Hub Group, Inc. Reports Record Third Quarter 2006 Revenue and Earnings
DOWNERS GROVE, Ill., Oct. 24 /PRNewswire-FirstCall/ -- 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.
HUB GROUP, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) Three Months Nine Months Ended September 30, Ended September 30, 2006 2005 2006 2005 Revenue $432,009 $387,434 $1,184,069 $1,078,661 Transportation costs 374,673 342,173 1,023,869 949,472 Gross margin 57,336 45,261 160,200 129,189 Costs and expenses: Salaries and benefits 23,965 20,985 71,271 62,125 General and administrative 9,890 8,367 28,585 26,589 Depreciation and amortization 1,642 2,262 5,029 6,736 Total costs and expenses 35,497 31,614 104,885 95,450 Operating income 21,839 13,647 55,315 33,739 Other income (expense): Interest expense (22) (17) (65) (109) Interest income 670 217 1,668 601 Other, net 7 60 63 91 Total other income 655 260 1,666 583 Income from continuing operations before provision for income taxes 22,494 13,907 56,981 34,322 Provision for income taxes 9,000 5,481 22,795 13,953 Income from continuing operations 13,494 8,426 34,186 20,369 Discontinued operations: Income from discontinued operations of HGDS (including loss on disposal of $70 in 2006) - 1,954 1,634 4,228 Provision for income taxes - 770 653 1,714 Income from discontinued operations - 1,184 981 2,514 Net income $13,494 $9,610 $35,167 $22,883 Basic earnings per common share Income from continuing operations $0.34 $0.21 $0.85 $0.51 Income from discontinued operations - 0.03 $0.02 0.06 Net income $0.34 $0.24 $0.87 $0.57 Diluted earnings per common share Income from continuing operations $0.33 $0.21 $0.83 $0.49 Income from discontinued operations - 0.03 0.02 0.06 Net income $0.33 $0.24 $0.85 $0.55 Basic weighted average number of shares outstanding 39,773 39,280 40,246 39,932 Diluted weighted average number of shares outstanding 40,572 40,812 41,161 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. HUB GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share amounts) September 30, December 31, 2006 2005 (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $32,936 $36,133 Restricted investments 2,550 1,387 Accounts receivable Trade, net 166,801 147,004 Other 6,570 10,603 Prepaid taxes 141 6,040 Deferred taxes 454 - Prepaid expenses and other current assets 5,355 3,860 Assets of discontinued operations - 17,855 TOTAL CURRENT ASSETS 214,807 222,882 Property and equipment, net 25,192 12,767 Other intangibles, net 7,614 - Goodwill, net 220,448 208,150 Other assets 390 619 TOTAL ASSETS $468,451 $444,418 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable Trade $126,534 $114,094 Other 7,131 3,668 Accrued expenses Payroll 18,810 20,909 Other 31,525 18,917 Deferred taxes - 960 Liabilities of discontinued operations - 5,341 TOTAL CURRENT LIABILITIES 184,000 163,889 DEFERRED TAXES 39,930 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; 41,224,792 shares issued and 39,090,050 outstanding in 2006; 41,224,792 shares issued and 39,962,484 outstanding in 2005 412 412 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 174,273 183,524 Purchase price in excess of predecessor basis, net of tax benefit of $10,306 (15,458) (15,458) Retained earnings 132,724 97,557 Unearned compensation - (6,259) Treasury stock; at cost, 2,134,742 shares in 2006 and 1,262,308 shares in 2005 (47,437) (17,708) TOTAL STOCKHOLDERS' EQUITY 244,521 242,075 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $468,451 $444,418 HUB GROUP, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Nine Months Ended September 30, 2006 2005 Cash flows from operating activities: Income from continuing operations $34,186 $20,369 Adjustments to reconcile income from continuing operations to net cash provided by operating activities: Depreciation and amortization 6,410 7,031 Deferred taxes 12 8,810 Compensation expense related to share-based compensation plans 2,649 1,581 (Gain) on sale of assets (31) (271) Other assets 234 530 Changes in working capital excluding effects of purchase transaction: Restricted investments (1,163) (1,173) Accounts receivable, net (6,325) (22,251) Prepaid taxes 5,295 - Prepaid expenses and other current assets (1,202) 379 Accounts payable 13,904 17,119 Accrued expenses 9,152 (664) Net cash provided by operating activities 63,121 31,460 Cash flows from investing activities: Proceeds from sale of equipment 228 573 Purchases of property and equipment (5,247) (3,188) Cash used in acquisition of Comtrak, Inc. (39,942) - Proceeds from the disposal of discontinued operations 12,203 - Net cash used in investing activities (32,758) (2,615) Cash flows from financing activities: Proceeds from stock options exercised 1,924 4,304 Purchase of treasury stock (45,191) (30,571) Excess tax benefits from share- based compensation 7,897 - Net cash (used in) financing activities (35,370) (26,267) Cash flows from operating activities of discontinued operations 1,848 7,752 Cash flows used in investing activities of discontinued operations (38) (289) Net cash provided by discontinued operations 1,810 7,463 Net increase (decrease) in cash and cash equivalents (3,197) 10,041 Cash and cash equivalents beginning of period 36,133 16,806 Cash and cash equivalents end of period $32,936 $26,847 Supplemental disclosures of cash flow information Cash paid for: Interest $64 $59 Income taxes $6,573 $3,310
SOURCE Hub Group, Inc. -0- 10/24/2006 /CONTACT: Amy Lisek of Hub Group, Inc., +1-630-795-2214/ /Web site: http://www.hubgroup.com / (HUBG) CO: Hub Group, Inc. ST: Illinois IN: TRN SU: ERN CCA CT-CM -- CGTU001 -- 7525 10/24/2006 16:03 EDT http://www.prnewswire.com