Hub Group, Inc. Reports Record First Quarter 2006 Earnings
DOWNERS GROVE, Ill., April 19 /PRNewswire-FirstCall/ -- Hub Group, Inc. (Nasdaq: HUBG) today reported record income from continuing operations for the quarter ended March 31, 2006 of $8.5 million. This represents an 80% increase in first quarter income versus the first quarter of 2005. Hub Group's diluted earnings per share from continuing operations of $0.41 for the first quarter 2006 represents an increase of 86% compared to last year's first quarter of $0.22. Hub's gross margin as a percent of revenue has increased to 13.3% in 2006 from 12.2% in 2005 due to a focus on margin improvement. Results for the quarter include one month of operations of Comtrak, a drayage company acquired on February 28, 2006.
Hub's revenue grew by 8.3% to $356.7 million compared to $329.4 million in the first quarter of 2005. First quarter intermodal revenue increased 11.3% to $260.7 million, which includes the addition of Comtrak. Truckload brokerage revenue increased 16.4% to $69.5 million this quarter. First quarter logistics revenue decreased 25.3% to $26.5 million.
Hub Group Distribution Services (HGDS) is currently a wholly owned subsidiary of Hub Group. As previously disclosed, in November 2004, Hub Group entered into a Purchase Option and Right of First Refusal Agreement and gave a third party the option to buy HGDS. This individual has given Hub Group written notice that he intends to exercise this option within the next sixty days. Although there can be no assurances that the transaction will in fact close, the Company anticipates it will be completed in the second quarter of 2006. The comparative results of HGDS have been reported as "discontinued operations" in the Company's Consolidated Financial Statements. These discontinued operations generated $0.03 of diluted earnings per share in the first quarter of 2006 and 2005.
Commenting on the results, David P. Yeager, Vice-Chairman and Chief Executive Officer of Hub Group stated, "We are very pleased with the quarter. The divesture of our HGDS installation business furthers our strategy of focusing on our core transportation business and our acquisition of Comtrak strengthens our intermodal franchise."
FULL YEAR 2006
Given the current operating environment, the Company is comfortable that the earnings from continuing operations for 2006 will be within the analysts' range of $1.90 to $2.02 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 Wednesday, April 19, 2006 to discuss its first 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 Investor Relations link at Hub Group's Web site at http://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 (800) 659-2037. The conference call participant code is 62583642. The call will be limited to 60 minutes, including questions and answers.
An audio replay will be available through the Investor Relations link on the Company's Web site at http://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, truckload brokerage and logistics and distribution 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. 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
Ended March 31,
2006 2005
Revenue $356,745 $329,405
Transportation costs 309,175 289,297
Gross margin 47,570 40,108
Costs and expenses:
Salaries and benefits 22,854 20,610
General and administrative 9,158 9,226
Depreciation and amortization of property,
equipment and intangibles 1,859 2,222
Total costs and expenses 33,871 32,058
Operating income 13,699 8,050
Other income (expense):
Interest expense (127) (207)
Interest income 446 200
Other, net 105 14
Total other income 424 7
Income from continuing operations
before provision for income taxes 14,123 8,057
Provision for income taxes 5,649 3,344
Income from continuing operations 8,474 4,713
Discontinued operations:
Income from discontinued operations of HGDS
before provision for income taxes 1,094 1,085
Provision for income taxes 438 450
Income from discontinued operations 656 635
Net Income $9,130 $5,348
Basic earnings per common share
Income from continuing operations $0.42 $0.23
Income from discontinued operations 0.03 0.03
Net Income $0.45 $0.26
Diluted earnings per common share
Income from continuing operations $0.41 $0.22
Income from discontinued operations 0.03 0.03
Net Income $0.44 $0.25
Basic weighted average number of shares
outstanding 20,098 20,282
Diluted weighted average number of shares
outstanding 20,651 21,158
HUB GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
March 31, December 31,
2006 2005
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $17,314 $36,133
Restricted investments 1,973 1,387
Accounts receivable
Trade, net 139,641 147,004
Other 9,943 10,603
Prepaid taxes 5,777 6,040
Prepaid expenses and other current assets 5,683 3,860
Assets of discontinued operations 15,690 17,855
TOTAL CURRENT ASSETS 196,021 222,882
Property and Equipment, net 25,315 12,767
Other Intangibles, net 7,837 -
Goodwill, net 220,168 208,150
Other Assets 325 619
TOTAL ASSETS $449,666 $444,418
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable
Trade $108,440 $114,094
Other 6,767 3,668
Accrued expenses
Payroll 11,873 20,909
Other 20,443 18,917
Deferred Taxes 687 960
Liabilities of discontinued operations 3,916 5,341
TOTAL CURRENT LIABILITIES 152,126 163,889
DEFERRED TAXES 39,694 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; 20,281,248 shares issued and
19,995,823 outstanding in 2006;
20,281,248 shares issued and
19,650,094 outstanding in 2005 203 203
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 174,364 183,733
Purchase price in excess of
predecessor basis, net of tax
benefit of $10,306 (15,458) (15,458)
Retained earnings 106,687 97,557
Unearned compensation - (6,259)
Treasury stock, at cost (285,425 shares
in 2006 and 631,154 shares in 2005) (7,957) (17,708)
TOTAL STOCKHOLDERS' EQUITY 257,846 242,075
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $449,666 $444,418
HUB GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Three Months Ended
March 31,
2006 2005
Cash flows from operating activities:
Income from continuing operations $8,474 $4,713
Adjustments to reconcile income from continuing
operations to net cash provided by operating
activities:
Depreciation and amortization of property,
equipment and intangibles 2,175 2,332
Deferred taxes 917 2,558
Compensation expense related to share based
compensation plans 771 520
Loss (Gain) on sale of assets 26 (12)
Other assets 299 511
Changes in working capital net of effects
of purchase transaction:
Restricted investments (586) (661)
Accounts receivable, net 18,172 2,256
Prepaid taxes (125) -
Prepaid expenses and other current assets (1,628) 1,011
Accounts payable (5,090) 381
Accrued expenses (8,372) (11,727)
Net cash provided by operating activities 15,033 1,882
Cash flows from investing activities:
Proceeds from sale of equipment 26 12
Purchases of property and equipment, net (1,047) (932)
Cash used in acquisition of Comtrak, Inc (40,491) -
Net cash used in investing activities (41,512) (920)
Cash flows from financing activities:
Proceeds from stock options exercised 1,141 2,184
Purchase of treasury stock (38) (5,599)
Excess tax benefits from share-based
compensation 4,767 -
Net cash provided by (used in) financing
activities 5,870 (3,415)
Cash flows from operating activities
of discontinued operations 1,822 1,245
Cash flows used in investing activities of
discontinued operations (32) (28)
Net cash provided by discontinued operations 1,790 1,217
Net decrease in cash and cash equivalents (18,819) (1,236)
Cash and cash equivalents beginning of period 36,133 16,806
Cash and cash equivalents end of period $17,314 $15,570
Supplemental disclosures of cash flow
information
Cash paid for:
Income taxes $91 $333
SOURCE Hub Group, Inc.
-0- 04/19/2006
/CONTACT: Renee Jurczyk of Hub Group, Inc., +1-630-271-3611/
/Web site: http://www.hubgroup.com/
(HUBG)
CO: Hub Group, Inc.
ST: Illinois
IN: TRN
SU: ERN ERP CCA
CS-CM
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2107 04/19/2006 16:05 EDT http://www.prnewswire.com