Press Release

Hub Group, Inc. Reports Record Third Quarter 2015 Earnings

OAK BROOK, Ill., Oct. 28, 2015 /PRNewswire/ -- Hub Group, Inc. (NASDAQ: HUBG) today announced financial results for the quarter ended September 30, 2015.

Hub Group reported net income of $19.8 million for the third quarter ended September 30, 2015 compared to $4.5 million in the third quarter of 2014.  Hub Group's diluted earnings per share was $0.55 for the third quarter of 2015 compared to earnings per share of $0.12 in third quarter of 2014.  Excluding the effect of one time costs, non-GAAP earnings per share was $0.49 for the third quarter of 2014 (see table below).  Hub Group's revenue decreased 1% to $900 million.  The revenue decline related primarily to lower fuel revenue.

The Hub segment's revenue decreased 2% to $681 million.  Third quarter intermodal revenue decreased 0.2% to $460 million.  Truck brokerage revenue was flat at $84 million this quarter.  Third quarter Unyson Logistics revenue decreased 7% to $137 million.   

The Mode segment's revenue decreased 2% to $239 million.  Operating income was $7.2 million, an increase of 2% compared to the prior year period.

Hub Group ended the quarter with $184 million in cash.

CONFERENCE CALL
Hub will hold a conference call at 5:00 p.m. Eastern Time on Wednesday, October 28, 2015 to discuss its third 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=UofPMhPZfVRwAI.  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) 206-4074 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 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 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 June 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


Nine Months








Ended September 30,


Ended September 30,








2015


2014


2015


2014

Revenue


$ 899,869


$ 913,386


$ 2,635,323


$ 2,655,765















Transportation costs


794,805


820,190


2,339,402


2,375,240


Gross margin


105,064


93,196


295,921


280,525















Costs and expenses:










Salaries and benefits


36,357


30,868


114,670


103,516


Agent fees and commissions


17,862


16,592


49,374


45,802


General and administrative


15,461


13,868


44,295


43,981


Depreciation and amortization


1,966


1,967


5,893


5,902


Driver settlements and related costs


-


10,343


-


10,343


Impairment of software


-


11,881


-


11,881



Total costs and expenses


71,646


85,519


214,232


221,425















Operating income




33,418


7,677


81,689


59,100















Other income (expense):











Interest expense



(757)


(361)


(2,218)


(1,166)


Interest and dividend income


22


(4)


47


21


Other, net 


(952)


39


(2,095)


(191)



Total other expense


(1,687)


(326)


(4,266)


(1,336)















Income before provision for income taxes


31,731


7,351


77,423


57,764















Provision for income taxes


11,899


2,860


28,848


22,562















Net income


$   19,832


$     4,491


$      48,575


$      35,202











































Basic earnings per common share


$       0.55


$       0.12


$          1.35


$          0.96















Diluted earnings per common share


$       0.55


$       0.12


$          1.35


$          0.96















Basic weighted average number of shares outstanding


35,769


36,676


35,970


36,670

Diluted weighted average number of shares outstanding


35,903


36,858


36,049


36,799

 

 

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)






















Three Months








Ended September 30, 2015








Hub


Mode


Inter-Segment Elims


Hub Group Total

Revenue


$       680,559


$       239,375


$           (20,065)


$       899,869















Transportation costs


606,081


208,789


(20,065)


794,805


Gross margin


74,478


30,586


-


105,064















Costs and expenses:










Salaries and benefits


32,917


3,440


-


36,357


Agent fees and commissions


14


17,848


-


17,862


General and administrative


13,659


1,802


-


15,461


Depreciation and amortization


1,647


319


-


1,966


Driver settlements and related costs


-


-


-


-


Impairment of software


-


-


-


-



Total costs and expenses


48,237


23,409


-


71,646















Operating income


$        26,241


$          7,177


$                   -


$        33,418

 

 

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)






















Three Months








Ended September 30, 2014








Hub


Mode


Inter-Segment Elims


Hub Group Total

Revenue


$       691,835


$       245,421


$           (23,870)


$       913,386















Transportation costs


627,752


216,308


(23,870)


820,190


Gross margin


64,083


29,113


-


93,196















Costs and expenses:










Salaries and benefits


27,428


3,440


-


30,868


Agent fees and commissions


15


16,577


-


16,592


General and administrative


12,144


1,724


-


13,868


Depreciation and amortization


1,627


340


-


1,967


Driver settlements and related costs


10,343


-


-


10,343


Impairment of software


11,881


-


-


11,881



Total costs and expenses


63,438


22,081


-


85,519















Operating income


$             645


$          7,032


$                   -


$          7,677

 

 

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)






















Nine Months








Ended September 30, 2015








Hub


Mode


Inter-Segment Elims


Hub Group Total

Revenue


$    2,010,453


$       686,744


$          (61,874)


$    2,635,323















Transportation costs


1,800,628


600,648


(61,874)


2,339,402


Gross margin


209,825


86,096


-


295,921















Costs and expenses:










Salaries and benefits


103,865


10,805


-


114,670


Agent fees and commissions


43


49,331


-


49,374


General and administrative


39,051


5,244


-


44,295


Depreciation and amortization


4,912


981


-


5,893


Driver settlements and related costs


-


-


-


-


Impairment of software


-


-


-


-



Total costs and expenses


147,871


66,361


-


214,232















Operating income


$        61,954


$        19,735


$                  -


$        81,689

 

 

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)






















Nine Months








Ended September 30, 2014








Hub


Mode


Inter-Segment Elims


Hub Group Total

Revenue


$    2,027,293


$       685,865


$          (57,393)


$    2,655,765















Transportation costs


1,828,014


604,619


(57,393)


2,375,240


Gross margin


199,279


81,246


-


280,525















Costs and expenses:










Salaries and benefits


92,812


10,704


-


103,516


Agent fees and commissions


31


45,771


-


45,802


General and administrative


38,701


5,280


-


43,981


Depreciation and amortization


4,682


1,220


-


5,902


Driver settlements and related costs


10,343


-


-


10,343


Impairment of software


11,881


-


-


11,881



Total costs and expenses


158,450


62,975


-


221,425















Operating income


$        40,829


$        18,271


$                  -


$        59,100

 

 

HUB GROUP, INC.

UNAUDITED NON-GAAP TO GAAP RECONCILIATION

(earnings per share)




















Three Months


Nine Months


Ended, September 30,


Ended, September 30,




Change

Change




Change

Change


2015

2014

$

%


2015

2014

$

%











Diluted GAAP EPS

$   0.55

$     0.12

$   0.43

358.3%


$   1.35

$   0.96

$   0.39

40.6%











Driver settlements and related costs, net of tax

$         -

$     0.17

$ (0.17)



$         -

$   0.17

$ (0.17)












Impairment of Software, net of tax

$         -

$     0.20

$ (0.20)



$         -

$   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)

$   0.55

$     0.49

$   0.06

12.2%


$   1.39

$   1.33

$   0.06

4.5%











Diluted Shares

35,903

36,858




36,049

36,799



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)































September 30,


December 31,









2015


2014









(unaudited)



ASSETS





CURRENT ASSETS:






Cash and cash equivalents

$         183,547


$         109,769



Accounts receivable trade, net

411,849


401,803



Accounts receivable other

9,206


24,886



Prepaid taxes

1,358


14,937



Deferred taxes

7,712


4,816



Prepaid expenses and other current assets

15,797


14,355





TOTAL CURRENT ASSETS

629,469


570,566













Restricted investments

20,555


21,944


Property and equipment, net

350,726


338,327


Other intangibles, net

13,463


14,434


Goodwill, net

262,649


262,813


Other assets

4,099


4,043






TOTAL ASSETS

$      1,280,961


$      1,212,127























LIABILITIES AND STOCKHOLDERS' EQUITY





CURRENT LIABILITIES:







Accounts payable trade


$         273,284


$         256,345



Accounts payable other


25,726


21,333



Accrued payroll

21,037


16,192



Accrued other

45,920


43,523



Current portion of capital lease

2,584


2,504



Current portion of long term debt

25,929


19,619





TOTAL CURRENT LIABILITIES

394,480


359,516













Long term debt

80,690


72,460


Non-current liabilities

19,562


22,929


Long term capital lease

13,974


15,937


Deferred taxes

148,754


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; 35,698,057 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

169,979


171,235



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

(15,458)


(15,458)





Retained earnings

638,384


589,809



Accumulated other comprehensive loss

(177)


(77)



Treasury stock; at cost, 5,526,735 shares in 2015 and 4,977,468 shares in 2014






(169,646)


(145,144)




TOTAL STOCKHOLDERS' EQUITY

623,501


600,784





TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$      1,280,961


$      1,212,127

 

 

HUB GROUP, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)






















Nine Months Ended










September 30,










2015


2014

























Cash flows from operating activities:






Net income




$        48,575


$        35,202


Adjustments to reconcile net income







to net cash provided by operating activities:








Depreciation and amortization 


26,662


21,165




Impairment of software


-


11,881




Deferred taxes



5,757


8,288




Compensation expense related to share-based compensation plans

5,843


6,238




Gain on sale of assets



(116)


(20)




Excess tax benefits from share-based compensation


(40)


-


Changes in operating assets and liabilities:








Restricted investments



1,389


(875)




Accounts receivable, net


6,540


(49,102)




Prepaid taxes



13,579


(5,794)




Prepaid expenses and other current assets


(1,442)


(7,104)




Other assets




(56)


(1,572)




Accounts payable



21,308


38,281




Accrued expenses



8,337


2,581




Non-current liabilities



(3,505)


(534)






Net cash provided by operating activities


132,831


58,635













Cash flows from investing activities:






Proceeds from sale of equipment


922


420


Purchases of property and equipment


(40,951)


(75,881)





Net cash used in investing activities


(40,029)


(75,461)













Cash flows from financing activities:






Proceeds from issuance of debt


31,376


49,268


Repayments of long term debt


(16,836)


(4,198)


Stock tendered for payments of withholding taxes


(2,902)


(3,184)


Purchase of treasury stock



(28,823)


-


Capital lease payments



(1,883)


(1,632)


Excess tax benefits from share-based compensation


166


434





Net cash (used in) provided by financing activities


(18,902)


40,688


























Effect of exchange rate changes on cash and cash equivalents


(122)


1













Net increase in cash and cash equivalents


73,778


23,863

Cash and cash equivalents beginning of period


109,769


68,964

Cash and cash equivalents end of period


$      183,547


$        92,827

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/hub-group-inc-reports-record-third-quarter-2015-earnings-300168066.html

SOURCE Hub Group, Inc.

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