EX-99.1 2 hubgroupq2pressrelease.htm HUB GROUP EARNINGS PRESS RELEASE hubgroupq2pressrelease.htm
Exhibit 99.1

Hub Group, Inc. Reports Record Second Quarter 2007 Revenue and Earnings

DOWNERS GROVE, IL, July 19, 2007, -- Hub Group, Inc. (NASDAQ: HUBG) today reported record income from continuing operations for the quarter ended June 30, 2007 of $13.8 million, a 13% increase versus income from continuing operations for the second quarter of 2006. Hub Group’s diluted earnings per share from continuing operations was $0.35 for the second quarter of 2007.  This represents an increase of 21% compared to last year's second quarter diluted earnings per share from continuing operations of $0.29.  Hub Group’s operating margin increased to 5.5% in 2007 from 5.0% in 2006 due to yield enhancement efforts and improved operational efficiencies including in-house drayage.

Hub Group’s revenue increased 1.6% to $401.6 million compared to $395.3 million in the second quarter of 2006.  Second quarter intermodal revenue increased 5.2% to $300.9 million.  Truck brokerage revenue decreased 6.3% to $73.2 million this quarter.  Second quarter logistics revenue decreased 12.2% to $27.5 million.  Gross margin from continuing operations increased 4.1% to $57.8 million compared to the second quarter of 2006.


FULL YEAR 2007

Given the current operating environment, we are comfortable that the earnings for 2007 will be within the current analysts’ range of $1.36 to $1.46 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 Thursday, July 19, 2007 to discuss its second quarter results.

Hosting the conference call will be David P. Yeager, Vice-Chairman and Chief Executive Officer and Terri A. Pizzuto, Executive 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.earnings.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) 299-0433. The conference call participant code is 41587483. 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, 2006 and the report on Form 10-Q for the period ended March 31, 2007.  Hub Group assumes no liability to update any such forward-looking statements.



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,
  
                         
   
2007
    
2006
    
2007
    
2006
  
                         
Revenue
   $
401,565
     $
395,296
     $
794,862
     $
752,060
  
Transportation costs
    
343,802
      
339,805
      
680,438
      
649,196
  
Gross margin
    
57,763
      
55,491
      
114,424
      
102,864
  
                                 
Costs and expenses:
                                
Salaries and benefits
    
24,177
      
24,425
      
49,787
      
47,306
  
General and administrative
    
10,218
      
9,726
      
21,819
      
18,695
  
Depreciation and amortization
    
1,203
      
1,528
      
2,375
      
3,387
  
Total costs and expenses
    
35,598
      
35,679
      
73,981
      
69,388
  
                                 
Operating income
    
22,165
      
19,812
      
40,443
      
33,476
  
                                 
Other income (expense):
                                
Interest expense
     (24 )     (25 )     (45 )     (43 )
Interest income
    
611
      
552
      
1,256
      
998
  
Other, net
    
55
      
26
      
58
      
56
  
Total other income
    
642
      
553
      
1,269
      
1,011
  
                                 
Income from continuing operations before provision for income taxes
    
22,807
      
20,365
      
41,712
      
34,487
  
                                 
Provision for income taxes
    
9,032
      
8,146
      
16,518
      
13,795
  
                                 
Income from continuing operations
    
13,775
      
12,219
      
25,194
      
20,692
  
                                 
Discontinued operations:
                                
Income from discontinued operations of HGDS
    
-
      
540
      
-
      
1,634
  
Provision for income taxes
    
-
      
216
      
-
      
653
  
Income from discontinued operations
    
-
      
324
      
-
      
981
  
                                 
Net income
   $
13,775
     $
12,543
     $
25,194
     $
21,673
  
                                 
Basic earnings per common share
                                
Income from continuing operations
   $
0.35
     $
0.30
     $
0.64
     $
0.51
  
Income from discontinued operations
   $
-
     $
0.01
     $
-
     $
0.03
  
Net income
   $
0.35
     $
0.31
     $
0.64
     $
0.54
  
                                 
Diluted earnings per common share
                                
Income from continuing operations
   $
0.35
     $
0.29
     $
0.64
     $
0.50
  
Income from discontinued operations
   $
-
     $
0.01
     $
-
     $
0.02
  
Net income
   $
0.35
     $
0.30
     $
0.64
     $
0.52
  
                                 
Basic weighted average number of shares outstanding
    
39,043
      
40,768
      
39,150
      
40,482
  
Diluted weighted average number of shares outstanding
    
39,538
      
41,607
      
39,652
      
41,455
  



HUB GROUP, INC.
  
CONSOLIDATED BALANCE SHEETS
  
(in thousands, except share amounts)
  
       
   
June 30,
2007
    
December 31,
2006
  
ASSETS
  
(unaudited)
        
CURRENT ASSETS:
            
Cash and cash equivalents
   $
52,380
     $
43,491
  
Accounts receivable
                
Trade, net
    
154,254
      
158,284
  
Other
    
10,732
      
8,369
  
Prepaid taxes
    
86
      
2,119
  
Deferred taxes
    
3,667
      
3,433
  
Prepaid expenses and other current assets
    
4,795
      
4,450
  
TOTAL CURRENT ASSETS
    
225,914
      
220,146
  
                 
Restricted investments
    
4,803
      
3,017
  
Property and equipment, net
    
30,511
      
26,974
  
Other intangibles, net
    
7,279
      
7,502
  
Goodwill, net
    
225,448
      
225,448
  
Other assets
    
1,457
      
1,461
  
TOTAL ASSETS
   $
495,412
     $
484,548
  
LIABILITIES AND STOCKHOLDERS' EQUITY
                
CURRENT LIABILITIES:
                
Accounts payable
                
Trade
   $
112,933
     $
117,676
  
Other
    
6,035
      
6,839
  
Accrued expenses
                
Payroll
    
11,855
      
18,294
  
Other
    
34,041
      
26,617
  
       Related party payable
    
-
      
5,000
  
TOTAL CURRENT LIABILITIES
    
164,864
      
174,426
  
Non-current liabilities
    
12,934
      
7,691
  
Deferred taxes
    
41,792
      
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 38,827,937 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
    
176,830
      
179,203
  
Purchase price in excess of predecessor basis, net of tax benefit of $10,306
     (15,458 )     (15,458 )
Retained earnings
    
171,437
      
146,243
  
Treasury stock; at cost, 2,396,855 shares in 2007 and 2,281,670 shares in 2006
     (57,406 )     (51,563 )
TOTAL STOCKHOLDERS' EQUITY
    
275,822
      
258,844
  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
   $
495,412
     $
484,548
  




HUB GROUP, INC.
  
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
  
(in thousands)
  
   
Six Months Ended June 30,
  
   
2007
    
2006
  
Cash flows from operating activities:
            
    Income from continuing operations
   $
25,194
     $
20,692
  
    Adjustments to reconcile income from continuing operations to net cash
                
     provided by operating activities:
                
       Depreciation and amortization
    
3,706
      
4,233
  
       Deferred taxes
    
3,034
      
296
  
       Compensation expense related to share-based compensation plans
    
1,923
      
1,708
  
       (Gain) loss on sale of assets
     (117 )    
12
  
    Changes in operating assets and liabilities excluding effects of purchase transaction:
                
          Restricted investments
     (1,786 )     (849 )
          Accounts receivable, net
    
1,667
      
11,179
  
          Prepaid taxes
    
2,033
      
4,962
  
          Prepaid expenses and other current assets
     (345 )     (1,340 )
          Other assets
    
4
      
239
  
          Accounts payable
     (5,547 )     (4,148 )
          Accrued expenses
    
985
       (2,552 )
          Non-current liabilities
    
180
      
-
  
            Net cash provided by operating activities
    
30,931
      
34,432
  
Cash flows from investing activities:
                
   Proceeds from sale of equipment
    
550
      
179
  
   Purchases of property and equipment
     (7,453 )     (2,364 )
   Cash used in acquisition of Comtrak, Inc.
     (5,000 )     (39,883 )
   Proceeds from the disposal of discontinued operations
    
-
      
12,203
  
            Net cash used in investing activities
     (11,903 )     (29,865 )
Cash flows from financing activities:
                
   Proceeds from stock options exercised
    
329
      
1,905
  
   Purchase of treasury stock
     (12,898 )     (173 )
   Excess tax benefits from share-based compensation
    
2,430
      
7,797
  
            Net cash (used in) provided by financing activities
     (10,139 )    
9,529
  
                 
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 increase in cash and cash equivalents
    
8,889
      
15,906
  
Cash and cash equivalents beginning of period
    
43,491
      
36,133
  
Cash and cash equivalents end of period
   $
52,380
     $
52,039