Press Release

Hub Group, Inc. Reports Fourth Quarter Earnings per Share of $0.41 Excluding One-Time Benefit for Effective Tax Rate

OAK BROOK, Ill., Feb. 4, 2015 /PRNewswire/ -- Hub Group, Inc. (NASDAQ: HUBG) today announced financial results for the quarter and year ended December 31, 2014.

Hub Group reported net income of $16.4 million for the fourth quarter ended December 31, 2014. Hub Group's diluted earnings per share was $0.45 for the fourth quarter of 2014.  Hub Group's fourth quarter income included a one-time benefit of $1.5 million related to changes in state tax apportionment. Excluding the effect of this item, non-GAAP earnings per share was $0.41 for the quarter (see table below). Hub Group's revenue increased 3% to $915 million.

The Hub segment's revenue increased 2% to $696 million.  Fourth quarter intermodal revenue decreased 1% to $464 million.  Truck brokerage revenue decreased 2% to $84 million this quarter.  Fourth quarter Unyson Logistics revenue increased 14% to $148 million.  The Hub segment's operating income was $19 million

The Mode segment's revenue increased 14% to $245 million for the fourth quarter.  Operating income was $6 million, an increase of 22% compared to the prior year period.

FULL YEAR 2014

Income for the year ended December 31, 2014 was $52 millionHub Group's diluted earnings per share for 2014 was $1.40.  Full year 2014 pre-tax income included one-time costs of $10.3 million for driver settlements and related costs, a non-cash impairment charge of $11.9 million associated with the write off of software development costs and the one-time $1.5 million benefit related to changes in state tax apportionment.  Excluding the effects of these items, non-GAAP earnings per share was $1.73 for the year (see table below).    Hub Group's revenue increased 6% to $3.6 billion.

Hub Group ended the year with $110 million in cash.

CONFERENCE CALL

Hub will hold a conference call at 5:00 p.m. Eastern Time on Wednesday, February 4, 2015 to discuss its fourth quarter and full year results and provide 2015 guidance.       

Hosting the conference call will be David Yeager, Chairman and Chief Executive Officer, Mark Yeager, Vice-Chairman, President and Chief Operating Officer, and Terri Pizzuto, Executive Vice-President, Chief Financial Officer and Treasurer.

This call is being webcast and can be accessed through the Investors link on Hub Group's Web site at www.hubgroup.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 (888) 206-4074.  The conference call participant code is 38766345#.  Participants may pre-register for the call at http://www.yourconferencecenter.com/r.aspx?p=1&a=UUEApQvuMvrAlX.   Pre-registrants will be issued a passcode and pin number to use when dialing into the live call which will provide quick access to the conference, bypassing the operator.  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 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 offices and independent agents 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 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'sSEC reports including, but not limited to, our annual report on Form 10-K for the year ended December 31, 2013 and our report on Form 10-Q for the period ended September 30, 2014. Hub Group assumes no liability to update any such forward-looking statements.

HUB GROUP, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)














Three Months


Twelve Months




Ended December 31,


Ended December 31,




2014


2013


2014


2013

Revenue

$ 915,361


$ 885,252


$ 3,571,126


$ 3,373,898











Transportation costs

825,451


790,164


3,200,691


3,002,875


Gross margin

89,910


95,088


370,435


371,023











Costs and expenses:









Salaries and benefits

32,964


33,868


136,480


135,341


Agent fees and commissions

16,239


14,272


62,041


55,789


General and administrative

14,033


15,096


58,014


56,772


Depreciation and amortization

1,897


1,697


7,799


6,470


Driver settlements and related costs

-


-


10,343


-


Impairment of software

-


-


11,881


-


Impairment of trade name

-


2,904


-


2,904



Total costs and expenses

65,133


67,837


286,558


257,276











Operating income

24,777


27,251


83,877


113,747











Other income (expense):









Interest expense

(619)


(328)


(1,785)


(1,246)


Interest and dividend income

11


13


32


82


Other, net 

(66)


(5)


(257)


(28)



Total other expense

(674)


(320)


(2,010)


(1,192)











Income before provision for income taxes

24,103


26,931


81,867


112,555











Provision for income taxes

7,747


10,395


30,309


43,445











Net income

$  16,356


$  16,536


$     51,558


$     69,110











Basic earnings per common share

$      0.45


$      0.45


$         1.41


$         1.88











Diluted earnings per common share

$      0.45


$      0.45


$         1.40


$         1.87











Basic weighted average number of shares outstanding

36,350


36,719


36,590


36,829

Diluted weighted average number of shares outstanding

36,533


36,942


36,732


36,982

 


 

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)














Three Months




Ended December 31, 2014




Hub


Mode


Inter-Segment
Elims


Hub Group
Consolidated

Revenue

$ 695,507


$ 245,266


$         (25,412)


$      915,361











Transportation costs

633,131


217,732


(25,412)


825,451


Gross margin

62,376


27,534


-


89,910











Costs and expenses:









Salaries and benefits

29,285


3,679


-


32,964


Agent fees and commissions

14


16,225


-


16,239


General and administrative

12,408


1,625


-


14,033


Depreciation and amortization

1,556


341


-


1,897



Total costs and expenses

43,263


21,870


-


65,133











Operating income

19,113


5,664


-


24,777



HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)














Three Months




Ended December 31, 2013




Hub


Mode


Inter-Segment
Elims


Hub Group
Consolidated

Revenue

$ 683,614


$ 214,357


$         (12,719)


$      885,252











Transportation costs

613,198


189,685


(12,719)


790,164


Gross margin

70,416


24,672


-


95,088











Costs and expenses:









Salaries and benefits

30,219


3,649


-


33,868


Agent fees and commissions

148


14,124


-


14,272


General and administrative

13,383


1,713


-


15,096


Depreciation and amortization

1,157


540


-


1,697


Impairment of trade name

2,904


-


-


2,904



Total costs and expenses

47,811


20,026


-


67,837

Operating income











22,605


4,646


-


27,251

 

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)














Twelve Months




Ended December 31, 2014




Hub


Mode


Inter-Segment
Elims


Hub Group
Consolidated

Revenue

$ 2,722,799


$ 931,131


$         (82,804)


$   3,571,126











Transportation costs

2,461,144


822,351


(82,804)


3,200,691


Gross margin

261,655


108,780


-


370,435











Costs and expenses:









Salaries and benefits

122,097


14,383


-


136,480


Agent fees and commissions

45


61,996


-


62,041


General and administrative

51,108


6,906


-


58,014


Depreciation and amortization

6,238


1,561


-


7,799


Driver settlements and related costs

10,343






10,343


Impairment of software

11,881


-


-


11,881



Total costs and expenses

201,712


84,846


-


286,558











Operating income

59,943


23,934


-


83,877



HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)














Twelve Months




Ended December 31, 2013




Hub


Mode


Inter-Segment
Elims


Hub Group
Consolidated

Revenue

$ 2,599,763


$ 823,159


$         (49,024)


$   3,373,898











Transportation costs

2,325,512


726,387


(49,024)


3,002,875


Gross margin

274,251


96,772


-


371,023











Costs and expenses:









Salaries and benefits

120,478


14,863


-


135,341


Agent fees and commissions

1,372


54,417


-


55,789


General and administrative

50,484


6,288


-


56,772


Depreciation and amortization

4,326


2,144


-


6,470


Impairment of trade name

2,904


-


-


2,904



Total costs and expenses

179,564


77,712


-


257,276

Operating income











94,687


19,060


-


113,747

 

UNAUDITED NON-GAAP TO GAAP RECONCILIATION

(earnings per share)




















Three Months


Twelve Months


Ended, December 31,


Ended, December 31,




Change

Change




Change

Change


2014

2013

$

%


2014

2013

$

%











Diluted GAAP EPS

$  0.45

$  0.45

$     -

0.0%


$  1.40

$  1.87

$ (0.47)

-25.1%











Impairment of trade name, net of tax

-

0.05

(0.05)



-

0.05

(0.05)












Driver settlements & related costs, net of tax

-

-

-



0.17

-

0.17












Impairment of software, net of tax

-

-

-



0.20

-

0.20












Benefit related to changes in state tax apportionment 

(0.04)

-

(0.04)



(0.04)

-

(0.04)












Diluted NON-GAAP EPS (adjusted)

$  0.41

$  0.50

$ (0.09)

-18.0%


$  1.73

$  1.92

$ (0.19)

-9.9%











Diluted shares

36,533

36,942




36,732

36,982



 

In accordance with U.S. generally accepted accounting principles (GAAP), reported earnings per share include the after-tax impact of the items identifiable in this table. For internal purposes, Hub excludes these items from results when evaluating operating performance.  This table and Hub's internal use of non-GAAP earnings per share are not intended to imply, and should not be interpreted as implying, that non-GAAP earnings per share is a better measure of performance than GAAP earnings per share.

HUB GROUP, INC.

UNAUDITED CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)






















December 31,


December 31,






2014


2013









ASSETS





CURRENT ASSETS:






Cash and cash equivalents

$       109,769


$         68,964



Accounts receivable trade, net

401,803


371,528



Accounts receivable other

24,886


26,569



Prepaid taxes

14,937


409



Deferred taxes

4,816


5,826



Prepaid expenses and other current assets

14,355


12,738





TOTAL CURRENT ASSETS

570,566


486,034











Restricted investments

21,944


20,754



Property and equipment, net

338,327


260,400



Other intangibles, net

14,434


15,729



Goodwill, net

262,813


263,032



Other assets

4,043


1,994





   TOTAL ASSETS

$    1,212,127


$    1,047,943

















LIABILITIES AND STOCKHOLDERS' EQUITY





CURRENT LIABILITIES:






Accounts payable trade

$       256,345


$       232,350



Accounts payable other

21,333


24,957



Accrued payroll

16,192


17,000



Accrued other

43,523


42,834



Current portion of capital lease

2,504


2,413



Current portion of long term debt

19,619


1,771





TOTAL CURRENT LIABILITIES

359,516


321,325










Long term debt

72,460


6,475


Non-current liabilities

22,929


22,304


Long term portion of capital lease

15,937


18,477


Deferred taxes

140,501


117,835










STOCKHOLDERS' EQUITY:






Preferred stock, $.01 par value; 2,000,000 shares authorized; no shares issued or outstanding in 2014 and 2013

 

-


-



Common stock







Class A: $.01 par value; 97,337,700 shares authorized and 41,224,792 shares issued in 2014 and 2013; 36,247,324 shares outstanding in 2014 and 36,626,384 shares outstanding in 2013

412


412




Class B:  $.01 par value; 662,300 shares authorized; 662,296 shares issued and outstanding in 2014 and 2013

7


7



Additional paid-in capital

171,235


167,357



Purchase price in excess of predecessor basis, net of tax benefit of $10,306

(15,458)


(15,458)



Retained earnings

589,809


538,251



Accumulated other comprehensive loss

(77)


(85)



Treasury stock; at cost, 4,977,468 shares in 2014 and 4,598,408 shares in 2013

(145,144)


(128,957)




TOTAL STOCKHOLDERS' EQUITY

600,784


561,527





TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$    1,212,127


$    1,047,943

 

HUB GROUP, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)














Twelve Months Ended






December 31,






2014


2013

















Cash flows from operating activities:





Net income

$   51,558


$   69,110


Adjustments to reconcile net income to net cash provided by operating activities:







Depreciation and amortization 

29,380


21,302




Impairment of software

11,881


-




Impairment of trade name

-


2,904




Deferred taxes

24,501


16,438




Compensation expense related to share-based compensation plans

8,258


7,667




Gain on sale of assets

(46)


(167)




Excess tax benefits from share based compensation

-


(13)


Changes in operating assets and liabilities:







Restricted investments

(1,190)


(3,536)




Accounts receivable, net

(28,621)


(25,420)




Prepaid taxes

(14,533)


(308)




Prepaid expenses and other current assets

(1,621)


(2,137)




Other assets

(2,047)


(682)




Accounts payable

20,370


27,635




Accrued expenses

367


1,736




Non-current liabilities

284


2,888





Net cash provided by operating activities

98,541


117,417









Cash flows from investing activities:





Proceeds from sale of equipment

612


1,837


Purchases of property and equipment

(119,171)


(110,917)





Net cash used in investing activities

(118,559)


(109,080)









Cash flows from financing activities:





Proceeds from issuance of debt

91,084


9,120


Repayments of long term debt

(7,251)


(874)


Proceeds from stock options exercised

-


41


Stock tendered for payments of withholding taxes

(3,195)


(2,634)


Purchase of treasury stock

(18,024)


(13,791)


Capital lease payments

(2,449)


(2,329)


Excess tax benefits from share-based compensation

652


336





Net cash provided by (used in) financing activities

60,817


(10,131)


















Effect of exchange rate changes on cash and cash equivalents

6


(2)









Net increase (decrease) in cash and cash equivalents

40,805


(1,796)

Cash and cash equivalents beginning of the year

68,964


70,760

Cash and cash equivalents end of the year

$ 109,769


$   68,964

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/hub-group-inc-reports-fourth-quarter-earnings-per-share-of-041-excluding-one-time-benefit-for-effective-tax-rate-300030966.html

SOURCE Hub Group, Inc.

Maralee Volchko, Hub Group, Inc., +1-630-271-3745