Hub Group, Inc. Reports Record Revenue and Earnings for the Fourth Quarter and Full Year 2006 and Provides 2007 Guidance
DOWNERS GROVE, Ill., Feb. 12 /PRNewswire-FirstCall/ — Hub Group, Inc.
(Nasdaq: HUBG) today reported record income from continuing operations for the
quarter ended December 31, 2006 of $13.5 million, a 54% increase versus income
from continuing operations for the fourth quarter of 2005. Hub Group’s diluted
earnings per share from continuing operations was $0.34 for the fourth quarter
2006. This represents an increase of 55% compared to last year’s fourth
quarter diluted earnings per share from continuing operations of $0.22. Hub
Group’s operating margin increased to 5.2% in 2006 from 3.5% in 2005 due to
yield enhancement efforts, improved operational efficiencies, and growth in
drayage and truck brokerage.
Hub Group’s revenue grew by 5.5% to $425.5 million compared to
$403.2 million in the fourth quarter of 2005. Fourth quarter intermodal
revenue increased 1.6% to $307.1 million, which includes the addition of
Comtrak for the entire quarter. Truck brokerage revenue increased 14.5% to
$81.5 million this quarter. Fourth quarter logistics revenue increased 24.2%
to $36.9 million. Gross margin from continuing operations grew 27.8% to
$58.2 million compared to the fourth quarter of 2005.
FULL YEAR 2006
Revenue from continuing operations for the year was $1,609.5 million
compared to $1,481.9 million in 2005, or an increase of 8.6%. Gross margin
from continuing operations grew 25% to $218.4 million compared to 2005.
Costs and expenses from continuing operations increased 11.3% in 2006 to
$141.2 million compared to $126.8 million in 2005 due primarily to the Comtrak
acquisition. Other income from continuing operations was $2.3 million in 2006
compared to $1.0 million in 2005.
Income from continuing operations increased 63.5% to $47.7 million for
2006 compared to last year’s income from continuing operations of
$29.2 million. Hub Group’s diluted earnings per share from continuing
operations for the year ended December 31, 2006 was $1.17. This represents an
increase of 65% compared to diluted earnings per share from continuing
operations for the year ended December 31, 2005 of $0.71.
As of December 31, 2006, the Company had $43.5 million of cash compared to
$36.1 million at December 31, 2005.
FULL YEAR 2007
Given the current operating environment, we are comfortable that the
earnings for 2007 will be within the current analysts’ range of $1.25 to $1.40
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 Monday, February 12, 2007 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) 510-0219. The conference call participant code
is 35092717. 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,
truckload 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, 2005 and Form 10-Q for the periods ended March 31,
2006, June 30, 2006 and September 30, 2006. 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,
2006 2005 2006 2005
Revenue $425,460 $403,217 $1,609,529 $1,481,878
Transportation costs 367,242 357,663 1,391,111 1,307,136
Gross margin 58,218 45,554 218,418 174,742
Costs and expenses:
Salaries and benefits 23,881 21,267 95,152 83,392
General and administrative 11,344 7,952 39,929 34,541
Depreciation and amortization 1,072 2,169 6,101 8,905
Total costs and expenses 36,297 31,388 141,182 126,838
Operating income 21,921 14,166 77,236 47,904
Other income (expense):
Interest expense (50) (15) (115) (124)
Interest income 643 369 2,311 971
Other, net 13 30 76 120
Total other income 606 384 2,272 967
Income from continuing
operations before provision
for income taxes 22,527 14,550 79,508 48,871
Provision for income taxes 9,008 5,743 31,803 19,695
Income from continuing
operations 13,519 8,807 47,705 29,176
Discontinued operations:
Income from discontinued
operations of HGDS (including
loss on disposal of $70 in
2006) - 2,088 1,634 6,315
Provision for income taxes - 832 653 2,545
Income from discontinued
operations - 1,256 981 3,770
Net income $13,519 $10,063 $48,686 $32,946
Basic earnings per common
share
Income from continuing
operations $0.35 $0.22 $1.19 $0.73
Income from discontinued
operations - 0.03 0.03 0.10
Net income $0.35 $0.25 $1.22 $0.83
Diluted earnings per common
share
Income from continuing
operations $0.34 $0.22 $1.17 $0.71
Income from discontinued
operations - 0.03 0.02 0.09
Net income $0.34 $0.25 $1.19 $0.80
Basic weighted average number
of shares outstanding 39,095 39,640 39,958 39,860
Diluted weighted average
number of shares outstanding 39,810 40,850 40,823 41,392
HUB GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
December 31, December 31,
2006 2005
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $43,491 $36,133
Accounts receivable
Trade, net 158,284 147,004
Other 8,369 10,603
Prepaid taxes 3,202 6,040
Deferred taxes 3,433 -
Prepaid expenses and other current
assets 4,450 3,860
Assets of discontinued operations - 17,855
TOTAL CURRENT ASSETS 221,229 221,495
Restricted investments 3,017 1,387
Property and equipment, net 26,974 12,767
Other intangibles, net 7,502 -
Goodwill, net 225,448 208,150
Other assets 378 619
TOTAL ASSETS $484,548 $444,418
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable
Trade $117,676 $114,094
Other 6,839 3,668
Accrued expenses
Payroll 15,901 14,826
Other 29,010 18,917
Related party payable 5,000 -
Deferred taxes - 960
Liabilities of discontinued operations - 5,341
TOTAL CURRENT LIABILITIES 174,426 157,806
Deferred compensation 7,691 6,083
Deferred taxes 43,587 38,454
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value;
2,000,000 shares authorized; no
shares issued or outstanding in 2006
and 2005 - -
Common stock
Class A: $.01 par value; 47,337,700
shares authorized; 41,224,792 shares
issued and 38,943,122 outstanding in
2006; 41,224,792 shares issued and
39,962,484 outstanding in 2005 412 412
Class B: $.01 par value; 662,300
shares authorized; 662,296 shares
issued and outstanding in 2006 and
2005 7 7
Additional paid-in capital 179,203 183,524
Purchase price in excess of predecessor
basis, net of tax benefit of $10,306 (15,458) (15,458)
Retained earnings 146,243 97,557
Unearned compensation - (6,259)
Treasury stock; at cost, 2,281,670
shares in 2006 and 1,262,308 shares in
2005 (51,563) (17,708)
TOTAL STOCKHOLDERS' EQUITY 258,844 242,075
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $484,548 $444,418
HUB GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Twelve Months Ended
December 31,
2006 2005
Cash flows from operating activities:
Income from continuing operations $47,705 $29,176
Adjustments to reconcile income from
continuing operations to net cash
provided by operating activities:
Depreciation and amortization 8,170 9,319
Deferred taxes 690 18,382
Compensation expense related to
share-based compensation plans 3,405 2,148
Gain on sale of assets (131) (271)
Changes in operating assets and
liabilities excluding effects of
purchase transaction:
Restricted investments (1,630) (1,387)
Accounts receivable, net 393 (18,931)
Prepaid taxes 2,234 (6,151)
Prepaid expenses and other current
assets (297) 722
Other assets 246 200
Accounts payable 4,754 3,039
Accrued expenses 9,440 8,497
Deferred compensation 1,608 (1,534)
Net cash provided by operating
activities 76,587 43,209
Cash flows from investing activities:
Proceeds from sale of equipment 394 579
Purchases of property and equipment (8,372) (4,078)
Cash used in acquisition of Comtrak, Inc. (39,942) -
Proceeds from the disposal of
discontinued operations 12,203 -
Net cash used in investing activities (35,717) (3,499)
Cash flows from financing activities:
Proceeds from stock options exercised 1,963 4,738
Purchase of treasury stock (49,622) (33,245)
Excess tax benefits from share-based
compensation 12,337 -
Net cash used in financing activities (35,322) (28,507)
Cash flows from operating activities of
discontinued operations 1,848 8,416
Cash flows used in investing activities
of discontinued operations (38) (292)
Net cash provided by discontinued
operations 1,810 8,124
Net increase in cash and cash equivalents 7,358 19,327
Cash and cash equivalents beginning of
period 36,133 16,806
Cash and cash equivalents end of period $43,491 $36,133
Supplemental disclosures of cash paid for:
Interest $114 $124
Income taxes $16,801 $6,811
SOURCE Hub Group, Inc.
-0- 02/12/2007
/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 ERP
SA-AM
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5381 02/12/2007 16:01 EST http://www.prnewswire.com