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

02/04/15

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 million.  Hub 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