Delaware
|
36-4007085
|
(State
or other jurisdiction of incorporation
or organization)
|
(I.R.S.
Employer Identification
No.)
|
PART I. Financial Information: | Page |
Hub Group, Inc. - Registrant | |
Condensed
Consolidated Balance Sheets – June 30, 2008 (unaudited) and
December 31,
2007
|
3 |
Unaudited
Condensed Consolidated Statements of Income - Three Months
and
Six Months Ended June 30, 2008 and 2007
|
4 |
Unaudited
Condensed Consolidated Statement of Stockholders’ Equity -
Six
Months Ended June 30,
2008
|
5 |
Unaudited
Condensed Consolidated Statements of Cash Flows - Six
Months Ended June 30, 2008 and
2007
|
6 |
Notes to Unaudited Condensed Consolidated Financial Statements | 7 |
Management’s
Discussion and Analysis of Financial Condition and
Results of
Operations
|
9 |
Quantitative and Qualitative Disclosures About Market Risk | 14 |
Controls and Procedures | 15 |
PART II. Other Information | 15 |
Item
1. Financial Statements
HUB
GROUP, INC.
|
||||||||
CONSOLIDATED
BALANCE SHEETS
|
||||||||
(in
thousands, except share amounts)
|
||||||||
June
30,
2008
|
December
31,
2007
|
|||||||
ASSETS
|
(unaudited)
|
|||||||
CURRENT
ASSETS:
|
||||||||
Cash
and cash equivalents
|
$ | 54,038 | $ | 38,002 | ||||
Accounts
receivable
|
||||||||
Trade,
net
|
191,878 | 160,944 | ||||||
Other
|
10,720 | 9,828 | ||||||
Prepaid
taxes
|
86 | 86 | ||||||
Deferred
taxes
|
3,876 | 5,044 | ||||||
Prepaid
expenses and other current assets
|
5,925 | 4,318 | ||||||
TOTAL
CURRENT ASSETS
|
266,523 | 218,222 | ||||||
Restricted
investments
|
7,746 | 5,206 | ||||||
Property
and equipment, net
|
28,181 | 29,662 | ||||||
Other
intangibles, net
|
6,833 | 7,056 | ||||||
Goodwill,
net
|
230,448 | 230,448 | ||||||
Other
assets
|
1,251 | 1,373 | ||||||
TOTAL
ASSETS
|
$ | 540,982 | $ | 491,967 | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
CURRENT
LIABILITIES:
|
||||||||
Accounts
payable
|
||||||||
Trade
|
$ | 147,282 | $ | 123,020 | ||||
Other
|
9,029 | 6,683 | ||||||
Accrued
expenses
|
||||||||
Payroll
|
12,137 | 16,446 | ||||||
Other
|
28,434 | 33,063 | ||||||
Related
party payable
|
- | 5,000 | ||||||
TOTAL
CURRENT LIABILITIES
|
196,882 | 184,212 | ||||||
Non-current
liabilities
|
9,753 | 9,708 | ||||||
Deferred
taxes
|
51,129 | 47,148 | ||||||
STOCKHOLDERS'
EQUITY:
|
||||||||
Preferred
stock, $.01 par value; 2,000,000 shares
authorized; no shares issued or outstanding in 2008 and
2007
|
- | - | ||||||
Common
stock
|
||||||||
Class
A: $.01 par value; 97,337,700 shares authorized and
41,224,792 shares issued in 2008 and 2007; 37,001,494
outstanding in 2008 and 36,666,731 outstanding in 2007
|
412 | 412 | ||||||
Class
B: $.01 par value; 662,300 shares authorized; 662,296 shares
issued and outstanding in 2008 and 2007
|
7 | 7 | ||||||
Additional
paid-in capital
|
172,357 | 176,657 | ||||||
Purchase
price in excess of predecessor basis, net of tax benefit of
$10,306
|
(15,458 | ) | (15,458 | ) | ||||
Retained
earnings
|
234,147 | 206,042 | ||||||
Treasury
stock; at cost, 4,223,298 shares in 2008 and 4,558,061 shares in
2007
|
(108,247 | ) | (116,761 | ) | ||||
TOTAL
STOCKHOLDERS' EQUITY
|
283,218 | 250,899 | ||||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ | 540,982 | $ | 491,967 |
HUB
GROUP, INC.
|
||||||||||||||||||||
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
||||||||||||||||||||
(in
thousands, except per share amounts)
|
||||||||||||||||||||
Three
Months
|
Six
Months
|
|||||||||||||||||||
Ended
June 30,
|
Ended
June 30,
|
|||||||||||||||||||
2008
|
2007
|
2008
|
2007
|
|
||||||||||||||||
Revenue
|
$ | 490,929 | $ | 401,565 | $ | 915,924 | $ | 794,862 | ||||||||||||
Transportation
costs
|
431,090 | 343,802 | 798,583 | 680,438 | ||||||||||||||||
Gross
margin
|
59,839 | 57,763 | 117,341 | 114,424 | ||||||||||||||||
Costs
and expenses:
|
||||||||||||||||||||
Salaries
and benefits
|
24,301 | 24,177 | 49,664 | 49,787 | ||||||||||||||||
General
and administrative
|
10,477 | 10,218 | 20,627 | 21,819 | ||||||||||||||||
Depreciation
and amortization
|
991 | 1,203 | 1,992 | 2,375 | ||||||||||||||||
Total
costs and expenses
|
35,769 | 35,598 | 72,283 | 73,981 | ||||||||||||||||
Operating
income
|
24,070 | 22,165 | 45,058 | 40,443 | ||||||||||||||||
Other
income (expense):
|
||||||||||||||||||||
Interest
expense
|
(26 | ) | (24 | ) | (52 | ) | (45 | ) | ||||||||||||
Interest
and dividend income
|
340 | 611 | 678 | 1,256 | ||||||||||||||||
Other,
net
|
(9 | ) | 55 | 86 | 58 | |||||||||||||||
Total
other income
|
305 | 642 | 712 | 1,269 | ||||||||||||||||
Income
before provision for income taxes
|
24,375 | 22,807 | 45,770 | 41,712 | ||||||||||||||||
Provision
for income taxes
|
9,405 | 9,032 | 17,665 | 16,518 | ||||||||||||||||
Net
income
|
$ | 14,970 | $ | 13,775 | $ | 28,105 | $ | 25,194 | ||||||||||||
Basic
earnings per common share
|
$ | 0.40 | $ | 0.35 | $ | 0.76 | $ | 0.64 | ||||||||||||
Diluted
earnings per common share
|
$ | 0.40 | $ | 0.35 | $ | 0.75 | $ | 0.64 | ||||||||||||
Basic
weighted average number of shares outstanding
|
37,191 | 39,043 | 37,146 | 39,150 | ||||||||||||||||
Diluted
weighted average number of shares outstanding
|
37,489 | 39,538 | 37,447 | 39,652 | ||||||||||||||||
See
notes to unaudited condensed consolidated financial
statements.
|
HUB
GROUP, INC
|
||||
UNAUDITED
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
|
||||
For
the six months ended June 30, 2008
|
||||
(in
thousands, except shares)
|
||||
June
30,
|
||||
2008
|
||||
Class
A & B Common Stock Shares Outstanding
|
||||
Beginning
of year
|
37,329,027 | |||
Purchase
of treasury shares
|
(28,528 | ) | ||
Treasury
shares issued for restricted stock and stock options
exercised
|
363,291 | |||
Ending
balance
|
37,663,790 | |||
Class
A & B Common Stock Amount
|
||||
Beginning
of year
|
$ | 419 | ||
Ending
balance
|
419 | |||
Additional
Paid-in Capital
|
||||
Beginning
of year
|
176,657 | |||
Exercise
of non-qualified stock options
|
(3,470 | ) | ||
Share-based
compensation expense
|
2,257 | |||
Tax
benefit of share-based compensation plans
|
2,398 | |||
Issuance
of restricted stock awards, net of forfeitures
|
(5,485 | ) | ||
Ending
balance
|
172,357 | |||
Purchase
Price in Excess of Predecessor Basis, Net of Tax
|
||||
Beginning
of year
|
(15,458 | ) | ||
Ending
balance
|
(15,458 | ) | ||
Retained
Earnings
|
||||
Beginning
of year
|
206,042 | |||
Net
income
|
28,105 | |||
Ending
balance
|
234,147 | |||
Treasury
Stock
|
||||
Beginning
of year
|
(116,761 | ) | ||
Purchase
of treasury shares
|
(796 | ) | ||
Issuance
of restricted stock and exercise of stock options
|
9,310 | |||
Ending
balance
|
(108,247 | ) | ||
Total
stockholders’ equity
|
$ | 283,218 | ||
See
notes to unaudited condensed consolidated financial
statements.
|
HUB
GROUP, INC.
|
||||||||
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
(in
thousands)
|
||||||||
Six
Months Ended June 30,
|
||||||||
2008
|
2007
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net
income
|
$ | 28,105 | $ | 25,194 | ||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||
Depreciation
and amortization
|
3,395 | 3,706 | ||||||
Deferred
taxes
|
5,149 | 3,034 | ||||||
Compensation
expense related to share-based compensation plans
|
2,257 | 1,923 | ||||||
Gain
loss on sale of assets
|
(197 | ) | (117 | ) | ||||
Changes
in operating assets and liabilities:
|
||||||||
Restricted
investments
|
(2,540 | ) | (1,786 | ) | ||||
Accounts
receivable, net
|
(31,826 | ) | 1,667 | |||||
Prepaid
taxes
|
- | 2,033 | ||||||
Prepaid
expenses and other current assets
|
(1,607 | ) | (345 | ) | ||||
Other
assets
|
122 | 4 | ||||||
Accounts
payable
|
26,608 | (4,388 | ) | |||||
Accrued
expenses
|
(8,938 | ) | (174 | ) | ||||
Deferred
compensation
|
45 | 180 | ||||||
Net
cash provided by operating activities
|
20,573 | 30,931 | ||||||
Cash
flows from investing activities:
|
||||||||
Proceeds
from sale of equipment
|
364 | 550 | ||||||
Purchases
of property and equipment
|
(1,858 | ) | (7,453 | ) | ||||
Cash
used in acquisition of Comtrak, Inc.
|
(5,000 | ) | (5,000 | ) | ||||
Net
cash used in investing activities
|
(6,494 | ) | (11,903 | ) | ||||
Cash
flows from financing activities:
|
||||||||
Proceeds
from stock options exercised
|
355 | 329 | ||||||
Purchase
of treasury stock
|
(796 | ) | (12,898 | ) | ||||
Excess
tax benefits from share-based compensation
|
2,398 | 2,430 | ||||||
Net
cash provided by (used in) financing activities
|
1,957 | (10,139 | ) | |||||
Net
increase in cash and cash equivalents
|
16,036 | 8,889 | ||||||
Cash
and cash equivalents beginning of period
|
38,002 | 43,491 | ||||||
Cash
and cash equivalents end of period
|
$ | 54,038 | $ | 52,380 | ||||
Supplemental
disclosures of cash paid for:
|
||||||||
Interest
|
$ | 52 | $ | 45 | ||||
Income
taxes
|
$ | 11,165 | $ | 7,427 | ||||
See
notes to unaudited condensed consolidated financial
statements.
|
Three
Months Ended
|
Three
Months Ended
|
|||||||||||||||||||||||
June
30, 2008
|
June
30, 2007
|
|||||||||||||||||||||||
(000's) |
(000's)
|
|||||||||||||||||||||||
Income
|
Shares
|
Per
Share Amount
|
Income
|
Shares
|
Per
Share Amount
|
|||||||||||||||||||
Basic
EPS
|
||||||||||||||||||||||||
Net
income
|
$ | 14,970 | 37,191 | $ | 0.40 | $ | 13,775 | 39,043 | $ | 0.35 | ||||||||||||||
Effect
of Dilutive Securities
|
||||||||||||||||||||||||
Stock
options and restricted stock
|
298 | 495 | ||||||||||||||||||||||
Diluted
EPS
|
$ | 14,970 | 37,489 | $ | 0.40 | $ | 13,775 | 39,538 | $ | 0.35 |
Six
Months Ended
|
Six
Months Ended
|
|||||||||||||||||||||||
June
30, 2008
|
June
30, 2007
|
|||||||||||||||||||||||
(000's) |
(000's)
|
|||||||||||||||||||||||
Income
|
Shares
|
Per
Share Amount
|
Income
|
Shares
|
Per
Share Amount
|
|||||||||||||||||||
Basic
EPS
|
||||||||||||||||||||||||
Net
income
|
$ | 28,105 | 37,146 | $ | 0.76 | $ | 25,194 | 39,150 | $ | 0.64 | ||||||||||||||
Effect
of Dilutive Securities
|
||||||||||||||||||||||||
Stock
options and restricted stock
|
301 | 502 | ||||||||||||||||||||||
Diluted
EPS
|
$ | 28,105 | 37,447 | $ | 0.75 | $ | 25,194 | 39,652 | $ | 0.64 |
·
|
the
degree and rate of market growth in the domestic intermodal, truck
brokerage and logistics markets served by
us;
|
·
|
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;
|
·
|
increases
in costs for independent contractors due to regulatory, judicial and legal
changes;
|
·
|
labor
unrest in the rail, drayage or trucking company
communities;
|
·
|
general
economic and business conditions;
|
·
|
significant
deterioration in our customer’s financial condition, particularly in the
retail sector;
|
·
|
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 retain 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
|
Six
Months Ended
|
|||||||||||||||||||||||
June
30,
|
June
30,
|
|||||||||||||||||||||||
%
|
%
|
|||||||||||||||||||||||
2008
|
2007
|
Change
|
2008
|
2007
|
Change
|
|||||||||||||||||||
Revenue
|
||||||||||||||||||||||||
Intermodal
|
$ | 351,640 | $ | 300,877 | 16.9 | % | $ | 654,411 | $ | 588,710 | 11.2 | % | ||||||||||||
Truck
brokerage
|
98,667 | 73,631 | 34.0 | 188,575 | 148,648 | 26.9 | ||||||||||||||||||
Logistics
|
40,622 | 27,057 | 50.1 | 72,938 | 57,504 | 26.8 | ||||||||||||||||||
Total
Revenue
|
$ | 490,929 | $ | 401,565 | 22.3 | % | $ | 915,924 | $ | 794,862 | 15.2 | % |
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
June
30,
|
June
30,
|
|||||||||||||||
2008
|
2007
|
2008
|
2007
|
|||||||||||||
Revenue
|
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||
Transportation
costs
|
87.8 | 85.6 | 87.2 | 85.6 | ||||||||||||
Gross
margin
|
12.2 | 14.4 | 12.8 | 14.4 | ||||||||||||
Costs
and expenses:
|
||||||||||||||||
Salaries
and benefits
|
5.0 | 6.0 | 5.4 | 6.3 | ||||||||||||
General
and administrative
|
2.1 | 2.6 | 2.3 | 2.7 | ||||||||||||
Depreciation
and amortization
|
0.2 | 0.3 | 0.2 | 0.3 | ||||||||||||
Total
costs and expenses
|
7.3 | 8.9 | 7.9 | 9.3 | ||||||||||||
Operating
income
|
4.9 | 5.5 | 4.9 | 5.1 | ||||||||||||
Other
income:
|
||||||||||||||||
Interest
and dividend income
|
0.1 | 0.2 | 0.1 | 0.1 | ||||||||||||
Total
other income
|
0.1 | 0.2 | 0.1 | 0.1 | ||||||||||||
Income
before provision for income taxes
|
5.0 | 5.7 | 5.0 | 5.2 | ||||||||||||
Provision
for income taxes
|
2.0 | 2.3 | 1.9 | 2.0 | ||||||||||||
Net
income
|
3.0 | % | 3.4 | % | 3.1 | % | 3.2 | % |
2008
|
$ | 9,847 | ||
2009
|
17,877 | |||
2010
|
15,453 | |||
2011
|
13,930 | |||
2012
|
12,297 | |||
2013
and thereafter
|
5,451 | |||
$ | 74,855 |
2008
|
$ | 101 | ||
2009
|
759 | |||
2010
|
1,636 | |||
2011
|
526 | |||
2012
|
615 | |||
2013
and thereafter
|
6,721 | |||
$ | 10,358 |
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)
|
|||||||||||||
April
1 to
April
30
|
-- | -- | -- | 75,000 | ||||||||||||
May
1 to
May
31
|
-- | -- | -- | 75,000 | ||||||||||||
June
1 to
June
30
|
-- | -- | -- | 75,000 | ||||||||||||
Total
|
-- | $ | -- | -- | $ | 75,000 |
HUB GROUP | |||
DATE:
July 25, 2008
|
|
/s/ Terri A. Pizzuto | |
Terri A. Pizzuto | |||
Executive Vice President, Chief Financial | |||
Officer and Treasurer | |||
(Principal Financial Officer) |
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.
|