Hub Group, Inc. Reports Record Third Quarter 2007 Earnings
DOWNERS GROVE, Ill., Oct. 22 /PRNewswire-FirstCall/ — Hub Group, Inc.
(Nasdaq: HUBG) today reported record income for the quarter ended September
30, 2007 of $16.6 million, a 23% increase versus income for the third quarter
of 2006. Hub Group’s diluted earnings per share was $0.42 for the third
quarter of 2007. This represents an increase of 27% compared to last year’s
third quarter diluted earnings per share of $0.33. Hub Group’s operating
margin increased to 5.9% in 2007 from 5.1% in 2006 due to improved operational
efficiencies and cost controls.
Hub Group’s revenue decreased 3.3% to $417.8 million compared to $432.0
million in the third quarter of 2006. Third quarter intermodal revenue
decreased 4.9% to $303.3 million. The decrease was attributable to a 2%
volume decline and a 3% decrease related to price and mix. Truck brokerage
revenue was flat at $77.1 million this quarter. Third quarter logistics
revenue increased 4.1% to $37.4 million. Gross margin increased 0.3% to $57.5
million compared to the third quarter of 2006.
Hub Group also announced that it has terminated its acquisition of DNJ
Transportation. The closing was expected to occur around the beginning of
October but was subject to certain conditions and approvals. Several of these
conditions were not met and therefore Hub elected not to proceed with the
transaction.
FULL YEAR 2007
Hub Group expects that its earnings for 2007 will be within a range of
$1.39 to $1.44 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, October 22, 2007 to discuss its third 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 (866) 700-6293. The conference call participant code
is 38099567. 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 periods ended
March 31, 2007 and June 30, 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 Nine Months
Ended September 30, Ended September 30,
2007 2006 2007 2006
Revenue $417,842 $432,009 $1,212,704 1,184,069
Transportation costs 360,332 374,673 1,040,770 1,023,869
Gross margin 57,510 57,336 171,934 160,200
Costs and expenses:
Salaries and benefits 22,100 23,965 71,887 71,271
General and
administrative 9,596 9,890 31,415 28,585
Depreciation and
amortization 1,080 1,642 3,455 5,029
Total costs and
expenses 32,776 35,497 106,757 104,885
Operating income 24,734 21,839 65,177 55,315
Other income (expense):
Interest expense (33) (22) (78) (65)
Interest income 711 670 1,967 1,668
Other, net 24 7 82 63
Total other income 702 655 1,971 1,666
Income from continuing
operations before
provision for income
taxes 25,436 22,494 67,148 56,981
Provision for income
taxes 8,828 9,000 25,346 22,795
Income from continuing
operations 16,608 13,494 41,802 34,186
Discontinued operations:
Income from discontinued
operations of HGDS - - - 1,634
Provision for income
taxes - - - 653
Income from discontinued
operations - - - 981
Net income $16,608 $13,494 $41,802 $35,167
Basic earnings per common
share
Income from continuing
operations $0.43 $0.34 $1.07 $0.85
Income from discontinued
operations - - - 0.02
Net income $0.43 $0.34 $1.07 $0.87
Diluted earnings per common
share
Income from continuing
operations $0.42 $0.33 $1.06 $0.83
Income from discontinued
operations - - - 0.02
Net income $0.42 $0.33 $1.06 $0.85
Basic weighted average
number of shares
outstanding 38,777 39,773 39,026 40,246
Diluted weighted average
number of shares
outstanding 39,230 40,572 39,511 41,161
HUB GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
September 30, December 31,
2007 2006
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $39,824 $43,491
Accounts receivable
Trade, net 181,601 158,284
Other 11,296 8,369
Prepaid taxes 86 2,119
Deferred taxes 4,207 3,433
Prepaid expenses and other
current assets 5,244 4,450
TOTAL CURRENT ASSETS 242,258 220,146
Restricted investments 5,116 3,017
Property and equipment, net 29,477 26,974
Other intangibles, net 7,168 7,502
Goodwill, net 225,448 225,448
Other assets 1,440 1,461
TOTAL ASSETS $510,907 $484,548
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES:
Accounts payable
Trade $129,986 $117,676
Other 6,091 6,839
Accrued expenses
Payroll 12,484 18,294
Other 35,742 26,617
Related party payable - 5,000
TOTAL CURRENT LIABILITIES 184,303 174,426
Non-current liabilities 13,400 7,691
Deferred taxes 42,248 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 38,217,278 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 176,317 179,203
Purchase price in excess of
predecessor basis, net of tax
benefit of $10,306 (15,458) (15,458)
Retained earnings 188,045 146,243
Treasury stock; at cost,
3,007,514 shares in 2007
and 2,281,670 shares in 2006 (78,367) (51,563)
TOTAL STOCKHOLDERS' EQUITY 270,956 258,844
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $510,907 $484,548
HUB GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Nine Months Ended
September 30,
2007 2006
Cash flows from operating
activities:
Income from continuing operations $41,802 $34,186
Adjustments to reconcile income
from continuing operations
to net cash provided by operating
activities:
Depreciation and amortization 5,475 6,410
Deferred taxes 3,178 12
Compensation expense related to
share-based compensation plans 2,893 2,649
Gain on sale of assets (156) (31)
Changes in operating assets and
liabilities excluding effects of
purchase transaction:
Restricted investments (2,099) (1,163)
Accounts receivable, net (26,244) (6,325)
Prepaid taxes 2,033 5,295
Prepaid expenses and other
current assets (794) (1,202)
Other assets 21 234
Accounts payable 11,562 13,904
Accrued expenses 3,315 9,152
Non-current liabilities 418 -
Net cash provided by operating
activities 41,404 63,121
Cash flows from investing activities:
Proceeds from sale of equipment 715 228
Purchases of property and
equipment (8,203) (5,247)
Cash used in acquisition of
Comtrak, Inc. (5,000) (39,942)
Proceeds from disposal of
discontinued operations - 12,203
Net cash used in investing
activities (12,488) (32,758)
Cash flows from financing
activities:
Proceeds from stock options
exercised 703 1,924
Purchase of treasury stock (37,142) (45,191)
Excess tax benefits from share-
based compensation 3,856 7,897
Net cash used in financing
activities (32,583) (35,370)
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 decrease in cash and cash
equivalents (3,667) (3,197)
Cash and cash equivalents beginning
of period 43,491 36,133
Cash and cash equivalents end of
period $39,824 $32,936
SOURCE Hub Group, Inc.
-0- 10/22/2007
/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 CCA ERP
EY-CD
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3293 10/22/2007 16:00 EDT http://www.prnewswire.com