Hub Group, Inc. Reports Record Second Quarter 2007 Revenue and Earnings
DOWNERS GROVE, Ill., July 19, 2007 /PRNewswire-FirstCall via COMTEX News Network/ — Hub Group, Inc.
(Nasdaq: HUBG) today reported record income from continuing operations for the
quarter ended June 30, 2007 of $13.8 million, a 13% increase versus income
from continuing operations for the second quarter of 2006. Hub Group’s diluted
earnings per share from continuing operations was $0.35 for the second quarter
of 2007. This represents an increase of 21% compared to last year’s second
quarter diluted earnings per share from continuing operations of $0.29. Hub
Group’s operating margin increased to 5.5% in 2007 from 5.0% in 2006 due to
yield enhancement efforts and improved operational efficiencies including
in-house drayage.
Hub Group’s revenue increased 1.6% to $401.6 million compared to $395.3
million in the second quarter of 2006. Second quarter intermodal revenue
increased 5.2% to $300.9 million. Truck brokerage revenue decreased 6.3% to
$73.2 million this quarter. Second quarter logistics revenue decreased 12.2%
to $27.5 million. Gross margin from continuing operations increased 4.1% to
$57.8 million compared to the second quarter of 2006.
FULL YEAR 2007
Given the current operating environment, we are comfortable that the
earnings for 2007 will be within the current analysts’ range of $1.36 to $1.46
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 19, 2007 to discuss its second quarter
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) 299-0433. The conference call participant code
is 41587483. 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 period ended
March 31, 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 Six Months
Ended June 30, Ended June 30,
2007 2006 2007 2006
Revenue $401,565 $395,296 $794,862 $752,060
Transportation costs 343,802 339,805 680,438 649,196
Gross margin 57,763 55,491 114,424 102,864
Costs and expenses:
Salaries and benefits 24,177 24,425 49,787 47,306
General and administrative 10,218 9,726 21,819 18,695
Depreciation and amortization 1,203 1,528 2,375 3,387
Total costs and expenses 35,598 35,679 73,981 69,388
Operating income 22,165 19,812 40,443 33,476
Other income (expense):
Interest expense (24) (25) (45) (43)
Interest income 611 552 1,256 998
Other, net 55 26 58 56
Total other income 642 553 1,269 1,011
Income from continuing operations
before provision for income taxes 22,807 20,365 41,712 34,487
Provision for income taxes 9,032 8,146 16,518 13,795
Income from continuing operations 13,775 12,219 25,194 20,692
Discontinued operations:
Income from discontinued
operations of HGDS - 540 - 1,634
Provision for income taxes - 216 - 653
Income from discontinued operations - 324 - 981
Net income $13,775 $12,543 $25,194 $21,673
Basic earnings per common share
Income from continuing operations $0.35 $0.30 $0.64 $0.51
Income from discontinued
operations - 0.01 - 0.03
Net income $0.35 $0.31 $0.64 $0.54
Diluted earnings per common share
Income from continuing operations $0.35 $0.29 $0.64 $0.50
Income from discontinued
operations - 0.01 - 0.02
Net income $0.35 $0.30 $0.64 $0.52
Basic weighted average number of
shares outstanding 39,043 40,768 39,150 40,482
Diluted weighted average number of
shares outstanding 39,538 41,607 39,652 41,455
HUB GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
June 30, December 31,
2007 2006
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $52,380 $43,491
Accounts receivable
Trade, net 154,254 158,284
Other 10,732 8,369
Prepaid taxes 86 2,119
Deferred taxes 3,667 3,433
Prepaid expenses and other current assets 4,795 4,450
TOTAL CURRENT ASSETS 225,914 220,146
Restricted investments 4,803 3,017
Property and equipment, net 30,511 26,974
Other intangibles, net 7,279 7,502
Goodwill, net 225,448 225,448
Other assets 1,457 1,461
TOTAL ASSETS $495,412 $484,548
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable
Trade $112,933 $117,676
Other 6,035 6,839
Accrued expenses
Payroll 11,855 18,294
Other 34,041 26,617
Related party payable - 5,000
TOTAL CURRENT LIABILITIES 164,864 174,426
Non-current liabilities 12,934 7,691
Deferred taxes 41,792 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 38,827,937 outstanding in 2007;
47,337,700 shares authorized in 2006
41,224,792 shares issued and 38,943,122
outstanding in 2006 412 412
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 176,830 179,203
Purchase price in excess of predecessor
basis, net of tax benefit of $10,306 (15,458) (15,458)
Retained earnings 171,437 146,243
Treasury stock; at cost, 2,396,855 shares
in 2007 and 2,281,670 shares in 2006 (57,406) (51,563)
TOTAL STOCKHOLDERS' EQUITY 275,822 258,844
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $495,412 $484,548
HUB GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Six Months Ended
June 30,
2007 2006
Cash flows from operating activities:
Income from continuing operations $25,194 $20,692
Adjustments to reconcile income from
continuing operations to net cash
provided by operating activities:
Depreciation and amortization 3,706 4,233
Deferred taxes 3,034 296
Compensation expense related to
share-based compensation plans 1,923 1,708
(Gain) loss on sale of assets (117) 12
Changes in operating assets and liabilities
excluding effects of purchase transaction:
Restricted investments (1,786) (849)
Accounts receivable, net 1,667 11,179
Prepaid taxes 2,033 4,962
Prepaid expenses and other
current assets (345) (1,340)
Other assets 4 239
Accounts payable (5,547) (4,148)
Accrued expenses 985 (2,552)
Non-current liabilities 180 -
Net cash provided by operating
activities 30,931 34,432
Cash flows from investing activities:
Proceeds from sale of equipment 550 179
Purchases of property and equipment (7,453) (2,364)
Cash used in acquisition of Comtrak, Inc. (5,000) (39,883)
Proceeds from disposal of
discontinued operations - 12,203
Net cash used in investing
activities (11,903) (29,865)
Cash flows from financing activities:
Proceeds from stock options exercised 329 1,905
Purchase of treasury stock (12,898) (173)
Excess tax benefits from share-based
compensation 2,430 7,797
Net cash (used in) provided by
financing activities (10,139) 9,529
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 increase in cash and cash equivalents 8,889 15,906
Cash and cash equivalents beginning
of period 43,491 36,133
Cash and cash equivalents end of period $52,380 $52,039
SOURCE Hub Group, Inc.
Amy Lisek of Hub Group, Inc., +1-630-795-2214
https://www.hubgroup.com