Press Release

Hub Group, Inc. Reports Third Quarter 2014 Earnings per Share of $0.49 Excluding One-Time Costs and Non-Cash Impairment Charge

OAK BROOK, Ill., Oct. 23, 2014 /PRNewswire/ -- Hub Group, Inc. (NASDAQ: HUBG) today announced financial results for the quarter ended September 30, 2014.

Hub Group reported income of $4.5 million for the third quarter ended September 30, 2014 compared to $18.6 million in the third quarter of 2013.  Hub Group's diluted earnings per share was $0.12 for the third quarter of 2014.  Hub Group's pre-tax income included one-time costs of $10.3 million for driver settlements and related costs and a non-cash impairment charge of $11.9 million associated with the write off of software development costs. Excluding the effect of these items, non-GAAP earnings per share was $0.49 for the quarter (see table below).  Non-GAAP earnings per share decreased 2% when compared with the prior year period.  Hub Group's revenue increased 3% to $913 million

The Hub segment's revenue increased 2% to $692 million.  Third quarter intermodal revenue decreased 2% to $461 million.  Truck brokerage revenue was flat at $84 million this quarter.  Third quarter Unyson Logistics revenue increased 18% to $147 million.   

The Mode segment's revenue increased 13% to $245 million.  Operating income was $7 million, an increase of 19% compared to the prior year period.

Hub Group ended the quarter with $93 million in cash.

Yesterday the Board of Directors authorized the purchase of up to $75 million of Hub's Class A common stock.  The authorization expires December 31, 2015.  Hub intends to make purchases from time to time as market conditions warrant.  Hub intends to hold the repurchased shares in treasury for future use.

CONFERENCE CALL
Hub will hold a conference call at 5:00 p.m. Eastern Time on Thursday, October 23, 2014 to discuss its third quarter results.

Hosting the conference call will be David Yeager, Chief Executive Officer, Mark Yeager, Chief Operating Officer, and Terri Pizzuto, 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 call ten minutes early by dialing (888) 206-4074.  The conference call participant code is 38233721#.  Participants may pre-register for the call at http://www.yourconferencecenter.com/r.aspx?p=1&a=UvoXrefUAYiZbp .   Pre-registrants will be issued a passcode and pin number to use when dialing into the live call which will provide quick access to the conference, bypassing the operator.  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, 2013 and the report on Form 10-Q for the period ended June 30, 2014.  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,








2014


2013


2014


2013

Revenue




$ 913,386


$ 882,981


$ 2,655,765


$ 2,488,646















Transportation costs




820,190


789,857


2,375,240


2,212,711


Gross margin




93,196


93,124


280,525


275,935















Costs and expenses:












Salaries and benefits




30,868


31,888


103,516


101,473


Agent fees and commissions



16,592


14,557


45,802


41,517


General and administrative



13,868


13,757


43,981


41,676


Depreciation and amortization



1,967


1,627


5,902


4,773


Driver settlements and related costs



10,343


-


10,343


-


Impairment of software



11,881


-


11,881


-



Total costs and expenses



85,519


61,829


221,425


189,439















Operating income




7,677


31,295


59,100


86,496















Other income (expense):











Interest expense




(361)


(323)


(1,166)


(918)


Interest and dividend income



(4)


25


21


69


Other, net 




39


(35)


(191)


(23)



Total other (expense) income 



(326)


(333)


(1,336)


(872)















Income before provision for income taxes



7,351


30,962


57,764


85,624















Provision for income taxes



2,860


12,362


22,562


33,050















Net income




$    4,491


$  18,600


$     35,202


$     52,574











































Basic earnings per common share



$      0.12


$      0.50


$         0.96


$         1.43















Diluted earnings per common share



$      0.12


$      0.50


$         0.96


$         1.42















Basic weighted average number of shares outstanding


36,676


36,873


36,670


36,866

Diluted weighted average number of shares outstanding


36,858


37,050


36,799


36,996


    

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)






















Three Months








Ended September 30, 2013








Hub


Mode


Inter-Segment Elims


Hub Group Total

Revenue




$ 678,573


$ 217,424


$                 (13,016)


$           882,981















Transportation costs




611,344


191,529


(13,016)


789,857


Gross margin




67,229


25,895


-


93,124















Costs and expenses:












Salaries and benefits




28,274


3,614


-


31,888


Agent fees and commissions



425


14,132


-


14,557


General and administrative



12,065


1,692


-


13,757


Depreciation and amortization



1,088


539


-


1,627



Total costs and expenses



41,852


19,977


-


61,829















Operating income




$  25,377


$    5,918


$                         -


$             31,295

    

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 FINANCIAL INFORMATION BY SEGMENT

(in thousands)






















Nine Months








Ended September 30, 2013








Hub


Mode


Inter-Segment Elims


Hub Group Total

Revenue




$ 1,916,149


$ 608,802


$         (36,305)


$        2,488,646















Transportation costs




1,712,314


536,702


(36,305)


2,212,711


Gross margin




203,835


72,100


-


275,935















Costs and expenses:












Salaries and benefits




90,259


11,214


-


101,473


Agent fees and commissions



1,223


40,294


-


41,517


General and administrative



37,101


4,575


-


41,676


Depreciation and amortization



3,169


1,604


-


4,773



Total costs and expenses



131,752


57,687


-


189,439















Operating income




$     72,083


$  14,413


$                 -


$             86,496

    

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


2014

2013

$

%


2014

2013

$

%











Diluted GAAP EPS

$  0.12

$  0.50

$ (0.38)

-76.0%


$  0.96

$  1.42

$ (0.46)

-32.4%











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












Diluted NON-GAAP EPS (adjusted)

$  0.49

$  0.50

$ (0.01)

-2.0%


$  1.33

$  1.42

$ (0.09)

-6.3%











Diluted Shares

36,858

37,050




36,799

36,996



 

In accordance with U.S. generally accepted accounting principles (GAAP), reported earnings per share include the after-tax impact, using our effective tax rate of 39%, 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.

UNAUDITED CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)




























September 30,


December 31,








2014


2013











ASSETS





CURRENT ASSETS:






Cash and cash equivalents

$           92,827


$          68,964



Accounts receivable trade, net

426,627


371,528



Accounts receivable other

20,572


26,569



Prepaid taxes

6,203


409



Deferred taxes

5,100


5,826



Prepaid expenses and other current assets

19,842


12,738





TOTAL CURRENT ASSETS


571,171


486,034












Restricted investments

21,629


20,754


Property and equipment, net

315,151


260,400


Other intangibles, net

14,758


15,729


Goodwill, net

262,868


263,032


Other assets

3,566


1,994






TOTAL ASSETS


$      1,189,143


$     1,047,943





















LIABILITIES AND STOCKHOLDERS' EQUITY





CURRENT LIABILITIES:






Accounts payable trade

$         272,250


$        232,350



Accounts payable other

23,336


24,957



Accrued payroll

17,477


17,000



Accrued other

56,449


42,834



Current portion of capital lease

2,679


2,413



Current portion of long term debt

11,559


1,771





TOTAL CURRENT LIABILITIES

383,750


321,325












Long term debt

41,757


6,475


Non-current liabilities

21,793


22,304


Long term capital lease

16,579


18,477


Deferred taxes

125,002


117,835












STOCKHOLDERS' EQUITY:






Preferred stock, $.01 par value; 2,000,000 shares authorized; no shares issued or outstanding in 2014 and 2013






-


-



Common stock







Class A: $.01 par value; 97,337,700 shares authorized and 41,224,792 shares issued in 2014 and 2013; 36,750,359 shares outstanding in 2014 and 36,626,384 shares outstanding in 2013

412




412




Class B:  $.01 par value; 662,300 shares authorized; 662,296 shares issued and outstanding in 2014 and 2013




7


7



Additional paid-in capital

168,941


167,357



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






(15,458)


(15,458)



Retained earnings

573,453


538,251



Accumulated other comprehensive loss

(38)


(85)



Treasury stock; at cost, 4,474,433 shares in 2014 and 4,598,408 shares in 2013






(127,055)


(128,957)




TOTAL STOCKHOLDERS' EQUITY

600,262


561,527





     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$      1,189,143


$     1,047,943

 

 

HUB GROUP, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)






















Nine Months Ended










September 30,










2014


2013

























Cash flows from operating activities:






Net income




$ 35,202


$ 52,574


Adjustments to reconcile net income







to net cash provided by operating activities:








Depreciation and amortization 


21,165


15,479




Impairment of software


11,881


-




Deferred taxes



8,288


10,945




Compensation expense related to share-based compensation plans

6,238


5,638




Gain on sale of assets



(20)


(345)




Excess tax benefits from share-based compensation


-


(11)


Changes in operating assets and liabilities:








Restricted investments



(875)


(1,924)




Accounts receivable, net


(49,102)


(57,439)




Prepaid taxes



(5,794)


(504)




Prepaid expenses and other current assets


(7,104)


156




Other assets




(1,572)


(803)




Accounts payable



38,281


55,641




Accrued expenses



2,581


1,330




Non-current liabilities



(534)


1,164






Net cash provided by operating activities


58,635


81,901













Cash flows from investing activities:






Proceeds from sale of equipment


420


1,788


Purchases of property and equipment


(75,881)


(66,079)





Net cash used in investing activities


(75,461)


(64,291)













Cash flows from financing activities:






Proceeds from issuance of debt


49,268


9,120


Repayments of long term debt


(4,198)


(436)


Proceeds from stock options exercised


-


42


Stock tendered for payments of withholding taxes


(3,184)


(2,621)


Purchase of treasury stock



-


(903)


Capital lease payments



(1,632)


(1,733)


Excess tax benefits from share-based compensation


434


310





Net cash provided by financing activities


40,688


3,779


























Effect of exchange rate changes on cash and cash equivalents


1


1













Net increase in cash and cash equivalents


23,863


21,390

Cash and cash equivalents beginning of period


68,964


70,760

Cash and cash equivalents end of period


$ 92,827


$ 92,150

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/hub-group-inc-reports-third-quarter-2014-earnings-per-share-of-049-excluding-one-time-costs-and-non-cash-impairment-charge-579916772.html

SOURCE Hub Group, Inc.

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