Hub Group, Inc. Reports Record First Quarter 2005 Earnings
DOWNERS GROVE, Ill., April 20, 2005 /PRNewswire-FirstCall via COMTEX/ — Hub Group, Inc.
(Nasdaq: HUBG) today reported record net income for the quarter ended
March 31, 2005 of $5.3 million. This represents a 97% increase in first
quarter net income versus the first quarter of 2004. Hub Group’s diluted
earnings per share of $0.51 for the quarter ended March 31, 2005 represents an
increase of 55% compared to last year’s first quarter diluted earnings per
share of $0.33 on 28% higher average diluted shares outstanding in the 2005
period. Costs and expenses decreased 3.9% in the first quarter of 2005 to
$34.1 million compared to $35.5 million in the first quarter of 2004,
reflecting the benefits from the Company’s improved operating efficiencies and
cost reduction efforts. Interest expense decreased from $1.7 million in first
quarter 2004 to $0.2 million in 2005 due to the extinguishment of debt in the
third quarter of 2004.
Hub’s revenue grew by 3.5% to $339.9 million as compared to $328.3 million
in the first quarter of 2004. First quarter intermodal revenue decreased
1.1% to $233.7 million. Truckload brokerage revenue increased 18.0% to
$60.1 million this quarter. First quarter logistics revenue increased 4.9% to
$35.6 million. Hub Group Distribution Services revenue increased 47.1% to
$10.5 million in the first quarter of 2005.
Commenting on the results, David P. Yeager, Vice-Chairman and Chief
Executive Officer of Hub Group, stated, “Our operating efficiencies resulted
in increased margin and reduced costs producing record first quarter results.
While we are pleased with these results, we remain committed to focusing on
profitable revenue growth.”
STOCK SPLIT
As previously announced, in February 2005, the Board of Directors approved
a 2 for 1 stock split. The Board has set May 4, 2005 as the record date for
this stock split and May 11, 2005 as the payment date, contingent on receiving
shareholder approval, at its annual meeting on May 4, 2005, to increase the
number of authorized shares of Class A common stock. If approved by Hub’s
shareholders, the stock split will be in the form of a stock dividend, which
will be tax-free to shareholders.
FULL YEAR 2005
Given the current operating environment, we are comfortable that the
earnings for 2005 will be within the analysts’ range of $2.58 to $2.67 per
diluted share.
Certain prior year amounts have been reclassified to conform to the
current year presentation.
CONFERENCE CALL
Hub will hold a conference call at 11:00 a.m. Eastern Time (10:00 a.m.
Central Time) on Thursday, April 21, 2005 to discuss its first 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
Investor Relations 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 (800) 591-6942. The conference call participant code
is 63789436. The call will be limited to 60 minutes, including questions and
answers.
An audio replay will be available through the Investor Relations 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 and 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. Hub Group assumes no liability to update any
such forward-looking statements.
HUB GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months
Ended March 31,
2005 2004
Revenue $339,858 $328,302
Transportation costs 296,613 286,498
Gross margin 43,245 41,804
Costs and expenses:
Salaries and benefits 21,875 22,342
General and administrative 9,752 10,281
Depreciation and amortization of
property and equipment 2,483 2,884
Total costs and expenses 34,110 35,507
Operating income 9,135 6,297
Other income (expense):
Interest expense (207) (1,713)
Interest income 200 53
Other, net 14 41
Total other income (expense) 7 (1,619)
Income before provision for income
taxes 9,142 4,678
Provision for income taxes 3,794 1,965
Net income $5,348 $2,713
Basic earnings per common share $0.53 $0.35
Diluted earnings per common share $0.51 $0.33
Basic weighted average number of
shares outstanding 10,141 7,746
Diluted weighted average number of
shares outstanding 10,579 8,294
HUB GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
March 31, December 31,
2005 2004
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $15,570 $16,806
Restricted investments 661 -
Accounts receivable
Trade, net 139,113 141,079
Other 7,527 7,996
Deferred taxes 4,412 4,667
Prepaid expenses and other
current assets 3,715 4,746
TOTAL CURRENT ASSETS 170,998 175,294
PROPERTY AND EQUIPMENT, net 17,854 19,487
GOODWILL, net 215,175 215,175
OTHER ASSETS 371 889
TOTAL ASSETS $404,398 $410,845
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES:
Accounts payable
Trade $115,250 $115,819
Other 2,925 1,660
Accrued expenses
Payroll 10,262 19,542
Other 12,031 15,100
TOTAL CURRENT LIABILITIES 140,468 152,121
DEFERRED TAXES 31,545 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;
12,337,700 shares authorized;
9,809,476 shares issued and
9,727,917 outstanding in
2005; 9,635,657 issued and
outstanding in 2004 98 96
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 187,068 182,365
Purchase price in excess of
predecessor basis, net of tax
benefit of $10,306 (15,458) (15,458)
Retained earnings 69,959 64,611
Unearned compensation (4,137) (4,685)
Treasury stock, at cost (81,559
shares in 2005) (5,152) -
TOTAL STOCKHOLDERS' EQUITY 232,385 226,936
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $404,398 $410,845
HUB GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Three Months Ended
March 31,
2005 2004
Cash flows from operating
activities:
Net income $5,348 $2,713
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization of
property and equipment 2,593 2,911
Deferred taxes 3,008 1,961
Compensation expense related to
restricted stock 520 404
Gain on sale of assets (12) (18)
Other assets 518 188
Changes in working capital:
Restricted investments (661) -
Accounts receivable, net 2,435 3,466
Prepaid expenses and other
current assets 1,031 462
Accounts payable 696 (1,867)
Accrued expenses (12,349) (4,072)
Net cash provided by operating
activities 3,127 6,148
Cash flows from investing
activities:
Purchases of property and
equipment, net (948) (460)
Net cash used in investing
activities (948) (460)
Cash flows from financing
activities:
Proceeds from stock options
exercised 2,184 2,090
Purchase of treasury stock (5,599) (2,767)
Net payments on revolver - (3,000)
Payments of long term debt - (2,011)
Net cash used in financing
activities (3,415) (5,688)
Net decrease in cash and cash
equivalents (1,236) -
Cash and cash equivalents beginning
of period 16,806 -
Cash and cash equivalents end of
period $15,570 $-
Supplemental disclosures of cash
flow information
Cash paid for:
Interest $- $1,357
Income taxes $333 $-
HUB GROUP, INC.
MODAL REVENUE SUMMARY
(in thousands)
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 $4,315 for the year ended December 31, 2004.
SOURCE Hub Group, Inc.
Amy Lisek of Hub Group, Inc., +1-630-795-2214
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