JB Hunt Transport Services Inc. (NASDAQ:JBHT) Q4 2019 Earnings Conference Call - Final Transcript

Jan 17, 2020 • 10:00 am ET


JB Hunt Transport Services Inc. (NASDAQ:JBHT) Q4 2019 Earnings Conference Call - Final Transcript


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Brad Delco

Good morning, and thanks for joining us. Hopefully, everyone has had an opportunity to review our earnings release that was issued earlier this morning. If not, you should be able to access the release on the Investors section of our website at jbhunt.com.

Before I introduce the speakers on today's call, I would like to take some time to provide some disclosures regarding forward-looking statements. This call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as expects, anticipates, intends, estimates or similar expressions are intended to identify these forward-looking statements. These statements are based on J.B. Hunt's current plans and expectations and involve risks and uncertainties that could cause future activities and results to be materially different from those set forth in the forward-looking statements. For more information regarding risk factors, please refer to J.B. Hunt's annual report on Form 10-K and other reports and filings with the Securities and Exchange Commission.

That out of the way, I would like to introduce the speakers on today's call. This afternoon, I'm joined by our CEO, John Roberts; our CFO, David Mee; Shelley Simpson, Chief Commercial Officer and President of Highway Services; Darren Field, Executive Vice President of Intermodal; Brad Hicks, Executive Vice President of Dedicated; and our Chief Accounting Officer, John Kuhlow.

At this time, I'd like to turn the call to our CEO, Mr. John Roberts, for some opening comments.

John N. Roberts

Thank you, Brad. During our last call, my comments were focused on the key steps taken over the past several years that have charted our course. We highlighted how we prioritized two key growth initiatives, our technology platforms known comprehensively as J.B. Hunt 360 and our Final Mile service offerings. We also confirmed our commitment to Intermodal, Dedicated and Highway Services as a part of our long-term strategy.

In 2019, we grew total revenue by 6% and operating income by 8%. This data includes a downward shift of approximately $60 million in op income opportunity for ICS, in part driven by our stated position to move forward with the developmental strategies we have for our digital freight management platform, 360. We called out a challenging pricing cycle through fiscal 2019 impacting our comparative data. And it should be observed that the financial data between 2018 and 2019 is rather noisy due to several one-time charges that occurred in 2018. Even still, we see the results for the year is confirming our ongoing portfolio approach to the markets we serve.

A key to the improvement shown in 2019 for the Company, overall, come from our DCS business unit. As the growth initiated in 2018 predictably moved into more stable performance for DCS, we experienced 25% top line growth and 39% operating income growth. In part, these increases are enhanced by the two previous acquisitions made for our Final Mile services, along with a strong trend organic growth of private fleet conversion, which we anticipate will continue in 2020. We also enjoy an