Hub Group, Inc. Reports Record Earnings for the Fourth Quarter and Full Year 2007 and Provides 2008 Guidance
DOWNERS GROVE, Ill., Feb. 6 /PRNewswire-FirstCall/ — Hub Group, Inc.
(Nasdaq: HUBG) today reported record income for the quarter ended
December 31, 2007 of $18.0 million, a 33% increase versus income for the
fourth quarter of 2006. Hub Group’s diluted earnings per share was $0.47 for
the fourth quarter of 2007. This represents an increase of 38% compared to
last year’s fourth quarter diluted earnings per share of $0.34. Fourth
quarter 2007 diluted earnings per share included a $0.04 tax benefit related
to the resolution of a dispute with the IRS. Hub Group’s operating margin
increased to 5.7% in the fourth quarter 2007 from 5.2% in 2006 due to growth,
improved operational efficiencies and cost controls.
Hub Group’s revenue increased 4.7% to $445.5 million compared to
$425.5 million in the fourth quarter of 2006. Fourth quarter intermodal
revenue increased 2.4% to $314.4 million. The increase was attributable to a
3% volume increase partially offset by a 1% decrease related to mix. Truck
brokerage revenue was up 15.2% to $93.9 million this quarter. Fourth quarter
logistics revenue increased 0.9% to $37.2 million. Gross margin increased
3.7% to $60.4 million compared to the fourth quarter of 2006.
Commenting on the results, David P. Yeager, Vice-Chairman and Chief
Executive Officer of Hub Group stated, “Given the current economic environment
we are pleased with our operating results. We grew in all of our service
lines and achieved operating margin of 5.7% compared to 5.2% last year.”
FULL YEAR 2007
Income from continuing operations increased 25.4% to $59.8 million for
2007 compared to last year’s income from continuing operations of
$47.7 million. Hub Group’s diluted earnings per share from continuing
operations for the year ended December 31, 2007 was $1.53. This represents an
increase of 31% compared to diluted earnings per share from continuing
operations for the year ended December 31, 2006 of $1.17.
Revenue from continuing operations increased 3% for the year to
$1,658.2 million. Gross margin from continuing operations grew 6% to
$232.3 million.
Costs and expenses from continuing operations increased 0.3% in 2007 to
$141.6 million compared to $141.2 million in 2006.
As of December 31, 2007, the Company had $38.0 million of cash.
FULL YEAR 2008
Given the current operating environment, we are comfortable that the
earnings for 2008 will be within the current analysts’ range of $1.50 to $1.62
per diluted share.
CONFERENCE CALL
Hub will hold a conference call at 5:00 p.m. Eastern Time (4:00 p.m.
Central Time) on Wednesday, February 6, 2008 to discuss its fourth quarter and
full year results.
Hosting the conference call will be David P. Yeager, Vice-Chairman and
Chief Executive Officer and Terri A. Pizzuto, Executive 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) 706-7745. The conference call participant code
is 22579500. 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 asset light freight
transportation management company providing comprehensive intermodal, truck
brokerage and logistics 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, 2006 and the report on Form 10-Q for the periods ended
March 31, 2007, June 30, 2007 and September 30, 2007. 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 Twelve Months
Ended December 31, Ended December 31,
2007 2006 2007 2006
Revenue $445,464 $425,460 $1,658,168 $1,609,529
Transportation costs 385,074 367,242 1,425,844 1,391,111
Gross margin 60,390 58,218 232,324 218,418
Costs and expenses:
Salaries and benefits 23,791 23,881 95,678 95,152
General and administrative 10,001 10,949 41,416 39,929
Depreciation and amortization 1,035 1,467 4,490 6,101
Total costs and expenses 34,827 36,297 141,584 141,182
Operating income 25,563 21,921 90,740 77,236
Other income (expense):
Interest expense (30) (50) (108) (115)
Interest income 513 643 2,480 2,311
Other, net 34 13 116 76
Total other income 517 606 2,488 2,272
Income from continuing
operations before provision
for income taxes 26,080 22,527 93,228 79,508
Provision for income taxes 8,083 9,008 33,429 31,803
Income from continuing
operations 17,997 13,519 59,799 47,705
Discontinued operations:
Income from discontinued
operations of HGDS - - - 1,634
Provision for income taxes - - - 653
Income from discontinued
operations - - - 981
Net income $17,997 $13,519 $59,799 $48,686
Basic earnings per common share
Income from continuing
operations $0.48 $0.35 $1.55 $1.19
Income from discontinued
operations - - - 0.03
Net income $0.48 $0.35 $1.55 $1.22
Diluted earnings per common share
Income from continuing
operations $0.47 $0.34 $1.53 $1.17
Income from discontinued
operations - - - 0.02
Net income $0.47 $0.34 $1.53 $1.19
Basic weighted average number
of shares outstanding 37,562 39,095 38,660 39,958
Diluted weighted average
number of shares outstanding 37,978 39,810 39,128 40,823
HUB GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
December 31, December 31,
2007 2006
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $38,002 $43,491
Accounts receivable
Trade, net 160,944 158,284
Other 9,828 8,369
Prepaid taxes 86 2,119
Deferred taxes 5,044 3,433
Prepaid expenses and other current assets 4,318 4,450
TOTAL CURRENT ASSETS 218,222 220,146
Restricted investments 5,206 3,017
Property and equipment, net 29,662 26,974
Other intangibles, net 7,056 7,502
Goodwill, net 230,448 225,448
Other assets 1,373 1,461
TOTAL ASSETS $491,967 $484,548
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable
Trade $123,020 $117,676
Other 6,683 7,783
Accrued expenses
Payroll 16,446 18,294
Other 33,063 25,673
Related party payable 5,000 5,000
TOTAL CURRENT LIABILITIES 184,212 174,426
Non-current liabilities 9,708 7,691
Deferred taxes 47,148 43,587
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value; 2,000,000
shares authorized; no shares issued or
outstanding in 2007 and 2006 - -
Common stock
Class A: $.01 par value; 97,337,700 shares
authorized in 2007; 41,224,792 shares issued
and 36,666,731 outstanding in 2007;
47,337,700 shares authorized in 2006; 412 412
41,224,792 shares issued and
38,943,122 outstanding in 2006
Class B: $.01 par value; 662,300 shares
authorized; 662,296 shares issued and
outstanding in 2007 and 2006 7 7
Additional paid-in capital 176,657 179,203
Purchase price in excess of predecessor
basis, net of tax benefit of $10,306 (15,458) (15,458)
Retained earnings 206,042 146,243
Treasury stock; at cost, 4,558,061 shares
in 2007 and 2,281,670 shares in 2006 (116,761) (51,563)
TOTAL STOCKHOLDERS' EQUITY 250,899 258,844
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $491,967 $484,548
HUB GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Twelve Months Ended
December 31,
2007 2006
Cash flows from operating activities:
Income from continuing operations $59,799 $47,705
Adjustments to reconcile income from continuing
operations to net cash provided by operating
activities:
Depreciation and amortization 7,195 8,170
Deferred taxes 3,523 690
Compensation expense related to share-based
compensation plans 3,853 3,405
Gain on sale of assets (160) (131)
Changes in operating assets and liabilities
excluding effects of purchase transaction:
Restricted investments (2,189) (1,630)
Accounts receivable, net (4,119) 393
Prepaid taxes 2,033 3,317
Prepaid expenses and other current assets 132 (297)
Other assets 88 (837)
Accounts payable 4,223 5,698
Accrued expenses 4,441 8,496
Deferred compensation 1,761 1,608
Net cash provided by operating activities 80,580 76,587
Cash flows from investing activities:
Proceeds from sale of equipment 725 394
Purchases of property and equipment (10,197) (8,372)
Cash used in acquisition of Comtrak, Inc. (5,000) (39,942)
Proceeds from disposal of discontinued operations - 12,203
Net cash used in investing activities (14,472) (35,717)
Cash flows from financing activities:
Proceeds from stock options exercised 760 1,963
Purchase of treasury stock (76,309) (49,622)
Excess tax benefits from share-based compensation 3,952 12,337
Net cash used in financing activities (71,597) (35,322)
Cash flows from operating activities of discontinued
operations - 1,848
Cash flows used in investing activities of discontinued
operations - (38)
Net cash provided by discontinued operations - 1,810
Net (decrease) increase in cash and cash equivalents (5,489) 7,358
Cash and cash equivalents beginning of year 43,491 36,133
Cash and cash equivalents end of year $38,002 $43,491
SOURCE Hub Group, Inc.
-0- 02/06/2008
/CONTACT: Amy Lisek of Hub Group, Inc., +1-630-795-2214/
/Web site: https://www.hubgroup.com /
(HUBG)
CO: Hub Group, Inc.
ST: Illinois
IN: TRN
SU: ERN CCA ERP
SH-JR
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0420 02/06/2008 16:01 EST http://www.prnewswire.com