Press Release

Hub Group, Inc. Reports Third Quarter 2016 Earnings

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

Hub Group reported net income of $17.9 million for the third quarter ended September 30, 2016 compared to $19.8 million in the third quarter of 2015.  Hub Group's diluted earnings per share was $0.54 for the quarter.  Earnings per share decreased 2% when compared with the prior year period.  Hub Group's revenue increased 4% to $933 million

The Hub segment's revenue increased 5% to $717 million.  Third quarter intermodal revenue increased 1% to $466 million.  Intermodal volume increased 5%.  Truck brokerage revenue increased 16% to $97 million this quarter.  Third quarter Unyson Logistics revenue increased 12% to $154 million.  The Hub segment's operating income was $21.8 million

The Mode segment's revenue increased 5% to $252 million.  Operating income was $8.0 million compared to $7.2 million in the prior year period.

Hub Group ended the quarter with $135 million in cash.

"The challenging intermodal pricing environment contributed to the decline in income this quarter.  We remain focused on providing excellent service and realizing the benefits of our cost savings initiatives," said Dave Yeager, Chairman and Chief Executive Officer of Hub Group.

CONFERENCE CALL
Hub will hold a conference call at 5:00 p.m. Eastern Time on Wednesday, October 26, 2016 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=UVVbfMMitwEGXv. 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 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, 2015 and the report on Form 10-Q for the period ended June 30, 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


Nine Months





Ended September 30,


Ended September 30,





2016


2015


2016


2015

Revenue


$ 932,814


$ 899,869


$ 2,594,230


$ 2,635,323










Transportation costs


821,360


794,805


2,259,899


2,339,402


Gross margin


111,454


105,064


334,331


295,921










Costs and expenses:










Salaries and benefits


42,610


36,357


130,075


114,670


Agent fees and commissions


19,072


17,862


54,334


49,374


General and administrative


17,641


15,461


50,368


44,295


Depreciation and amortization


2,276


1,966


6,559


5,893



Total costs and expenses


81,599


71,646


241,336


214,232












Operating income


29,855


33,418


92,995


81,689











Other income (expense):










Interest expense


(888)


(757)


(2,655)


(2,218)


Interest and dividend income


104


22


286


47


Other, net 


27


(952)


1,178


(2,095)



Total other expense


(757)


(1,687)


(1,191)


(4,266)










Income before provision for income taxes


29,098


31,731


91,804


77,423










Provision for income taxes


11,174


11,899


35,243


28,848










Net income


$   17,924


$   19,832


$     56,561


$     48,575




























Basic earnings per common share


$       0.54


$       0.55


$         1.66


$         1.35










Diluted earnings per common share


$       0.54


$       0.55


$         1.66


$         1.35










Basic weighted average number of shares outstanding


33,212


35,769


34,098


35,970

Diluted weighted average number of shares outstanding


33,366


35,903


34,172


36,049

 

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)
















Three Months





Ended September 30, 2016





Hub


Mode


Inter-Segment Elims


Hub Group Total

Revenue


$       716,699


$       251,611


$           (35,496)


$       932,814












Transportation costs


638,154


218,702


(35,496)


821,360


Gross margin


78,545


32,909


-


111,454












Costs and expenses:










Salaries and benefits


38,775


3,835


-


42,610


Agent fees and commissions


20


19,052


-


19,072


General and administrative


15,969


1,672


-


17,641


Depreciation and amortization


1,959


317


-


2,276



Total costs and expenses


56,723


24,876


-


81,599












Operating income


$        21,822


$          8,033


$                   -


$        29,855

 

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



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)
















Nine Months





Ended September 30, 2016





Hub


Mode


Inter-Segment Elims


Hub Group Total

Revenue


$    1,980,450


$       692,366


$          (78,586)


$    2,594,230












Transportation costs


1,739,676


598,809


(78,586)


2,259,899


Gross margin


240,774


93,557


-


334,331












Costs and expenses:










Salaries and benefits


118,658


11,417


-


130,075


Agent fees and commissions


47


54,287


-


54,334


General and administrative


44,917


5,451


-


50,368


Depreciation and amortization


5,603


956


-


6,559



Total costs and expenses


169,225


72,111


-


241,336












Operating income


$        71,549


$        21,446


$                  -


$        92,995

 

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



Total costs and expenses


147,871


66,361


-


214,232












Operating income


$        61,954


$        19,735


$                  -


$        81,689

 

HUB GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)





September 30,


December 31,



2016


2015



(unaudited)



ASSETS






CURRENT ASSETS:







Cash and cash equivalents


$        135,195


$       207,749



Accounts receivable trade, net


445,574


379,987



Accounts receivable other


7,036


10,344



Prepaid taxes


1,971


362



Deferred taxes


-


8,412



Prepaid expenses and other current assets


16,508


17,756



     TOTAL CURRENT ASSETS


606,284


624,610









Restricted investments


20,563


21,108


Property and equipment, net


406,885


374,847


Other intangibles, net


12,167


13,139


Goodwill, net


262,431


262,594


Other assets


3,887


4,848



TOTAL ASSETS


$     1,312,217


$    1,301,146













LIABILITIES AND STOCKHOLDERS' EQUITY






CURRENT LIABILITIES:







Accounts payable trade


$        265,659


$       230,432



Accounts payable other


23,330


21,495



Accrued payroll


23,989


33,020



Accrued other


45,846


38,733



Current portion of capital lease


2,672


2,608



Current portion of long term debt


39,769


32,409



     TOTAL CURRENT LIABILITIES


401,265


358,697








Long term debt


104,561


100,895


Non-current liabilities


22,562


20,233


Long term capital lease


11,270


13,299


Deferred taxes


164,699


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; 33,195,497 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


171,371


174,285



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


(15,458)


(15,458)



Retained earnings


717,319


660,758



Accumulated other comprehensive loss


(241)


(178)



Treasury stock; at cost, 8,029,295 shares in 2016 and 5,590,831 shares in 2015


(265,550)


(171,986)



     TOTAL STOCKHOLDERS' EQUITY


607,860


647,840



          TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY


$     1,312,217


$    1,301,146

 

HUB GROUP, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)








Nine Months Ended



September 30,



2016


2015











Cash flows from operating activities:






Net income


$        56,561


$        48,575


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








Depreciation and amortization 


32,665


26,662




Deferred taxes


13,269


5,757




Compensation expense related to share-based compensation plans


6,318


5,843




Gain on sale of assets


(382)


(116)




Excess tax benefits from share-based compensation


(524)


(40)


Changes in operating assets and liabilities:








Restricted investments


545


1,389




Accounts receivable, net


(62,324)


6,540




Prepaid taxes


(1,609)


13,579




Prepaid expenses and other current assets


1,244


(1,442)




Other assets


961


(56)




Accounts payable


37,080


21,308




Accrued expenses


(6,968)


8,337




Non-current liabilities


2,181


(3,505)






Net cash provided by operating activities


79,017


132,831











Cash flows from investing activities:






Proceeds from sale of equipment


1,573


922


Purchases of property and equipment


(59,883)


(40,951)





Net cash used in investing activities


(58,310)


(40,029)











Cash flows from financing activities:






Proceeds from issuance of debt


36,100


31,376


Repayments of long term debt


(25,074)


(16,836)


Stock tendered for payments of withholding taxes


(2,484)


(2,902)


Purchase of treasury stock


(100,000)


(28,823)


Capital lease payments


(1,965)


(1,883)


Excess tax benefits from share-based compensation


212


166





Net cash used in financing activities


(93,211)


(18,902)






















Effect of exchange rate changes on cash and cash equivalents


(50)


(122)











Net (decrease) increase in cash and cash equivalents


(72,554)


73,778

Cash and cash equivalents beginning of period


207,749


109,769

Cash and cash equivalents end of period


$      135,195


$      183,547

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/hub-group-inc-reports-third-quarter-2016-earnings-300351824.html

SOURCE Hub Group, Inc.

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