Press Release

Hub Group, Inc. Reports Record Fourth Quarter 2015 Earnings & Announces Share Repurchase Program

OAK BROOK, Ill., Feb. 3, 2016 /PRNewswire/ -- Hub Group, Inc. (NASDAQ: HUBG) today announced financial results for the quarter and year ended December 31, 2015.

Hub Group reported net income of $22.4 million for the fourth quarter ended December 31, 2015 compared to $16.4 million in the fourth quarter of 2014.  Hub Group's diluted earnings per share was $0.63 in the fourth quarter of 2015 compared to earnings per share of $0.45 in fourth quarter of 2014.  Hub Group's revenue decreased 3% to $890 million compared to fourth quarter 2014 revenue.  The revenue decline related primarily to lower fuel revenue.

The Hub segment's revenue decreased 4% to $669 million compared to fourth quarter 2014 revenue.  Fourth quarter intermodal revenue decreased 4% to $446 million.  Truck brokerage revenue increased 6% to $89 million this quarter.  Fourth quarter Unyson Logistics revenue decreased 10% to $134 million.  Operating income was $28.4 million, an increase of 49% compared to the prior year period.

The Mode segment's revenue decreased 1% to $242 million compared to fourth quarter 2014 revenue.  Operating income was $6.9 million, an increase of 22% compared to the prior year period.

Hub Group, Inc. announced today that the Board of Directors has authorized the purchase of up to $100 million of its Class A common stock.  This authorization expires in December 2016.

FULL YEAR 2015

Income for the year ended December 31, 2015 was $71 millionHub Group's diluted earnings per share for 2015 was $1.97.  Full year 2015 pre-tax income included one-time costs of $2.3 million including a $1.4 million Canadian currency translation loss and $0.9 million of severance in the first quarter.  Excluding the effects of these items, non-GAAP earnings per share was $2.01 for the year (see table below).  Hub Group's revenue decreased 1% to $3.5 billion.

Hub Group ended the quarter with $208 million in cash.

CONFERENCE CALL

Hub will hold a conference call at 5:00 p.m. Eastern Time on Wednesday, February 3, 2016 to discuss its fourth quarter and full year 2015 results and provide 2016 guidance. 

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=UPglXcxOTHkGPE. 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) 771-4371 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 earnings guidance, 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, the annual report on Form 10-K for the year ended December 31, 2014 and the report on Form 10-Q for the period ended September 30, 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



Twelve Months Ended



Ended December 31,



December 31,



2015



2014



2015



2014


















Revenue

$

890,272



$

915,361



$

3,525,595



$

3,571,126


Transportation costs


773,498




825,451




3,112,900




3,200,691


Gross margin


116,774




89,910




412,695




370,435


















Costs and expenses:
















Salaries and benefits


44,268




32,964




158,938




136,480


Agent fees and commissions


19,350




16,239




68,724




62,041


General and administrative


15,720




14,033




60,015




58,014


Depreciation and amortization


2,095




1,897




7,988




7,799


Driver settlements and related costs


-




-




-




10,343


Impairment of software


-




-




-




11,881


Total costs and expenses


81,433




65,133




295,665




286,558


















Operating income


35,341




24,777




117,030




83,877


















Other income (expense):
















Interest expense


(753)




(619)




(2,971)




(1,785)


Interest and dividend income


36




11




83




32


Other, net


(465)




(66)




(2,560)




(257)


Total other expense


(1,182)




(674)




(5,448)




(2,010)


















Income before provision for income taxes


34,159




24,103




111,582




81,867


















Provision for income taxes


11,785




7,747




40,633




30,309


















Net income

$

22,374



$

16,356



$

70,949



$

51,558


































Basic earnings per common share

$

0.63



$

0.45



$

1.98



$

1.41


















Diluted earnings per common share

$

0.63



$

0.45



$

1.97



$

1.40


















Basic weighted average number of shares outstanding


35,595




36,350




35,876




36,590


Diluted weighted average number of shares outstanding


35,726




36,533




35,968




36,732


 

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)





Three Months



Ended December 31, 2015









Inter-


Hub









Segment


Group



Hub


Mode


Elims


Total


Revenue

$

668,865


$

241,917


$

(20,510)


$

890,272


Transportation costs


584,569



209,439



(20,510)



773,498


Gross margin


84,296



32,478



-



116,774















Costs and expenses:













Salaries and benefits


40,128



4,140



-



44,268


Agent fees and commissions


13



19,337



-



19,350


General and administrative


13,972



1,748



-



15,720


Depreciation and amortization


1,775



320



-



2,095


Total costs and expenses


55,888



25,545



-



81,433















Operating income

$

28,408


$

6,933


$

-


$

35,341


 

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)





Three Months



Ended December 31, 2014









Inter-


Hub









Segment


Group



Hub


Mode


Elims


Total


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)





Twelve Months



Ended December 31, 2015









Inter-


Hub









Segment


Group



Hub


Mode


Elims


Total


Revenue

$

2,679,318


$

928,661


$

(82,384)


$

3,525,595


Transportation costs


2,385,197



810,087



(82,384)



3,112,900


Gross margin


294,121



118,574



-



412,695















Costs and expenses:













Salaries and benefits


143,993



14,945



-



158,938


Agent fees and commissions


56



68,668



-



68,724


General and administrative


53,023



6,992



-



60,015


Depreciation and amortization


6,688



1,300



-



7,988


Driver settlements and related costs


-



-



-



-


Impairment of software


-



-



-



-


Total costs and expenses


203,760



91,905



-



295,665















Operating income

$

90,361


$

26,669


$

-


$

117,030


 

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)





Twelve Months



Ended December 31, 2014









Inter-


Hub









Segment


Group



Hub


Mode


Elims


Total


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 NON-GAAP TO GAAP RECONCILIATION
(earnings per share)



Twelve Months Ended,December 31,



2015


2014


Change $


Change %


















Diluted GAAP EPS

$

1.97



$

1.40



$

0.57




40.7%


















Driver settlements and related costs, net of tax

$

-



$

0.17



$

(0.17)






















Impairment of Software, net of tax

$

-



$

0.20



$

(0.20)






















Canadian currency loss, net of tax

$

0.02



$

-



$

0.02






















Severance cost, net of tax

$

0.02



$

-



$

0.02






















Diluted NON-GAAP EPS (adjusted)

$

2.01



$

1.77



$

0.24




13.6%


















Diluted Shares


35,968




36,732










 

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)




December 31,



2015



2014


ASSETS


unaudited






CURRENT ASSETS:








Cash and cash equivalents

$

207,749



$

109,769


Accounts receivable trade, net


379,987




401,803


Accounts receivable other


10,344




24,886


Prepaid taxes


362




14,937


Deferred taxes


8,412




4,816


Prepaid expenses and other current assets


17,756




14,355


TOTAL CURRENT ASSETS


624,610




570,566










Restricted investments


21,108




21,944


Property and equipment, net


374,847




338,327


Other intangibles, net


13,139




14,434


Goodwill, net


262,594




262,813


Other assets


4,848




4,043


TOTAL ASSETS

$

1,301,146



$

1,212,127










LIABILITIES AND STOCKHOLDERS' EQUITY








CURRENT LIABILITIES:








Accounts payable trade

$

230,432



$

256,345


Accounts payable other


21,495




21,333


Accrued payroll


33,020




16,192


Accrued other


38,733




43,523


Current portion of capital lease


2,608




2,504


Current portion of long term debt


32,409




19,619


TOTAL CURRENT LIABILITIES


358,697




359,516










Long term debt


100,895




72,460


Non-current liabilities


20,233




22,929


Long term portion of capital lease


13,299




15,937


Deferred taxes


160,182




140,501










STOCKHOLDERS' EQUITY:








Preferred stock, $.01 par value;  2,000,000 shares authorized;  no shares issued or outstanding in 2015 and 2014

-



-


Common stock








Class A:  $.01 par value;  97,337,700 shares authorized and 41,224,792 shares issued in 2015 and 2014; 35,633,961 shares outstanding in 2015 and 36,247,324 shares outstanding in 2014


412




412


Class B:  $.01 par value; 662,300 shares authorized; 662,296 shares issued and outstanding in 2015 and 2014


7




7


Additional paid-in capital


174,285




171,235


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


(15,458)




(15,458)


Retained earnings


660,758




589,809


Accumulated other comprehensive loss


(178)




(77)


Treasury stock; at cost, 5,590,831 shares in 2015 and 4,977,468 shares in 2014


(171,986)




(145,144)


TOTAL STOCKHOLDERS' EQUITY


647,840




600,784


TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

1,301,146



$

1,212,127


 

HUB GROUP, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)



Years Ended December 31,



2015



2014


Cash flows from operating activities:








    Net Income

$

70,949



$

51,558


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








       Depreciation and amortization


37,042




29,380


       Impairment of software


-




11,881


       Deferred taxes


16,378




24,501


       Compensation expense related to share-based compensation plans


7,833




8,258


       Gain on sale of assets


(129)




(46)


       Excess tax benefits from share based compensation


(81)




-


       Changes in operating assets and liabilities:








          Restricted investments


836




(1,190)


          Accounts receivable, net


36,373




(28,621)


          Prepaid taxes


14,575




(14,533)


          Prepaid expenses and other current assets


(3,401)




(1,621)


          Other assets


(805)




(2,047)


          Accounts payable


(25,736)




20,370


          Accrued expenses


20,505




367


          Non-current liabilities


(2,642)




284


            Net cash provided by operating activities


171,697




98,541










Cash flows from investing activities:








   Proceeds from sale of equipment


2,309




612


   Purchases of property and equipment


(83,042)




(119,171)


            Net cash used in investing activities


(80,733)




(118,559)










Cash flows from financing activities:








   Proceeds from issuance of debt


64,442




91,084


   Repayments of long term debt


(23,217)




(7,251)


   Stock tendered for payments of withholding taxes


(2,916)




(3,195)


   Purchase of treasury stock


(28,823)




(18,024)


   Capital lease payments


(2,534)




(2,449)


   Excess tax benefits from share-based compensation


195




652


            Net cash provided by financing activities


7,147




60,817


















   Effect of exchange rate changes on cash and cash equivalents


(131)




6










Net increase in cash and cash equivalents


97,980




40,805


Cash and cash equivalents beginning of the year


109,769




68,964


Cash and cash equivalents end of the year

$

207,749



$

109,769


 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/hub-group-inc-reports-record-fourth-quarter-2015-earnings--announces-share-repurchase-program-300214755.html

SOURCE Hub Group, Inc.

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