Hub Group, Inc. Reports Record Earnings for the Third Quarter
DOWNERS GROVE, Ill., Oct 19, 2005 /PRNewswire-FirstCall via COMTEX News Network/ — Hub Group, Inc.
(Nasdaq: HUBG) today reported record net income for the quarter ended
September 30, 2005 of $9.6 million. This represents a 23% increase versus
third quarter 2004 adjusted net income. The 2004 adjustment excludes early
debt extinguishment costs. Hub Group’s diluted earnings per share for the
quarter ended September 30, 2005 is $0.47. This represents an increase of 24%
compared to adjusted diluted earnings per share for the quarter ended
September 30, 2004 of $0.38.
On an as-reported basis, net income for the third quarter of 2005
increased to $9.6 million from $3.6 million in the same quarter last year. As
reported diluted earnings per share increased to $0.47 compared to $0.17
during last year’s third quarter.
Hub’s revenue grew by 10.3% to $399.4 million compared to $362.1 million
in the third quarter of 2004. Third quarter intermodal revenue increased 9.0%
to $283.5 million. Truckload brokerage revenue increased 21.7% to
$68.3 million this quarter. Third quarter logistics revenue increased 4.8% to
$35.7 million. Hub Group Distribution Services revenue decreased 0.3% to
$12.0 million in the third quarter of 2005.
Costs and expenses decreased 1.1% in the third quarter of 2005 to
$33.7 million compared to $34.1 million in the third quarter of 2004,
reflecting the benefits from the Company’s improved operating efficiencies and
cost containment programs. Other income increased to $0.4 million in 2005
from an expense of $7.6 million in 2004 due primarily to expenses associated
with the extinguishment of the private placement debt during the third quarter
of 2004.
FULL YEAR 2005
Given the current operating environment, we are comfortable that the
earnings for 2005 will be within the analysts’ range of $1.45 to $1.53 per
diluted share.
A tabular reconciliation of the differences between the adjusted financial
results for the three-month period ended September 30, 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 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 Wednesday, October 19, 2005 to discuss its third quarter
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.fulldisclosure.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 (866) 271-6130. The conference call participant code
is 13601626. 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 and June 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 Nine Months
Ended September 30 Ended September 30
2005 2004 2005 2004
Revenue $399,400 $362,105 $1,110,888 $1,039,377
Transportation costs 350,273 314,077 971,607 905,881
Gross margin 49,127 48,028 139,281 133,496
Costs and expenses:
Salaries and benefits 22,242 21,995 65,621 66,570
General and administrative 9,052 9,023 28,294 29,618
Depreciation and amortization
of property and equipment 2,401 3,052 7,337 8,786
Total costs and expenses 33,695 34,070 101,252 104,974
Operating income 15,432 13,958 38,029 28,522
Other income (expense):
Interest expense (145) (571) (492) (3,968)
Interest income 217 56 601 165
Debt extinguishment expenses - (7,296) - (7,296)
Other, net 357 180 411 583
Total other income (expense) 429 (7,631) 520 (10,516)
Income before provision for
income taxes 15,861 6,327 38,549 18,006
Provision for income taxes 6,251 2,775 15,666 7,682
Net income $9,610 $3,552 $22,883 $10,324
Basic earnings per common
share $0.49 $0.18 $1.15 $0.61
Diluted earnings per common
share $0.47 $0.17 $1.10 $0.57
Basic weighted average number
of shares outstanding 19,640 19,414 19,966 16,870
Diluted weighted average
number of shares outstanding 20,406 20,648 20,786 18,058
HUB GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
September 30, December 31,
2005 2004
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $26,847 $16,806
Restricted investments 1,173 -
Accounts receivable
Trade, net 159,602 140,762
Other 8,266 8,313
Deferred taxes 4,514 4,667
Prepaid expenses and other current assets 4,327 4,746
TOTAL CURRENT ASSETS 204,729 175,294
PROPERTY AND EQUIPMENT, net 15,029 19,487
GOODWILL, net 215,175 215,175
OTHER ASSETS 354 889
TOTAL ASSETS $435,287 $410,845
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable
Trade $130,053 $115,819
Other 4,439 1,660
Accrued expenses
Payroll 16,886 19,542
Other 16,596 15,100
TOTAL CURRENT LIABILITIES 167,974 152,121
DEFERRED TAXES 36,566 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 19,538,478 shares
outstanding in 2005; 19,933,610
shares issued and outstanding
in 2004 203 199
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 182,003 182,262
Purchase price in excess of
predecessor basis, net of tax
benefit of $10,306 (15,458) (15,458)
Retained earnings 87,494 64,611
Unearned compensation (3,375) (4,685)
Treasury stock, at cost (742,770
shares in 2005) (20,127) -
TOTAL STOCKHOLDERS' EQUITY 230,747 226,936
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $435,287 $410,845
HUB GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Nine Months Ended
September 30,
2005 2004
Cash flows from operating activities:
Net income $22,883 $10,324
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization of
property and equipment 7,633 8,966
Deferred taxes 10,523 7,535
Compensation expense related to
restricted stock 1,603 1,593
Gain on sale of assets (271) (248)
Other assets - 696
Changes in working capital:
Restricted investments (1,173) -
Accounts receivable, net (18,793) (5,273)
Prepaid expenses and other
current assets 419 219
Other, net 535 -
Accounts payable 17,013 (6,731)
Accrued expenses (1,160) 3,756
Net cash provided by operating
activities 39,212 20,837
Cash flows from investing activities:
Proceeds from sale of property and equipment 573 261
Purchases of property and equipment (3,477) (2,668)
Net cash used in investing activities (2,904) (2,407)
Cash flows from financing activities:
Proceeds from stock offering, net - 55,871
Proceeds from stock options exercised 4,304 3,500
Purchase of treasury stock (30,571) (2,767)
Net payments on revolver - (6,000)
Payments of long term debt - (69,034)
Net cash used in financing activities (26,267) (18,430)
Net decrease in cash and cash
equivalents 10,041 -
Cash and cash equivalents beginning
of period 16,806 -
Cash and cash equivalents end of period $26,847 $-
Supplemental disclosures of cash
flow information
Cash paid for:
Interest $909 $2,995
Income taxes $3,310 $477
HUB GROUP, INC.
MODAL REVENUE SUMMARY
(in thousands)
First Second Third
Quarter Quarter Quarter YTD
2005 2005 2005 2005
Intermodal $233,662 $259,260 $283,476 $776,398
Brokerage 60,154 68,038 68,283 196,475
Logistics 35,589 34,524 35,676 105,789
Total Core 329,405 361,822 387,435 1,078,662
HGDS 10,453 9,808 11,965 32,226
Consolidated $339,858 $371,630 $399,400 $1,110,888
First Second Third
Quarter Quarter Quarter YTD
2004 2004 2004 2004
Intermodal $236,321 $247,940 $259,958 $744,219
Brokerage 50,960 56,778 56,124 163,862
Logistics 33,913 33,786 34,028 101,727
Total Core 321,194 338,504 350,110 1,009,808
HGDS 7,108 10,466 11,995 29,569
Consolidated $328,302 $348,970 $362,105 $1,039,377
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)
Three Months Ended September 30, 2004
As Reported Adjustments As Adjusted
Operating Income $13,958 $- $13,958
Interest expense (571) - (571)
Interest income 56 - 56
Debt extinguishment expenses (7,296) (7,296) a -
Other, net 180 - 180
Income before provision for
income taxes 6,327 (7,296) 13,623
Provision for income taxes 2,775 (3,064) b 5,839
Net Income $3,552 $(4,232) $7,784
Basic earnings per common
share $0.18 $(0.22) $0.40
Diluted earnings per common
share $0.17 $(0.21) $0.38
Basic weighted average number
of shares outstanding 19,414 19,414 19,414
Diluted weighted average number
of shares outstanding 20,648 20,648 20,648
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.
Amy Lisek of Hub Group, Inc., +1-630-795-2214
http://www.prnewswire.com