Hub Group, Inc. Reports Record Earnings for the Fourth Quarter and Full Year 2005 and Provides 2006 Guidance
DOWNERS GROVE, Ill., Feb. 7 /PRNewswire-FirstCall/ — Hub Group, Inc.
(Nasdaq: HUBG) today reported record net income for the quarter ended December
31, 2005 of $10.1 million. This represents a 45% increase versus fourth
quarter 2004 net income. Hub Group’s diluted earnings per share for the
quarter ended December 31, 2005 is $0.49. This represents an increase of 48%
compared to diluted earnings per share for the quarter ended December 31, 2004
of $0.33.
Hub’s revenue grew by 8.6% to $420.6 million compared to $387.4 million
in the fourth quarter of 2004. Fourth quarter intermodal revenue increased
11.8% to $302.3 million. Truckload brokerage revenue increased 15.6% to
$71.2 million this quarter. Fourth quarter logistics revenue decreased to
$29.7 million and Hub Group Distribution Services revenue increased to
$17.4 million in the fourth quarter of 2005. Gross margin grew 8.0% to
$49.7 million compared to the fourth quarter of 2004.
Costs and expenses decreased 1.7% in the fourth quarter of 2005 to
$33.4 million compared to $34.0 million in the fourth quarter of 2004. Other
income increased to $0.3 million in 2005 from an expense of $0.1 million in
2004 due primarily to increased interest income on a higher cash balance
compared to the fourth quarter of 2004.
FULL YEAR 2005
Revenue for the year was $1,531.5 million compared to $1,426.8 million in
2004, or an increase of 7.3%. Gross margin grew 5.3% to $189.0 million
compared to 2004.
Costs and expenses decreased 3.1% in 2005 to $134.6 million compared to
$138.9 million in 2004. Other income was $0.8 million in 2005 compared to an
expense of $10.6 million in 2004 due primarily to expenses associated with the
extinguishment of the private placement debt during the third quarter of 2004
and interest expense in 2004.
Net income increased 53.2% to $32.9 million for 2005 compared to last
year’s adjusted net income of $21.5 million. Hub Group’s diluted earnings per
share for the year ended December 31, 2005 is $1.59. This represents an
increase of 38% compared to adjusted diluted earnings per share for the year
ended December 31, 2004 of $1.15. The 2004 adjusted net income and earnings
per share exclude debt extinguishment costs.
On an as-reported basis, net income for 2005 increased to $32.9 million
from $17.3 million in 2004. As reported diluted earnings per share increased
to $1.59 compared to $0.92 last year.
As of December 31, 2005, the Company had $36.1 million of cash compared to
$16.8 million at December 31, 2004.
FULL YEAR 2006
Given the current operating environment, we are comfortable that the
earnings for 2006 will be within the current analysts’ range of $1.82 to $2.00
per diluted share. Our guidance assumes that our acquisition of Comtrak
closes on February 28, 2006.
A tabular reconciliation of the differences between the adjusted financial
results for the year ended December 31, 2004 and the Company’s financial
results determined in accordance with generally accepted accounting principles
in the United States of America (“GAAP”) is contained in the summary financial
statements attached to this press release.
All share and per share amounts have been adjusted to give retroactive
effect to the stock split which occurred in the second quarter of 2005.
Certain prior year and quarter amounts have been reclassified to conform to
the current year presentation.
CONFERENCE CALL
Hub will hold a conference call at 5:00 p.m. Eastern Time (4:00 p.m.
Central Time) on Tuesday, February 7, 2006 to discuss its fourth quarter and
full year results.
Hosting the conference call will be David P. Yeager, Vice-Chairman and CEO
and Thomas M. White, Senior Vice-President, Chief Financial Officer and
Treasurer.
This call is being webcast by Thomson/CCBN and can be accessed through the
Investors link at Hub Group’s Web site at https://www.hubgroup.com or
individual investors can access the audio webcast at http://www.earnings.com
and institutional investors can access the webcast at
http://www.streetevents.com . The webcast is listen-only. Those interested in
participating in the question and answer session should follow the telephone
dial-in instructions below.
To participate in the conference call by telephone, please call ten
minutes early by dialing (800) 659-2037. The conference call participant code
is 40679457. The call will be limited to 60 minutes, including questions and
answers.
An audio replay will be available through the Investors link on the
Company’s Web site at https://www.hubgroup.com . This replay will be available
for 30 days.
ABOUT HUB GROUP: Hub Group, Inc. is a leading non-asset based freight
transportation management company providing comprehensive intermodal,
truckload brokerage, logistics and distribution services. The Company operates
through a network of over 30 offices throughout the United States, Canada and
Mexico.
CERTAIN FORWARD-LOOKING STATEMENTS: Statements in this press release that
are not historical, including statements about Hub Group’s or management’s
earnings guidance, intentions, beliefs, expectations, representations,
projections, plans or predictions of the future, are forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements are inherently uncertain and subject to
risks. Such statements should be viewed with caution. Actual results or
experience could differ materially from the forward-looking statements as a
result of many factors. Factors that could cause actual results to differ
materially include the factors listed from time to time in Hub Group’s SEC
reports including, but not limited to, the annual report on Form 10-K for the
year ended December 31, 2004 and Form 10-Q for the periods ended March 31,
2005, June 30, 2005 and September 30, 2005. Hub Group assumes no liability to
update any such forward-looking statements.
HUB GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
Three Months Years Ended
Ended December 31, December 31,
2005 2004 2005 2004
Revenue $420,611 $387,428 $1,531,499 $1,426,806
Transportation costs 370,869 341,377 1,342,476 1,247,258
Gross margin 49,742 46,051 189,023 179,548
Costs and expenses:
Salaries and benefits 22,561 21,623 88,182 88,193
General and administrative 8,556 9,599 36,850 39,218
Depreciation and amortization
of property and equipment 2,274 2,752 9,611 11,539
Total costs and expenses 33,391 33,974 134,643 138,950
Operating income 16,351 12,077 54,380 40,598
Other income (expense):
Interest expense (146) (308) (638) (4,276)
Interest income 370 95 971 260
Debt extinguishment expenses - - - (7,296)
Other, net 63 128 474 712
Total other income (expense) 287 (85) 807 (10,600)
Income before provision for
income taxes 16,638 11,992 55,187 29,998
Provision for income taxes 6,575 5,037 22,241 12,719
Net income $10,063 $6,955 $32,946 $17,279
Basic earnings per common
share $0.51 $0.35 $1.65 $0.98
Diluted earnings per common
share $0.49 $0.33 $1.59 $0.92
Basic weighted average number
of shares outstanding 19,820 19,790 19,930 17,600
Diluted weighted average
number of shares outstanding 20,425 20,942 20,696 18,778
HUB GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
December 31, December 31,
2005 2004
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $36,133 $16,806
Restricted investments 1,387 -
Accounts receivable
Trade, net 156,864 140,762
Other 10,603 8,313
Deferred taxes - current - 4,667
Prepaid expenses and other
current assets 4,007 4,746
Prepaid taxes 6,040 -
TOTAL CURRENT ASSETS 215,034 175,294
PROPERTY AND EQUIPMENT, net 13,524 19,487
GOODWILL, net 215,175 215,175
OTHER ASSETS 685 889
TOTAL ASSETS $444,418 $410,845
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES:
Accounts payable
Trade $117,712 $115,819
Other 3,735 1,660
Accrued expenses
Payroll 22,092 19,542
Other 19,390 15,100
Deferred taxes 960 -
TOTAL CURRENT LIABILITIES 163,889 152,121
DEFERRED TAXES 38,454 31,788
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value,
2,000,000 shares authorized; - -
no shares issued or outstanding
in 2005 and 2004
Common stock
Class A: $.01 par value;
47,337,700 shares authorized;
20,281,248 shares issued and
19,650,094 shares
outstanding in 2005;
19,933,610 shares issued and
outstanding in 2004 197 199
Class B: $.01 par value;
662,300 shares authorized;
662,296 shares issued and
outstanding in 2005 and 2004 7 7
Additional paid-in capital 183,733 182,262
Purchase price in excess of
predecessor basis, net of tax
benefit of $10,306 (15,458) (15,458)
Retained earnings 97,557 64,611
Unearned compensation (6,259) (4,685)
Treasury stock, at cost (631,154
shares in 2005) (17,702) -
TOTAL STOCKHOLDERS' EQUITY 242,075 226,936
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $444,418 $410,845
HUB GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Years Ended
December 31,
2005 2004
Cash flows from operating activities:
Net income $32,946 $17,279
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization of
property and equipment 10,025 11,828
Deferred taxes 20,816 12,752
Compensation expense related to
restricted stock 2,177 2,148
Gain on sale of assets (271) (294)
Other assets 204 128
Changes in working capital:
Restricted investments (1,387) -
Accounts receivable, net (18,392) (13,849)
Prepaid expenses and other
current assets 739 (168)
Prepaid taxes (6,040) -
Accounts payable 3,968 (2,866)
Accrued expenses 6,840 8,893
Net cash provided by operating
activities 51,625 35,851
Cash flows from investing activities:
Proceeds from sale of property and
equipment 579 383
Purchases of property and equipment (4,370) (3,549)
Net cash used in investing activities (3,791) (3,166)
Cash flows from financing activities:
Proceeds from stock offering, net - 55,871
Proceeds from stock options exercised 4,732 7,394
Purchase of treasury stock (33,239) (4,110)
Net payments on revolver - (6,000)
Payments of long term debt - (69,034)
Net cash used in financing activities (28,507) (15,879)
Net increase in cash and cash equivalents 19,327 16,806
Cash and cash equivalents beginning
of period 16,806 -
Cash and cash equivalents end of
period $36,133 $16,806
Supplemental disclosures of cash
flow information
Cash paid for:
Interest $923 $2,995
Income taxes $6,811 $591
HUB GROUP, INC.
MODAL REVENUE SUMMARY
(in thousands)
First Second Third Fourth
Quarter Quarter Quarter Quarter Total
2005 2005 2005 2005 2005
Intermodal $234,133 $259,275 $284,052 $302,339 $1,079,799
Brokerage 59,755 68,016 67,590 71,185 266,546
Logistics 35,518 34,531 35,793 29,693 135,535
Total Core 329,406 361,822 387,435 403,217 1,481,880
HGDS 10,452 9,808 11,965 17,394 49,619
Consolidated $339,858 $371,630 $399,400 $420,611 $1,531,499
First Second Third Fourth
Quarter Quarter Quarter Quarter Total
2004 2004 2004 2004 2004
Intermodal $236,321 $247,940 $259,958 $270,314 $1,014,533
Brokerage 50,960 56,778 56,124 61,604 225,466
Logistics 33,913 33,786 34,028 38,996 140,723
Total Core 321,194 338,504 350,110 370,914 1,380,722
HGDS 7,108 10,467 11,995 16,514 46,084
Consolidated $328,302 $348,971 $362,105 $387,428 $1,426,806
NOTE: HGDS transferred its Pharmaceutical business to Logistics in
August 2004, resulting in an increase in Logistics revenue of
$4,331 in first quarter 2005, $3,384 in second quarter 2005
and $484 in third quarter 2005.
HUB GROUP, INC.
RECONCILIATION OF AS REPORTED FINANCIAL
RESULTS TO AS ADJUSTED FINANCIAL RESULTS
(in thousands, except per share amounts)
Year Ended December 31, 2004
As Reported Adjustments As Adjusted
Operating Income $40,598 $- $40,598
Interest expense (4,276) - (4,276)
Interest income 260 - 260
Debt extinguishment expenses (7,296) (7,296) a -
Other, net 712 - 712
Income before provision for income
taxes 29,998 (7,296) 37,294
Provision for income taxes 12,719 (3,064) b 15,783
Net Income $17,279 $(4,232) $21,511
Basic earnings per common share $0.98 $(0.24) $1.22
Diluted earnings per common share $0.92 $(0.23) $1.15
Basic weighted average number of
shares outstanding 17,600 17,600 17,600
Diluted weighted average number of
shares outstanding 18,778 18,778 18,778
a) Fees and expenses related to our early extinguishment of 9.14% debt
1) Pre-payment penalty of $6,804
2) Write-off of related deferred financing costs of $492
b) Income taxes at 42.0%
Note: The purpose of this statement is to reflect as adjusted earnings
excluding the one time costs
associated with prepaying our debt.
SOURCE Hub Group, Inc.
-0- 02/07/2006
/CONTACT: Renee Jurczyk of Hub Group, Inc., +1-630-271-3611/
/Web site: https://www.hubgroup.com /
(HUBG)
CO: Hub Group, Inc.
ST: Illinois
IN: FIN TRN
SU: ERN ERP CCA
CT-JR
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3567 02/07/2006 16:05 EST http://www.prnewswire.com