Press Release

Hub Group, Inc. Reports Record Second Quarter 2016 Earnings

OAK BROOK, Ill., July 26, 2016 /PRNewswire/ -- Hub Group, Inc. (NASDAQ: HUBG) today announced financial results for the quarter ended June 30, 2016.

Hub Group reported net income of $20.7 million for the second quarter ended June 30, 2016 compared to $18.5 million in the second quarter of 2015.  Hub Group's diluted earnings per share was $0.61 for the quarter.  Earnings per share increased 20% when compared with the prior year period.  Hub Group's revenue decreased 5% to $856 million due primarily to lower fuel revenue. 

The Hub segment's revenue decreased 6% to $649 million due primarily to a decrease in fuel revenue.  Second quarter intermodal revenue decreased 6% to $438 million.  Intermodal volume decreased 2%.  Truck brokerage revenue decreased 11% to $83 million this quarter.  Second quarter Unyson Logistics revenue decreased 1% to $127 million.  The Hub segment's operating income was $27.2 million, an increase of 24% compared to the prior year period. 

The Mode segment's revenue decreased 1% to $232 million.  Operating income was $7.1 million compared to $7.5 million in the prior year period.

Hub Group ended the quarter with $164 million in cash.

CONFERENCE CALL

Hub Group will hold a conference call at 5:00 p.m. Eastern Time on Tuesday, July 26, 2016 to discuss its second 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=UVdYOgtaldUyqs. 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 and our report on Form 10-Q for the period ended March 31, 2016. 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


Six Months








Ended June 30,


Ended June 30,








2016


2015


2016


2015

Revenue




$ 855,557


$ 899,513


$ 1,661,416


$ 1,735,454















Transportation costs




741,067


797,784


1,438,539


1,544,597


Gross margin




114,490


101,729


222,877


190,857















Costs and expenses:












Salaries and benefits




43,602


38,837


87,465


78,313


Agent fees and commissions



18,360


16,686


35,262


31,512


General and administrative



16,083


14,763


32,727


28,834


Depreciation and amortization



2,148


1,967


4,283


3,927



Total costs and expenses



80,193


72,253


159,737


142,586















Operating income




34,297


29,476


63,140


48,271















Other income (expense):











Interest expense




(857)


(720)


(1,767)


(1,461)


Interest and dividend income



120


19


181


25


Other, net 




216


261


1,152


(1,143)



Total other expense




(521)


(440)


(434)


(2,579)















Income before provision for income taxes



33,776


29,036


62,706


45,692















Provision for income taxes



13,105


10,569


24,069


16,949















Net income




$  20,671


$  18,467


$     38,637


$     28,743





























Basic earnings per common share



$      0.61


$      0.51


$         1.12


$         0.80















Diluted earnings per common share



$      0.61


$      0.51


$         1.12


$         0.80















Basic weighted average number of shares outstanding


33,944


35,986


34,541


36,071

Diluted weighted average number of shares outstanding


34,027


36,075


34,575


36,122


 

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)






















Three Months








Ended June 30, 2016








Hub


Mode


Inter-Segment Elims


Hub Group Total

Revenue




$ 648,523


$ 231,924


$                (24,890)


$          855,557















Transportation costs




565,448


200,509


(24,890)


741,067


Gross margin




83,075


31,415


-


114,490















Costs and expenses:












Salaries and benefits




39,787


3,815


-


43,602


Agent fees and commissions



13


18,347


-


18,360


General and administrative



14,226


1,857


-


16,083


Depreciation and amortization



1,830


318


-


2,148



Total costs and expenses



55,856


24,337


-


80,193















Operating income




$  27,219


$    7,078


$                        -


$            34,297

 

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)






















Three Months








Ended June 30, 2015








Hub


Mode


Inter-Segment Elims


Hub Group Total

Revenue




$ 686,451


$ 233,847


$                (20,785)


$          899,513















Transportation costs




614,289


204,280


(20,785)


797,784


Gross margin




72,162


29,567


-


101,729















Costs and expenses:












Salaries and benefits




35,288


3,549


-


38,837


Agent fees and commissions



14


16,672


-


16,686


General and administrative



13,194


1,569


-


14,763


Depreciation and amortization



1,647


320


-


1,967



Total costs and expenses



50,143


22,110


-


72,253















Operating income




$  22,019


$    7,457


$                        -


$            29,476

 

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)






















Six Months








Ended June 30, 2016








Hub


Mode


Inter-Segment Elims


Hub Group Total

Revenue




$ 1,263,751


$ 440,755


$         (43,090)


$        1,661,416















Transportation costs




1,101,522


380,107


(43,090)


1,438,539


Gross margin




162,229


60,648


-


222,877















Costs and expenses:












Salaries and benefits




79,883


7,582


-


87,465


Agent fees and commissions



27


35,235


-


35,262


General and administrative



28,948


3,779


-


32,727


Depreciation and amortization



3,644


639


-


4,283



Total costs and expenses



112,502


47,235


-


159,737















Operating income




$     49,727


$  13,413


$                 -


$            63,140

 

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)






















Six Months








Ended June 30, 2015








Hub


Mode


Inter-Segment Elims


Hub Group Total

Revenue




$ 1,329,894


$ 447,369


$         (41,809)


$        1,735,454















Transportation costs




1,194,547


391,859


(41,809)


1,544,597


Gross margin




135,347


55,510


-


190,857















Costs and expenses:












Salaries and benefits




70,948


7,365


-


78,313


Agent fees and commissions



29


31,483


-


31,512


General and administrative



25,392


3,442


-


28,834


Depreciation and amortization



3,265


662


-


3,927



Total costs and expenses



99,634


42,952


-


142,586















Operating income




$     35,713


$  12,558


$                 -


$            48,271

 

HUB GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)































June 30,


December 31,









2016


2015









(unaudited)














ASSETS








CURRENT ASSETS:







Cash and cash equivalents

$    164,150


$       207,749



Accounts receivable trade, net

399,207


379,987



Accounts receivable other

3,917


10,344



Prepaid taxes



3,339


362



Deferred taxes



-


8,412



Prepaid expenses and other current assets

15,071


17,756





TOTAL CURRENT ASSETS

585,684


624,610













Restricted investments


19,991


21,108


Property and equipment, net

381,532


374,847


Other intangibles, net


12,491


13,139


Goodwill, net



262,485


262,594


Other assets



4,287


4,848





TOTAL ASSETS



$ 1,266,470


$    1,301,146























LIABILITIES AND STOCKHOLDERS' EQUITY





CURRENT LIABILITIES:







Accounts payable trade


$    251,815


$       230,432



Accounts payable other


24,841


21,495



Accrued payroll



22,883


33,020



Accrued other



38,005


38,733



Current portion of capital lease

2,648


2,608



Current portion of long term debt

35,430


32,409





TOTAL CURRENT LIABILITIES

375,622


358,697













Long term debt



94,968


100,895


Non-current liabilities


21,536


20,233


Long term portion of capital lease

11,962


13,299


Deferred taxes



159,319


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; 33,567,862 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


169,229


174,285



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






(15,458)


(15,458)



Retained earnings


699,395


660,758



Accumulated other comprehensive loss

(231)


(178)



Treasury stock; at cost, 7,656,930 shares in 2016 and 5,590,831 shares in 2015






(250,291)


(171,986)




TOTAL STOCKHOLDERS' EQUITY

603,063


647,840





TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$ 1,266,470


$    1,301,146

 

HUB GROUP, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)






















Six Months Ended










June 30,










2016


2015

























Cash flows from operating activities:






Net income




$   38,637


$   28,743


Adjustments to reconcile net income







to net cash provided by operating activities:








Depreciation and amortization 


21,426


17,526




Deferred taxes



7,777


2,489




Compensation expense related to share-based compensation plans

4,245


4,110




Gain on sale of assets



(255)


(60)




Excess tax benefits from share-based compensation


132


(33)


Changes in operating assets and liabilities:








Restricted investments



1,117


(295)




Accounts receivable, net


(12,826)


(11,407)




Prepaid taxes



(2,977)


13,284




Prepaid expenses and other current assets


2,685


3,030




Other assets




561


216




Accounts payable



24,740


15,132




Accrued expenses



(14,031)


8,943




Non-current liabilities



1,211


(1,226)





Net cash provided by operating activities



72,442


80,452













Cash flows from investing activities:






Proceeds from sale of equipment


1,148


136


Purchases of property and equipment


(25,217)


(23,716)





Net cash used in investing activities


(24,069)


(23,580)













Cash flows from financing activities:






Proceeds from issuance of debt


13,274


18,548


Repayments of long term debt


(16,180)


(10,938)


Stock tendered for payments of withholding taxes


(2,379)


(2,877)


Purchase of treasury stock



(85,000)


(13,419)


Capital lease payments



(1,297)


(1,243)


Excess tax benefits from share-based compensation


(359)


89





Net cash used in financing activities


(91,941)


(9,840)


























Effect of exchange rate changes on cash and cash equivalents


(31)


(21)













Net (decrease) increase in cash and cash equivalents


(43,599)


47,011

Cash and cash equivalents beginning of period


207,749


109,769

Cash and cash equivalents end of period


$ 164,150


$ 156,780

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/hub-group-inc-reports-record-second-quarter-2016-earnings-300304112.html

SOURCE Hub Group, Inc.

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