Hub Group, Inc. Reports Record Third Quarter 2006 Revenue and Earnings
DOWNERS GROVE, Ill., Oct. 24 /PRNewswire-FirstCall/ — Hub Group, Inc.
(Nasdaq: HUBG) today reported record income from continuing operations for the
quarter ended September 30, 2006 of $13.5 million, a 60% increase versus
continuing operations from the third quarter of 2005. Hub Group’s diluted
earnings per share from continuing operations was $0.33 for the third quarter
2006. This represents an increase of 57% compared to last year’s third
quarter diluted earnings per share from continuing operations of $0.21. Hub
Group’s operating margin increased to 5.1% in 2006 from 3.5% in 2005 due to
yield enhancement efforts, growth in drayage and truck brokerage and
leveraging its operations with a stable cost platform.
Hub Group’s revenue grew by 11.5% to $432.0 million compared to $387.4
million in the third quarter of 2005. Third quarter intermodal revenue
increased 12.3% to $318.9 million, which includes the addition of Comtrak for
the entire quarter. Truck brokerage revenue increased 14.1% to $77.1 million
this quarter. Third quarter logistics revenue increased 0.4% to $36.0
million.
Commenting on the results, David P. Yeager, Vice-Chairman and Chief
Executive Officer of Hub Group stated, “We are proud of our results for the
quarter. In addition to strong operating results, we executed our $45 million
stock buyback plan and ended the quarter with $32.9 million in cash.”
FULL YEAR 2006
The Company expects earnings from continuing operations for 2006 to be
within the analysts’ range of $1.10 to $1.15 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 Tuesday, October 24, 2006 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) 700-6067. The conference call participant code
is 93567962. 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, 2005 and our reports on Form 10-Q for the quarters
ended March 31, 2006 and June 30, 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 Nine Months
Ended September 30, Ended September 30,
2006 2005 2006 2005
Revenue $432,009 $387,434 $1,184,069 $1,078,661
Transportation costs 374,673 342,173 1,023,869 949,472
Gross margin 57,336 45,261 160,200 129,189
Costs and expenses:
Salaries and benefits 23,965 20,985 71,271 62,125
General and administrative 9,890 8,367 28,585 26,589
Depreciation and amortization 1,642 2,262 5,029 6,736
Total costs and expenses 35,497 31,614 104,885 95,450
Operating income 21,839 13,647 55,315 33,739
Other income (expense):
Interest expense (22) (17) (65) (109)
Interest income 670 217 1,668 601
Other, net 7 60 63 91
Total other income 655 260 1,666 583
Income from continuing
operations before provision
for income taxes 22,494 13,907 56,981 34,322
Provision for income taxes 9,000 5,481 22,795 13,953
Income from continuing
operations 13,494 8,426 34,186 20,369
Discontinued operations:
Income from discontinued
operations of HGDS (including
loss on disposal of $70 in
2006) - 1,954 1,634 4,228
Provision for income taxes - 770 653 1,714
Income from discontinued
operations - 1,184 981 2,514
Net income $13,494 $9,610 $35,167 $22,883
Basic earnings per common
share
Income from continuing
operations $0.34 $0.21 $0.85 $0.51
Income from discontinued
operations - 0.03 $0.02 0.06
Net income $0.34 $0.24 $0.87 $0.57
Diluted earnings per common
share
Income from continuing
operations $0.33 $0.21 $0.83 $0.49
Income from discontinued
operations - 0.03 0.02 0.06
Net income $0.33 $0.24 $0.85 $0.55
Basic weighted average number
of shares outstanding 39,773 39,280 40,246 39,932
Diluted weighted average
number of shares outstanding 40,572 40,812 41,161 41,572
All share and per share amounts have been adjusted to give retroactive
effect to the stock split which was paid on June 6, 2006.
HUB GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
September 30, December 31,
2006 2005
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $32,936 $36,133
Restricted investments 2,550 1,387
Accounts receivable
Trade, net 166,801 147,004
Other 6,570 10,603
Prepaid taxes 141 6,040
Deferred taxes 454 -
Prepaid expenses and other
current assets 5,355 3,860
Assets of discontinued operations - 17,855
TOTAL CURRENT ASSETS 214,807 222,882
Property and equipment, net 25,192 12,767
Other intangibles, net 7,614 -
Goodwill, net 220,448 208,150
Other assets 390 619
TOTAL ASSETS $468,451 $444,418
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES:
Accounts payable
Trade $126,534 $114,094
Other 7,131 3,668
Accrued expenses
Payroll 18,810 20,909
Other 31,525 18,917
Deferred taxes - 960
Liabilities of discontinued
operations - 5,341
TOTAL CURRENT LIABILITIES 184,000 163,889
DEFERRED TAXES 39,930 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
39,090,050 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 174,273 183,524
Purchase price in excess of
predecessor basis, net of tax
benefit of $10,306 (15,458) (15,458)
Retained earnings 132,724 97,557
Unearned compensation - (6,259)
Treasury stock; at cost,
2,134,742 shares in 2006 and
1,262,308 shares in 2005 (47,437) (17,708)
TOTAL STOCKHOLDERS' EQUITY 244,521 242,075
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $468,451 $444,418
HUB GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Nine Months Ended
September 30,
2006 2005
Cash flows from operating activities:
Income from continuing operations $34,186 $20,369
Adjustments to reconcile income
from continuing operations
to net cash provided by operating
activities:
Depreciation and amortization 6,410 7,031
Deferred taxes 12 8,810
Compensation expense related to
share-based compensation plans 2,649 1,581
(Gain) on sale of assets (31) (271)
Other assets 234 530
Changes in working capital
excluding effects of purchase
transaction:
Restricted investments (1,163) (1,173)
Accounts receivable, net (6,325) (22,251)
Prepaid taxes 5,295 -
Prepaid expenses and other
current assets (1,202) 379
Accounts payable 13,904 17,119
Accrued expenses 9,152 (664)
Net cash provided by operating
activities 63,121 31,460
Cash flows from investing
activities:
Proceeds from sale of equipment 228 573
Purchases of property and equipment (5,247) (3,188)
Cash used in acquisition of
Comtrak, Inc. (39,942) -
Proceeds from the disposal of
discontinued operations 12,203 -
Net cash used in investing
activities (32,758) (2,615)
Cash flows from financing
activities:
Proceeds from stock options exercised 1,924 4,304
Purchase of treasury stock (45,191) (30,571)
Excess tax benefits from share-
based compensation 7,897 -
Net cash (used in) financing
activities (35,370) (26,267)
Cash flows from operating activities
of discontinued operations 1,848 7,752
Cash flows used in investing activities
of discontinued operations (38) (289)
Net cash provided by discontinued
operations 1,810 7,463
Net increase (decrease) in cash and
cash equivalents (3,197) 10,041
Cash and cash equivalents beginning
of period 36,133 16,806
Cash and cash equivalents end of
period $32,936 $26,847
Supplemental disclosures of cash
flow information
Cash paid for:
Interest $64 $59
Income taxes $6,573 $3,310
SOURCE Hub Group, Inc.
-0- 10/24/2006
/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 CCA
CT-CM
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7525 10/24/2006 16:03 EDT http://www.prnewswire.com