HUB
GROUP, INC.
|
||||||||
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
||||||||
(in
thousands, except share amounts)
|
||||||||
September
30,
2007
|
December
31,
2006
|
|||||||
ASSETS
|
(unaudited)
|
|||||||
CURRENT
ASSETS:
|
||||||||
Cash
and cash equivalents
|
$ |
39,824
|
$ |
43,491
|
||||
Accounts
receivable
|
||||||||
Trade,
net
|
181,601
|
158,284
|
||||||
Other
|
11,296
|
8,369
|
||||||
Prepaid
taxes
|
86
|
2,119
|
||||||
Deferred
taxes
|
4,207
|
3,433
|
||||||
Prepaid
expenses and other current assets
|
5,244
|
4,450
|
||||||
TOTAL
CURRENT ASSETS
|
242,258
|
220,146
|
||||||
Restricted
investments
|
5,116
|
3,017
|
||||||
Property
and equipment, net
|
29,477
|
26,974
|
||||||
Other
intangibles, net
|
7,168
|
7,502
|
||||||
Goodwill,
net
|
225,448
|
225,448
|
||||||
Other
assets
|
1,440
|
1,461
|
||||||
TOTAL
ASSETS
|
$ |
510,907
|
$ |
484,548
|
||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
CURRENT
LIABILITIES:
|
||||||||
Accounts
payable
|
||||||||
Trade
|
$ |
129,986
|
$ |
117,676
|
||||
Other
|
6,091
|
6,839
|
||||||
Accrued
expenses
|
||||||||
Payroll
|
12,484
|
18,294
|
||||||
Other
|
35,742
|
26,617
|
||||||
Related
party payable
|
-
|
5,000
|
||||||
TOTAL
CURRENT LIABILITIES
|
184,303
|
174,426
|
||||||
Non-current
liabilities
|
13,400
|
7,691
|
||||||
Deferred
taxes
|
42,248
|
43,587
|
||||||
STOCKHOLDERS'
EQUITY:
|
||||||||
Preferred
stock, $.01 par value; 2,000,000 shares
authorized; no shares issued or outstanding in 2007 and
2006
|
-
|
-
|
||||||
Common
stock
|
||||||||
Class
A: $.01 par value; 97,337,700 shares authorized in
2007; 41,224,792 shares issued and 38,217,278 outstanding in 2007;
47,337,700 shares authorized in 2006; 41,224,792 shares issued
and 38,943,122 outstanding in 2006
|
412
|
412
|
||||||
Class
B: $.01 par value; 662,300 shares authorized; 662,296 shares
issued and outstanding in 2007 and 2006
|
7
|
7
|
||||||
Additional
paid-in capital
|
176,317
|
179,203
|
||||||
Purchase
price in excess of predecessor basis, net of tax benefit of
$10,306
|
(15,458 | ) | (15,458 | ) | ||||
Retained
earnings
|
188,045
|
146,243
|
||||||
Treasury
stock; at cost, 3,007,514 shares in 2007 and 2,281,670 shares
in 2006
|
(78,367 | ) | (51,563 | ) | ||||
TOTAL
STOCKHOLDERS' EQUITY
|
270,956
|
258,844
|
||||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ |
510,907
|
$ |
484,548
|
||||
See
notes to unaudited condensed consolidated financial
statements.
|
HUB
GROUP, INC.
|
|||||||||||||||||||
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
|||||||||||||||||||
(in
thousands, except per share amounts)
|
|||||||||||||||||||
Three
Months
|
Nine
Months
|
||||||||||||||||||
Ended
September 30,
|
Ended
September 30,
|
||||||||||||||||||
2007
|
2006
|
|
2007
|
2006
|
|||||||||||||||
Revenue
|
$ |
417,842
|
$ |
432,009
|
$ |
1,212,704
|
$ |
1,184,069
|
|||||||||||
Transportation
costs
|
360,332
|
374,673
|
1,040,770
|
1,023,869
|
|||||||||||||||
Gross
margin
|
57,510
|
57,336
|
171,934
|
160,200
|
|||||||||||||||
Costs
and expenses:
|
|||||||||||||||||||
Salaries
and benefits
|
22,100
|
23,965
|
71,887
|
71,271
|
|||||||||||||||
General
and administrative
|
9,596
|
9,890
|
31,415
|
28,585
|
|||||||||||||||
Depreciation
and amortization
|
1,080
|
1,642
|
3,455
|
5,029
|
|||||||||||||||
Total
costs and expenses
|
32,776
|
35,497
|
106,757
|
104,885
|
|||||||||||||||
Operating
income
|
24,734
|
21,839
|
65,177
|
55,315
|
|||||||||||||||
Other
income (expense):
|
|||||||||||||||||||
Interest
expense
|
(33 | ) | (22 | ) | (78 | ) | (65 | ) | |||||||||||
Interest
income
|
711
|
670
|
1,967
|
1,668
|
|||||||||||||||
Other,
net
|
24
|
7
|
82
|
63
|
|||||||||||||||
Total
other income
|
702
|
655
|
1,971
|
1,666
|
|||||||||||||||
Income
from continuing operations before provision for income
taxes
|
25,436
|
22,494
|
67,148
|
56,981
|
|||||||||||||||
Provision
for income taxes
|
8,828
|
9,000
|
25,346
|
22,795
|
|||||||||||||||
Income
from continuing operations
|
16,608
|
13,494
|
41,802
|
34,186
|
|||||||||||||||
Discontinued
operations:
|
|||||||||||||||||||
Income
from discontinued operations of HGDS
|
-
|
-
|
-
|
1,634
|
|||||||||||||||
Provision
for income taxes
|
-
|
-
|
-
|
653
|
|||||||||||||||
Income
from discontinued operations
|
-
|
-
|
-
|
981
|
|||||||||||||||
Net
income
|
$ |
16,608
|
$ |
13,494
|
$ |
41,802
|
$ |
35,167
|
|||||||||||
Basic
earnings per common share
|
|||||||||||||||||||
Income
from continuing operations
|
$ |
0.43
|
$ |
0.34
|
$ |
1.07
|
$ |
0.85
|
|||||||||||
Income
from discontinued operations
|
$ |
-
|
$ |
-
|
$ |
-
|
$ |
0.02
|
|||||||||||
Net
income
|
$ |
0.43
|
$ |
0.34
|
$ |
1.07
|
$ |
0.87
|
|||||||||||
Diluted
earnings per common share
|
|||||||||||||||||||
Income
from continuing operations
|
$ |
0.42
|
$ |
0.33
|
$ |
1.06
|
$ |
0.83
|
|||||||||||
Income
from discontinued operations
|
$ |
-
|
$ |
-
|
$ |
-
|
$ |
0.02
|
|||||||||||
Net
income
|
$ |
0.42
|
$ |
0.33
|
$ |
1.06
|
$ |
0.85
|
|||||||||||
Basic
weighted average number of shares outstanding
|
38,777
|
39,773
|
39,026
|
40,246
|
|||||||||||||||
Diluted
weighted average number of shares outstanding
|
39,230
|
40,572
|
39,511
|
41,161
|
|||||||||||||||
See
notes to unaudited condensed consolidated financial
statements.
|
HUB
GROUP, INC
|
||||
UNAUDITED
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’
EQUITY
|
||||
For
the nine months ended September 30, 2007
|
||||
(in
thousands, except shares)
|
||||
September
30,
|
||||
2007
|
||||
Class
A & B Common Stock Shares Outstanding
|
||||
Beginning
of year
|
39,605,418
|
|||
Purchase
of treasury shares
|
(1,161,762 | ) | ||
Treasury
shares issued for restricted stock and stock options
exercised
|
435,918
|
|||
Ending
balance
|
38,879,574
|
|||
Class
A & B Common Stock Amount
|
||||
Beginning
of year
|
$ |
419
|
||
Ending
balance
|
419
|
|||
Additional
Paid-in Capital
|
||||
Beginning
of year
|
179,203
|
|||
Exercise
of non-qualified stock options
|
(5,940 | ) | ||
Share-based
compensation expense
|
2,893
|
|||
Tax
benefit of share-based compensation plans
|
3,856
|
|||
Issuance
of restricted stock awards, net of forfeitures
|
(3,695 | ) | ||
Ending
balance
|
176,317
|
|||
Purchase
Price in Excess of Predecessor Basis, Net of Tax
|
||||
Beginning
of year
|
(15,458 | ) | ||
Ending
balance
|
(15,458 | ) | ||
Retained
Earnings
|
||||
Beginning
of year
|
146,243
|
|||
Net
income
|
41,802
|
|||
Ending
balance
|
188,045
|
|||
Treasury
Stock
|
||||
Beginning
of year
|
(51,563 | ) | ||
Purchase
of treasury shares
|
(37,142 | ) | ||
Issuance
of restricted stock and exercise of stock options
|
10,338
|
|||
Ending
balance
|
(78,367 | ) | ||
Total
stockholders’ equity
|
$ |
270,956
|
||
See
notes to unaudited condensed consolidated financial
statements.
|
HUB
GROUP, INC.
|
||||||||
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
(in
thousands)
|
||||||||
Nine
Months Ended September 30,
|
||||||||
2007
|
2006
|
|||||||
Cash
flows from operating activities:
|
||||||||
Income
from continuing operations
|
$ |
41,802
|
$ |
34,186
|
||||
Adjustments
to reconcile income from continuing operations to net cash
|
||||||||
provided
by operating activities:
|
||||||||
Depreciation
and amortization
|
5,475
|
6,410
|
||||||
Deferred
taxes
|
3,178
|
12
|
||||||
Compensation
expense related to share-based compensation plans
|
2,893
|
2,649
|
||||||
Gain
on sale of assets
|
(156 | ) | (31 | ) | ||||
Changes
in operating assets and liabilities excluding effects of purchase
transaction:
|
||||||||
Restricted
investments
|
(2,099 | ) | (1,163 | ) | ||||
Accounts
receivable, net
|
(26,244 | ) | (6,325 | ) | ||||
Prepaid
taxes
|
2,033
|
5,295
|
||||||
Prepaid
expenses and other current assets
|
(794 | ) | (1,202 | ) | ||||
Other
assets
|
21
|
234
|
||||||
Accounts
payable
|
11,562
|
13,904
|
||||||
Accrued
expenses
|
3,315
|
9,152
|
||||||
Non-current
liabilities
|
418
|
-
|
||||||
Net
cash provided by operating activities
|
41,404
|
63,121
|
||||||
Cash
flows from investing activities:
|
||||||||
Proceeds
from sale of equipment
|
715
|
228
|
||||||
Purchases
of property and equipment
|
(8,203 | ) | (5,247 | ) | ||||
Cash
used in acquisition of Comtrak, Inc.
|
(5,000 | ) | (39,942 | ) | ||||
Proceeds
from the disposal of discontinued operations
|
-
|
12,203
|
||||||
Net
cash used in investing activities
|
(12,488 | ) | (32,758 | ) | ||||
Cash
flows from financing activities:
|
||||||||
Proceeds
from stock options exercised
|
703
|
1,924
|
||||||
Purchase
of treasury stock
|
(37,142 | ) | (45,191 | ) | ||||
Excess
tax benefits from share-based compensation
|
3,856
|
7,897
|
||||||
Net
cash used in by financing activities
|
(32,583 | ) | (35,370 | ) | ||||
Cash
flows from operating activities of discontinued operations
|
-
|
1,848
|
||||||
Cash
flows used in investing activities of discontinued
operations
|
-
|
(38 | ) | |||||
Net
cash provided by discontinued operations
|
-
|
1,810
|
||||||
Net
decrease in cash and cash equivalents
|
(3,667 | ) | (3,197 | ) | ||||
Cash
and cash equivalents beginning of period
|
43,491
|
36,133
|
||||||
Cash
and cash equivalents end of period
|
$ |
39,824
|
$ |
32,936
|
||||
Supplemental
disclosures of cash paid for:
|
||||||||
Interest
|
$ |
78
|
$ |
64
|
||||
Income
taxes
|
$ |
14,518
|
$ |
6,573
|
||||
See
notes to unaudited condensed consolidated financial
statements.
|
Three
Months Ended
|
Three
Months Ended
|
|||||||||||||||||||||||
September
30, 2007
|
September
30, 2006
|
|||||||||||||||||||||||
Income
|
Shares
|
Per
Share Amount
|
Income
|
Shares
|
Per
Share Amount
|
|||||||||||||||||||
Basic
EPS
|
||||||||||||||||||||||||
Income
from continuing operations
|
$ |
16,608
|
38,777
|
$ |
0.43
|
$ |
13,494
|
39,773
|
$ |
0.34
|
||||||||||||||
Income
from discontinued operations
|
-
|
38,777
|
-
|
-
|
39,773
|
-
|
||||||||||||||||||
Net
Income
|
$ |
16,608
|
38,777
|
$ |
0.43
|
$ |
13,494
|
39,773
|
$ |
0.34
|
||||||||||||||
Effect
of Dilutive Securities
|
||||||||||||||||||||||||
Stock
options and restricted stock
|
453
|
799
|
||||||||||||||||||||||
Diluted
EPS
|
||||||||||||||||||||||||
Income
from continuing operations
|
$ |
16,608
|
39,230
|
$ |
0.42
|
$ |
13,494
|
40,572
|
$ |
0.33
|
||||||||||||||
Income
from discontinued operations
|
-
|
39,230
|
-
|
-
|
40,572
|
-
|
||||||||||||||||||
Net
Income
|
$ |
16,608
|
39,230
|
$ |
0.42
|
$ |
13,494
|
40,572
|
$ |
0.33
|
Nine
Months Ended
|
Nine
Months Ended
|
|||||||||||||||||||||||
September
30, 2007
|
September
30, 2006
|
|||||||||||||||||||||||
Income
|
Shares
|
Per
Share Amount
|
Income
|
Shares
|
Per
Share Amount
|
|||||||||||||||||||
Basic
EPS
|
||||||||||||||||||||||||
Income
from continuing operations
|
$ |
41,802
|
39,026
|
$ |
1.07
|
$ |
34,186
|
40,246
|
$ |
0.85
|
||||||||||||||
Income
from discontinued operations
|
-
|
39,026
|
-
|
981
|
40,246
|
0.02
|
||||||||||||||||||
Net
Income
|
$ |
41,802
|
39,026
|
$ |
1.07
|
$ |
35,167
|
40,246
|
$ |
0.87
|
||||||||||||||
Effect
of Dilutive Securities
|
||||||||||||||||||||||||
Stock
options and restricted stock
|
485
|
915
|
||||||||||||||||||||||
Diluted
EPS
|
||||||||||||||||||||||||
Income
from continuing operations
|
$ |
41,802
|
39,511
|
$ |
1.06
|
$ |
34,186
|
41,161
|
$ |
0.83
|
||||||||||||||
Income
from discontinued operations
|
-
|
39,511
|
-
|
981
|
41,161
|
0.02
|
||||||||||||||||||
Net
Income
|
$ |
41,802
|
39,511
|
$ |
1.06
|
$ |
35,167
|
41,161
|
$ |
0.85
|
·
|
the
degree and rate of market growth in the domestic intermodal, truck
brokerage and logistics markets we
serve;
|
·
|
deterioration
in our relationships with existing railroads or adverse changes to
the
railroads’ operating rules;
|
·
|
changes
in rail service conditions or adverse weather
conditions;
|
·
|
further
consolidation of railroads;
|
·
|
the
impact of competitive pressures in the marketplace, including entry
of new
competitors, direct marketing efforts by the railroads or marketing
efforts of asset-based carriers;
|
·
|
changes
in rail, drayage and trucking company
capacity;
|
·
|
railroads
moving away from ownership of intermodal
assets;
|
·
|
equipment
shortages or equipment surplus;
|
·
|
changes
in the cost of services from rail, drayage, truck or other
vendors;
|
·
|
labor
unrest in the rail, drayage or trucking company
communities;
|
·
|
general
economic and business conditions;
|
·
|
fuel
shortages or fluctuations in fuel
prices;
|
·
|
increases
in interest rates;
|
·
|
changes
in homeland security or terrorist
activity;
|
·
|
difficulties
in maintaining or enhancing our information technology
systems;
|
·
|
changes
to or new governmental regulation;
|
·
|
loss
of several of our largest
customers;
|
·
|
inability
to recruit and retain key
personnel;
|
·
|
inability
to recruit and maintain drivers and owner
operators;
|
·
|
changes
in insurance costs and claims expense;
and
|
·
|
inability
to close and successfully integrate any future business
combinations.
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||||||||||
%
|
%
|
|||||||||||||||||||||||
2007
|
2006
|
Change
|
2007
|
2006
|
Change
|
|||||||||||||||||||
Revenue
|
||||||||||||||||||||||||
Intermodal
|
$ |
303,289
|
$ |
318,927
|
(4.9 | )% | $ |
891,999
|
$ |
865,499
|
3.1 | % | ||||||||||||
Truck
brokerage
|
77,115
|
77,129
|
0.0
|
224,933
|
224,805
|
0.1
|
||||||||||||||||||
Logistics
|
37,438
|
35,953
|
4.1
|
95,772
|
93,765
|
2.1
|
||||||||||||||||||
Total
revenue from continuing operations
|
$ |
417,842
|
$ |
432,009
|
(3.3 | )% | $ |
1,212,704
|
$ |
1,184,069
|
2.4 | % |
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2007
|
2006
|
2007
|
2006
|
|||||||||||||
Revenue
|
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
Transportation
costs
|
86.2
|
86.7
|
85.8
|
86.5
|
||||||||||||
Gross
margin
|
13.8
|
13.3
|
14.2
|
13.5
|
||||||||||||
Costs
and expenses:
|
||||||||||||||||
Salaries
and benefits
|
5.3
|
5.5
|
5.9
|
6.0
|
||||||||||||
General
and administrative
|
2.3
|
2.3
|
2.6
|
2.4
|
||||||||||||
Depreciation
and amortization
|
0.3
|
0.4
|
0.3
|
0.4
|
||||||||||||
Total
costs and expenses
|
7.9
|
8.2
|
8.8
|
8.8
|
||||||||||||
Operating
income
|
5.9
|
5.1
|
5.4
|
4.7
|
||||||||||||
Other
income:
|
||||||||||||||||
Interest
income
|
0.2
|
0.1
|
0.1
|
0.1
|
||||||||||||
Total
other income
|
0.2
|
0.1
|
0.1
|
0.1
|
||||||||||||
Income
from continuing operations before provision for income
taxes
|
6.1
|
5.2
|
5.5
|
4.8
|
||||||||||||
Provision
for income taxes
|
2.1
|
2.1
|
2.1
|
1.9
|
||||||||||||
Income
from continuing operations
|
4.0 | % | 3.1 | % | 3.4 | % | 2.9 | % |
2007
|
$ |
4,997
|
||
2008
|
18,324
|
|||
2009
|
15,271
|
|||
2010
|
13,313
|
|||
2011
|
12,516
|
|||
2012
and thereafter
|
15,924
|
|||
$ |
80,345
|
2007
|
$ |
-
|
||
2008
|
1,932
|
|||
2009
|
1,021
|
|||
2010
|
1,610
|
|||
2011
|
639
|
|||
2012
and thereafter
|
4,987
|
|||
$ |
10,189
|
Total
Number of Shares Purchased
|
Average
Price Paid Per Share
|
Total
Number of Shares Purchased as Part of Publicly Announced
Plan
|
Maximum
Value of Shares that May Yet Be Purchased Under the Plan (in
000’s)
|
|||||||||||||
January
1 to
January
31
|
--
|
--
|
--
|
$ |
75,000
|
|||||||||||
February
1 to
February
28
|
--
|
--
|
--
|
75,000
|
||||||||||||
March
1 to
March
31
|
408,205
|
$ |
30.62
|
408,205
|
62,500
|
|||||||||||
April
1 to
April
30
|
--
|
--
|
--
|
62,500
|
||||||||||||
May
1 to
May
31
|
--
|
--
|
--
|
62,500
|
||||||||||||
June
1 to
June
30
|
--
|
--
|
--
|
62,500
|
||||||||||||
July
1 to
July
31
|
411,715
|
$ |
34.49
|
411,715
|
48,300
|
|||||||||||
August
1 to
August
31
|
100,000
|
$ |
31.73
|
100,000
|
45,126
|
|||||||||||
September
1 to
September
30
|
228,300
|
$ |
29.97
|
228,300
|
38,285
|
|||||||||||
Total
|
1,148,220
|
$ |
31.98
|
1,148,220
|
$ |
38,285
|
31.1
|
Certification
of David P. Yeager, Vice Chairman and Chief Executive Officer, Pursuant
to
Rule 13a-14(a) under the Securities Exchange Act of
1934.
|
31.2
|
Certification
of Terri A. Pizzuto, Executive Vice President, Chief Financial Officer
and
Treasurer, Pursuant to Rule 13a-14(a) under the Securities Exchange
Act of
1934.
|
32.1
|
Certification
of David P. Yeager and Terri A. Pizzuto, Chief Executive Officer
and Chief
Financial Officer, respectively, Pursuant to 18 U.S.C. Section
1350.
|