SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported) November 3, 2003
HUB GROUP, INC.
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation)
0-27754 36-4007085
(Commission File Number) (I.R.S. Employer Identification No.)
3050 HIGHLAND PARKWAY, SUITE 100
DOWNERS GROVE, ILLINOIS 60515
(Address Of Principal Executive Offices, including Zip Code)
(630) 271-3600
(Registrant's Telephone Number, Including Area Code)
NOT APPLICABLE
(Former Name or Former Address, If Changed Since Last Report)
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Not applicable.
(b) Not applicable.
(c) A list of exhibits filed herewith is contained on the Exhibit
Index which immediately precedes such exhibits and is
incorporated herein by reference.
ITEM 9. INFORMATION PROVIDED UNDER ITEM 12 (RESULTS OF OPERATIONS AND
FINANCIAL CONDITION)
The following information is furnished pursuant to Item 12 "Results of
Operations and Financial Condition."
On November 3, 2003, Hub Group, Inc. issued a press release announcing its third
quarter 2003 operating results. The press release is furnished as Exhibit 99.1
to this Form 8-K.
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.
Dated: November 4, 2003 /S/ THOMAS M. WHITE
-----------------------------------------
By: Thomas M. White
Its: Senior Vice President-
Chief Financial Officer and Treasurer
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
99.1 Press release issued on November 3, 2003 announcing operating
results for Hub Group, Inc. for the third quarter 2003
Hub Group, Inc. Announces Results for the Third Quarter Ended September 30, 2003
and Stock Buyback Program
Downers Grove, IL, November 3, 2003 - Hub Group, Inc. (NASDAQ: HUBG)
reported results of operations for the quarter ended September 30, 2003.
Net income and earnings per share for the quarter more than doubled. Net income
for the quarter was $2.9 million versus $1.4 million in 2002, an increase of
109%. Earnings per share of $0.37 for the quarter increased by 106% compared to
last year's $0.18 per share. Year-to-date net income is $5.8 million compared to
$0.1 million for the same period of 2002. Earnings per share for the nine months
ended September 30, 2003 were $0.75 versus $0.01 in 2002.
Gross margin increased 2.8% to $43.5 million for the third quarter of 2003 from
$42.3 million in 2002. As a percent of revenue, gross margin increased to 12.8%
in 2003 from 11.9% in 2002. The increase in margin as a percent of revenue is
primarily due to improvements in purchased transportation services and some
directed changes in customer mix. Salaries and benefits for the third quarter,
which include severance costs of approximately $0.5 million, decreased to $22.5
million in 2003 from $23.3 million in 2002. Selling, general and administrative
expenses decreased to $11.0 million in 2003 from $11.8 million in 2002. Interest
expense for the quarter was down 25.8% to $1.9 million as compared to $2.5
million last year reflecting a reduction in debt levels from $109.0 million at
September 30, 2002 to $82.0 million at September 30, 2003.
Year-to-date gross margin is up 7.6% to $129.0 million in 2003 from $119.9
million in 2002. As a percent of revenue, gross margin is 12.9 % versus 12.1% in
2002. Salaries and benefits for the year have decreased 2.2% to $68.7 million in
2003 from $70.2 million in 2002. Selling, general and administrative expenses
remained consistent at $34.9 million. Interest expense for the nine months ended
September 30, 2003 is $6.0 million, an 18.1% reduction from last year's $7.3
million.
For the quarter, revenue totaled $339.5 million which is a decrease of 4.8% from
the prior year quarter. Intermodal revenue was $245.3 million, which represents
a decrease of 7.0% from the prior year due primarily to a decrease in volume.
Truckload brokerage revenue was $49.5 million for a decrease of 7.6% from prior
year quarter due primarily to a strategic decision to support logistics customer
growth with traditional brokerage resources. Supply Chain Solutions logistics
revenue was $36.7 million, which represents a 98.4% increase from the prior year
due primarily to increased volume. In addition, Hub Group Distribution Services
("HGDS") revenue was $8.0 million in 2003, a decrease of 61.3% from the prior
year quarter due to a decrease in the installation business and the transfer of
some business to another Hub subsidiary in 2002.
Year-to-date revenue increased 1.1% to $1,000.4 million in 2003 from $989.6
million in 2002. Intermodal revenue decreased 1.1% to $713.2 million from $721.4
million in 2002. Truckload brokerage revenue of $146.7 million represents a 6.8%
decrease from $157.4 million in 2002. Supply Chain Solutions logistics revenue
increased 95.2% to $101.1 million from $51.8 million in 2002. Finally, HGDS
revenue decreased 33.2% to $39.4 million in 2003 from $59.0 in 2002. Certain
prior year amounts have been reclassified to conform to the current year
presentation.
Hub's Chairman, Phillip C. Yeager, stated: "Our margin enhancement programs as
well as our cost control efforts continue to favorably impact our bottom line.
We are pleased with the growth in net income. As a result of our performance
this year we have been able to pay down over $20 million in debt and we are now
in a strong position to focus on revenue growth."
STOCK BUYBACK PROGRAM
Hub Group also announced today that its Board of Directors has authorized the
purchase of up to 500,000 shares of the Company's Class A Common Stock from time
to time. The Company expects to use a portion of these shares to fund certain
restricted stock grants. The timing of the program will be determined by
financial and market conditions.
Statements in this press release that are not historical, including statements
regarding Hub Group's or management's 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, 2002 and the quarterly reports on Form 10-Q for the
quarters ended March 31, 2003 and June 30, 2003. Hub Group assumes no liability
to update any such forward-looking statements.
Hub Group, Inc. is a leading non-asset based freight transportation management
company providing comprehensive intermodal, truckload, LTL, railcar, air
freight, international and related logistics and distribution services. The
Company operates through a network of over 30 offices throughout the United
States, Canada and Mexico and had 2002 sales of approximately $1.3 billion.
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,
--------------------------- --------------------------
2003 2002 2003 2002
------------ -------------- ------------ -------------
Revenue $ 339,484 $ 356,666 $ 1,000,418 $ 989,560
Transportation costs 296,023 314,385 871,447 869,674
------------ ------------- ------------ -------------
Gross margin 43,461 42,281 128,971 119,886
Costs and expenses:
Salaries and benefits 22,508 23,294 68,689 70,239
Selling, general and administrative 11,041 11,822 34,932 34,945
Depreciation and amortization of property and equipment 2,716 2,652 7,865 7,859
------------ ------------- ------------ -------------
Total costs and expenses 36,265 37,768 111,486 113,043
------------ ------------- ------------ -------------
Operating income 7,196 4,513 17,485 6,843
Other income (expense):
Interest expense (1,885) (2,539) (5,981) (7,307)
Interest income 43 45 118 166
Other, net 46 153 59 275
------------ ------------- ------------ -------------
Total other expense (1,796) (2,341) (5,804) (6,866)
Income (loss) before minority interest and provision for income taxes 5,400 2,172 11,681 (23)
Minority interest - - - (524)
------------ ------------- ------------ -------------
Income before provision for income taxes 5,400 2,172 11,681 501
Provision for income taxes 2,514 793 5,889 409
------------ ------------- ------------ -------------
Net income $ 2,886 $ 1,379 $ 5,792 $ 92
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Basic earnings per common share $ 0.37 $ 0.18 $ 0.75 $ 0.01
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Diluted earnings per common share $ 0.37 $ 0.18 $ 0.74 $ 0.01
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