Delaware
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36-4007085
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(State
or other jurisdiction of incorporation or organization)
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(I.R.S.
Employer Identification No.)
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Page
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PART
I. Financial Information:
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Hub
Group, Inc. - Registrant
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Condensed
Consolidated Balance Sheets – March 31, 2008 (unaudited) and December 31,
2007
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3
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Unaudited
Condensed Consolidated Statements of Income - Three Months Ended
March 31,
2008 and 2007
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4
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Unaudited
Condensed Consolidated Statement of Stockholders’ Equity - Three Months
Ended
March
31, 2008
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5
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Unaudited
Condensed Consolidated Statements of Cash Flows - Three Months Ended
March
31, 2008 and 2007
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6
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Notes
to Unaudited Condensed Consolidated Financial Statements
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7
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Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
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9
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Quantitative
and Qualitative Disclosures related to Market Risk
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14
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Controls
and Procedures
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14
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PART
II. Other Information
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15
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Item 1. Financial Statements | ||||||||
HUB
GROUP, INC.
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||||||||
UNAUDITED
CONSOLIDATED BALANCE SHEETS
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||||||||
(in
thousands, except share amounts)
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||||||||
March
31,
2008
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December
31,
2007
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|||||||
ASSETS
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||||||||
CURRENT
ASSETS:
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||||||||
Cash
and cash equivalents
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$ | 38,878 | $ | 38,002 | ||||
Accounts
receivable
|
||||||||
Trade,
net
|
164,170 | 160,944 | ||||||
Other
|
7,325 | 9,828 | ||||||
Prepaid
taxes
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86 | 86 | ||||||
Deferred
taxes
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3,945 | 5,044 | ||||||
Prepaid
expenses and other current assets
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3,740 | 4,318 | ||||||
TOTAL
CURRENT ASSETS
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218,144 | 218,222 | ||||||
Restricted
investments
|
7,452 | 5,206 | ||||||
Property
and equipment, net
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28,858 | 29,662 | ||||||
Other
intangibles, net
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6,945 | 7,056 | ||||||
Goodwill,
net
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230,448 | 230,448 | ||||||
Other
assets
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1,237 | 1,373 | ||||||
TOTAL
ASSETS
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$ | 493,084 | $ | 491,967 | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
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||||||||
CURRENT
LIABILITIES:
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||||||||
Accounts
payable
|
||||||||
Trade
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$ | 123,815 | $ | 123,020 | ||||
Other
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8,387 | 6,683 | ||||||
Accrued
expenses
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||||||||
Payroll
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8,372 | 16,446 | ||||||
Other
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27,157 | 33,063 | ||||||
Related
party payable
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- | 5,000 | ||||||
TOTAL
CURRENT LIABILITIES
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167,731 | 184,212 | ||||||
Non-current
liabilities
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9,407 | 9,708 | ||||||
Deferred
taxes
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49,281 | 47,148 | ||||||
STOCKHOLDERS'
EQUITY:
|
||||||||
Preferred
stock, $.01 par value; 2,000,000 shares
authorized; no shares issued or outstanding in 2008 and
2007
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- | - | ||||||
Common
stock
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||||||||
Class
A: $.01 par value; 97,337,700 shares authorized and
41,224,792 shares issued in 2008 and 2007; 36,975,979
outstanding in 2008 and 36,666,731 outstanding in 2007
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412 | 412 | ||||||
Class
B: $.01 par value; 662,300 shares authorized; 662,296 shares
issued and outstanding in 2008 and 2007
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7 | 7 | ||||||
Additional
paid-in capital
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171,401 | 176,657 | ||||||
Purchase
price in excess of predecessor basis, net of tax benefit of
$10,306
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(15,458 | ) | (15,458 | ) | ||||
Retained
earnings
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219,177 | 206,042 | ||||||
Treasury
stock; at cost, 4,248,813 shares in 2008 and 4,558,061 shares in
2007
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(108,874 | ) | (116,761 | ) | ||||
TOTAL
STOCKHOLDERS' EQUITY
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266,665 | 250,899 | ||||||
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY
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$ | 493,084 | $ | 491,967 |
HUB
GROUP, INC.
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||||||||
UNAUDITED
CONSOLIDATED STATEMENTS OF INCOME
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||||||||
(in
thousands, except per share amounts)
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||||||||
Three
Months
|
||||||||
Ended
March 31,
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||||||||
2008
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2007
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|||||||
Revenue
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$ | 424,995 | $ | 393,297 | ||||
Transportation
costs
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367,493 | 336,636 | ||||||
Gross
margin
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57,502 | 56,661 | ||||||
Costs
and expenses:
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||||||||
Salaries
and benefits
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25,363 | 25,610 | ||||||
General
and administrative
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10,150 | 11,601 | ||||||
Depreciation
and amortization
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1,001 | 1,172 | ||||||
Total
costs and expenses
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36,514 | 38,383 | ||||||
Operating
income
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20,988 | 18,278 | ||||||
Other
income (expense):
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||||||||
Interest
expense
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(26 | ) | (21 | ) | ||||
Interest
and dividend income
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338 | 645 | ||||||
Other,
net
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95 | 3 | ||||||
Total
other income
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407 | 627 | ||||||
Income
before provision for income taxes
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21,395 | 18,905 | ||||||
Provision
for income taxes
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8,260 | 7,486 | ||||||
Net
income
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$ | 13,135 | $ | 11,419 | ||||
Basic
earnings per common share
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$ | 0.35 | $ | 0.29 | ||||
Diluted
earnings per common share
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$ | 0.35 | $ | 0.29 | ||||
Basic
weighted average number of shares outstanding
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37,101 | 39,257 | ||||||
Diluted
weighted average number of shares outstanding
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37,405 | 39,766 |
HUB
GROUP, INC
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||||
UNAUDITED
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
|
||||
For
the three months ended March 31, 2008
|
||||
(in
thousands, except shares)
|
||||
March
31,
|
||||
2008
|
||||
Class
A & B Common Stock Shares Outstanding
|
||||
Beginning
of year
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37,329,027 | |||
Purchase
of treasury shares
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(24,785 | ) | ||
Treasury
shares issued for restricted stock and stock options
exercised
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334,033 | |||
Ending
balance
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37,638,275 | |||
Class
A & B Common Stock Amount
|
||||
Beginning
of year
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$ | 419 | ||
Ending
balance
|
419 | |||
Additional
Paid-in Capital
|
||||
Beginning
of year
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176,657 | |||
Exercise
of non-qualified stock options
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(2,855 | ) | ||
Share-based
compensation expense
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1,171 | |||
Tax
benefit of share-based compensation plans
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1,817 | |||
Issuance
of restricted stock awards, net of forfeitures
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(5,389 | ) | ||
Ending
balance
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171,401 | |||
Purchase
Price in Excess of Predecessor Basis, Net of Tax
|
||||
Beginning
of year
|
(15,458 | ) | ||
Ending
balance
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(15,458 | ) | ||
Retained
Earnings
|
||||
Beginning
of year
|
206,042 | |||
Net
income
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13,135 | |||
Ending
balance
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219,177 | |||
Treasury
Stock
|
||||
Beginning
of year
|
(116,761 | ) | ||
Purchase
of treasury shares
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(672 | ) | ||
Issuance
of restricted stock and exercise of stock options
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8,559 | |||
Ending
balance
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(108,874 | ) | ||
Total
stockholders’ equity
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$ | 266,665 |
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,
|
||||||||
2008
|
2007
|
|||||||
Cash
flows from operating activities:
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||||||||
Net
income
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$ | 13,135 | $ | 11,419 | ||||
Adjustments
to reconcile net income to net cash
|
||||||||
provided
by operating activities:
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||||||||
Depreciation
and amortization
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1,706 | 1,804 | ||||||
Deferred
taxes
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3,232 | 1,652 | ||||||
Compensation
expense related to share-based compensation plans
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1,171 | 960 | ||||||
Loss
on sale of assets
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29 | 2 | ||||||
Changes
in operating assets and liabilities:
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||||||||
Restricted
investments
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(2,246 | ) | (1,261 | ) | ||||
Accounts
receivable, net
|
(723 | ) | 7,803 | |||||
Prepaid
taxes
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- | 2,033 | ||||||
Prepaid
expenses and other current assets
|
578 | (2,344 | ) | |||||
Other
assets
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136 | 30 | ||||||
Accounts
payable
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2,499 | (6,416 | ) | |||||
Accrued
expenses
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(13,980 | ) | (5,631 | ) | ||||
Deferred
compensation
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(301 | ) | (637 | ) | ||||
Net
cash provided by operating activities
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5,236 | 9,414 | ||||||
Cash
flows from investing activities:
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||||||||
Proceeds
from sale of equipment
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29 | 15 | ||||||
Purchases
of property and equipment
|
(849 | ) | (2,078 | ) | ||||
Cash
used in acquisition of Comtrak, Inc.
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(5,000 | ) | (5,000 | ) | ||||
Net
cash used in investing activities
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(5,820 | ) | (7,063 | ) | ||||
Cash
flows from financing activities:
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||||||||
Proceeds
from stock options exercised
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315 | 248 | ||||||
Purchase
of treasury stock
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(672 | ) | (12,740 | ) | ||||
Excess
tax benefits from share-based compensation
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1,817 | 1,380 | ||||||
Net
cash provided by (used in) financing activities
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1,460 | (11,112 | ) | |||||
Net
increase (decrease) in cash and cash equivalents
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876 | (8,761 | ) | |||||
Cash
and cash equivalents beginning of period
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38,002 | 43,491 | ||||||
Cash
and cash equivalents end of period
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$ | 38,878 | $ | 34,730 | ||||
Supplemental
disclosures of cash paid for:
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||||||||
Interest
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$ | 26 | $ | 21 | ||||
Income
taxes
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$ | 4,018 | $ | 232 |
Three
Months Ended
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Three
Months Ended
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|||||||||||||||||||||||
March
31, 2008
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March
31, 2007
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|||||||||||||||||||||||
(000's) | (000's) | |||||||||||||||||||||||
Income
|
Shares
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Per
Share Amount
|
Income
|
Shares
|
Per
Share Amount
|
|||||||||||||||||||
Basic
EPS
|
||||||||||||||||||||||||
Net
Income
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$ | 13,135 | 37,101 | $ | 0.35 | $ | 11,419 | 39,257 | $ | 0.29 | ||||||||||||||
Effect
of Dilutive Securities
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||||||||||||||||||||||||
Stock
options and restricted stock
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- | 304 | - | - | 509 | - | ||||||||||||||||||
Diluted
EPS
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||||||||||||||||||||||||
Net
Income plus assumed exercises and restricted stock
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$ | 13,135 | 37,405 | $ | 0.35 | $ | 11,419 | 39,766 | $ | 0.29 |
·
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the
degree and rate of market growth in the domestic intermodal, truck
brokerage and logistics markets served by
us;
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·
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deterioration
in our relationships with existing railroads or adverse changes to
the
railroads’ operating rules;
|
·
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changes
in rail service conditions or adverse weather
conditions;
|
·
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further
consolidation of railroads;
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·
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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;
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·
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changes
in rail, drayage and trucking company
capacity;
|
·
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railroads
moving away from ownership of intermodal
assets;
|
·
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equipment
shortages or equipment surplus;
|
·
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changes
in the cost of services from rail, drayage, truck or other
vendors;
|
·
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increases
in costs for independent contractors due to regulatory, judicial
and legal
changes;
|
·
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labor
unrest in the rail, drayage or trucking company
communities;
|
·
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general
economic and business conditions;
|
·
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significant
deterioration in our customer’s financial condition, particularly in the
retail sector;
|
·
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fuel
shortages or fluctuations in fuel
prices;
|
·
|
increases
in interest rates;
|
·
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changes
in homeland security or terrorist
activity;
|
·
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difficulties
in maintaining or enhancing our information technology
systems;
|
·
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changes
to or new governmental regulation;
|
·
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loss
of several of our largest
customers;
|
·
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inability
to recruit and retain key
personnel;
|
·
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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
|
||||||||||||
March
31,
|
||||||||||||
2008
|
2007
|
%
Change
|
||||||||||
Revenue
|
||||||||||||
Intermodal
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$ | 302,771 | $ | 287,833 | 5.2 | % | ||||||
Truck
brokerage
|
89,908 | 75,017 | 19.9 | |||||||||
Logistics
|
32,316 | 30,447 | 6.1 | |||||||||
Total
Revenue
|
$ | 424,995 | $ | 393,297 | 8.1 | % |
Three
Months Ended
|
||||||||
March
31,
|
||||||||
2008
|
2007
|
|||||||
Revenue
|
100.0 | % | 100.0 | % | ||||
Transportation
costs
|
86.5 | 85.6 | ||||||
Gross
margin
|
13.5 | 14.4 | ||||||
Costs
and expenses:
|
||||||||
Salaries
and benefits
|
6.0 | 6.5 | ||||||
General
and administration
|
2.4 | 3.0 | ||||||
Depreciation
and amortization
|
0.2 | 0.3 | ||||||
Total
costs and expenses
|
8.6 | 9.8 | ||||||
Operating
income
|
4.9 | 4.6 | ||||||
Other
income:
|
||||||||
Interest
and dividend income
|
0.1 | 0.2 | ||||||
Total
other income
|
0.1 | 0.2 | ||||||
Income
before provision for income taxes
|
5.0 | 4.8 | ||||||
Provision
for income taxes
|
1.9 | 1.9 | ||||||
Net
income
|
3.1 | % | 2.9 | % |
2008
|
$ | 14,720 | ||
2009
|
17,877 | |||
2010
|
15,453 | |||
2011
|
13,930 | |||
2012
|
12,297 | |||
2013
and thereafter
|
5,451 | |||
$ | 79,728 |
2008
|
$ | 103 | ||
2009
|
798 | |||
2010
|
1,622 | |||
2011
|
519 | |||
2012
|
582 | |||
2013
and thereafter
|
6,428 | |||
$ | 10,052 |
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
29
|
-- | -- | -- | 75,000 | ||||||||||||
March
1 to
March
31
|
-- | -- | -- | 75,000 | ||||||||||||
Total
|
-- | -- | -- | $ | 75,000 |
HUB GROUP, INC. | |||
Date: April
28, 2008
|
By:
|
/s/ Terri A. Pizzuto | |
Name: Terri A. Pizzuto | |||
Title: Executive Vice President, Chief Financial Officer | |||
and Treasurer |
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.
|