Hub Group, Inc. Reports Third Quarter 2010 Earnings

HUB GROUP, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

Three Months

Nine Months

Ended September 30,

Ended September 30,

2010

2009

2010

2009

Revenue

$ 478,417

$ 388,781

$ 1,353,824

$ 1,103,089

Transportation costs

421,020

340,581

1,197,033

963,958

Gross margin

57,397

48,200

156,791

139,131

Costs and expenses:

Salaries and benefits

25,547

22,237

72,868

67,514

General and administrative

10,205

9,122

30,414

28,374

Depreciation and amortization

938

949

2,845

3,229

Total costs and expenses

36,690

32,308

106,127

99,117

Operating income

20,707

15,892

50,664

40,014

Other income (expense):

Interest expense

(12)

(26)

(38)

(76)

Interest and dividend income

35

29

83

120

Other, net

(68)

116

84

188

Total other income

(45)

119

129

232

Income before provision for income taxes

20,662

16,011

50,793

40,246

Provision for income taxes

8,045

6,180

19,844

15,932

Net income

$ 12,617

$ 9,831

$ 30,949

$ 24,314

Basic earnings per common share

$ 0.34

$ 0.26

$ 0.83

$ 0.65

Diluted earnings per common share

$ 0.34

$ 0.26

$ 0.83

$ 0.65

Basic weighted average number of shares outstanding

37,118

37,373

37,358

37,346

Diluted weighted average number of shares outstanding

37,288

37,550

37,504

37,481

HUB GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

September 30,

December 31,

2010

2009

(Unaudited)

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$ 118,043

$ 126,863

Accounts receivable trade, net

210,134

145,317

Accounts receivable other

13,561

11,932

Prepaid taxes

129

593

Deferred taxes

2,260

2,874

Prepaid expenses and other current assets

6,285

6,801

TOTAL CURRENT ASSETS

350,412

294,380

Restricted investments

10,521

9,583

Property and equipment, net

43,184

28,510

Other intangibles, net

5,830

6,164

Goodwill, net

232,727

232,892

Other assets

2,310

1,819

TOTAL ASSETS

$ 644,984

$ 573,348

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:

Accounts payable trade

$ 148,057

$ 110,626

Accounts payable other

9,958

7,695

Accrued payroll

13,420

8,253

Accrued other

28,233

18,958

TOTAL CURRENT LIABILITIES

199,668

145,532

Non-current liabilities

12,997

12,002

Deferred taxes

68,401

61,973

STOCKHOLDERS’ EQUITY:

Preferred stock, $.01 par value; 2,000,000 shares authorized;

no shares issued or outstanding in 2010 and 2009

–

–

Common stock

Class A: $.01 par value; 97,337,700 shares authorized and

41,224,792 shares issued in 2010 and 2009; 36,652,858 shares

outstanding in 2010 and 37,253,330 shares outstanding in 2009

412

412

Class B: $.01 par value; 662,300 shares authorized;

662,296 shares issued and outstanding in 2010 and 2009

7

7

Additional paid-in capital

169,181

171,470

Purchase price in excess of predecessor basis, net of tax

benefit of $10,306

(15,458)

(15,458)

Retained earnings

330,501

299,552

Other comprehensive income (loss)

5

(9)

Treasury stock; at cost, 4,571,934 shares in 2010

and 3,971,462 shares in 2009

(120,730)

(102,133)

TOTAL STOCKHOLDERS’ EQUITY

363,918

353,841

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$ 644,984

$ 573,348

HUB GROUP, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Nine Months Ended

September 30,

2010

2009

Cash flows from operating activities:

Net income

$ 30,949

$ 24,314

Adjustments to reconcile net income

to net cash provided by operating activities:

Depreciation and amortization

6,078

6,282

Deferred taxes

7,325

4,465

Compensation expense related to share-based compensation plans

2,720

3,218

Loss (gain) on sale of assets

46

(21)

Changes in operating assets and liabilities:

Restricted investments

(938)

(2,833)

Accounts receivable, net

(66,443)

(12,555)

Prepaid taxes

464

(9)

Prepaid expenses and other current assets

517

(1,809)

Other assets

(491)

99

Accounts payable

39,692

20,542

Accrued expenses

6,497

(3,544)

Non-current liabilities

847

1,601

Net cash provided by operating activities

27,263

39,750

Cash flows from investing activities:

Proceeds from sale of equipment

871

72

Purchases of property and equipment

(13,362)

(2,534)

Net cash used in investing activities

(12,491)

(2,462)

Cash flows from financing activities:

Proceeds from stock options exercised

18

155

Purchase of treasury stock

(23,822)

(1,096)

Excess tax benefits from share-based compensation

198

660

Net cash used in financing activities

(23,606)

(281)

Effect of exchange rate changes on cash and cash equivalents

14

2

Net (decrease) increase in cash and cash equivalents

(8,820)

37,009

Cash and cash equivalents beginning of period

126,863

85,799

Cash and cash equivalents end of period

$ 118,043

$ 122,808