Dedicated tractor and trailing fleet and reduced gainsequipment fleets. This increase in depreciation expense was also due to differences in gain or loss on the disposition of assets in 1998. Gainsasset dispositions. A $34,000 net loss on asset dispositions reduceduring the first quarter of 1999 increased depreciation slightly while a $677,000 net gain reduced the expense and totaled $3,000 in 1998 and $595,000 in 1997. The decrease of depreciation as a percentage of revenue was primarily due to the amount of revenue growth that was not as heavily asset related, such as logistics and intermodal.1998. Operating supplies and expenses increased nearly 6%, but declined from 6.0% of revenue in 1997 to 5.2% in 1998. This decrease in percentage rate was alsosignificantly during 1999, primarily due to higher levels of spending on tractor and trailer maintenance and tires. These increased costs are due, in part, to a more than 20% increase in the amountaverage age of logisticsthe Van tractor fleet. 11 The increased cost of insurance and intermodal revenue growth, with no correspondingclaims was primarily due to three serious collisions which occurred during the first quarter of 1999. The nearly 21% increase in operating suppliestaxes and expenses. In addition, tractor maintenance and repairslicense expense declined during 1998, partlywas due to a newer agethe larger size of the fleet. The nearly $1.0 million decreasetractor fleet and a higher state base plate cost per tractor which was effective in insurance and claims expense was the result of fewer vehicle collisions during the third quarter of 1998. The Company has been successful in attracting and retaining experienced, professional drivers that have been involved in fewer vehicle collisions and reduced accident costs.1999. The significant increase in general and administrative expense was primarily due to increaseda result of higher levels of spending for computer rental and maintenance expenditures and foreign currency losses in the Company's Mexican joint venture operation.increased reserves for uncollectible accounts receivable. The resultsincrease of the Company's joint venture in Mexico, including currency fluctuations of the Peso, have historically been classified as generalcommunication and administrative expense. A joint venture loss of $374,000 was recognized during the current quarter, compared with earnings of $418,000 in 1997. The decrease in operating taxes and licensesutilities expense was primarily due to certain refunds received from state taxing authorities. Communicationsa result of expanded data and utilities increased approximately 28%, partly due totelecommunication networks and higher charges for satellite usage.communication costs. Interest expense increased 21%nearly 14%, primarily due to higher debt levels. The effective income tax rate was 36.5% in 1999 and 37% during the current quarter, compared with 38% in 1997. 10 1998. As a result of the above, net earnings for the thirdfirst quarter of 19981999 increased to $10.8$10.6 million, or diluted earnings per share of 30 cents,$.29, compared with 1997 third quarter net earnings of $1.9$9.5 million in 1998, or 5 cents$.26 per diluted share. The decrease in the number of weighted average shares outstanding (before the effect of dilutive stock options) was primarily due to the Company's acquisition of treasury shares. The increase in weighted average shares assuming dilution results from the increased effect of dilutive stock options caused by the increase in the Company's market price of common stock. COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 1998 TO NINE MONTHS ENDED SEPTEMBER 30, 1997 The following table sets forth items in the Condensed Consolidated Statements of Earnings as a percentage of operating revenues and the percentage increase or decrease of those items as compared with the prior period.
Nine Months Ended September 30 ----------------------------------- Percentage of Percentage Change Operating Revenues Between Quarters ------------------ ---------------- 1998 1997 1998 vs. 1997 ------ ------ ---------------- Operating revenues 100.0% 100.0% 18.3% Operating expenses Salaries, wages and employee benefits 34.9% 34.3% 20.6% Purchased transportation 33.7% 32.7% 21.8% Fuel and fuel taxes 7.6% 9.4% (4.8%) Depreciation 7.5% 8.6% 3.0% Operating supplies and expenses 5.2% 6.1% 1.1% Insurance and claims 1.7% 2.6% (21.7%) General and administrative expenses 1.3% 1.4% 12.2% Operating taxes and licenses 1.3% 1.6% (3.6%) Communication and utilities 1.0% 1.1% 15.1% ----------------- ------ Total operating expenses 94.2% 97.8% 14.1% ----------------- ------ Operating income 5.8% 2.2% 203.4% Interest expense 1.6% 1.6% 13.0% ----------------- ------ Earnings before income taxes 4.2% .6% 707.0% Income taxes 1.5% .2% 676.6% ----------------- ------ Net earnings 2.7% .4% 725.6% ----------------- ------ ----------------- ------
Operating revenues for the nine month period ended September 30, 1998 increased approximately 18%, to $1.35 billion from $1.14 billion in 1997. The increase in revenue would have been 23%, adjusted for the sale of the flatbed business in July of 1997. Revenues in the dry-van business, which includes intermodal, grew 20% during the nine months ended September 30, 1998. Revenues in the logistics business, which includes dedicated contract services, increased 34% compared with the same period in 1997. The growth of dry-van revenues was primarily due to a 17% increase in the size of the tractor fleet and a 4% increase in tractor utilization. Dry-van truck rates rose approximately 1.6% during the first nine months of 1998, while intermodal rates declined nearly 3%. The 34% growth of logistics revenue during 1998 was driven by strong demand from existing customers and contracts, and from new business. Total operating expenses for the first nine months of 1998 increased approximately 11 14% over the comparable period of 1997. Total operating expenses expressed as a percentage of operating revenues (operating ratio) were 94.2% in 1998, compared with 97.8% in 1997. Salaries, wages and employee benefits increased approximately 21%, and increased from 34.3% of revenue in 1997 to 34.9% of revenue in 1998. The primary reason for the increase relative to revenue was the approximate 33% pay increase awarded to certain over-the-road van drivers in February of 1997. The increase in purchased transportation expense was consistent with trends in recent periods and reflects payments to railroads and third-party providers of truck line-haul transportation services. The decrease in fuel and fuel taxes was primarily due to an approximate 13% decline in fuel cost per gallon and a slight improvement in fuel miles per gallon during 1998. This decline in fuel expense was partly offset by a decrease in fuel surcharge revenue. Depreciation expense increased approximately 3%, but declined as a percentage of revenue. The increase in the dollar amount of depreciation was primarily due to the increase in the size of the tractor and trailing fleet and reduced gains on the disposition of assets in 1998. Gains on asset dispositions reduce depreciation expense and totaled $678,000 in 1998 and $2.1 million in 1997. The decrease of depreciation, as a percentage of revenue, was primarily due to the amount of revenue growth that was not as heavily asset related, such as logistics and intermodal. Operating supplies and expenses increased approximately 1%, but declined from 6.1% of revenue in 1997 to 5.2% in 1998. This decrease in percentage rate was also primarily due to the amount of logistics and intermodal revenue growth, with no corresponding increase in operating supplies and expenses. In addition, tractor maintenance and repairs expense declined during 1998, partly due to a newer age of the fleet. The significant decline in insurance and claims expense was due to fewer vehicle collisions and the more experienced driver force. The 12.2% increase in general and administrative expense was primarily due to higher levels of spending for computer rental and maintenance, including Year 2000 compliance costs. The decrease in operating taxes and licenses was primarily due to certain refunds received from state taxing authorities. Communications and utilities increased in relative proportion to revenue. Interest expense increased 13%, primarily due to higher debt levels. The effective income tax rate was 36.6% in 1998 and 38% in 1997. The reduction in the effective tax rate related, in part, to taxes applicable to the Mexican joint venture operations. As a result of the above, net earnings for the nine months ended September 30, 1998 increased to $36.0 million, or diluted earnings per share of 98 cents, compared with $4.4 million in 1997, or 12 cents per diluted share. The decrease in the number of weighted average shares outstanding (before the effect of dilutive stock options), was primarily due to the Company's acquisition of treasury shares. The increase in weighted average shares assuming dilution results from the increased effect of dilutive stock options caused by the increase in the Company's market price of common stock. 12 LIQUIDITY AND CAPITAL RESOURCES This discussion of corporate liquidity and capital resources should be read in conjunction with information presented in the Condensed Consolidated Statements of Cash Flows and the Condensed Consolidated Balance Sheets. Net cash provided by operating activities was $132.3$27.6 million for the ninethree month periodsperiod ended September 30, 1998, and in 1997. Net cashMarch 31, 1999, compared with $20.4 million for the first quarter of 1998. Cash was generated during 19981999 primarily from net earnings, depreciation and increases in accrued payroll and other accrued expenses. NetOperating cash was used primarily to pay claims accrualsfund increases in accounts receivable and to fund an increasedecreases in customertrade accounts receivable.payable. Net cash used in investing activities was $215.2$37.1 million in 1998,1999, down from $74.6 million in the comparable period of 1998. Purchases of new revenue equipment were significantly lower in 1999 due to timing of orders and suppliers' production schedules. New tractor purchases totaled approximately 220 units during the first quarter of 1999, compared with $39.7 millionnearly 1,200 in 1997. This increase in net investment spending was primarily to purchase revenue equipment.1998. In addition, the decline in proceeds from sale of equipment declined in 1999, due primarily to $35.3fewer tractor dispositions. Financing activities generated $4.1 million in 1998 from $109.0the first quarter of 1999, compared with $59.9 million in 1997, was due, in part, to the sale1998. Approximately $66 million of the flatbed and owner-operator businesses in 1997. The purchases of revenue equipment in 1998 were funded by cash from operating activities and an increase in debt. The Company also used $5.3 million and $5.8 millionnet borrowing occurred during the first nine monthsquarter of 1998, primarily to pay dividendsfund purchases of new revenue equipment and purchase treasury stock, respectively.stock. SELECTED BALANCE SHEET DATA
As of ----------------------------------------------------------- September 30, 1998------------------------------------------------------ March 31, 1999 December 31, 1997 September 30, 1997 ------------------1998 March 31, 1998 -------------- ----------------- ------------------ -------------- Working capital ratio 1.08 .97 1.18 1.09 .81 Current maturities of long- term debt (millions) $ 15.621.9 $ 17.516.4 $ 5.088.7 Total debt (millions) $432.9 $340.3 $314.6$ 439 $ 433 $ 406 Total debt to equity 1.18 1.01 .911.14 1.15 1.19 Total debt as a percentage of total capital .53 .54 .50 .48.54
12 The Company's debt levels increased $92.6 millionslightly during the first ninethree months of 1999 to $439 million from $433 million at December 31, 1998. Total debt increased approximately $33 million from March of 1998 to March of 1999, primarily due to fund capital expenditures forpurchases of revenue equipment. On September 10,However, total debt to equity and debt as a percentage of total capital declined from 1998 the Company sold $100 million of 7.00% senior notes due September 15, 2004. The notes were pursuant to an original shelf registration filed in June of 1993 and a prospectus supplement dated September 4, 1998. The proceeds from the sale of these notes were used to reduce indebtedness under the Company's existing commercial paper program and two-uncommitted lines of credit. As of September 30, 1998, the Company had commitments to purchase approximately $161 million of revenue and service equipment, net cost, after expected proceeds from sale or trade-in allowances of approximately $17 million.levels. The Company generates significant cash from operating activities and has borrowing capacity to meet its committed and contemplated cash requirements. 13 YEAR 2000 The Company utilizes and is dependent upon a wide variety of complex information technologies (IT) to conduct daily business operations. Some of the Company's older computer software programs and equipment use two digit fields rather than four digit fields to define the applicable year. As a result, some of the time or date-sensitive functions of these programs and equipment could result in equipment shutdowns, miscalculations, inability to process data and/or disruption of operations as the Year 2000 approaches. It is possible that some problems may develop during 1999 (e.g. applications that utilize future or projected data), well before January 1, 2000. The Company recognized the importance of Year 2000 issues and developed an action plan in 1996. The plan includes systematic reviews of all internal hardware, software and functions to either verify that the system is Year 2000 compliant or modify/replace the software or system as required. The process includes the use of a software testing tool which simulates the transition to the Year 2000. The original plan contemplated all conversion efforts to be completed by the end of 1998. As of September 30, 1998,March 31, 1999, the majority of application programs (i.e. software that interacts with users through computer terminals and produces reports) had been modified or replaced. These programs have been unit tested by IT staff members, but still require detail testing by users and Year 2000 simulation. A number of the primary financial systems utilized to pay vendors, track customer accounts receivable and produce regular financial reports have been converted or are in the final stages of conversion to be Year 2000 compliant. The additional modifications, installations and unitdetail testing of the Company's internal computer and IT applications are currently expected to be completed by July 1, 1999. In addition to the issues and risks associated with the Company's internal IT systems and equipment, the Company has relationships and is dependent upon a number of third parties that include customers and suppliers of goods and services. Daily business operations include the electronic data interchange of information (EDI) with customers and providers of transportation services such as railroads and motor freight carriers. Other third party providers of critical services such as voice and data communications, natural gas and electricity, and diesel fuel are also an integral part of daily business operations. If significant numbers or certain critical customers or suppliers experience failures in their computer systems or equipment due to Year 2000 non-compliance, it could affect the Company's normal business activities. While some of these risks are not controllable by the Company, a number of actions and procedures have been implemented to assess and/or reduce this risk. Formal communications have been initiated with certain significant customers and suppliers. Depending upon the circumstances, formal certifications of Year 2000 compliance have been requested and received. The Company 13 has not received enough formal responses to date to make an accurate assessment of the Year 2000 readiness of its primary customers and suppliers. Since 1996, the Company has spent approximately $1.1$1.4 million on Year 2000 compliance. Estimated future expense to complete testing and related compliance work is $300,000$.2 million for a total cost of $1.4$1.6 million. These costs are being charged to operations as incurred. This cost estimate excludes certain new system acquisitions, development and implementation expenses that relate to on-going business activity, normal upgrades and enhancements. The Company has also spent approximately $3.8$4.4 million of acquisition and 14 implementation costs for primary financial systems.systems upgrades. These costs are being capitalized and amortized over the estimated useful life of the software. Current estimated future costs for such financial systems upgrades are $2.0$3.0 million. The Company presently believes that its internal computer systems and equipment will not pose significant operational problems relative to the Year 2000 issue. There can be no assurance that the Company will properly identify all year 2000 issues or that certain external customers or suppliers will not experience disruption of IT functions or actual services provided. Even short-term disruption of telecommunications service, for example, could have a material adverse impact on the Company's business. A contingency plan has not yet been developed for dealing with the most reasonably likely worst case scenario. A contingency plan will be completed by June 30, 1999. FORWARD-LOOKING STATEMENTS This report contains statements that may be considered as forward-looking or predictions concerning future operations. Such statements are based on management's belief or interpretation of information currently available. These statements and assumptions involve certain risks and uncertainties and management can give no assurance that such expectations will be realized. Among all the factors and events that are not within the Company's control and could have a material impact on future operating results are general economic conditions, cost and availability of diesel fuel, adverse weather conditions and competitive rate fluctuations. The ultimate net cost of the new driver compensation package will be dependent on the mix of experienced drivers attracted to the Company and on rates and severity of future accidents, cargo damage and worker's compensation claims, as well as other factors. In addition, the Year 2000 issue is extremely complex and compliance failures on the part of customers and/or suppliers that are outside the control of the Company could have a material negative impact on future operating results. 15ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company's earnings are affected by changes in short-term interest rates as a result of its issuance of short-term commercial paper. However, due to its selective utilization of interest rate swaps, the effects of interest rate changes are mitigated. Risk can be estimated by measuring the impact of a near-term adverse movement of 10% in short-term market interest rates. If short-term market interest rates average 10% more in 1999 than in 1998, there would be no material adverse impact on the Company's results of operations. At March 31, 1999, the Company's interest rate swap agreements had a fair 14 value of $1.0 million (net liability position). The Company has no material future earnings or cash flow expenses from changes in interest rates related to its long-term obligations as all of the Company's long-term debt obligations have fixed rates. At March 31, 1999, the fair value of the Company's fixed rate long-term obligations approximated carrying value. Although the Company conducts business in foreign countries, international operations are not material to the Company's consolidated financial position, results of operations or cash flows. Additionally, foreign currency transaction gains and losses were not material to the Company's results of operations for the three months ended March 31, 1999. Accordingly, the Company is not currently subject to material foreign currency exchange rate risks from the effects that exchange rate movements of foreign currencies would have on the Company's future costs or on future cash flows it would receive from its foreign investment. To date, the Company has not entered into any foreign currency forward exchange contracts or other derivative financial instruments to hedge the effects of adverse fluctuation in foreign currency exchange rates. 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 April 15, 1999. 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 four Class I Directors for a term of three years each. 32,345,932 0 309,907 2. To ratify the appointment of KPMG LLP as the Company's independent public accountants for the next fiscal year. 32,641,345 9,122 5,372
There was no solicitation in opposition to management's nominees for Directors as listed in the proxy statement and each nominee was elected by greater than ninety-two percent of the shares entitled to vote. No additional business or other matters came before the meeting or any adjournment thereof. ITEM 5. OTHER INFORMATION As discussed in Part 1, Item 2, the Company closed a $100 million offering of senior notes in September of 1998.None applicable. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 27.127 Financial Data Schedule 27.2 1997 Restated Financial Data Schedule (b) Reports on Form 8-K The Company filed a Form 8-K on September 10, 1998 containing information relating to Items 5 and 7 of that Form and announcing a $100 million sale of senior notes dated September 10, 1998 and due September 15 2004. 16 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: November 12, 1998May 4, 1999 BY: /s/ Kirk Thompson ------------------------------------------------------- -------------------------------------- Kirk Thompson President and Chief Executive Officer DATE: November 12, 1998May 4, 1999 BY: /s/ Jerry W. Walton ------------------------------------------------------- -------------------------------------- Jerry W. Walton Executive Vice President, Finance and Chief Financial Officer 17DATE: May 4, 1999 BY: /s/ Donald G. Cope --------------------- -------------------------------------- Donald G. Cope Vice President, Controller and Chief Financial Officer 16