SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported) April 19, 2006
HUB GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE
(State or Other Jurisdiction of Incorporation)
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0-27754 |
36-4007085 |
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(Commission File Number) |
(I.R.S. Employer Identification No.) |
3050 Highland Parkway, Suite 100
Downers Grove, Illinois 60515
(Address, including zip code, of principal executive offices)
(630) 271-3600
(Registrant’s telephone number, including area code)
NOT APPLICABLE
(Former Name or Former Address, If Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant any of the following provisions:
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o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION
On April 19, 2006, Hub Group, Inc. issued a press release announcing its first quarter 2006 operating results. The press release is furnished as Exhibit 99.1 to this Form 8-K.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
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(a) |
Not Applicable. |
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(b) |
Not Applicable. |
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(c) |
Not Applicable. |
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(d) |
A list of exhibits filed herewith is contained on the Exhibit | |||||
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Index which immediately precedes such exhibits and is |
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incorporated herein by reference. |
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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.
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DATE: April 20, 2006 |
/s/ David P. Yeager |
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By: David P. Yeager |
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Title: Vice Chairman and |
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Chief Executive Officer |
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EXHIBIT INDEX
Exhibit No.
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99.1 |
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Press release, issued on April 19, 2006, announcing operating results for Hub Group, Inc. for the first quarter 2006. |
Hub Group, Inc. Reports Record First Quarter 2006 Earnings
DOWNERS GROVE, IL, April 19, 2006, -- Hub Group, Inc. (NASDAQ: HUBG) today reported record income from continuing operations for the quarter ended March 31, 2006 of $8.5 million. This represents an 80% increase in first quarter income versus the first quarter of 2005. Hub Group’s diluted earnings per share from continuing operations of $0.41 for the first quarter 2006 represents an increase of 86% compared to last year's first quarter of $0.22. Hub’s gross margin as a percent of revenue has increased to 13.3% in 2006 from 12.2% in 2005 due to a focus on margin improvement. Results for the quarter include one month of operations of Comtrak, a drayage company acquired on February 28, 2006.
Hub’s revenue grew by 8.3% to $356.7 million compared to $329.4 million in the first quarter of 2005. First quarter intermodal revenue increased 11.3% to $260.7 million, which includes the addition of Comtrak. Truckload brokerage revenue increased 16.4% to $69.5 million this quarter. First quarter logistics revenue decreased 25.3% to $26.5 million.
Hub Group Distribution Services (HGDS) is currently a wholly owned subsidiary of Hub Group. As previously disclosed, in November 2004, Hub Group entered into a Purchase Option and Right of First Refusal Agreement and gave a third party the option to buy HGDS. This individual has given Hub Group written notice that he intends to exercise this option within the next sixty days. Although there can be no assurances that the transaction will in fact close, the Company anticipates it will be completed in the second quarter of 2006. The comparative results of HGDS have been reported as “discontinued operations” in the Company’s Consolidated Financial Statements. These discontinued operations generated $0.03 of diluted earnings per share in the first quarter of 2006 and 2005.
Commenting on the results, David P. Yeager, Vice-Chairman and Chief Executive Officer of Hub Group stated, “We are very pleased with the quarter. The divesture of our HGDS installation business furthers our strategy of focusing on our core transportation business and our acquisition of Comtrak strengthens our intermodal franchise.”
FULL YEAR 2006
Given the current operating environment, the Company is comfortable that the earnings from continuing operations for 2006 will be within the analysts’ range of $1.90 to $2.02 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 Wednesday, April 19, 2006 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) 659-2037. The conference call participant code is 62583642. 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 asset light 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, 2005. Hub Group assumes no liability to update any such forward-looking statements.
SOURCE: HUB GROUP, INC.
CONTACT: Renee Jurczyk of Hub Group, Inc., +1-630-271-3611
HUB GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
| Three Months Ended March 31, | |||||||
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| 2006 |
2005 | ||||||
| Revenue | $356,745 | $329,405 | |||||
| Transportation costs | 309,175 | 289,297 | |||||
| Gross margin | 47,570 | 40,108 | |||||
| Costs and expenses: | |||||||
| Salaries and benefits | 22,854 | 20,610 | |||||
| General and administrative | 9,158 | 9,226 | |||||
| Depreciation and amortization of property, equipment and intangibles | 1,859 | 2,222 | |||||
| Total costs and expenses | 33,871 | 32,058 | |||||
| Operating income | 13,699 | 8,050 | |||||
| Other income (expense): | |||||||
| Interest expense | (127 | ) | (207 | ) | |||
| Interest income | 446 | 200 | |||||
| Other, net | 105 | 14 | |||||
| Total other income | 424 | 7 | |||||
| Income from continuing operations before provision for income taxes | 14,123 | 8,057 | |||||
| Provision for income taxes | 5,649 | 3,344 | |||||
| Income from continuing operations | 8,474 | 4,713 | |||||
| Discontinued operations: | |||||||
| Income from discontinued operations of HGDS before provision for income taxes | 1,094 | 1,085 | |||||
| Provision for income taxes | 438 | 450 | |||||
| Income from discontinued operations | 656 | 635 | |||||
| Net income | $ 9,130 | $ 5,348 | |||||
| Basic earnings per common share Income from continuing operations | $ 0.42 | $ 0.23 | |||||
| Income from discontinued operations | 0.03 | 0.03 | |||||
| Net Income | $ 0.45 | $ 0.26 | |||||
| Diluted earnings per common share Income from continuing operations | $ 0.41 | $ 0.22 | |||||
| Income from discontinued operations | 0.03 | 0.03 | |||||
| Net Income | $ 0.44 | $ 0.25 | |||||
| Basic weighted average number of shares outstanding | 20,098 | 20,282 | |||||
| Diluted weighted average number of shares outstanding | 20,651 | 21,158 | |||||
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HUB GROUP, INC. |
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March 31, |
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December 31, |
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2006 |
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2005 |
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(unaudited) |
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ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents |
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$ 17,314 |
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$ 36,133 |
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Restricted investments |
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1,973 |
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1,387 |
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Accounts receivable |
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Trade, net |
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139,641 |
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147,004 |
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Other |
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9,943 |
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10,603 |
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Prepaid taxes |
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5,777 |
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6,040 |
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Prepaid expenses and other current assets |
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5,683 |
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3,860 |
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Assets of discontinued operations |
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15,690 |
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17,855 |
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TOTAL CURRENT ASSETS |
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196,021 |
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222,882 |
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Property and equipment, net |
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25,315 |
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12,767 |
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Other Intangibles, net |
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7,837 |
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- |
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Goodwill, net |
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220,168 |
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208,150 |
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Other assets |
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325 |
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619 |
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TOTAL ASSETS |
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$ 449,666 |
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$ 444,418 |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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CURRENT LIABILITIES: |
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Accounts payable |
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Trade |
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$ 108,440 |
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$ 114,094 |
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Other |
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6,767 |
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3,668 |
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Accrued expenses |
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Payroll |
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11,873 |
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20,909 |
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Other |
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20,443 |
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18,917 |
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Deferred taxes |
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687 |
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960 |
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Liabilities of discontinued operations |
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3,916 |
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5,341 |
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TOTAL CURRENT LIABILITIES |
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152,126 |
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163,889 |
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DEFERRED TAXES |
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39,694 |
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38,454 |
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STOCKHOLDERS' EQUITY: |
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Preferred stock, $.01 par value; 2,000,000 shares authorized; no |
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shares issued or outstanding in 2006 and 2005 |
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- |
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Common stock |
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Class A: $.01 par value; 47,337,700 shares authorized; |
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20,281,248 shares issued and 19,995,823 outstanding in 2006; |
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203 |
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203 | ||||||||||||||||||
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20,281,248 shares issued and 19,650,094 outstanding in 2005 |
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Class B: $.01 par value; 662,300 shares authorized; 662,296 |
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shares issued and outstanding in 2006 and 2005 |
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7 |
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7 | ||||||||||||||||||
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Additional paid-in capital |
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174,364 |
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183,733 | ||||||||||||||||||||
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Purchase price in excess of predecessor basis, net of tax benefit of |
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$10,306 |
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(15,458) |
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(15,458) | ||||||||||||||||||||
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Retained earnings |
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106,687 |
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97,557 | ||||||||||||||||||||
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Unearned compensation |
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- |
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(6,259) | |||||||||||||||||||
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Treasury stock, at cost (285,425 shares in 2006 and 631,154 |
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shares in 2005) |
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(7,957) |
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(17,708) | |||||||||||||||||||
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TOTAL STOCKHOLDERS' EQUITY |
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257,846 |
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242,075 | |||||||||||||||||||
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
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$ 449,666 |
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$ 444,418 | ||||||||||||||||||
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HUB GROUP, INC. |
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
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(in thousands) |
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Three Months Ended March 31, | |||||
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2006 |
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2005 |
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Cash flows from operating activities: |
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Income from continuing operations |
$ 8,474 |
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$ 4,713 |
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Adjustments to reconcile income from continuing operations to net cash |
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provided by operating activities: |
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Depreciation and amortization of property, equipment and intangibles |
2,175 |
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2,332 |
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Deferred taxes |
917 |
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2,558 |
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Compensation expense related to share based compensation plans |
771 |
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520 |
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Loss (Gain) on sale of assets |
26 |
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(12) |
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Other assets |
299 |
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511 |
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Changes in working capital net of effects of purchase transaction: |
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Restricted investments |
(586) |
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(661) |
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Accounts receivable, net |
18,172 |
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2,256 |
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Prepaid taxes |
(125) |
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- |
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Prepaid expenses and other current assets |
(1,628) |
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1,011 |
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Accounts payable |
(5,090) |
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381 |
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Accrued expenses |
(8,372) |
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(11,727) |
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Net cash provided by operating activities |
15,033 |
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1,882 |
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Cash flows from investing activities: |
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Proceeds from sale of equipment |
26 |
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12 |
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Purchases of property and equipment, net |
(1,047) |
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(932) |
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Cash used in acquisition of Comtrak, Inc. |
(40,491) |
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Net cash used in investing activities |
(41,512) |
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(920) |
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Cash flows from financing activities: |
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Proceeds from stock options exercised |
1,141 |
2,184 |
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Purchase of treasury stock |
(38) |
(5,599) |
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Excess tax benefits from share-based compensation |
4,767 |
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Net cash provided by (used in) financing activities |
5,870 |
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(3,415) |
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Cash flows from operating activities of discontinued operations |
1,822 |
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1,245 |
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Cash flows used in investing activities of discontinued operations |
(32) |
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(28) |
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Net cash provided by discontinued operations |
1,790 |
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1,217 |
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Net decrease in cash and cash equivalents |
(18,819) |
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(1,236) |
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Cash and cash equivalents beginning of period |
36,133 |
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16,806 |
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Cash and cash equivalents end of period |
$ 17,314 |
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$ 15,570 |
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Supplemental disclosures of cash flow information |
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Cash paid for: |
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Income taxes |
$ 91 |
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$ 333 |
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