SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
Amendment No. 1
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported) May 6, 2002
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.)
377 E. Butterfield Road, Suite 700, Lombard, IL 60148
(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 4. Changes In Registrant's Certifying Accountant.
On May 6, 2002, Hub Group, Inc. ("Hub") decided to dismiss its independent
auditors, Arthur Andersen LLP ("Arthur Andersen"), and to engage Ernst &
Young LLP to serve as its new independent auditors for 2002. The change in
auditors will become effective May 13, 2002. This determination was made by
Hub's Audit Committee upon the recommendation of Hub's management.
Arthur Andersen's reports on Hub's consolidated financial statements for
each of the years ended December 31, 2001 and December 31, 2000 did not
contain an adverse opinion or disclaimer of opinion, nor were they
qualified or modified as to uncertainty, audit scope or accounting
principles. Arthur Andersen was unable to review the quarterly financial
data from 2001 and 2000 in accordance with standards established by the
American Institute of Certified Public Accountants because Hub did not
restate its results on a quarterly basis.
During the years ended December 31, 2001 and 2000 and the interim period
between December 31, 2001 and May 13, 2002, there were no disagreements
between Hub and Arthur Andersen on any matter of accounting principles or
practices, financial statement disclosure or auditing scope or procedure
which, if not resolved to Arthur Andersen's satisfaction, would have caused
them to make reference to the subject matter of the disagreement in
connection with their report on such years.
In January 2002, Hub learned that its 65% owned subsidiary, Hub Group
Distribution Services ("HGDS"), was having difficulties reconciling its
general ledger balances for several accounts, including cash, accounts
payable and accounts receivable. HGDS was formed in 1990 to perform certain
specialized logistics and distribution functions. Hub currently owns 65% of
HGDS, while an unaffiliated third party, the former President of HGDS, owns
the remaining 35%. HGDS is located in Arlington Heights, IL, approximately
20 miles from Hub's headquarters in Lombard, IL. Since these business lines
are unique to HGDS, HGDS maintained its own office space, information
technology systems and accounting software. Unlike Hub's other
subsidiaries, which are all wholly-owned and which centralized their
accounting function in Lombard in 2001, HGDS maintains its own accounting
department. The HGDS accounting department regularly reported its financial
results to Hub, who then incorporated these results into its consolidated
financial reports.
After a preliminary investigation into the nature of the problem, which
included consultation with auditors from Arthur Andersen and attorneys at
Mayer, Brown, Rowe & Maw, Hub retained a team of outside accounting
professionals, working under the direction of Hub's Chief Financial
Officer, to assist it in reconciling the HGDS accounts and reconstructing
the HGDS balance sheet. Based on the work this team performed, Hub
determined that HGDS' December 31, 2001 balance sheet was incorrect,
resulting in HGDS' net income being overstated. After completely recreating
HGDS' 1999, 2000 and 2001 year-end balance sheets, Hub determined that
Hub's 1999 financial results were overstated by $1.4 million and its 2000
financial results were overstated by $1.9 million on an after-tax,
post-minority interest basis, which Hub reflected by restating the
financial results for those years. Additional adjustments were necessary to
properly reflect the results of 2001, but since Hub had not yet finalized
its results for 2001, Hub did not need to restate its 2001 results. Due to
time constraints and cost, Hub did not restate its results on a quarterly
basis, therefore the adjustments to properly reflect Hub's results were
made in the fourth quarter of each of 1999, 2000 and 2001.
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In the early stages of the investigation, Arthur Andersen notified Hub's
Audit Committee that there was a material weakness with the internal
controls at HGDS. Arthur Andersen also advised Hub that previously issued
financial results for the years 1999, 2000 and 2001 and previously issued
audit reports for 1999 and 2000 should not be relied upon. Following Hub's
restatement of its financial statements for those years, the financial
statements were audited by Arthur Andersen. At the conclusion of its audit,
Arthur Andersen issued unqualified opinions on Hub's restated financial
results for the years 1999, 2000, and 2001. Arthur Andersen was unable to
review the quarterly financial data from 2001 and 2000 in accordance with
standards established by the American Institute of Certified Public
Accountants because Hub did not restate its results on a quarterly basis.
Hub announced the restated results for 1999 and 2000 and its results for
2001 in a press release on March 19, 2002.
In addition to the work resulting in the restatement of its 1999 and 2000
financial statements, Hub, with the assistance of outside counsel,
conducted an investigation into the cause of the accounting problems at
HGDS. Hub has concluded that the accounting problems at HGDS resulted from
several factors, including (1) systems problems associated with HGDS'
implementation of multiple financial accounting and operating systems; (2)
the rapid growth of HGDS' business beginning in late 1998; (3) weaknesses
in internal controls at HGDS; and (4) inadequate oversight by the HGDS
management.
Hub has already taken numerous steps to address these problems and is
reviewing other possible measures intended to ensure that similar
accounting problems will not arise in the future.
There were no other reportable events as defined in Item 304(a)(1)(v) of
Regulation S-K.
Hub has provided Arthur Andersen with a copy of the foregoing disclosures.
Attached as Exhibit 16.1 is a copy of Arthur Andersen's letter, dated June
11, 2002, stating its agreement with such statements.
During the years ended December 31, 2001 and 2000 and through May 13, 2002,
neither Hub nor anyone acting on its behalf consulted Ernst and Young LLP
with respect to the application of accounting principles to a specified
transaction, either completed or proposed, or the type of audit opinion
that might be rendered on Hub's consolidated financials statements, or any
other matters or reportable events listed in Items 304(a)(2)(i) and (ii) of
Regulation S-K.
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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.
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: June 11, 2002 /s/ JAY E. PARKER
------------------------------------
By: Jay E. Parker
Its: Vice President - Finance,
Chief Financial Officer and
Treasurer
EXHIBIT INDEX
Exhibit No. Description
16.1 Letter from Arthur Andersen LLP regarding change
in certifying accountant