Hub Group, Inc. Reports Record Third Quarter 2008 Earnings
DOWNERS GROVE, Ill., Oct. 22 /PRNewswire-FirstCall/ — Hub Group, Inc.
(Nasdaq: HUBG) today reported record diluted earnings per share for the
quarter ended September 30, 2008 of $0.45. This represents an increase of 7%
compared to last year’s third quarter diluted earnings per share of $0.42.
Earnings per share for the third quarter of 2007 included a one-time $1.2
million tax benefit or $0.03 per share. Excluding this benefit, earnings per
share increased 15% this quarter. Hub Group’s operating income for the third
quarter was $27.3 million, a 10% increase versus operating income for the
third quarter of 2007.
Hub Group’s revenue increased 23% to $514.2 million compared to $417.8
million in the third quarter of 2007. Third quarter intermodal revenue
increased 22% to $369.7 million. The increase was attributable to a 9% volume
increase and a 13% increase in pricing, related primarily to fuel. Truck
brokerage revenue was up 29% to $101.2 million this quarter. Third quarter
logistics revenue increased 20% to $43.3 million. Gross margin increased by
10% or $5.7 million to $63.2 million compared to the third quarter of 2007.
Commenting on the results, David P. Yeager, Vice-Chairman and Chief
Executive Officer of Hub Group stated, “We are pleased with our performance in
the third quarter. Strong intermodal volume growth contributed to the highest
third quarter earnings per share in the Company’s history. Our asset light
business model continues to give us the ability to perform well in both strong
and weak freight markets.”
FULL YEAR 2008
Given the current operating environment, we are comfortable that the
earnings for 2008 will be within the current analysts’ range of $1.65 to $1.70
per diluted share.
CONFERENCE CALL
Hub will hold a conference call at 4:30 p.m. Eastern Time on Wednesday,
October 22, 2008 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 and can be accessed through the Investors link
on Hub Group’s Web site at https://www.hubgroup.com. 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 (888) 713-4213. The conference call participant code
is 79012655. Participants may pre-register for the call at
https://www.theconferencingservice.com/prereg/key.process?key=PL4YELEYA.
Pre-registrants will be issued a pin number to use when dialing into the live
call which will provide quick access to the conference, bypassing the
operator. 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, 2007 and the reports on Form 10-Q for the periods
ended March 31, 2008 and June 30, 2008. 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,
2008 2007 2008 2007
Revenue $514,212 $417,842 $1,430,136 $1,212,704
Transportation costs 451,052 360,332 1,249,635 1,040,770
Gross margin 63,160 57,510 180,501 171,934
Costs and expenses:
Salaries and benefits 24,116 22,100 73,780 71,887
General and administrative 10,766 9,596 31,393 31,415
Depreciation and
amortization 995 1,080 2,987 3,455
Total costs and expenses 35,877 32,776 108,160 106,757
Operating income 27,283 24,734 72,341 65,177
Other income (expense):
Interest expense (31) (33) (83) (78)
Interest and dividend income 362 711 1,040 1,967
Other, net (58) 24 28 82
Total other income 273 702 985 1,971
Income before provision for
income taxes 27,556 25,436 73,326 67,148
Provision for income taxes 10,626 8,828 28,291 25,346
Net income $16,930 $16,608 $45,035 $41,802
Basic earnings per common
share $0.45 $0.43 $1.21 $1.07
Diluted earnings per common
share $0.45 $0.42 $1.20 $1.06
Basic weighted average number
of shares outstanding 37,209 38,777 37,167 39,026
Diluted weighted average
number of shares outstanding 37,541 39,230 37,478 39,511
HUB GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
September 30, December 31,
2008 2007
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $63,378 $38,002
Accounts receivable
Trade, net 202,901 160,944
Other 12,594 9,828
Prepaid taxes 86 86
Deferred taxes 4,024 5,044
Prepaid expenses and other
current assets 5,734 4,318
TOTAL CURRENT ASSETS 288,717 218,222
Restricted investments 7,089 5,206
Property and equipment, net 30,955 29,662
Other intangibles, net 6,722 7,056
Goodwill, net 230,448 230,448
Other assets 1,165 1,373
TOTAL ASSETS $565,096 $491,967
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES:
Accounts payable
Trade $150,434 $123,020
Other 9,189 6,683
Accrued expenses
Payroll 13,537 16,446
Other 28,067 32,408
Related party payable - 5,000
TOTAL CURRENT LIABILITIES 201,227 183,557
Non-current liabilities 10,121 10,363
Deferred taxes 53,587 47,148
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value;
2,000,000 shares authorized;
no shares issued or outstanding
in 2008 and 2007 - -
Common stock
Class A: $.01 par value;
97,337,700 shares authorized
and 41,224,792 shares issued in
2008 and 2007; 36,986,767
shares outstanding in 2008 and
36,666,731 outstanding in
2007 412 412
Class B: $.01 par value;
662,300 shares authorized;
662,296 shares issued and
outstanding in 2008 and 2007 7 7
Additional paid-in capital 173,158 176,657
Purchase price in excess of
predecessor basis, net of tax
benefit of $10,306 (15,458) (15,458)
Retained earnings 251,077 206,042
Treasury stock; at cost,
4,238,025 shares in 2008
and 4,558,061 shares in 2007 (109,035) (116,761)
TOTAL STOCKHOLDERS' EQUITY 300,161 250,899
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $565,096 $491,967
HUB GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Nine Months Ended
September 30,
2008 2007
Cash flows from operating
activities:
Net income $45,035 $41,802
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 5,326 5,475
Deferred taxes 7,459 3,178
Compensation expense related to
share-based compensation plans 3,332 2,893
Loss (gain) on sale of assets 77 (156)
Changes in operating assets and
liabilities:
Restricted investments (1,883) (2,099)
Accounts receivable, net (44,723) (26,244)
Prepaid taxes - 2,033
Prepaid expenses and other
current assets (1,416) (794)
Other assets 208 21
Accounts payable 29,920 12,724
Accrued expenses (7,250) 1,909
Non-current liabilities (242) 662
Net cash provided by operating
activities 35,843 41,404
Cash flows from investing
activities:
Proceeds from sale of equipment 857 715
Purchases of property and
equipment (7,219) (8,203)
Cash used in acquisition of
Comtrak, Inc. (5,000) (5,000)
Net cash used in investing
activities (11,362) (12,488)
Cash flows from financing
activities:
Proceeds from stock options
exercised 401 703
Purchase of treasury stock (2,215) (37,142)
Excess tax benefits from
share-based compensation 2,709 3,856
Net cash provided by (used in)
financing activities 895 (32,583)
Net increase (decrease) in cash and
cash equivalents 25,376 (3,667)
Cash and cash equivalents beginning
of period 38,002 43,491
Cash and cash equivalents end of
period $63,378 $39,824
SOURCE Hub Group, Inc.