Hub Group, Inc. Reports Record First Quarter 2016 Earnings per Share of $0.51

04/26/16

OAK BROOK, Ill., April 26, 2016 /PRNewswire/ -- Hub Group, Inc. (NASDAQ: HUBG) today announced financial results for the quarter ended March 31, 2016.

Hub Group reported net income of $18.0 million for the first quarter ended March 31, 2016 compared to $10.3 million for the first quarter of 2015. Hub Group's diluted earnings per share was $0.51 for the quarter. Earnings per share increased 82% when compared with the prior year period. Hub Group's pre-tax income included one-time costs of $4.1 million including $3.1 million of costs related to the closure of the Hub Group Trucking terminal in Los Angeles and $1.0 million of severance resulting from management changes. Excluding the effect of these items, non-GAAP earnings per share was $0.58 for the quarter (see table below). Hub Group's revenue decreased 4% to $806 million due to lower fuel revenue.

The Hub segment's revenue decreased 4% to $615 million due primarily to a decrease in fuel revenue. First quarter intermodal revenue decreased 2% to $414 million. Intermodal volume increased 1%. Truck brokerage revenue decreased 9% to $81 million this quarter. First quarter Unyson Logistics revenue decreased 10% to $120 million. The Hub segment's operating income was $22.5 million.

The Mode segment's revenue decreased 2% to $209 million. Operating income was $6.3 million, an increase of 24% compared to the prior year period.

Hub Group ended the quarter with $200 million in cash.

CONFERENCE CALL

Hub Group will hold a conference call at 5:00 p.m. Eastern Time on Tuesday, April 26, 2016 to discuss its first quarter results.

Hosting the conference call will be Dave Yeager, Chairman and Chief Executive Officer. Also participating on the call will be Don Maltby, President and Chief Operating Officer, and Terri Pizzuto, Executive Vice-President and Chief Financial Officer.

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 register at http://www.yourconferencecenter.com/r.aspx?p=1&a=UWPVrIWNdEuuMN. Registrants will be issued a passcode and PIN to use when dialing into the live call which will provide quickest access to the conference. You may register at any time, including up to and after the call start time. On the day of the call, dial (888) 771-4384 approximately ten minutes prior to the scheduled call time; enter the participant passcode and PIN received during registration. 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 transportation management company that provides multi-modal solutions throughout North America, including intermodal, truck brokerage and logistics services. As a publicly traded company with over $3.5 billion in revenue, Hub Group's organization of over 2,500 employees delivers innovative, customer-focused solutions and industry leading service to help customers better control supply chains and their costs. For more information, visit www.hubgroup.com.

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, 2015. 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
			Ended March 31,
			2016	2015
Revenue			$ 805,859	$ 835,941

Transportation costs			697,472	746,813
	Gross margin		108,387	89,128

Costs and expenses:
	Salaries and benefits		43,863	39,476
	Agent fees and commissions		16,901	14,826
	General and administrative		16,644	14,071
	Depreciation and amortization		2,136	1,960
		Total costs and expenses	79,544	70,333

Operating income			28,843	18,795

Other income (expense):
	Interest expense		(911)	(741)
	Interest and dividend income		61	6
	Other, net		936	(1,404)
		Total other income (expense)	86	(2,139)

Income before provision for income taxes			28,929	16,656

Provision for income taxes			10,964	6,380

Net income			$ 17,965	$ 10,276

Basic earnings per common share			$ 0.51	$ 0.28

Diluted earnings per common share			$ 0.51	$ 0.28

Basic weighted average number of shares outstanding			35,137	36,156
Diluted weighted average number of shares outstanding			35,122	36,169

HUB GROUP, INC.
UNAUDITED FINANCIAL INFORMATION BY SEGMENT
(in thousands)

			Three Months
			Ended March 31, 2016
			Hub	Mode	Inter-Segment Elims	Hub Group Consolidated
Revenue			$ 615,227	$ 208,832	$ (18,200)	$ 805,859

Transportation costs			536,073	179,599	(18,200)	697,472
	Gross margin		79,154	29,233	-	108,387

Costs and expenses:
	Salaries and benefits		40,096	3,767	-	43,863
	Agent fees and commissions		13	16,888	-	16,901
	General and administrative		14,722	1,922	-	16,644
	Depreciation and amortization		1,815	321	-	2,136
		Total costs and expenses	56,646	22,898	-	79,544

Operating income			22,508	6,335	-	28,843

HUB GROUP, INC.
UNAUDITED FINANCIAL INFORMATION BY SEGMENT
(in thousands)

			Three Months
			Ended March 31, 2015
			Hub	Mode	Inter-Segment Elims	Hub Group Consolidated
Revenue			$ 643,443	$ 213,522	$ (21,024)	$ 835,941

Transportation costs			580,258	187,579	(21,024)	746,813
	Gross margin		63,185	25,943	-	89,128

Costs and expenses:
	Salaries and benefits		35,660	3,816	-	39,476
	Agent fees and commissions		15	14,811	-	14,826
	General and administrative		12,198	1,873	-	14,071
	Depreciation and amortization		1,618	342	-	1,960
		Total costs and expenses	49,491	20,842	-	70,333

Operating income			13,694	5,101	-	18,795

HUB GROUP, INC.
UNAUDITED NON-GAAP TO GAAP RECONCILIATION
(earnings per share)

	Three Months
	Ended, March 31,
			Change	Change
	2016	2015	$	%

Diluted GAAP EPS	$ 0.51	$ 0.28	$ 0.23	82.1%

Hub Group Trucking Los Angeles shutdown costs, net of tax	0.05	-	0.05

Severance costs, net of tax	0.02	0.02	-

Canadian currency translation loss, net of tax	-	0.02	(0.02)

Diluted non-GAAP EPS (adjusted)	$ 0.58	$ 0.32	$ 0.26	81.3%

Diluted shares	35,122	36,169

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.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)


					March 31,	December 31,
					2016	2015
					(unaudited)
ASSETS
	CURRENT ASSETS:
		Cash and cash equivalents			$ 200,256	$ 207,749
		Accounts receivable trade, net			365,149	379,987
		Accounts receivable other			3,848	10,344
		Prepaid taxes			336	362
		Deferred taxes			-	8,412
		Prepaid expenses and other current assets			16,347	17,756
			TOTAL CURRENT ASSETS		585,936	624,610

	Restricted investments				19,423	21,108
	Property and equipment, net				379,484	374,847
	Other intangibles, net				12,815	13,139
	Goodwill, net				262,540	262,594
	Other assets				4,448	4,848
			TOTAL ASSETS		$ 1,264,646	$ 1,301,146


LIABILITIES AND STOCKHOLDERS' EQUITY
	CURRENT LIABILITIES:
		Accounts payable trade			$ 234,196	$ 230,432
		Accounts payable other			23,150	21,495
		Accrued payroll			14,355	33,020
		Accrued other			54,469	38,733
		Current portion of capital lease			2,624	2,608
		Current portion of long term debt			32,524	32,409
			TOTAL CURRENT LIABILITIES		361,318	358,697

	Long term debt				92,648	100,895
	Non-current liabilities				20,754	20,233
	Long term portion of capital lease				12,640	13,299
	Deferred taxes				154,039	160,182

	STOCKHOLDERS' EQUITY:
		Preferred stock, $.01 par value; 2,000,000 shares authorized;
			no shares issued or outstanding in 2016 and 2015		-	-
		Common stock
			Class A: $.01 par value; 97,337,700 shares authorized and 41,224,792 shares issued in 2016 and 2015; 34,675,173 shares outstanding in 2016 and 35,633,961 shares outstanding in 2015

					412	412
			Class B: $.01 par value; 662,300 shares authorized; 662,296 shares issued and outstanding in 2016 and 2015
					7	7
		Additional paid-in capital			166,803	174,285
		Purchase price in excess of predecessor basis, net of tax
		benefit of $10,306			(15,458)	(15,458)
		Retained earnings			678,723	660,758
		Accumulated other comprehensive loss			(177)	(178)
		Treasury stock; at cost, 6,549,619 shares in 2016
			and 5,590,831 shares in 2015		(207,063)	(171,986)
			TOTAL STOCKHOLDERS' EQUITY		623,247	647,840
				TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 1,264,646	$ 1,301,146

HUB GROUP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

						Three Months Ended
						March 31,
						2016	2015


Cash flows from operating activities:
	Net income					$ 17,965	$ 10,276
	Adjustments to reconcile net income
		to net cash provided by operating activities:
			Depreciation and amortization			10,639	8,731
			Deferred taxes			2,383	1,593
			Compensation expense related to share-based compensation plans			2,181	2,034
			Gain on sale of assets			(83)	-
			Excess tax benefits from share-based compensation			(30)	(13)
	Changes in operating assets and liabilities:
			Restricted investments			1,685	98
			Accounts receivable, net			21,332	2,874
			Prepaid taxes			26	4,557
			Prepaid expenses and other current assets			1,409	(3,246)
			Other assets			400	330
			Accounts payable			5,421	13,414
			Accrued expenses			(13,517)	5,733
			Non-current liabilities			481	(1,052)
					Net cash provided by operating activities	50,292	45,329

Cash flows from investing activities:
	Proceeds from sale of equipment					592	26
	Purchases of property and equipment					(4,893)	(15,057)
				Net cash used in investing activities		(4,301)	(15,031)

Cash flows from financing activities:
	Proceeds from issuance of debt					-	11,480
	Repayments of long term debt					(8,132)	(5,553)
	Stock tendered for payments of withholding taxes					(2,208)	(2,754)
	Purchase of treasury stock					(42,368)	(13,419)
	Capital lease payments					(643)	(605)
	Excess tax benefits from share-based compensation					(134)	42
				Net cash used in financing activities		(53,485)	(10,809)


	Effect of exchange rate changes on cash and cash equivalents					1	3

Net (decrease) increase in cash and cash equivalents						(7,493)	19,492
Cash and cash equivalents beginning of period						207,749	109,769
Cash and cash equivalents end of period						$ 200,256	$ 129,261

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/hub-group-inc-reports-record-first-quarter-2016-earnings-per-share-of-051-300257600.html

SOURCE Hub Group, Inc.

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

Press Releases

Hub Group, Inc. Reports Record First Quarter 2016 Earnings per Share of $0.51