Hub Group, Inc. Reports Record Second Quarter 2006 Revenue and Earnings
DOWNERS GROVE, Ill., July 20, 2006 /PRNewswire-FirstCall via COMTEX News Network/ — Hub Group, Inc.
(Nasdaq: HUBG) today reported record income from continuing operations for the
quarter ended June 30, 2006 of $12.2 million. This represents a 69% increase
in second quarter income versus the second quarter of 2005. Hub Group’s
diluted earnings per share from continuing operations was $0.29 for the second
quarter 2006. This represents an increase of 71% compared to last year’s
second quarter of $0.17. Hub Group’s operating margin increased to 5.0% in
2006 from 3.4% in 2005 due to yield enhancement efforts, growth in truck
brokerage, an increase in drayage and leveraging our operations with a stable
cost platform.
Hub Group’s revenue grew by 9.2% to $395.3 million compared to
$361.8 million in the second quarter of 2005. Second quarter intermodal
revenue increased 10.2% to $285.8 million, which includes the addition of
Comtrak for the entire quarter. Truck brokerage revenue increased 14.9% to
$78.1 million this quarter. Second quarter logistics revenue decreased 9.4%
to $31.4 million.
On May 1, 2006, Hub Group, Inc. closed on the sale of Hub Group
Distribution Services (HGDS) for $12.2 million. The comparative results of
HGDS have been reported as “discontinued operations” in Hub Group’s
Consolidated Financial Statements. These discontinued operations generated
$0.01 of diluted earnings per share in the second quarter of 2006 and $0.02 of
diluted earnings per share in the second quarter of 2005.
Commenting on the results, David P. Yeager, Vice-Chairman and Chief
Executive Officer of Hub Group stated, “We are very pleased with the quarter.
Our focus on yield management and our strategic initiatives continue to
generate strong shareholder returns.”
STOCK SPLIT
As previously announced, the Board of Directors approved a 2 for 1 stock
split in the form of a stock dividend which was paid on June 6, 2006.
Accordingly, all share and per share amounts have been adjusted to give
retroactive effect to the stock split.
FULL YEAR 2006
Given the current operating environment, the Company is comfortable that
the earnings from continuing operations for 2006 will be within the analysts’
range of $0.98 to $1.05 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 Thursday, July 20, 2006 to discuss its second 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 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) 510-0707. The conference call participant code
is 39285337. The call will be limited to 60 minutes, including questions and
answers.
An audio replay will be available through the Investor 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, 2005 and our report on Form 10-Q for the quarter ended
March 31, 2006. 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 Six Months
Ended June 30, Ended June 30,
2006 2005 2006 2005
Revenue $395,253 $361,822 $751,999 $691,227
Transportation costs 339,805 318,002 649,196 607,299
Gross margin 55,448 43,820 102,803 83,928
Costs and expenses:
Salaries and benefits 24,286 20,281 47,140 40,891
General and administrative 9,740 9,012 18,683 18,238
Depreciation and amortization 1,528 2,252 3,387 4,474
Total costs and expenses 35,554 31,545 69,210 63,603
Operating income 19,894 12,275 33,593 20,325
Other income (expense):
Interest expense (136) (140) (264) (347)
Interest income 552 183 998 383
Other, net 55 40 160 54
Total other income 471 83 894 90
Income from continuing
operations before provision
for income taxes 20,365 12,358 34,487 20,415
Provision for income taxes 8,146 5,129 13,795 8,473
Income from continuing
operations 12,219 7,229 20,692 11,942
Discontinued operations:
Income from discontinued
operations of HGDS (including
loss on disposal of $70) 540 1,189 1,634 2,274
Provision for income taxes 216 493 653 943
Income from discontinued
operations 324 696 981 1,331
Net income $12,543 $7,925 $21,673 $13,273
Basic earnings per common share
Income from continuing
operations $0.30 $0.18 $0.51 $0.30
Income from discontinued
operations 0.01 0.02 0.03 0.03
Net income $0.31 $0.20 $0.54 $0.33
Diluted earnings per common share
Income from continuing
operations $0.29 $0.17 $0.50 $0.29
Income from discontinued
operations 0.01 0.02 0.02 0.03
Net income $0.30 $0.19 $0.52 $0.32
Basic weighted average number of
shares outstanding 40,768 39,954 40,482 40,260
Diluted weighted average number
of shares outstanding 41,607 41,592 41,455 41,954
HUB GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
June 30, December 31,
2006 2005
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $52,039 $36,133
Restricted investments 2,236 1,387
Accounts receivable
Trade, net 143,725 147,004
Other 12,044 10,603
Prepaid taxes 474 6,040
Deferred taxes 1,534 -
Prepaid expenses and other current assets 5,493 3,860
Assets of discontinued operations - 17,855
TOTAL CURRENT ASSETS 217,545 222,882
Property and equipment, net 24,381 12,767
Other intangibles, net 7,725 -
Goodwill, net 220,488 208,150
Other assets 384 619
TOTAL ASSETS $470,523 $444,418
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable
Trade $109,917 $114,094
Other 6,233 3,668
Accrued expenses
Payroll 16,020 20,909
Other 22,074 18,917
Deferred taxes - 960
Liabilities of discontinued operations - 5,341
TOTAL CURRENT LIABILITIES 154,244 163,889
DEFERRED TAXES 41,294 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
41,040,324 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 173,360 183,524
Purchase price in excess of predecessor
basis, net of tax benefit of $10,306 (15,458) (15,458)
Retained earnings 119,230 97,557
Unearned compensation - (6,259)
Treasury stock, at cost (184,468 shares
in 2006 and 1,262,308 shares in 2005) (2,566) (17,708)
TOTAL STOCKHOLDERS' EQUITY 274,985 242,075
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $470,523 $444,418
HUB GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Six Months Ended
June 30,
2006 2005
Cash flows from operating activities:
Income from continuing operations $20,692 $11,942
Adjustments to reconcile income
from continuing operations to net cash
provided by operating activities:
Depreciation and amortization 4,233 4,693
Deferred taxes 296 7,207
Compensation expense related to
share-based compensation plans 1,708 1,047
Loss (Gain) on sale of assets 12 (18)
Other assets 239 459
Changes in working capital excluding effects
of purchase transaction:
Restricted investments (849) (885)
Accounts receivable, net 11,179 (9,594)
Prepaid taxes 4,962 -
Prepaid expenses and other current assets (1,340) 1,571
Accounts payable (4,148) 3,824
Accrued expenses (2,552) (6,251)
Net cash provided by operating
activities 34,432 13,995
Cash flows from investing activities:
Proceeds from sale of equipment 179 40
Purchases of property and equipment (2,364) (1,893)
Cash used in acquisition of Comtrak, Inc. (39,883) -
Proceeds from the disposal of
discontinued operations 12,203 -
Net cash used in investing activities (29,865) (1,853)
Cash flows from financing activities:
Proceeds from stock options exercised 1,905 2,794
Purchase of treasury stock (173) (30,558)
Excess tax benefits from share-based
compensation 7,797 -
Net cash provided by (used in)
financing activities 9,529 (27,764)
Cash flows from operating activities of
discontinued operations 1,848 5,969
Cash flows used in investing activities of
discontinued operations (38) (181)
Net cash provided by discontinued
operations 1,810 5,788
Net increase (decrease) in cash and
cash equivalents 15,906 (9,834)
Cash and cash equivalents beginning
of period 36,133 16,806
Cash and cash equivalents end of period $52,039 $6,972
Supplemental disclosures of cash
flow information
Cash paid for:
Interest $374 $907
Income taxes $744 $1,066
SOURCE Hub Group, Inc.
Amy Lisek of Hub Group, Inc., +1-630-795-2214
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