SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported) October 24, 2006
HUB GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or Other Jurisdiction of Incorporation)
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0-27754 |
36-4007085 |
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(Commission File Number) |
(I.R.S. Employer Identification No.) |
3050 Highland Parkway, Suite 100
Downers Grove, Illinois 60515
(Address, including zip code, of principal executive offices)
(630) 271-3600
(Registrant’s telephone number, including area code)
NOT APPLICABLE
(Former Name or Former Address, If Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant any of the following provisions:
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o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On October 24, 2006, Hub Group, Inc. issued a press release announcing its third quarter 2006 operating results. The press release is furnished as Exhibit 99.1 to this Form 8-K.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
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(a) |
Not Applicable. |
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(b) |
Not Applicable. |
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(c) |
Not Applicable. |
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(d) |
A list of exhibits filed herewith is contained on the Exhibit | |||||
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Index which immediately precedes such exhibits and is |
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incorporated herein by reference. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
HUB GROUP, INC.
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DATE: October 24, 2006 |
/s/ David P. Yeager |
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By: David P. Yeager |
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Title: Vice Chairman and |
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Chief Executive Officer |
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EXHIBIT INDEX
Exhibit No.
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99.1 |
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Press release, issued on October 24, 2006, announcing operating results for Hub Group, Inc. for the third quarter 2006. |
Exhibit No. 99.1
Hub Group, Inc. Reports Record Third Quarter 2006 Revenue and Earnings
DOWNERS GROVE, IL, October 24, 2006, -- 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 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 (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 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, 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.
SOURCE: HUB GROUP, INC.
CONTACT: Amy Lisek of Hub Group, Inc., +1-630-795-2214
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HUB GROUP, INC. | |||||||||||||
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||
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(in thousands, except per share amounts) | |||||||||||||
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Three Months |
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Nine Months | ||||
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Ended September 30, |
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Ended September 30, | ||||
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2006 |
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2005 |
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2006 |
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2005 |
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Revenue |
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$ 432,009 |
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$ 387,434 |
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$ 1,184,069 |
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$ 1,078,661 | |||
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Transportation costs |
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374,673 |
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342,173 |
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1,023,869 |
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949,472 | |||
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Gross margin |
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57,336 |
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45,261 |
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160,200 |
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129,189 | ||
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Costs and expenses: |
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Salaries and benefits |
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23,965 |
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20,985 |
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71,271 |
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62,125 | ||
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General and administrative |
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9,890 |
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8,367 |
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28,585 |
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26,589 | ||
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Depreciation and amortization |
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1,642 |
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2,262 |
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5,029 |
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6,736 | |||
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Total costs and expenses |
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35,497 |
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31,614 |
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104,885 |
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95,450 | ||
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Operating income |
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21,839 |
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13,647 |
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55,315 |
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33,739 |
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Other income (expense): |
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Interest expense |
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(22) |
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(17) |
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(65) |
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(109) | ||
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Interest income |
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670 |
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217 |
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1,668 |
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601 | ||
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Other, net |
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7 |
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60 |
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63 |
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91 | ||
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Total other income |
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655 |
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260 |
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1,666 |
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583 | |
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Income from continuing operations |
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before provision for income taxes |
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22,494 |
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13,907 |
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56,981 |
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34,322 | |||
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Provision for income taxes |
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9,000 |
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5,481 |
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22,795 |
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13,953 | |||
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Income from continuing operations |
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13,494 |
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8,426 |
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34,186 |
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20,369 | ||||
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Discontinued operations: |
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Income from discontinued operations of HGDS (including |
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loss on disposal of $70 in 2006) |
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- |
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1,954 |
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1,634 |
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4,228 | |||
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Provision for income taxes |
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- |
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770 |
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653 |
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1,714 | |||
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Income from discontinued operations |
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- |
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1,184 |
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981 |
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2,514 | ||||
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Net income |
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$ 13,494 |
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$ 9,610 |
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$ 35,167 |
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$ 22,883 | |||
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Basic earnings per common share |
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Income from continuing operations |
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$ 0.34 |
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$ 0.21 |
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$ 0.85 |
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$ 0.51 | ||||
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Income from discontinued operations |
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- |
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0.03 |
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$ 0.02 |
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0.06 | ||||
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Net income |
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$ 0.34 |
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$ 0.24 |
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$ 0.87 |
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$ 0.57 | |||
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Diluted earnings per common share |
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Income from continuing operations |
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$ 0.33 |
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$ 0.21 |
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$ 0.83 |
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$ 0.49 | ||||
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Income from discontinued operations |
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- |
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0.03 |
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0.02 |
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0.06 | ||||
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Net income |
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$ 0.33 |
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$ 0.24 |
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$ 0.85 |
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$ 0.55 | |||
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Basic weighted average number of shares outstanding |
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39,773 |
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39,280 |
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40,246 |
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39,932 | |||||
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Diluted weighted average number of shares outstanding |
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40,572 |
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40,812 |
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41,161 |
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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.
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HUB GROUP, INC. | ||||||||||
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CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||
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(in thousands, except share amounts) | ||||||||||
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September 30, |
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December 31, |
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2006 |
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2005 |
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(Unaudited) |
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ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents |
$ 32,936 |
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$ 36,133 | |||||
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Restricted investments |
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2,550 |
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1,387 | ||||
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Accounts receivable |
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Trade, net |
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166,801 |
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147,004 | ||
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Other |
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6,570 |
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10,603 | ||
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Prepaid taxes |
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141 |
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6,040 | |||
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Deferred taxes |
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454 |
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- | ||||
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Prepaid expenses and other current assets |
5,355 |
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3,860 | |||||
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Assets of discontinued operations |
- |
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17,855 | |||||
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TOTAL CURRENT ASSETS |
214,807 |
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222,882 | |||
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Property and equipment, net |
25,192 |
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12,767 | ||||||
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Other intangibles,net |
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7,614 |
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- | |||||
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Goodwill, net |
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220,448 |
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208,150 | ||||
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Other assets |
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390 |
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619 | ||||
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TOTAL ASSETS |
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$ 468,451 |
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$ 444,418 | |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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CURRENT LIABILITIES: |
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Accounts payable |
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Trade |
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$ 126,534 |
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$ 114,094 | ||
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Other |
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7,131 |
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3,668 | ||
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Accrued expenses |
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Payroll |
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18,810 |
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20,909 | ||
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Other |
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31,525 |
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18,917 | ||
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Deferred taxes |
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- |
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960 | ||||
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Liabilities of discontinued operations |
- |
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5,341 | |||||
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TOTAL CURRENT LIABILITIES |
184,000 |
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163,889 | |||
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DEFERRED TAXES |
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39,930 |
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38,454 | |||||
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STOCKHOLDERS' EQUITY: |
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Preferred stock, $.01 par value, 2,000,000 shares authorized; |
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no shares issued or outstanding in 2006 and 2005 |
- |
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Common stock |
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Class A: $.01 par value; 47,337,700 shares authorized; |
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41,224,792 shares issued and 39,090,050 outstanding in 2006; |
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41,224,792 shares issued and 39,962,484 outstanding in 2005 |
412 |
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412 | |||
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Class B: $.01 par value; 662,300 shares authorized; |
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662,296 shares issued and outstanding in 2006 and 2005 |
7 |
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7 | |||
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Additional paid-in capital |
174,273 |
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183,524 | |||||
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Purchase price in excess of predecessor basis, net of tax |
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benefit of $10,306 |
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(15,458) |
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(15,458) | ||||
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Retained earnings |
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132,724 |
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97,557 | ||||
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Unearned compensation |
- |
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(6,259) | |||||
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Treasury stock; at cost 2,134,742 shares in 2006 |
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and 1,262,308 shares in 2005 |
(47,437) |
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(17,708) | |||||
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TOTAL STOCKHOLDERS' EQUITY |
244,521 |
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242,075 | ||||
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ 468,451 |
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$ 444,418 | |||
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HUB GROUP, INC. | |||||||||||
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||
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(in thousands) | |||||||||||
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Nine Months Ended | ||
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September 30, | ||
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2006 |
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2005 |
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Cash flows from operating activities: |
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Income from continuing operations |
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$ 34,186 |
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$ 20,369 | ||||||
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Adjustments to reconcile income from continuing operations |
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to net cash provided by operating activities: |
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Depreciation and amortization |
6,410 |
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7,031 | |||||
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Deferred taxes |
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12 |
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8,810 | ||||
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Compensation expense related to share-based compensation plans |
2,649 |
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1,581 | |||||
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Gain on sale of assets |
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(31) |
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(271) | ||||
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Other assets |
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234 |
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530 | |||
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Changes in working capital excluding effects of purchase transaction: |
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Restricted investments |
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(1,163) |
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(1,173) | |||
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Accounts receivable, net |
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(6,325) |
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(22,251) | |||
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Prepaid taxes |
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5,295 |
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- | |||
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Prepaid expenses and other current assets |
(1,202) |
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379 | ||||
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Accounts payable |
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13,904 |
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17,119 | |||
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Accrued expenses |
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9,152 |
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(664) | |||
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Net cash provided by operating activities |
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63,121 |
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31,460 | ||
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Cash flows from investing activities: |
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Proceeds from sale of equipment |
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228 |
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573 | ||||||
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Purchases of property and equipment |
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(5,247) |
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(3,188) | ||||||
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Cash used in acquisition of Comtrak, Inc. |
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(39,942) |
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- | ||||||
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Proceeds from the disposal of discontinued operations |
12,203 |
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- | |||||||
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Net cash used in investing activities |
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(32,758) |
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(2,615) | |||
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Cash flows from financing activities: |
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Proceeds from stock options exercised |
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1,924 |
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4,304 | ||||||
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Purchase of treasury stock |
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(45,191) |
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(30,571) | ||||||
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Excess tax benefits from share-based compensation |
7,897 |
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- | |||||||
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Net cash used in financing activities |
(35,370) |
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(26,267) | ||||
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Cash flows from operating activities of discontinued operations |
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1,848 |
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7,752 | |||||||
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Cash flows used in investing activities of discontinued operations |
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(38) |
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(289) | |||||||
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Net cash provided by discontinued operations |
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1,810 |
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7,463 | |||||||
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Net increase (decrease) in cash and cash equivalents |
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(3,197) |
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10,041 | |||||||
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Cash and cash equivalents beginning of period |
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36,133 |
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16,806 | |||||||
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Cash and cash equivalents end of period |
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$ 32,936 |
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$ 26,847 | |||||||
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Supplemental disclosures of cash flow information |
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Cash paid for: |
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Interest |
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$ 64 |
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$ 59 | |||
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Income taxes |
|
|
$ 6,573 |
|
$ 3,310 | ||||