Hub Group, Inc. Reports Second Quarter 2015 Earnings

07/21/15

OAK BROOK, Ill., July 21, 2015 /PRNewswire/ -- Hub Group, Inc. (NASDAQ: HUBG) today announced financial results for the quarter ended June 30, 2015.

Hub Group reported net income of $18.5 million for the second quarter ended June 30, 2015 compared to $18.7 million in the second quarter of 2014. Hub Group's diluted earnings per share was $0.51 for the second quarter of 2015 and 2014. Hub Group's revenue increased 1% to $900 million.

The Hub segment's revenue increased 1% to $686 million. Second quarter intermodal revenue increased 2% to $465 million. Truck brokerage revenue increased 8% to $93 million this quarter. Second quarter Unyson Logistics revenue declined 8% to $128 million. The Hub segment's operating income was $22 million.

The Mode segment's revenue increased 1% to $234 million. Operating income was $7.5 million, an increase of 12% compared to the prior year period.

Hub Group ended the quarter with $157 million in cash.

CONFERENCE CALL

Hub will hold a conference call at 5:00 p.m. Eastern Time on Tuesday, July 21, 2015 to discuss its second quarter results.

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 register at http://www.yourconferencecenter.com/r.aspx?p=1&a=UWHyXScrivrkgm. 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 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, 2014 and our report on Form 10-Q for the period ended March 31, 2015. Hub Group assumes no liability to update any such forward-looking statements.

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

HUB GROUP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)

			Three Months		Six Months
			Ended June 30,		Ended June 30,
			2015	2014	2015	2014
Revenue			$ 899,513	$ 893,930	$ 1,735,454	$ 1,742,379

Transportation costs			797,784	795,345	1,544,597	1,555,050
	Gross margin		101,729	98,585	190,857	187,329

Costs and expenses:
	Salaries and benefits		38,837	35,556	78,313	72,648
	Agent fees and commissions		16,686	15,544	31,512	29,210
	General and administrative		14,763	14,681	28,834	30,113
	Depreciation and amortization		1,967	1,877	3,927	3,935
		Total costs and expenses	72,253	67,658	142,586	135,906

Operating income			29,476	30,927	48,271	51,423

Other income (expense):
	Interest expense		(720)	(398)	(1,461)	(805)
	Interest and dividend income		19	11	25	25
	Other, net		261	(25)	(1,143)	(230)
		Total other expense	(440)	(412)	(2,579)	(1,010)

Income before provision for income taxes			29,036	30,515	45,692	50,413

Provision for income taxes			10,569	11,839	16,949	19,702

Net income			$ 18,467	$ 18,676	$ 28,743	$ 30,711


Basic earnings per common share			$ 0.51	$ 0.51	$ 0.80	$ 0.84

Diluted earnings per common share			$ 0.51	$ 0.51	$ 0.80	$ 0.84

Basic weighted average number of shares outstanding			35,986	36,674	36,071	36,667
Diluted weighted average number of shares outstanding			36,075	36,814	36,122	36,769

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)

			Three Months
			Ended June 30, 2014
			Hub	Mode	Inter-Segment Elims	Hub Group Total
Revenue			$ 682,049	$ 231,538	$ (19,657)	$ 893,930

Transportation costs			611,351	203,651	(19,657)	795,345
	Gross margin		70,698	27,887	-	98,585

Costs and expenses:
	Salaries and benefits		32,047	3,509	-	35,556
	Agent fees and commissions		5	15,539	-	15,544
	General and administrative		12,817	1,864	-	14,681
	Depreciation and amortization		1,538	339	-	1,877
		Total costs and expenses	46,407	21,251	-	67,658

Operating income			$ 24,291	$ 6,636	$ -	$ 30,927

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.
UNAUDITED FINANCIAL INFORMATION BY SEGMENT
(in thousands)

			Six Months
			Ended June 30, 2014
			Hub	Mode	Inter-Segment Elims	Hub Group Total
Revenue			$ 1,335,458	$ 440,444	$ (33,523)	$ 1,742,379

Transportation costs			1,200,262	388,311	(33,523)	1,555,050
	Gross margin		135,196	52,133	-	187,329

Costs and expenses:
	Salaries and benefits		65,384	7,264	-	72,648
	Agent fees and commissions		16	29,194	-	29,210
	General and administrative		26,557	3,556	-	30,113
	Depreciation and amortization		3,055	880	-	3,935
		Total costs and expenses	95,012	40,894	-	135,906

Operating income			$ 40,184	$ 11,239	$ -	$ 51,423

HUB GROUP, INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)


					June 30,	December 31,
					2015	2014

ASSETS
	CURRENT ASSETS:
		Cash and cash equivalents			$ 156,780	$ 109,769
		Accounts receivable trade, net			420,951	401,803
		Accounts receivable other			18,022	24,886
		Prepaid taxes			1,653	14,937
		Deferred taxes			8,229	4,816
		Prepaid expenses and other current assets			11,325	14,355
				TOTAL CURRENT ASSETS	616,960	570,566

	Restricted investments				22,239	21,944
	Property and equipment, net				332,532	338,327
	Other intangibles, net				13,786	14,434
	Goodwill, net				262,704	262,813
	Other assets				3,827	4,043
				TOTAL ASSETS	$ 1,252,048	$ 1,212,127


LIABILITIES AND STOCKHOLDERS' EQUITY
	CURRENT LIABILITIES:
		Accounts payable trade			$ 270,189	$ 256,345
		Accounts payable other			22,629	21,333
		Accrued payroll			19,644	16,192
		Accrued other			37,401	43,523
		Current portion of capital lease			2,560	2,504
		Current portion of long term debt			23,387	19,619
				TOTAL CURRENT LIABILITIES	375,810	359,516

	Long term debt				76,302	72,460
	Non-current liabilities				21,731	22,929
	Long term portion of capital lease				14,638	15,937
	Deferred taxes				146,188	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; 36,072,126 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			168,785	171,235
		Purchase price in excess of predecessor basis, net of tax
		benefit of $10,306			(15,458)	(15,458)
		Retained earnings			618,552	589,809
		Accumulated other comprehensive loss			(97)	(77)
		Treasury stock; at cost, 5,152,666 shares in 2015 and 4,977,468 shares in 2014
					(154,822)	(145,144)
			TOTAL STOCKHOLDERS' EQUITY		617,379	600,784
				TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 1,252,048	$ 1,212,127

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

					Six Months Ended
					June 30,
					2015	2014


Cash flows from operating activities:
	Net income				$ 28,743	$ 30,711
	Adjustments to reconcile net income
		to net cash provided by operating activities:
			Depreciation and amortization		17,526	13,780
			Deferred taxes		2,489	5,557
			Compensation expense related to share-based compensation plans		4,110	4,191
			Gain on sale of assets		(60)	(10)
			Excess tax benefits from share-based compensation		(33)	-
	Changes in operating assets and liabilities:
			Restricted investments		(295)	(1,206)
			Accounts receivable, net		(11,407)	(40,654)
			Prepaid taxes		13,284	(165)
			Prepaid expenses and other current assets		3,030	(2,063)
			Other assets		216	(601)
			Accounts payable		15,132	21,756
			Accrued expenses		8,943	882
			Non-current liabilities		(1,226)	(537)
				Net cash provided by operating activities	80,452	31,641

Cash flows from investing activities:
	Proceeds from sale of equipment				136	319
	Purchases of property and equipment				(23,716)	(46,443)
				Net cash used in investing activities	(23,580)	(46,124)

Cash flows from financing activities:
	Proceeds from issuance of debt				18,548	25,361
	Repayments of long term debt				(10,938)	(2,535)
	Stock tendered for payments of withholding taxes				(2,877)	(3,151)
	Purchase of treasury stock				(13,419)	-
	Capital lease payments				(1,243)	(1,219)
	Excess tax benefits from share-based compensation				89	228
				Net cash (used in) provided by financing activities	(9,840)	18,684


	Effect of exchange rate changes on cash and cash equivalents				(21)	(1)

Net increase in cash and cash equivalents					47,011	4,200
Cash and cash equivalents beginning of period					109,769	68,964
Cash and cash equivalents end of period					$ 156,780	$ 73,164

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SOURCE Hub Group, Inc.

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Hub Group, Inc. Reports Second Quarter 2015 Earnings