Hub Group, Inc. Reports Record First Quarter 2005 Earnings
DOWNERS GROVE, Ill., April 20, 2005 /PRNewswire-FirstCall via COMTEX/ -- Hub Group, Inc. (Nasdaq: HUBG) today reported record net income for the quarter ended March 31, 2005 of $5.3 million. This represents a 97% increase in first quarter net income versus the first quarter of 2004. Hub Group's diluted earnings per share of $0.51 for the quarter ended March 31, 2005 represents an increase of 55% compared to last year's first quarter diluted earnings per share of $0.33 on 28% higher average diluted shares outstanding in the 2005 period. Costs and expenses decreased 3.9% in the first quarter of 2005 to $34.1 million compared to $35.5 million in the first quarter of 2004, reflecting the benefits from the Company's improved operating efficiencies and cost reduction efforts. Interest expense decreased from $1.7 million in first quarter 2004 to $0.2 million in 2005 due to the extinguishment of debt in the third quarter of 2004.
Hub's revenue grew by 3.5% to $339.9 million as compared to $328.3 million in the first quarter of 2004. First quarter intermodal revenue decreased 1.1% to $233.7 million. Truckload brokerage revenue increased 18.0% to $60.1 million this quarter. First quarter logistics revenue increased 4.9% to $35.6 million. Hub Group Distribution Services revenue increased 47.1% to $10.5 million in the first quarter of 2005.
Commenting on the results, David P. Yeager, Vice-Chairman and Chief Executive Officer of Hub Group, stated, "Our operating efficiencies resulted in increased margin and reduced costs producing record first quarter results. While we are pleased with these results, we remain committed to focusing on profitable revenue growth."
As previously announced, in February 2005, the Board of Directors approved a 2 for 1 stock split. The Board has set May 4, 2005 as the record date for this stock split and May 11, 2005 as the payment date, contingent on receiving shareholder approval, at its annual meeting on May 4, 2005, to increase the number of authorized shares of Class A common stock. If approved by Hub's shareholders, the stock split will be in the form of a stock dividend, which will be tax-free to shareholders.
FULL YEAR 2005
Given the current operating environment, we are comfortable that the earnings for 2005 will be within the analysts' range of $2.58 to $2.67 per diluted share.
Certain prior year amounts have been reclassified to conform to the current year presentation.
Hub will hold a conference call at 11:00 a.m. Eastern Time (10:00 a.m. Central Time) on Thursday, April 21, 2005 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) 591-6942. The conference call participant code is 63789436. 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 non-asset based 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, 2004. 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, 2005 2004 Revenue $339,858 $328,302 Transportation costs 296,613 286,498 Gross margin 43,245 41,804 Costs and expenses: Salaries and benefits 21,875 22,342 General and administrative 9,752 10,281 Depreciation and amortization of property and equipment 2,483 2,884 Total costs and expenses 34,110 35,507 Operating income 9,135 6,297 Other income (expense): Interest expense (207) (1,713) Interest income 200 53 Other, net 14 41 Total other income (expense) 7 (1,619) Income before provision for income taxes 9,142 4,678 Provision for income taxes 3,794 1,965 Net income $5,348 $2,713 Basic earnings per common share $0.53 $0.35 Diluted earnings per common share $0.51 $0.33 Basic weighted average number of shares outstanding 10,141 7,746 Diluted weighted average number of shares outstanding 10,579 8,294 HUB GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share amounts) March 31, December 31, 2005 2004 (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $15,570 $16,806 Restricted investments 661 - Accounts receivable Trade, net 139,113 141,079 Other 7,527 7,996 Deferred taxes 4,412 4,667 Prepaid expenses and other current assets 3,715 4,746 TOTAL CURRENT ASSETS 170,998 175,294 PROPERTY AND EQUIPMENT, net 17,854 19,487 GOODWILL, net 215,175 215,175 OTHER ASSETS 371 889 TOTAL ASSETS $404,398 $410,845 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable Trade $115,250 $115,819 Other 2,925 1,660 Accrued expenses Payroll 10,262 19,542 Other 12,031 15,100 TOTAL CURRENT LIABILITIES 140,468 152,121 DEFERRED TAXES 31,545 31,788 STOCKHOLDERS' EQUITY: Preferred stock, $.01 par value, 2,000,000 shares authorized; - - no shares issued or outstanding in 2005 and 2004 Common stock Class A: $.01 par value; 12,337,700 shares authorized; 9,809,476 shares issued and 9,727,917 outstanding in 2005; 9,635,657 issued and outstanding in 2004 98 96 Class B: $.01 par value; 662,300 shares authorized; 662,296 shares issued and outstanding in 2005 and 2004 7 7 Additional paid-in capital 187,068 182,365 Purchase price in excess of predecessor basis, net of tax benefit of $10,306 (15,458) (15,458) Retained earnings 69,959 64,611 Unearned compensation (4,137) (4,685) Treasury stock, at cost (81,559 shares in 2005) (5,152) - TOTAL STOCKHOLDERS' EQUITY 232,385 226,936 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $404,398 $410,845 HUB GROUP, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Three Months Ended March 31, 2005 2004 Cash flows from operating activities: Net income $5,348 $2,713 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of property and equipment 2,593 2,911 Deferred taxes 3,008 1,961 Compensation expense related to restricted stock 520 404 Gain on sale of assets (12) (18) Other assets 518 188 Changes in working capital: Restricted investments (661) - Accounts receivable, net 2,435 3,466 Prepaid expenses and other current assets 1,031 462 Accounts payable 696 (1,867) Accrued expenses (12,349) (4,072) Net cash provided by operating activities 3,127 6,148 Cash flows from investing activities: Purchases of property and equipment, net (948) (460) Net cash used in investing activities (948) (460) Cash flows from financing activities: Proceeds from stock options exercised 2,184 2,090 Purchase of treasury stock (5,599) (2,767) Net payments on revolver - (3,000) Payments of long term debt - (2,011) Net cash used in financing activities (3,415) (5,688) Net decrease in cash and cash equivalents (1,236) - Cash and cash equivalents beginning of period 16,806 - Cash and cash equivalents end of period $15,570 $- Supplemental disclosures of cash flow information Cash paid for: Interest $- $1,357 Income taxes $333 $- HUB GROUP, INC. MODAL REVENUE SUMMARY (in thousands) First Second Third Fourth Quarter Quarter Quarter Quarter Total 2004 2004 2004 2004 2004 Intermodal $236,321 $247,940 $259,958 $270,314 $1,014,533 Brokerage 50,960 56,778 56,124 61,604 225,466 Logistics 33,913 33,786 34,028 38,996 140,723 Total Core 321,194 338,504 350,110 370,914 1,380,722 HGDS 7,108 10,467 11,995 16,514 46,084 Consolidated $328,302 $348,971 $362,105 $387,428 $1,426,806 NOTE: HGDS transferred its Pharmaceutical business to Logistics in August 2004, resulting in an increase in Logistics revenue of $4,315 for the year ended December 31, 2004.
SOURCE Hub Group, Inc.
Amy Lisek of Hub Group, Inc., +1-630-795-2214