AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 10, 2002
REGISTRATION NO. 333-
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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J.B. HUNT TRANSPORT SERVICES, INC.
(Exact name of registrant as specified in charter)
ARKANSAS 71-033511
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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615 J.B. HUNT CORPORATE DRIVE
LOWELL, ARKANSAS 72745
479-820-0000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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KIRK THOMPSON, PRESIDENT
J.B. HUNT TRANSPORT SERVICES, INC.
615 J.B. HUNT CORPORATE DRIVE
LOWELL, ARKANSAS 72745
479-820-0000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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COPIES TO:
C. DOUGLAS BUFORD, JR. THOMAS E. CONSTANCE
CHARLES C. PRICE THOMAS E. MOLNER
WRIGHT, LINDSEY & JENNINGS LLP KRAMER LEVIN NAFTALIS & FRANKEL LLP
200 WEST CAPITOL AVENUE, SUITE 2200 919 THIRD AVENUE
LITTLE ROCK, ARKANSAS 72201 NEW YORK, NEW YORK 10022-3852
501-371-0808 212-715-9100
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after this registration statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following box. [
]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plan, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS OF
SECURITIES AMOUNT TO PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED BE REGISTERED OFFERING PRICE PER SHARE(1) AGGREGATE OFFERING PRICE(1) REGISTRATION FEE
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Common Stock, $.01 par
value.............. 5,865,000 Shares $26.52 $155,539,800 $14,309.66
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(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(c) based on the average of the high and low prices of the Common
Stock as reported on the Nasdaq National Market on May 7, 2002.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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THE INFORMATION IN THIS PRELIMINARY PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PRELIMINARY
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES, AND IT IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
SUBJECT TO COMPLETION, DATED MAY 10, 2002
PROSPECTUS
5,100,000 SHARES
(LOGO)
COMMON STOCK
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We are selling 2,000,000 shares of our common stock, and the selling
shareholder identified in this prospectus is selling an additional 3,100,000
shares of our common stock. We will not receive any proceeds from the sale of
shares by the selling stockholder.
Our common stock is traded on the Nasdaq National Market under the symbol
"JBHT." On May 9, 2002, the last reported sale price for our common stock was
$26.59 per share.
SEE "RISK FACTORS" BEGINNING ON PAGE 7 FOR CERTAIN RISKS THAT YOU SHOULD
CONSIDER BEFORE BUYING SHARES OF OUR COMMON STOCK.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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PER SHARE TOTAL
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Public offering price....................................... $ $
Underwriting discounts and commissions...................... $ $
Proceeds, before expenses, to the company................... $ $
Proceeds, before expenses, to the selling stockholder....... $ $
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The underwriters may, under certain circumstances, purchase up to an
additional 765,000 shares of common stock from the Company at the public
offering price less the underwriting discount.
The underwriters are severally underwriting the shares being offered. The
underwriters expect to deliver the shares against payment in New York, New York,
on or before , 2002.
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BEAR, STEARNS & CO. INC. CREDIT SUISSE FIRST BOSTON DEUTSCHE BANK SECURITIES
JPMORGAN
BB&T CAPITAL MARKETS
STEPHENS INC.
The date of this prospectus is , 2002.
PROSPECTUS SUMMARY
This summary highlights certain information contained elsewhere in this
prospectus. This summary is not complete and does not contain all of the
information that you should consider before investing in our common stock. You
should read the entire prospectus carefully, especially the risks of investing
in our common stock discussed under "Risk Factors." The terms "Company," "we" or
"us" refer to J.B. Hunt Transport Services, Inc., and its subsidiaries unless
the context otherwise requires.
Unless otherwise stated in this prospectus, we have assumed throughout this
prospectus that the underwriters' over-allotment option is not exercised.
THE COMPANY
We are one of the largest full-load transportation logistics companies in
North America. We operate in three distinct, yet complementary, business
segments, providing a wide range of tailored solutions to a diverse group of
customers. Our three business segments are: Truck, the movement of freight by
dry van truckload; Intermodal, the movement of freight by container or trailer
using two or more modes of transportation; and Dedicated Contract Services
(DCS), the design, development, and execution of supply chain solutions for
customers. We believe that this wide range of services gives us a competitive
advantage and provides significant cross-selling opportunities with large
shippers that seek to use a limited number of core carriers. In 2001, all of our
ten largest customers utilized at least two of our three service offerings, and
nine of them used all three. For the fiscal year ended December 31, 2001, our
revenues totaled $2.1 billion of which $829 million or 39% was attributed to our
Truck business segment, $741 million or 35% to our Intermodal business segment,
and $549 million or 26% to our DCS business segment.
In recent years, we have taken significant steps to re-establish a primary
focus on the profitability of our core business segments. The benefits of these
initiatives, which are summarized below, are beginning to become apparent in our
operating results. The most significant of these are:
- Focusing on our core businesses by separating our Truck and Intermodal
segments, which had previously operated as a single segment, and selling
or discontinuing seven non-core businesses;
- Improving and standardizing our equipment fleet to provide additional
operating flexibility and to address driver preference;
- Stabilizing our driver pool and enhancing our ability to attract
experienced drivers; and
- Implementing our yield management program using proprietary technologies
to deploy our assets where we believe they can optimize profitability.
As a result of these and other initiatives, we improved our operating ratio
for the first quarter of 2002 compared to the first quarter of 2001 and for the
fiscal year 2001 compared to the fiscal year 2000 by 1.0% and 0.5%,
respectively. We believe that there are significant opportunities to continue to
improve our margins, particularly in our Truck and DCS segments.
OPERATING STRATEGY
We seek to add value to each customer's supply chain by providing superior
service at competitive rates while reducing our customers' costs through network
density, modal conversion, and dedicated fleets. We believe that our operating
strategy can add value to customers and increase our profits and returns to
shareholders. The key elements of our operating strategy are:
- Focus on yield management. In each business segment, we have implemented
a yield management driven decision-making process that directs us to
deploy our assets where we believe they can generate optimal
profitability. In our Truck segment, we continually seek to replace less
profitable freight with more profitable lanes and loads. This involves an
increased focus on service-sensitive customers in short-to-medium haul
traffic lanes where margins are higher and seasonal demand fluctuations
are less volatile. We seek additional freight density in our Intermodal
lanes where we
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believe our service is superior to our competitors' and where our margins are
attractive. We intend to continue to grow our DCS business with customers in
selected industries that we believe have freight characteristics that provide an
acceptable level of profitability.
- Offer diversified, complementary services. We are one of three major
full-load transportation logistics companies to offer truckload,
intermodal, and dedicated contract services. We believe our diversified
service offering adds value for our customers and provides us with
significant cross-selling opportunities.
- Leverage our broad geographic scope and high network density. We believe
that the large scale and broad geographic scope of our operations allow
us to meet our customers' shipping requirements better than smaller or
more limited truckload carriers. Although a large number of carriers may
provide competition on a regional basis, only a limited number of
carriers can compete in all of our geographic markets. In addition, our
high network density allows us to fill backhaul routes, thereby reducing
empty miles and increasing asset utilization.
- Provide safe, superior service. We pride ourselves on our record of
quality service and safety. Our on-time service for 2001 was 97% for our
Truck segment, 93% for our Intermodal segment, and over 99% for our DCS
segment. We ranked second in terms of safety in a recent DOT peer group
comparison including 22 of our largest competitors.
- Utilize leading edge systems and technology. We believe we have the most
advanced technological systems in the truckload industry. Our proprietary
systems enable us to better manage our assets, improve profitability, and
enhance customer service.
COMPANY INFORMATION
We were incorporated in Arkansas in 1961. Our principal executive offices
are located at 615 J.B. Hunt Corporate Drive, Lowell, Arkansas 72745, and our
telephone number is (479) 820-0000. Our website address is
http://www.jbhunt.com. Information contained on our website is not incorporated
by reference into this prospectus, and you should not consider information on
our website as part of this prospectus.
2
THE OFFERING
We are offering for sale 2,000,000 shares, par value $0.01 per share, of
our common stock. The selling stockholder is offering for sale a total of
3,100,000 shares of our common stock.
Common stock offered by us........... 2,000,000 shares
Common stock offered by the selling
stockholder.......................... 3,100,000 shares
Common stock outstanding after the
offering(1).......................... 38,336,471 shares
Use of proceeds...................... We intend to use the net proceeds
from this offering to repay
indebtedness and to fund capital
expenditures. We will not receive any
proceeds from the sale of shares by
the selling stockholder.
Nasdaq National Market symbol........ JBHT
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(1) The number of shares to be outstanding after this offering is based on
36,336,471 shares of our common stock outstanding as of March 31, 2002,
before giving effect to this offering. The number excludes approximately 1.5
million shares of our common stock available for issuance under our
Management Incentive Plan. In addition, 490,000 shares of common stock were
issuable upon exercise of outstanding stock options as of March 31, 2002,
with a weighted average exercise price of $16.15 per share.
RISK FACTORS
For a description of certain risks that you should consider before buying
shares of our common stock, see "Risk Factors."
3
SUMMARY HISTORICAL FINANCIAL AND OPERATING DATA
The following summary financial data of the Company as of and for the years
ended December 31, 1999, 2000, and 2001, under the captions "Statement of
Operations Data," "Other Financial Data," "Balance Sheet Data" and "Financial
Data by Operating Segment" are derived from our consolidated financial
statements and the footnotes thereto. These financial statements have been
audited by KPMG LLP. The summary financial data as of and for the periods ended
March 31, 2001 and 2002 have been derived from our unaudited interim financial
statements. The unaudited financial statements include all adjustments,
consisting of normal recurring accruals, which we consider necessary for a fair
presentation of our financial position and the results of operation for these
periods. This data should be read in conjunction with the financial statements,
related notes, and other financial information included or incorporated by
reference in this prospectus.
THREE MONTHS
YEAR ENDED DECEMBER 31, ENDED MARCH 31,
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1999 2000 2001 2001 2002
--------- --------- --------- ------- -------
(UNAUDITED)
(IN MILLIONS, EXCEPT PER SHARE DATA AND PERCENTAGES)
STATEMENT OF OPERATIONS DATA:
Operating revenue............................. $2,045.1 $2,160.4 $2,100.3 $495.4 $510.2
Operating expenses............................ 1,970.8 2,097.0 2,028.1 487.1 496.6
Operating income.............................. 74.3 63.4 72.2 8.4 13.6
Interest expense.............................. (28.3) (25.7) (27.0) (6.3) (6.8)
Equity in earnings (loss) of associated
companies(1)................................ 3.1 4.8 (2.1) 0.2 (0.5)
Earnings before income taxes.................. 49.1 42.4 43.1 2.3 6.3
Net earnings.................................. $ 31.9 $ 36.1 $ 32.9 $ 1.6 $ 4.9
======== ======== ======== ====== ======
Basic earnings per share...................... $ 0.90 $ 1.02 $ 0.93 $ 0.05 $ 0.13
======== ======== ======== ====== ======
Diluted earnings per share.................... $ 0.89 $ 1.02 $ 0.91 $ 0.05 $ 0.13
======== ======== ======== ====== ======
Weighted average common shares outstanding.... 35.6 35.3 35.6 35.3 36.3
Weighted average diluted shares outstanding... 35.8 35.4 36.2 35.7 37.3
OTHER FINANCIAL DATA:
Operating Ratio(2)............................ 96.4% 97.1% 96.6% 98.3% 97.3%
EBITDA(3)..................................... $ 223.3 $ 197.8 $ 215.0 $ 43.9 $ 49.6
Capital Expenditures, net(4).................. $ 10.3 $ 99.3 $ 27.8 $(25.2) $ 40.9
MARCH 31, 2002
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AS
ACTUAL ADJUSTED(5)
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(UNAUDITED)
BALANCE SHEET DATA:
Current assets.............................................. $ 329.5 $ 356.8
Total assets................................................ 1,220.6 1,247.9
Current liabilities......................................... 228.6 205.6
Total debt and capitalized leases........................... 408.3 385.3
Stockholders' equity........................................ 472.5 522.8
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(1) Includes our share of the financial results of: (i) Transplace, Inc. (TPC)
beginning in July, 2000, and (ii) our former Mexican joint venture for all
periods presented. In July, 2000, we contributed our logistics business to
TPC in exchange for a 27% ownership interest in TPC. During the first
quarter of 2002, we closed the sale of our Mexican joint venture to the
majority owner.
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(2) Operating expenses, as a percentage of revenue.
(3) We define EBITDA as operating income plus depreciation and amortization. We
have included EBITDA because it is commonly used as a measurement of
financial performance by investors to analyze and compare companies on the
basis of operating performance. EBITDA is not a measurement of financial
performance under generally accepted accounting principles (GAAP) and should
not be considered an alternative either to operating income, as an indicator
of our operating performance, or to cash flows from operating activities, as
a measurement of our liquidity, each as determined in accordance with GAAP.
(4) Capital expenditures less proceeds from sales of revenue equipment.
(5) As adjusted to give effect to our receipt of the estimated net proceeds from
our sale of 2,000,000 shares of common stock in this offering at an assumed
public offering price of $26.59 per share.
FINANCIAL DATA BY OPERATING SEGMENT:
YEAR ENDED THREE MONTHS ENDED
DECEMBER 31, MARCH 31,
------------------- ------------------
2000 2001 2001 2002
-------- -------- ------ ---------
(IN MILLIONS)
OPERATING REVENUE:
Truck............................................... $ 833.8 $ 828.6 $204.7 $187.7
Intermodal.......................................... 681.1 740.5 167.9 185.5
DCS................................................. 478.6 548.7 127.8 142.9
Logistics(1)........................................ 230.0 -- 0.1 --
Other............................................... -- 0.6 -- --
-------- -------- ------ ------
Subtotal......................................... 2,223.5 2,118.4 500.5 516.1
Inter-segment eliminations.......................... (63.1) (18.1) (5.0) (5.9)
-------- -------- ------ ------
Total.......................................... $2,160.4 $2,100.3 $495.4 $510.2
======== ======== ====== ======
OPERATING INCOME (LOSS):
Truck............................................... $ (7.1) $ 8.7 $ (3.2) $ (2.2)
Intermodal.......................................... 36.7 42.1 7.3 10.5
DCS................................................. 28.4 17.4 4.3 5.3
Logistics(1)........................................ 8.1 -- -- --
Other............................................... (2.7) 4.0 -- --
-------- -------- ------ ------
Total.......................................... $ 63.4 $ 72.2 $ 8.4 $ 13.6
======== ======== ====== ======
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(1) As of December 31, 2000, TPC qualified as a reportable business segment for
financial reporting purposes. However, the logistics segment information for
2001 shown above excludes TPC from its inception in July 2000. We account
for TPC using the equity method, and it did not qualify as a reporting
segment in 2001.
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OPERATING STATISTICS BY SEGMENT:
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
----------------------- -------------------
2000 2001 2001 2002
---------- ---------- -------- --------
TRUCK:
Operating ratio.................................. 100.8% 98.9% 101.6% 101.2%
Total loads...................................... 915,783 946,672 229,872 229,297
Net revenue (excluding fuel surcharge) per
tractor per week.............................. $ 2,710 $ 2,600 $ 2,416 $ 2,477
Length of haul in miles.......................... 616 590 609 557
Net change in revenue per loaded mile (excluding
fuel surcharge)............................... 3.4% 3.2% 2.6% 3.3%
Average number of tractors during the period..... 5,767 5,964 6,089 5,880
Tractors at end of period:
Company owned................................. 5,851 5,382 5,942 5,487
Independent contractor........................ 16 337 112 459
-------- -------- -------- --------
Total tractors.............................. 5,867 5,719 6,054 5,946
Trailers at end of period........................ 18,121 20,948 18,756 20,786
INTERMODAL:
Operating ratio.................................. 94.6% 94.3% 95.6% 94.3%
Total loads...................................... 457,359 472,567 104,872 110,770
Net change in revenue per loaded mile (excluding
fuel surcharge)............................... 0.2% 1.7% 0.1% 1.4%
Tractors at end of period........................ 908 910 902 918
Containers at end of period...................... 21,929 18,711 21,162 18,808
DCS:
Operating ratio.................................. 94.1% 96.8% 96.6% 96.3%
Net revenue (excluding fuel surcharge) per
tractor per week.............................. 2,605 2,500 2,460 2,580
Average number of tractors during the period..... 3,511 4,235 3,919 4,418
Tractors at end of period........................ 3,890 4,478 4,020 4,365
Trailers at end of period........................ 4,257 4,631 4,357 4,615
6
RISK FACTORS
Any investment in our common stock involves significant risks. You should
carefully consider the following information about such risks, together with all
of the other information contained in or incorporated into this prospectus,
before buying shares of our common stock.
OUR BUSINESS IS SUBJECT TO GENERAL ECONOMIC AND BUSINESS FACTORS THAT ARE
LARGELY OUT OF OUR CONTROL, ANY OF WHICH COULD HAVE A MATERIALLY ADVERSE EFFECT
ON OUR RESULTS OF OPERATIONS.
Our business is dependent upon a number of factors that may have a
materially adverse effect on the results of our operations, many of which are
beyond our control. These factors include significant increases or rapid
fluctuations in fuel prices, excess capacity in the trucking industry, surpluses
in the market for used equipment, interest rates, fuel taxes, license and
registration fees, insurance premiums, self-insurance levels, and difficulty in
attracting and retaining qualified drivers and independent contractors.
We are also affected by recessionary economic cycles and downturns in
customers' business cycles, particularly in market segments and industries, such
as retail and manufacturing, where we have a significant concentration of
customers. Economic conditions may adversely affect our customers and their
ability to pay for our services. It is not possible to predict the medium or
long-term effects of the September 11, 2001, terrorist attacks and subsequent
events on the economy or on customer confidence in the United States, or the
impact, if any, on our future results of operations. Customers encountering
adverse economic conditions represent a greater potential for loss, and we may
be required to increase our reserve for bad-debt losses. In addition, our
results of operations may be affected by seasonal factors. Customers tend to
reduce shipments after the winter holiday season, and our operating expenses
tend to be higher in the winter months primarily due to colder weather, which
causes higher fuel consumption from increased idle time and higher maintenance
costs.
WE OPERATE IN A HIGHLY COMPETITIVE AND FRAGMENTED INDUSTRY. NUMEROUS FACTORS
COULD IMPAIR OUR ABILITY TO MAINTAIN OUR CURRENT PROFITABILITY AND TO COMPETE
WITH OTHER CARRIERS.
These factors include:
- We compete with many other truckload carriers of varying sizes and, to a
lesser extent, with less-than-truckload carriers and railroads, some of
which have more equipment and greater capital resources than we do.
- Many of our competitors periodically reduce their freight rates to gain
business, especially during times of reduced growth rates in the economy,
which may limit our ability to maintain or increase freight rates or
maintain our profit margins.
- Many customers reduce the number of carriers they use by selecting
so-called "core carriers" as approved transportation service providers,
and in some instances we may not be selected.
- Many customers periodically accept bids from multiple carriers for their
shipping needs, and this process may depress freight rates or result in
the loss of some business to competitors.
- The trend toward consolidation in the trucking industry may create other
large carriers with greater financial resources and other competitive
advantages relating to their size.
- Advances in technology require increased investments to remain
competitive, and our customers may not be willing to accept higher
freight rates to cover the cost of these investments.
WE DERIVE A SIGNIFICANT PORTION OF OUR REVENUE FROM A FEW MAJOR CUSTOMERS, THE
LOSS OF ONE OR MORE OF WHICH COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR
BUSINESS.
For the fiscal year ended December 31, 2001, our top ten customers, based
on revenue, accounted for approximately 42% of our revenue. Our largest customer
is Wal-Mart Stores, Inc., which accounted for approximately 14% of our total
revenue in 2001. Generally, we do not have long-term contracts with our
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customers, and we cannot assure you that our current customers will continue to
utilize our services or that they will continue at the same levels. A reduction
in or termination of our services by one or more of our major customers could
have a materially adverse effect on our business and operating results.
WE DEPEND ON THIRD PARTIES IN THE OPERATION OF OUR BUSINESS.
Our Intermodal business segment utilizes railroads in the performance of
its transportation services. These services are provided pursuant to contractual
relationships with the railroads. While we have agreements with various Class I
railroads, the majority of our business travels on the Burlington Northern Santa
Fe Railway and the Norfolk Southern Railroad. The inability to utilize one or
more of these railroads could have a material adverse effect on our business and
operating results. In addition, a portion of the freight we deliver is imported
to the United States through ports of call that are subject to labor union
contracts. On July 1, 2002, the contract between the International Longshoremen
Union and the Pacific Maritime Association will expire. If these third parties
become involved in an extended labor action, the amount of freight available for
shipment could be reduced, which could have a material adverse effect on our
business.
DIFFICULTY IN ATTRACTING DRIVERS COULD AFFECT OUR PROFITABILITY AND ABILITY TO
GROW.
Periodically, the trucking industry experiences substantial difficulty in
attracting and retaining qualified drivers, including independent contractors.
If we are unable to continue to attract drivers and contract with independent
contractors, we could be required to adjust our driver compensation package or
let trucks sit idle, which could adversely affect our growth and profitability.
ONGOING INSURANCE AND CLAIMS EXPENSES COULD SIGNIFICANTLY REDUCE OUR EARNINGS.
Our future insurance and claims expenses might exceed historical levels,
which could reduce our earnings. We currently self-insure for a portion of our
claims exposure resulting from cargo loss, personal injury, property damage,
worker's compensation, and health claims for amounts up to the first $2 million
of each claim. If the number or severity of claims for which we are self-insured
increases, our operating results could be adversely affected. Also, we maintain
insurance above the amounts for which we self-insure with licensed insurance
companies. Insurance carriers have recently raised premiums for most trucking
companies. As a result, our insurance and claims expenses could increase when
our current coverage expires in July, 2002, or we could be required to raise our
self-insured retention. If these expenses increase, and we are unable to offset
the increase with higher freight rates, our earnings could be materially and
adversely affected.
WE MAY BE SUBJECT TO LIABILITY AS A RESULT OF A SALE-LEASEBACK AND RELATED
TRANSACTIONS.
Federal, state and local taxes comprise a significant part of our expenses
and, as such, we actively manage these expenses when executing our business
strategy. Recently, the Internal Revenue Service (IRS) has deemed certain types
of transactions to be tax aggressive and has begun to scrutinize them to
determine whether they were entered into solely for tax avoidance purposes.
Specifically, in 1999 we entered into a series of transactions effecting a sale
and leaseback of a portion of our Intermodal container and chassis fleet for a
sale price of approximately $175 million. These transactions used a structure
that the IRS has recently indicated it intends to examine. We have voluntarily
disclosed these transactions to the IRS. If the IRS challenges our transactions,
we intend to vigorously defend them. However, if the IRS successfully challenges
these transactions, and is successful in disallowing some or all of the tax
benefits that we realized, these actions could have a material adverse effect on
our financial condition and operating results. In particular, we could be
required to make significant payments, including taxes and interest. We could
also be subject to a higher corporate tax rate for future fiscal years. See
notes 4 and 8 to our consolidated financial statements included in our annual
report on Form 10-K for the fiscal year ended December 31, 2001.
8
EMPLOYMENT-RELATED CLAIMS BROUGHT AGAINST US COULD CAUSE US TO INCUR SUBSTANTIAL
COSTS OR DAMAGES.
From time to time, legal actions alleging employment discrimination and
other employment-related claims are filed against us. In 1997, the Equal
Employment Opportunity Commission (EEOC) commenced an action against us in
federal District Court alleging that we had violated the Americans With
Disabilities Act by refusing to hire as truck drivers certain individuals who
were taking certain medications. The EEOC sought injunctive relief and damages
for a group of 540 individuals. The District Court dismissed the EEOC's
complaint on our motion for summary judgment. The EEOC has appealed this
decision to the federal Court of Appeals, and a ruling is expected sometime this
year. We continue to vigorously contest this legal action. However, if the Court
of Appeals rules against us, we could be subject to a trial in the District
Court. In addition, in a separate action filed in Michigan in November 2001 by a
group of eight former employees, the plaintiffs allege that we violated the
Elliott-Larsen Civil Rights Act of Michigan. To date, we have only been served
with a complaint to which we have filed an answer. We intend to vigorously
defend the action. A future trial in either of these actions could cause us to
incur substantial costs in defending ourselves, and a judgment against us in
such a trial could have a material adverse effect on our financial condition and
operating results.
IF WE ARE UNABLE TO RETAIN OUR KEY EMPLOYEES, OUR BUSINESS, FINANCIAL CONDITION,
AND RESULTS OF OPERATIONS COULD BE HARMED.
We are highly dependent upon the services of the following key employees:
Wayne Garrison, Chairman of the Board; Kirk Thompson, President and Chief
Executive Officer; Paul Bergant, Executive Vice President, Marketing and Chief
Marketing Officer; Bob Ralston, Executive Vice President, Equipment and
Properties; Jerry Walton, Executive Vice President, Finance and Administration
and Chief Financial Officer; Craig Harper, Executive Vice President, Operations
and Chief Operations Officer; John N. Roberts, III, President, Dedicated
Contract Services and Executive Vice President, Enterprise Solutions; Kay
Palmer, Chief Information Officer; and Donald G. Cope, Senior Vice
President/Controller and Chief Accounting Officer. We do not have employment
agreements with any of these persons. The loss of any of their services could
have a materially adverse effect on our operations and future profitability. We
must continue to develop and retain a core group of managers if we are to
realize our goal of expanding our operations and continuing our growth. We
cannot assure you that we will be able to do so.
OUR SENIOR CHAIRMAN AND HIS WIFE WILL CONTINUE TO CONTROL A LARGE PORTION OF OUR
OUTSTANDING COMMON STOCK AFTER THIS OFFERING.
J.B. Hunt and his wife beneficially own 32.8% of our common stock before
this offering and will beneficially own 23.0% of our common stock (or 22.6% if
the over-allotment option is exercised) after the completion of this offering.
As significant stockholders, Mr. and Mrs. Hunt may be able to influence
decisions requiring stockholder approval, including election of our board of
directors, the adoption or extension of anti-takeover provisions, mergers, and
other business combinations, through the vote of their shares. Although Mr. Hunt
serves as Senior Chairman of the Board of Directors, he is not currently
involved in the management of our day-to-day operations.
OUR GROWTH AND PROFITABILITY MAY NOT RETURN TO HISTORICAL RATES, WHICH COULD
ADVERSELY AFFECT OUR STOCK PRICE.
We have experienced significant growth in revenue and net income since our
initial public offering in 1983. Over the past several years, however, our
growth rate of revenue and net income slowed. There can be no assurance that our
growth rate will return to historical levels or that we can effectively adapt
our management, administrative, and operational systems to respond to any future
growth. We can provide no assurance that our operating margins will not be
adversely affected by future changes in and expansion of our business or by
changes in economic conditions. Slower or less profitable growth could adversely
affect our stock price.
9
WE HAVE SIGNIFICANT ONGOING CAPITAL REQUIREMENTS THAT COULD AFFECT OUR
PROFITABILITY IF WE ARE UNABLE TO GENERATE SUFFICIENT CASH FROM OPERATIONS.
The truckload industry is capital intensive. If we are unable to generate
sufficient cash from operations in the future, we may have to limit our growth,
enter into additional financing arrangements, or operate our revenue equipment
for longer periods, any of which could have a materially adverse effect on our
profitability.
INCREASED PRICES FOR NEW REVENUE EQUIPMENT AND DECREASES IN THE VALUE OF USED
REVENUE EQUIPMENT MAY ADVERSELY AFFECT OUR EARNINGS AND CASH FLOWS.
In the past, we have acquired new tractors and trailers at favorable prices
and traded or disposed of them at prices higher than current market values.
There is currently a large supply of used tractors and trailers on the market,
which has depressed the market value of used equipment to levels below the
values we historically received. In addition, some manufacturers have
communicated their intention to raise the prices of new equipment, and new
emissions control regulations, which become effective in October 2002, could
also result in higher equipment prices. If any or all of these events occur, we
may increase our depreciation expense or recognize less gain (or a loss) on the
disposition of our tractors and trailers, which would adversely affect our
earnings and cash flows. We currently have certain fixed residual or trade-in
arrangements with a key equipment supplier concerning a portion of our fleet. If
this supplier is unable to meet its financial obligations under these
arrangements, we may suffer a financial loss upon the disposition of some of our
equipment.
OUR STOCK PRICE IS VOLATILE, WHICH COULD CAUSE YOU TO LOSE A SIGNIFICANT PORTION
OF YOUR INVESTMENT.
The market price of our common stock could be subject to significant
fluctuations in response to certain factors, such as variations in our
anticipated or actual results of operations, the operating results of other
companies in the transportation industry, changes in conditions affecting the
economy generally, including incidents of terrorism, analysts reports, general
trends in the industry, sales of common stock by insiders, as well as other
factors unrelated to our results of operations.
OUR OPERATIONS ARE SUBJECT TO VARIOUS ENVIRONMENTAL LAWS AND REGULATIONS, THE
VIOLATION OF WHICH COULD RESULT IN SUBSTANTIAL FINES OR PENALTIES.
We are subject to various environmental laws and regulations dealing with
the handling of hazardous materials, underground fuel storage tanks, and
discharge and retention of storm water. We operate in industrial areas, where
truck terminals and other industrial activities are located, and where
groundwater or other forms of environmental contamination have occurred. Our
operations involve the risks of fuel spillage or seepage, environmental damage,
and hazardous waste disposal, among others. We also maintain bulk fuel storage
and fuel islands at several of our facilities. If we are involved in a spill or
other accident involving hazardous substances, or if we are found to be in
violation of applicable laws or regulations, it could have a materially adverse
effect on our business and operating results. If we should fail to comply with
applicable environmental regulations, we could be subject to substantial fines
or penalties and to civil and criminal liability.
10
WE OPERATE IN A HIGHLY REGULATED INDUSTRY AND INCREASED DIRECT AND INDIRECT
COSTS OF COMPLIANCE WITH, OR LIABILITY FOR VIOLATION OF, EXISTING OR FUTURE
REGULATIONS COULD HAVE A MATERIALLY ADVERSE EFFECT ON OUR BUSINESS.
The U.S. Department of Transportation and various state agencies exercise
broad powers over our business, generally governing matters including
authorization to engage in motor carrier service, equipment operation, safety,
and financial reporting. We may also become subject to new or more restrictive
regulations relating to fuel emissions, drivers' service hours, and ergonomics.
For example, new emissions control regulations become effective in October 2002.
The new regulations decrease the amount of emissions which can be released by
truck engines and affect tractors produced after the effective date of the
regulations. Compliance with such regulations could substantially impair
equipment productivity and increase our operating expenses.
11
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
We make statements in this prospectus and in the documents we incorporate
by reference that reflect our current expectations regarding our future results
of operations, performance, and achievements. These "forward-looking" statements
are made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. We have tried to identify these statements by
using words such as "may," "believe," "expect," "continue," "intend,"
"anticipate," "estimate," or other similar words. These statements reflect our
current beliefs and are based on information currently available to us.
Accordingly, these statements are subject to risks and uncertainties which could
cause our actual results, performance, or achievements to differ materially from
those expressed in, or implied by, these statements. Such risks and
uncertainties include the following:
- General economic and business conditions;
- Competition, including lower freight rates;
- Ability to attract and retain qualified drivers;
- Loss of one or more major customers;
- Interference with or termination of our relationships with certain
railroads;
- Insurance claims and expenses;
- Retention of key employees;
- Sustained growth in profitability;
- Ongoing capital requirements;
- Increased costs for new revenue equipment or decreases in the value of
used equipment;
- Compliance with environmental laws and regulations; and
- Increased government regulation.
USE OF PROCEEDS
We estimate that our net proceeds from the offering, after deducting the
underwriting discounts, commissions, and other estimated offering expenses
payable by us, will be approximately $50.3 million (assuming a public offering
price of $26.59). We expect to use these net proceeds to repay borrowings under
our revolving credit facility and for future capital expenditures. As of March
31, 2002, borrowings under our revolving credit facility bear interest at a rate
of 4.75%.
We will not receive any proceeds from the sale of our common stock by the
selling stockholder.
DIVIDEND POLICY
On January 21, 2000, the Board of Directors declared a regular quarterly
dividend of $0.05 per share, paid on February 17, 2000 to shareholders of record
on February 3, 2000. On February 16, 2000, the Board of Directors announced a
decision to discontinue its policy of paying quarterly cash dividends. No
dividends have been paid since February 2000. The current policy of our board of
directors is to retain earnings to finance our operations.
12
CAPITALIZATION
The following table sets forth our capitalization as of March 31, 2002, (i)
on an actual basis, and (ii) on an adjusted basis, giving effect to our sale of
2,000,000 shares of common stock in this offering at an assumed public offering
price of $26.59 per share and the application of the estimated net proceeds as
set forth in "Use of Proceeds."
MARCH 31, 2002
-------------------------
ACTUAL AS ADJUSTED
----------- -----------
(UNAUDITED)
(IN THOUSANDS)
Cash and cash equivalents................................... $ 12,404 $ 39,739
======== ========
Current portion of long-term debt and capital lease
obligations............................................... 61,884 38,884
Long-term debt and capital lease obligations, excluding
current maturities........................................ 346,457 346,457
Stockholders' equity:
Preferred Stock, par value $100; 10,000,000 shares
authorized; no shares issued and outstanding........... -- --
Common Stock, par value $.01; 100,000,000 shares
authorized; 36,336,471 shares issued and outstanding,
actual; 38,336,471 shares issued and outstanding, as
adjusted............................................... 390 410
Additional paid-in capital................................ 117,289 167,604
Retained earnings......................................... 412,841 412,841
Treasury stock, at cost (2,644,813 shares)................ (58,027) (58,027)
-------- --------
Total stockholders' equity............................. 472,493 522,828
-------- --------
Total capitalization................................... $880,834 $908,169
======== ========
13
BUSINESS
GENERAL
We are one of the largest full-load transportation logistics companies in
North America. Through three distinct, yet complementary, business segments, we
provide a wide range of tailored solutions to a diverse group of customers,
including a growing list of Fortune 500 companies. Our three business segments
are: Truck, the movement of freight by dry van truckload; Intermodal, the
movement of freight by container or trailer using two or more modes of
transportation; and Dedicated Contract Services (DCS), the design, development,
and execution of supply chain solutions for customers. Our ability to offer all
three services constitutes a competitive advantage versus smaller or more
limited trucking companies and provides significant cross-selling opportunities
with large shippers that seek to use a small number of core carriers. In 2001,
all of our ten largest customers utilized at least two of our three service
offerings, and nine of them used all three. For the fiscal year ended December
31, 2001, our revenues totaled $2.1 billion of which $829 million or 39% was
attributed to our Truck business segment, $740 million or 35% to our Intermodal
business segment, and $549 million or 26% to our DCS business segment.
In recent years, we have re-established a primary focus on improving the
profitability of our core business segments. Before our margins could be
improved, we had to restructure our largest business segment, eliminate several
non-strategic businesses, and make other fundamental changes to our equipment
fleet and organization. In order to implement these changes, we undertook a
number of initiatives which are summarized below. The benefits of these
initiatives are beginning to become apparent in our operating results.
- Focus on our core businesses. In order to focus on our core businesses
(i) we separated our Truck and Intermodal businesses into two distinct
segments to better manage the profitability of each segment; (ii) we sold
or discontinued seven non-core businesses; and (iii) we contributed our
logistics operation in exchange for a 27% ownership interest in
Transplace, Inc., a venture that combined our logistics business with the
logistics businesses of four other publicly-traded trucking companies.
- Improve and standardize our equipment fleet. We improved and
standardized our equipment fleet, which we believe enhances our ability
to attract experienced drivers, provides better service options for our
customers, increases our operating flexibility, lowers our maintenance
expenses, and results in longer equipment service lives. Primarily in
response to over-the-road driver preference, we replaced our Truck
segment tractor fleet of approximately 5,500 cab-over tractors with
conventional tractors, which we completed in March 2002. In order to
separate our Truck and Intermodal businesses, we created a separate fleet
of 53-foot Wabash DuraPlate Air-Ride trailers for exclusive use in our
Truck segment and discontinued the dual-use of containers in our Truck
and Intermodal segments. In our Intermodal segment, we are completing the
replacement of our 48-foot containers with 53-foot containers, which we
believe will result in increased operating efficiency and revenue
benefits.
- Stabilize our driver pool. We stabilized our driver pool by changing
from cab-over to conventional tractors, eliminating slip-seating, and
separating our Truck and Intermodal segments. This allows us to attract
experienced drivers and currently avoid the common industry practice of
using student drivers.
- Implement our yield management program. Our focus on core businesses,
the improvement and standardization of our equipment fleet, and the
stabilization of our driver pool have enabled us to intensify our focus
on the profitability of individual lanes and loads. Eliminating
unprofitable lanes and loads has been a high priority for us over the
last twelve months, and we have developed proprietary yield management
technologies to assist in this process. We believe there are significant
opportunities to improve our margins, particularly in our Truck and DCS
segments.
14
As a result of these and other initiatives, we improved our operating ratio
for the first quarter of 2002 compared to the first quarter of 2001 and for the
fiscal year 2001 compared to the fiscal year 2000 by 1.0% and 0.5%,
respectively.
BUSINESS SEGMENTS
Our three business segments are as follows:
Truck Segment. Our Truck segment provides dry van truckload service to
major shippers throughout the United States and parts of Canada and, through
interline agreements for trailers, into and out of Mexico. We operate one of the
largest tractor and trailer fleets in North America, with 5,946 tractors and
20,786 trailers with an average company-owned tractor age of 1.4 years and an
average trailer age of 1.4 years, respectively. We derived $829 million or 39%
of our total operating revenues from this business segment in 2001, but only $9
million or 13% of operating income. Significant operating leverage is embedded
in our Truck segment, and we believe the potential for substantial improvement
in overall company earnings exists through the continued improvement of margins
in this segment. We are committed to improving the margins of our Truck segment
to approach the industry-leading margins of other truckload carriers in our
industry.
Intermodal Segment. Our Intermodal segment provides container-on-flatcar
intermodal service to major shippers throughout the United States, Canada, and
Mexico under arrangements with various Class I railroads in North America. We
differentiate ourselves from other intermodal providers through our premium
service network, as well as our ability to provide door-to-door service on
company-owned or controlled assets. We provide our customers with billing,
collecting, load tracking, load tracing, pick-up, and delivery services. We also
coordinate, track, and trace the line-haul portion of the freight movement with
the railroads. The majority of our Intermodal freight travels on the Burlington
Northern Santa Fe Railway and the Norfolk Southern Railroad, where we receive
priority space on trains and preferential loading and unloading at rail
facilities. The Intermodal segment represented $740 million or 35% of our total
operating revenues and $42 million or 58% of operating income for 2001.
DCS Segment. Our DCS segment utilizes advanced systems and technologies to
provide custom-engineered solutions that support private fleet conversion,
dedicated fleet creation, and private fleet capacity augmentation. DCS services
generally involve providing a customer with a fleet of trucks and drivers as
well as dispatch, routing, scheduling, fleet sizing, maintenance, and other
technical support services. Our DCS operations involve dry van, flatbed,
temperature-controlled, and other specialized trucking services. Our on-time
service record is excellent, and we focus on reducing customer costs by
utilizing backhaul freight to reposition equipment and reduce empty miles. Our
DCS operations share resources with our Truck and Intermodal segments, including
terminals, maintenance shops, bulk fuel locations, and trailer/container pools.
In 2001, DCS represented $549 million or 26% of our total operating revenue and
$17 million or 24% of our operating income.
OPERATING STRATEGY
We seek to add value to each customer's supply chain by providing superior
service at competitive rates while reducing our customers' costs through network
density, modal conversion and dedicated fleets. By implementing our operating
strategy, we believe that we can add value to customers and increase our profits
and returns to shareholders. The key elements of our operating strategy are:
- Focus on yield management. In each business segment we have implemented
a yield management driven decision-making process that directs us to
deploy our assets where we believe they can generate optimal
profitability. We seek to increase the utilization of our existing fleet
and do not plan to add any incremental equipment to our fleet in the near
term. In our Truck segment, we continually seek to replace less
profitable freight with more profitable lanes and loads. This involves an
increased focus on service-sensitive customers in short-to-medium haul
traffic lanes where margins are higher and seasonal demand fluctuations
are less volatile. We seek additional freight density in our Intermodal
lanes where we believe our service is superior to our competitors' and
15
where our margins are attractive. We intend to continue to grow our DCS business
with customers in selected industries that we believe have freight
characteristics that provide an acceptable level of profitability.
- Offer diversified, complementary services. Our ability to offer
truckload, intermodal, and dedicated contract services provides added
value to our customers and allows us to cross-sell additional services to
customers of each segment. We are one of three major truckload companies
to offer all of these services. In 2001, all of our ten largest customers
utilized at least two of our three service offerings, and nine of them
used all three. We believe that our ability to bundle and cross-sell our
services provides significant revenue enhancement opportunities with
large customers that seek to use a limited number of core carriers.
- Leverage our broad geographic scope and high network density. The large
scale and broad geographic scope of our operations provide us with
competitive advantages versus smaller or more limited trucking companies.
Although a large number of carriers may compete with us on a regional
basis, only a limited number of carriers can compete in all of our
geographic markets. Our customers include a growing list of Fortune 500
companies, which demand consistent capacity, reliable service, and
competitive prices across multiple geographic markets. We believe that
the large scale and scope of our operations allow us to meet our
customers' requirements better than smaller or more limited truckload
carriers. In addition, our large scale produces a density of freight in a
variety of geographic regions, which enhances our asset utilization by
turning equipment quickly and reducing empty miles between loads.
- Provide safe, superior service. In 2001, we delivered outstanding
service to our customers in each of our business segments. Our on-time
service for the year was 97% for our Truck segment, 93% for our
Intermodal segment, and over 99% for our DCS segment. Our current
intermodal freight mix and railroad partnerships are producing the best
service levels in the history of our Intermodal segment, and we believe
that the service levels in all of our business segments are difficult for
competitors to match. We emphasize safety in all aspects of our operation
and will continue to strive to be one of the safest carriers in the
nation. We ranked second in terms of safety in a recent DOT peer group
comparison including 22 of our largest competitors. During the last five
years, we have lowered our injuries per 100 drivers by 50% in the Truck
and Intermodal segments and 43% in the DCS segment.
- Utilize leading edge systems and technology. We believe we have the most
advanced technological systems in the trucking industry, and we use our
systems to provide custom-engineered solutions to customers. Our systems
enable us to better manage our assets, improve profitability, and enhance
customer service. For example, our proprietary technology provides a
comprehensive view of all loads and price quotes, on a region by region
basis, within our freight network. With this information, we can better
match high margin loads with available capacity to increase
profitability. In addition, we have significantly enhanced customer
service by integrating web-based, phone, and EDI interfaces into a
convenient, highly functional, on-line call center system. Our customers
can use this system to track existing loads, price and book new loads,
and receive billing information.
INDUSTRY
According to the American Trucking Association (ATA), the U.S. market for
truck-based transportation services generated total revenues of approximately
$610 billion in 2001 and is projected to grow in line with the overall U.S.
economy. Our Truck, Intermodal, and DCS businesses all operate in the highly
fragmented for-hire truckload segment of this market, which the ATA estimates
generated revenues of approximately $274 billion in 2001. Our DCS business also
competes for the private fleet portion of the overall trucking market (also
estimated by the ATA at approximately $274 billion in revenues in 2001), by
seeking to convince private fleet operators to outsource or supplement their
private fleets. Measured by annual revenue, the ten largest dry van truckload
carriers accounted for approximately $12 billion or 4% of annual for-hire
truckload revenue in 2001.
16
We believe that the cost and complexity of operating truck fleets is
increasing and that economic and competitive pressures are likely to force many
smaller competitors and private fleets to consolidate or exit the industry. As a
result, we believe that larger, better capitalized companies, like us, will have
greater opportunities to increase profit margins and gain market share. In the
market for dedicated contract services, we believe that truckload carriers, like
us, have a competitive advantage over truck lessors, who are the other major
participants in the market, because we can offer lower prices by utilizing
back-haul freight within our network that traditional lessors do not have. In
the intermodal market, we believe that our ability to offer coordinated
door-to-door intermodal service on Company-owned and controlled assets provides
us with competitive advantages versus other trucking companies, particularly
when we compete to serve large customers in the retail sector.
CUSTOMERS AND MARKETING
We target service-sensitive customers rather than those that use price as
their primary consideration. In addition, we seek customers whose transportation
requirements would involve more than one of our service offerings. We are
particularly successful at analyzing large transportation networks and
developing custom-engineered solutions for our customers. We generally market
our services through a nationwide marketing network that involves
segment-specific, as well as corporate-level, sales staff.
Our customers include many Fortune 500 companies and generally have large
and complex shipping needs. During 2001, our top 25 customers, based on revenue,
accounted for approximately 59% of our revenue, our top ten customers accounted
for approximately 42% of our revenue, and our top five customers accounted for
approximately 31% of our revenue. Our largest customer in 2001 was Wal-Mart
Stores, Inc., which accounted for approximately 14% of our total revenue.
REVENUE EQUIPMENT
We operate standardized equipment fleets in each of our business segments,
which we believe enhances our ability to attract experienced drivers, provides
better service options for our customers, increases our operating flexibility,
lowers our maintenance expenses, and results in longer equipment service lives.
We adhere to a comprehensive maintenance program seeking to minimize downtime
and maximize resale value. We perform routine servicing and maintenance of our
equipment at most of our regional terminal facilities, thus avoiding costly
on-road repairs and out-of-route trips.
We generally operate newer revenue equipment in our Truck segment, where
equipment utilization is the highest of our three business segments. Our
Intermodal segment utilizes specially designed high-cube containers which can be
separated from chassis and double-stacked on rail cars. The Intermodal segment
began receiving new containers and reconditioned chassis in late 2001 and plans
to receive approximately 6,000 new containers during 2002. The composition of
our DCS fleet varies with specific customer requirements and currently includes
dry vans, flatbeds, and temperature-controlled units.
17
The following tables summarize by business segment the type and age of
revenue equipment owned or leased by us as of December 31, 2001.
TRUCK:
TRAILERS
------------------------
MODEL YEAR TRACTORS(1) 48FEET 53FEET TOTAL
---------- ----------- ------ ------ ------
2002..................................... 866 -- 6,338 6,338
2001..................................... 2,325 -- 9,419 9,419
2000..................................... 1,793 -- 2,645 2,645
1999..................................... 26 1 2,018 2,019
1998..................................... 367 -- 435 435
1997 and prior........................... 5 26 66 92
----- ----- ------ ------
Total............................... 5,382 27 20,921 20,948
===== ===== ====== ======
Average age (years)...................... 1.4 1.4
===== ======
---------------
(1) Excludes 337 independent contractors.
INTERMODAL:
CONTAINERS
------------------------
MODEL YEAR TRACTORS 48FEET 53FEET TOTAL
---------- -------- ------ ------ ------
2002....................................... 6 -- 513 513
2001....................................... 23 -- -- --
2000....................................... 183 -- -- --
1999....................................... 218 -- 2 2
1998....................................... 308 -- 3,656 3,656
1997 and prior............................. 172 4,804 9,736 14,540
----- ----- ------ ------
Total................................. 910 4,804 13,907 18,711
===== ===== ====== ======
Average age (years)........................ 3.7 6.5
===== ======
DCS:
TRAILERS
-------------------------------
MODEL YEAR TRACTORS 48FEET 53FEET OTHER TOTAL
---------- -------- ------ ------ ----- -----
2002................................... 282 57 337 -- 394
2001................................... 576 86 494 -- 580
2000................................... 1,273 29 370 5 404
1999................................... 1,254 510 822 7 1,339
1998................................... 820 171 92 11 274
1997 and prior......................... 273 784 372 484 1,640
----- ----- ----- --- -----
Total............................. 4,478 1,637 2,487 507 4,631
===== ===== ===== === =====
Average age (years).................... 2.8 3.6
===== =====
18
MANAGEMENT
Our executive management team is set forth in the table below.
WITH COMPANY
NAME AGE POSITION WITH COMPANY SINCE
---- --- --------------------- -------------
Wayne Garrison............................ 49 Chairman of the Board; 1976
Director
Kirk Thompson............................. 48 President and Chief Executive 1973
Officer; Director
Jerry W. Walton........................... 55 Executive Vice President, 1991
Finance and Administration
and Chief Financial Officer
Paul R. Bergant........................... 55 Executive Vice President, 1978
Marketing and Chief Marketing
Officer
Craig Harper.............................. 44 Executive Vice President, 1992
Operations and Chief
Operations Officer
John N. Roberts, III...................... 37 President, Dedicated Contract 1989
Services and Executive Vice
President, Enterprise
Solutions
Kay J. Palmer............................. 38 Chief Information Officer 1988
Donald G. Cope............................ 52 Senior Vice President, 1991
Controller and Chief
Accounting Officer
Bob D. Ralston............................ 55 Executive Vice President, 1978
Equipment and Properties
Terrence D. Matthews...................... 43 Senior Vice President, Sales 1986
and National Accounts
David G. Mee.............................. 42 Senior Vice President, Tax 1992
and Risk Management
David N. Chelette......................... 38 Vice President and Treasurer 1993
19
PRINCIPAL AND SELLING STOCKHOLDERS
The following table sets forth, as of March 31, 2002, certain information
concerning shares of our common stock beneficially owned by:
- each of our executive officers and directors;
- all of our executive officers and directors as a group;
- each stockholder known by us to be the beneficial owner of more than 5%
of our outstanding common stock; and
- the selling stockholder.
The percentages shown are based upon 36,336,471 shares of common stock
outstanding before this offering, 38,336,471 shares of common stock outstanding
after this offering, and the sale by the selling stockholder of 3,100,000
shares. A person is deemed to have "beneficial ownership" of any security that
he or she has a right to acquire within 60 days after such date. Except as
indicated by footnote, and subject to community property laws where applicable,
the persons named in the table have sole voting and investment power for all
shares of common stock shown as beneficially owned by them. Information about
the selling stockholder has been provided to us by the selling stockholder.
SHARES BENEFICIALLY OWNED SHARES TO BE BENEFICIALLY
PRIOR TO THE OFFERING OWNED AFTER THE OFFERING
------------------------- SHARES -------------------------
NAME NUMBER PERCENTAGE BEING SOLD NUMBER PERCENTAGE
---- ----------- ----------- ---------- ----------- -----------
EXECUTIVE OFFICERS, KEY EMPLOYEES,
AND DIRECTORS:
Wayne Garrison(1).................. 2,008,595 5.5% -- 2,008,595 5.2%
Kirk Thompson(2)................... 182,767 * -- 182,767 *
Jerry W. Walton(3)................. 161,815 * -- 161,815 *
Paul R. Bergant(4)................. 231,972 * -- 231,972 *
Craig Harper(5).................... 43,923 * -- 43,923 *
John N. Roberts, III(6)............ 34,274 * -- 34,274 *
Kay J. Palmer(7)................... 15,844 * -- 15,844 *
Donald G. Cope(8).................. 27,865 * -- 27,865 *
Bob D. Ralston(9).................. 66,009 * -- 66,009 *
Terrence D. Matthews(10)........... 41,835 * -- 41,835 *
David G. Mee(11)................... 20,956 * -- 20,956 *
David N. Chelette(12).............. 6,253 * -- 6,253 *
J.B. Hunt(13)...................... 11,926,516 32.8 3,100,000 8,826,516 23.0
Johnelle D. Hunt(13)............... 11,926,516 32.8 3,100,000 8,826,516 23.0
John A. Cooper, Jr. ............... 12,734 * -- 12,734 *
Gene George(14).................... 627,291 1.7 -- 617,291 1.6
Thomas L. Hardeman................. 6,234 * -- 6,234 *
Bryan Hunt(15)..................... 19,918 * -- 19,918 *
Leland E. Tollett.................. 1,142 * -- 1,142 *
John A. White...................... 5,376 * -- 5,376 *
All executive officers, key
employees, and directors as a group
(20 persons)....................... 15,441,319 42.5 3,100,000 12,341,319 31.9
OTHER PRINCIPAL STOCKHOLDERS:
Dimensional Fund Advisors(16)...... 2,338,100 6.4 -- 2,338,100 6.1
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
20
---------------
* Less than one percent (1%).
(1) Includes 3,000 shares owned by Mr. Garrison's immediate family and 26,000
shares subject to options which are currently exercisable.
(2) Includes 45,968 shares subject to options which become exercisable on June
1, 2002.
(3) Includes 33,149 shares held in trusts in which Mr. Walton is designated as
the trustee, for which he disclaims beneficial ownership, 17,200 shares
subject to options which are currently exercisable and 44,800 shares
subject to options which become exercisable June 1, 2002.
(4) Includes 46,860 shares subject to options which are currently exercisable
and 28,935 shares subject to options which become exercisable June 1, 2002.
(5) Includes 9,000 shares subject to options which are currently exercisable
and 15,971 shares subject to options which become exercisable June 1, 2002.
(6) Includes 17,857 subject to options which become exercisable June 1, 2002.
(7) Includes 5,358 shares subject to options which are currently exercisable
and 8,028 shares subject to options which become exercisable June 1, 2002.
(8) Includes 13,908 shares subject to options which are currently exercisable
and 6,478 shares subject to options which become exercisable June 1, 2002.
(9) Includes 30,650 shares subject to options which are currently exercisable
and 12,050 shares subject to options which become exercisable June 1, 2002.
(10) Includes 9,000 shares subject to options which are currently exercisable
and 8,057 shares subject to options which become exercisable June 1, 2002.
(11) Includes 3,000 shares subject to options which are currently exercisable
and 10,343 shares subject to options which become exercisable June 1, 2002.
(12) Includes 2,250 shares subject to options which are currently exercisable
and 2,650 shares subject to options which become exercisable June 1, 2002.
(13) Includes 8,423,264 shares owned by J.B. Hunt LLC, in which Mr. & Mrs. Hunt
are co-managers, 3,359,942 shares owned by Johnelle D. Hunt LLC in which
Mr. & Mrs. Hunt are also co-managers, 140,199 shares owned directly by Mr.
Hunt, and 3,111 shares owned directly by Mrs. Hunt. Johnelle D. Hunt LLC is
selling 3,100,000 shares in this offering.
(14) Includes an indirect 25% beneficial ownership through a family limited
partnership that owns 730,989 shares which equals 182,747 shares and the
ownership of 444,544 shares in another family limited partnership. Mr.
George disclaims the beneficial ownership of the 182,747 shares described
above and listing such shares shall not be construed as an admission that
Mr. George is the owner of such shares for purposes of Section 13(d) of the
Securities Exchange Act.
(15) Includes 4,800 shares subject to options which are currently exercisable
and 1,600 shares subject to options which become shares exercisable June 1,
2002.
(16) Represents information reported to us on February 2, 2002.
STOCK OWNERSHIP POLICY
In an effort to motivate our key employees and align their interests with
those of our stockholders, we have implemented certain guidelines for stock
ownership. We expect our executive officers and other management employees to
meet such guidelines within five years. The guidelines set forth a number of
shares of common stock that we expect our employees to beneficially own, based
upon each employee's base salary. The guidelines are as follows:
POSITION MULTIPLE OF BASE SALARY
-------- -----------------------
Chief Executive Officer..................................... 5 times
Executive Vice Presidents................................... 3 times
Group Presidents, Senior Vice Presidents and Vice Presidents
of Operations............................................. 2.5 times
Vice Presidents, Terminal Managers, Regional Operations
Managers.................................................. 2 times
21
UNDERWRITING
Subject to the terms and conditions of an underwriting agreement dated
, 2002, the underwriters named below, through their representatives,
Bear, Stearns & Co. Inc., Credit Suisse First Boston Corporation, Deutsche Bank
Securities Inc., J.P. Morgan Securities Inc., BB&T Capital Markets, a division
of Scott & Stringfellow, Inc., and Stephens Inc., have severally agreed to
purchase from us and the selling stockholder the respective number of shares of
common stock set forth opposite their names below:
NUMBER
NAME OF SHARES
---- ---------
Bear, Stearns & Co. Inc. ...................................
Credit Suisse First Boston Corporation......................
Deutsche Bank Securities Inc. ..............................
J.P. Morgan Securities Inc. ................................
BB&T Capital Markets, a division of Scott & Stringfellow,
Inc. .....................................................
Stephens Inc. ..............................................
---------
Total..................................................... 5,100,000
=========
The underwriting agreement provides that the obligations of the
underwriters are several and are subject to approval of certain legal matters by
their counsel and various other conditions. The nature of the underwriters'
obligations is such that they are committed to purchase all shares of common
stock offered hereby if any of the shares are purchased.
We have granted an option to the underwriters, exercisable for 30 days
after the date of this prospectus, to purchase up to an additional 765,000
shares of our common stock at the public offering price, less the underwriting
discounts set forth on the cover page of this prospectus. The underwriters may
exercise this option solely to cover over-allotments, if any, in connection with
the sale of our common stock. If the underwriters exercise this option, each
underwriter will be obligated, subject to certain conditions, to purchase a
number of additional shares of our common stock proportionate to the
underwriter's initial amount set forth in the table above.
The following table summarizes the underwriting discounts to be paid by us
and the selling stockholder to the underwriters and the expenses payable by us
and the selling stockholder for each share of our common stock and in total.
This information is presented assuming either no exercise or full exercise of
the underwriters' option to purchase additional shares of common stock.
AGGREGATE
PER WITHOUT AGGREGATE
SHARE OPTION WITH OPTION
------ --------- -----------
Assumed public offering price..........................
Underwriting discounts payable by us...................
Expenses payable by us.................................
Underwriting discounts payable by the selling
stockholder..........................................
Expenses payable by the selling stockholder............
We have been advised that the underwriters propose to offer the shares of
our common stock to the public at the public offering price set forth on the
cover page of this prospectus and to certain dealers at that price less a
concession not in excess of per share. The underwriters may allow, and
such dealers may re-allow, a concession not in excess of per share to
certain other dealers. The offering of the shares of common stock is made for
delivery when, as and if accepted by the underwriters and subject to prior sale
and to withdrawal, cancellation or modification of this offering without notice.
The underwriters reserve the right to reject an order for the repurchase of
shares, in whole or in part.
22
We, along with our directors, officers and the selling stockholders have
agreed under lock-up agreements not to, directly or indirectly, offer, sell, or
otherwise dispose of any shares of common stock or any securities which may be
converted into or exchanged for shares of common stock without the prior written
consent of Bear, Stearns & Co, Inc. on behalf of the underwriters for a period
of 90 days from the date of this prospectus.
We and the selling stockholder have agreed to indemnify the underwriters
against certain liabilities, including liabilities under the Securities Act, and
to contribute to payments which the underwriters may be required to make in
respect thereof.
The underwriters may engage in over-allotment, stabilizing transaction,
syndicate covering transactions, and penalty bids or purchase for the purpose of
pegging, fixing or maintaining the price of the common stock, in accordance with
Regulation M under the Securities Exchange Act of 1934:
- Over-allotment involves sales by the underwriters of shares in excess of
the number of shares the underwriters are obligated to purchase, which
create a syndicate short position. The short position may be either a
covered short position or a naked short position. In a covered short
position, the number of shares over-alloted by the underwriters is not
greater than the number of shares that they may purchase in the
over-allotment option. In a naked short position, the number of shares
involved is greater than the number of shares in the over-allotment
option. The underwriters may close out any short position by either
exercising their over-allotment option and/or purchasing shares in the
open market.
- Stabilizing transactions consist of bids to purchase the underlying
security in the open market which are subject to a specified maximum.
- Syndicate covering transactions involve purchases of the common stock in
the open market after the distribution has been completed in order to
cover syndicate short positions. In determining the source of shares to
close out the short position, the underwriters will consider, among other
things, the price of shares available for purchase in the open market as
compared to the price at which they may purchase shares through the
over-allotment option. If the underwriters sell more shares than could be
covered by the over-allotment option, a naked short position, the
position can only be closed out by buying shares in the open market. A
naked short position is more likely to be created if the underwriters are
concerned that there could be downward pressure on the price of the
shares in the open market after pricing that could adversely affect
investors who purchase in the offering.
- Penalty bids permit the underwriters to reclaim a selling concession from
a syndicate member when the common stock originally sold by the syndicate
member is purchased in a stabilizing or syndicate covering transaction to
cover syndicate short positions.
These stabilizing transactions, syndicate covering transactions and penalty
bids may have the effect of raising or maintaining the market price of the
common stock or preventing or retarding a decline in the market price of the
common stock. As a result, the price of the common stock may be higher than the
price that might otherwise exist in the open market. These transactions may be
effected on the Nasdaq National Market or otherwise and, if commenced, may be
discontinued at any time.
Neither we nor any of the underwriters make any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the common stock may be higher than the
price that might otherwise exist in the open market. These transactions may be
effected on the Nasdaq National Market or otherwise, and if commenced, may be
discontinued at any time.
In connection with the offering, the underwriters and selling group members
may engage in passive market making transactions in the common stock on the
Nasdaq National Market in accordance with Rule 103 of Regulation M under the
Securities Exchange Act of 1934 during the period before the commencement of
offers or sales of common stock and extending through the completion of the
distribution. A passive market maker must display its bids at a price not in
excess of the highest
23
independent bid of the security. However, if all independent bids are lowered
below the passive market maker's bid, that bid must be lowered when specified
purchase limits are exceeded.
The underwriters may, from time to time, engage in transaction with, and
perform services for, us in the ordinary course of their business. An affiliate
of Deutsche Bank Securities Inc. is serving as a lender to us under a credit
facility, and an affiliate of J.P. Morgan Securities, Inc. also serves as a
lender to us under the same facility.
A prospectus in electronic format may be made available on internet sites
or through other online services maintained by one or more of the underwriters
and/or selling group members participating in this offering, or by their
affiliates. In those cases, prospective investors may view offering terms online
and, depending upon the particular underwriter or selling group member,
prospective investors may be allowed to place orders online. The underwriters
may agree with us to allocate a specific number of shares for sale to online
brokerage account holders. Any such allocation for online distributions will be
made by the representatives on the same basis as other allocations.
Other than the prospectus in electronic format, information contained in
any other web site maintained by an underwriter or selling group member is not
part of this prospectus or the registration statement of which this prospectus
forms a part, has not been endorsed by us or the underwriters or any selling
group member in its capacity as underwriter or selling group member and should
not be relied on by investors in deciding whether to purchase any shares of
common stock. The underwriters and selling group members are not responsible for
information contained in internet websites that they do not maintain.
WHERE YOU CAN OBTAIN ADDITIONAL INFORMATION
We file annual, quarterly, and current reports, proxy statements, and other
documents with the SEC. You may read and copy any document we file at the SEC's
public reference room at Judiciary Plaza Building, 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549. You should call 1-800-SEC-0330 for more
information on the public reference room. The SEC maintains an internet site at
http://www.sec.gov that contains reports, proxy and information statements, and
other information regarding issuers that file electronically with the SEC.
Our common stock is listed on the Nasdaq National Market and similar
information can be inspected and copied at the offices of the National
Association of Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C.
20006.
We have filed a registration statement under the Securities Act of 1933
with the Commission with respect to the common stock offered by this prospectus.
This prospectus is a part of the registration statement. However, it does not
contain all of the information contained in the registration statement and its
exhibits. You should refer to the registration statement and its exhibits for
further information about us and the common stock offered by this prospectus.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate" into this prospectus information we file
with it in other documents. This means that we can disclose important
information to you by referring you to other documents that contain that
information. The information incorporated by reference is an important part of
this prospectus, and information that we file later with the SEC will
automatically update and supersede this information. We have filed the following
documents with the SEC, and they are incorporated by reference into this
prospectus:
- our annual report on Form 10-K for the fiscal year ended December 31,
2001;
- our quarterly report on Form 10-Q, including exhibits, for the quarter
ended March 31, 2002, filed with the Commission on March 10, 2002; and
24
- the description of our common stock in our Registration Statement on Form
8-A, filed with the Commission on March 27, 1984, including any amendment
or report filed to update such description.
Please note that all other documents and reports filed under Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 following the
date of this prospectus and prior to the termination of this offering will be
deemed to be incorporated by reference into this prospectus and to be made a
part of it from the date of the filing of our reports and documents.
You may request free copies of filings incorporated herein by reference by
writing or telephoning us at the following address:
J.B. Hunt Transport Services, Inc.
615 J.B. Hunt Corporate Drive
Lowell, Arkansas 72745
Attention: Jerry W. Walton, Chief Financial Officer
Telephone: 479-820-0000
LEGAL MATTERS
The legality of the shares of common stock offered by this prospectus will
be passed upon for us by Wright, Lindsey & Jennings LLP, Little Rock, Arkansas.
Certain legal matters will be passed upon for the underwriters by Kramer Levin
Naftalis & Frankel LLP, New York, New York.
EXPERTS
The consolidated financial statements of J.B. Hunt Transport Services, Inc.
and its subsidiaries as of December 31, 2001 and 2000, and for each of the years
in the three year period ended December 31, 2001, have been incorporated by
reference herein in reliance upon the report of KPMG LLP, independent certified
public accountants, incorporated by reference herein, and upon the authority of
said firm as experts in accounting and auditing.
25
------------------------------------------------------
------------------------------------------------------
PROSPECTIVE INVESTORS MAY RELY ONLY ON THE INFORMATION CONTAINED IN THIS
PROSPECTUS. NEITHER J.B. HUNT TRANSPORT SERVICES, INC., THE SELLING STOCKHOLDER,
NOR ANY U.S. UNDERWRITER HAS AUTHORIZED ANYONE TO PROVIDE PROSPECTIVE INVESTORS
WITH DIFFERENT OR ADDITIONAL INFORMATION. THIS PROSPECTUS IS NOT AN OFFER TO
SELL NOR IS IT SEEKING AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION
WHERE THE OFFER OR SALE IS NOT PERMITTED. THE INFORMATION CONTAINED IN THIS
PROSPECTUS IS CORRECT ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE
TIME OF THE DELIVERY OF THIS PROSPECTUS OR ANY SALE OF THESE SECURITIES.
NO ACTION IS BEING TAKEN IN ANY JURISDICTION OUTSIDE THE UNITED STATES TO PERMIT
A PUBLIC OFFERING OF THE COMMON STOCK OR POSSESSION OR DISTRIBUTION OF THIS
PROSPECTUS IN ANY SUCH JURISDICTION. PERSONS WHO COME INTO POSSESSION OF THIS
PROSPECTUS IN JURISDICTIONS OUTSIDE THE UNITED STATES AND CANADA ARE REQUIRED TO
INFORM THEMSELVES ABOUT AND TO OBSERVE THE RESTRICTIONS OF THAT JURISDICTION
RELATED TO THIS OFFERING AND THE DISTRIBUTION OF THE PROSPECTUS.
---------------------------------
TABLE OF CONTENTS
---------------------------------
PAGE
----
Prospectus Summary.................... 1
Risk Factors.......................... 7
Special Note Regarding Forward-Looking
Statements.......................... 12
Use of Proceeds....................... 12
Dividend Policy....................... 12
Capitalization........................ 13
Business.............................. 14
Management............................ 19
Principal and Selling Stockholders.... 20
Underwriting.......................... 22
Where You Can Obtain Additional
Information......................... 24
Incorporation of Documents by
Reference........................... 24
Legal Matters......................... 25
Experts............................... 25
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
J.B. HUNT TRANSPORT
SERVICES, INC.
(LOGO)
5,100,000 SHARES
COMMON STOCK
------------------------
PROSPECTUS
------------------------
BEAR, STEARNS & CO. INC.
CREDIT SUISSE FIRST BOSTON
DEUTSCHE BANK SECURITIES
JPMORGAN
BB&T CAPITAL MARKETS
STEPHENS INC.
, 2002
------------------------------------------------------
------------------------------------------------------
PART II
ALL CAPITALIZED TERMS USED AND NOT DEFINED IN PART II OF THIS
REGISTRATION STATEMENT SHALL HAVE THE MEANINGS ASSIGNED TO THEM
IN THE PROSPECTUS WHICH FORMS A PART OF THIS REGISTRATION STATEMENT
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the expenses to be paid by us in connection
with the offering described in this Registration Statement. All of such amounts
(except the SEC Registration Fee, NASD Filing Fee and Nasdaq National Market
Listing Fee) are estimated. The selling stockholder is paying its pro rata share
of the SEC Registration Fee and the NASD Filing Fee based upon the respective
numbers of shares being sold in this offering.
SEC Registration Fee........................................ $ 14,310
NASD Filing Fee............................................. 16,054
Nasdaq National Market Listing Fee.......................... 20,000
Blue Sky Fees and Expenses.................................. 5,000
Accounting Fees and Expenses................................ 50,000
Legal Fees and Expenses..................................... 125,000
Printing and Engraving Costs................................ 95,000
Miscellaneous............................................... 12,000
--------
Total..................................................... $337,364
========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Bylaws provide that the Company shall, to the fullest extent
permitted by the Arkansas Business Corporation Act of 1987 (the "Corporation
Act"), as amended from time to time, indemnify all persons whom it may indemnify
pursuant thereto.
Section 4-27-850 of the Corporation Act permits a corporation, under
specified circumstances, to indemnify its directors, officers, employees or
agents against expenses (including attorney's fees), judgments, fines and
amounts paid in settlements actually and reasonably incurred by them in
connection with any action, suit or proceeding brought by third parties by
reason of the fact that the directors, officers, employee or agents acted in
good faith and in a manner they reasonably believed to be in or not opposed to
the best interests of the corporation and, with respect to any criminal action
or proceeding, had no reason to believe their conduct was unlawful. In a
derivative action, i.e., one by or in the right of the corporation,
indemnification may be made only for expenses actually and reasonably incurred
by directors, officers, employees or agents in connection with the defense or
settlement of an action or suit, and only with respect to a matter as to which
they shall have acted in good faith and in a manner they reasonably believed to
be in or not opposed to the best interests of the corporation, except that no
indemnification shall be made if such person shall have been adjudged liable to
the corporation, unless and only to the extent that the court in which the
action or suit was brought shall determine upon application that the defendant
directors, officers, employees or agents are fairly and reasonably entitled to
indemnity for such expenses despite such adjudication of liability.
Pursuant to Section 4-27-202 of the Corporation Act, the Company's Articles
of Incorporation, as amended, provide that the Company's directors will not be
personally liable to the Company or its stockholders for monetary damages
resulting from breaches of their fiduciary duty as directors except (a) for any
breach of the duty of loyalty to the Company or its stockholders, (b) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (c) under section 4-27-833 of the Corporation Act,
which makes directors liable for unlawful dividends or unlawful
II-1
distributions, (d) for transactions from which directors derive improper
personal benefit or (e) for any action, omission, transaction, or breach of a
director's duty creating any third-party liability to any person or entity other
than the corporation or stockholder.
In accordance with Arkansas law, the Company has entered into
indemnification agreements with its executive officers and directors, pursuant
to which it will agree to pay certain expenses, including attorneys' fees,
judgments, fines and amounts paid in settlement incurred by such directors in
connection with certain actions, suits or proceedings. These agreements require
directors to repay the amount of any expenses advanced if it shall be determined
that they shall not have been entitled to indemnification.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
EXHIBIT
NUMBER DESCRIPTION
------- -----------
*1.1 Form of Underwriting Agreement
4.1 Amended and Restated Articles of Incorporation of J. B. Hunt
Transport Services, Inc. (incorporated by reference from
Exhibit 4A to the Company's Registration Statement on Form
S-8 (File No. 33-40028) filed April 16, 1991)
4.2 Amended and Restated Bylaws of the Company (incorporated by
reference from Exhibit 3C to the Company's Registration
Statement on Form S-1 (File No. 2-95714) filed February 7,
1985)
*5.1 Opinion of Wright, Lindsey & Jennings LLP
10.1 Form of Senior Indenture for the Company's Medium Term
Notes, Series A (incorporated by reference from Exhibit 4.1
to the Company's Registration Statement of Form S-3 (File
No. 33-64950) filed June 24, 1993)
10.2 Form of Subordinated Indenture for the Company's Medium Term
Notes, Series B (incorporated by reference from Exhibit 4.2
to the Company's Registration Statement of Form S-3 (File
No. 33-64950) filed June 24, 1993)
10.3 Amended and Restated Management Incentive Plan (incorporated
by reference from Exhibit 4.1 to Amendment No. 3 to the
Company's Registration Statement on Form S-8 (File No.
33-40028), filed on May 9, 2002
15.1 Awareness letter related to Independent Accountant's Review
Report
23.1 Consent of KPMG LLP
23.2 Consent of Wright, Lindsey & Jennings LLP (included as part
of Exhibit 5.1)
24.1 Powers of Attorney (included as part of signature page)
---------------
* To be filed by Amendment.
ITEM 17. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b),
II-2
if, in the aggregate, the changes in volume and price represent no more
than a 20 percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the effective
registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Lowell, State of Arkansas, on May 10, 2002.
J.B. HUNT TRANSPORT SERVICES, INC.
By /s/ KIRK THOMPSON
------------------------------------
Kirk Thompson
President and Chief Executive
Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Kirk Thompson and Jerry Walton, and each
or either one of them, his true and lawful attorney-in-fact and agent, with full
power of substitution and resubstitution for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this registration statement on Form S-3 and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by or on behalf the following persons in
the capacities and on the date indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ JOHN A. COOPER, JR. Director May 10, 2002
------------------------------------------------
John A. Cooper, Jr.
/s/ WAYNE GARRISON Chairman of the Board May 10, 2002
------------------------------------------------
Wayne Garrison
/s/ GENE GEORGE Director May 10, 2002
------------------------------------------------
Gene George
/s/ THOMAS L. HARDEMAN Director May 10, 2002
------------------------------------------------
Thomas L. Hardeman
/s/ J. BRYAN HUNT, JR. Vice Chairman of the Board May 10, 2002
------------------------------------------------
J. Bryan Hunt, Jr.
/s/ LELAND TOLLETT Director May 10, 2002
------------------------------------------------
Leland Tollett
II-4
SIGNATURE TITLE DATE
--------- ----- ----
/s/ J.B. HUNT Senior Chairman of the Board May 10, 2002
------------------------------------------------
J.B. Hunt
/s/ KIRK THOMPSON President and Chief Executive May 10, 2002
------------------------------------------------ Officer; Director
Kirk Thompson
/s/ JERRY W. WALTON Executive Vice President, Finance May 10, 2002
------------------------------------------------ and Administration, Chief Financial
Jerry W. Walton Officer
/s/ JOHNELLE HUNT Secretary of the Board May 10, 2002
------------------------------------------------
Johnelle Hunt
/s/ DONALD G. COPE Senior Vice President, Controller, May 10, 2002
------------------------------------------------ Chief Accounting Officer (Principal
Donald G. Cope Financial and Accounting Officer)
/s/ JOHN A. WHITE Director May 10, 2002
------------------------------------------------
John A. White
II-5
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------- -----------
*1.1 Form of Underwriting Agreement
4.1 Amended and Restated Articles of Incorporation of J. B. Hunt
Transport Services, Inc. (incorporated by reference from
Exhibit 4A to the Company's Registration Statement on Form
S-8 (File No. 33-40028) filed April 16, 1991)
4.2 Amended and Restated Bylaws of the Company (incorporated by
reference from Exhibit 3C to the Company's Registration
Statement on Form S-1 (File No. 2-95714) filed February 7,
1985)
*5.1 Opinion of Wright, Lindsey & Jennings LLP
10.1 Form of Senior Indenture for the Company's Medium Term
Notes, Series A (incorporated by reference from Exhibit 4.1
to the Company's Registration Statement of Form S-3 (File
No. 33-64950) filed June 24, 1993)
10.2 Form of Subordinated Indenture for the Company's Medium Term
Notes, Series B (incorporated by reference from Exhibit 4.2
to the Company's Registration Statement of Form S-3 (File
No. 33-64950) filed June 24, 1993)
10.3 Amended and Restated Management Incentive Plan (incorporated
by reference from Exhibit 4.1 to Amendment No. 3 to the
Company's Registration Statement on Form S-8 (File No.
33-40028), filed on May 9, 2002
15.1 Awareness letter related to Independent Accountant's Review
Report
23.1 Consent of KPMG LLP
23.2 Consent of Wright, Lindsey & Jennings LLP (included as part
of Exhibit 5.1)
24.1 Powers of Attorney (included as part of signature page)
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* To be filed by Amendment.