Hub Group, Inc. Reports Record Fourth Quarter and Full Year 2012 Earnings

01/29/13

DOWNERS GROVE, Ill., Jan. 29, 2013 /PRNewswire/ -- Hub Group, Inc. (NASDAQ: HUBG) today announced financial results for the quarter and year ended December 31, 2012.

Hub Group reported record net income of $18.8 million for the fourth quarter ended December 31, 2012, an increase of 11% compared to the fourth quarter of 2011. Diluted earnings per share for the fourth quarter of 2012 was $0.51 compared to diluted earnings per share of $0.46 in the fourth quarter of 2011. Earnings per share increased 6% when compared with the non-GAAP earnings per share of $0.48 in the prior year period, which excludes $1 million of pre-tax expense related to integration and restructuring (see table below).

The Hub segment's revenue increased 6% to $614 million. Fourth quarter intermodal revenue increased 8% to $451 million. The increase was primarily attributable to 7% volume growth. Truck brokerage revenue increased 7% to $87 million this quarter. Fourth quarter Unyson Logistics revenue decreased 1% to $76 million. The Hub segment's operating income was $27.5 million.

The Mode segment's revenue increased 2% to $199 million for the fourth quarter. Operating income was $4.1 million.

FULL YEAR 2012

Net income for the year ended December 31, 2012 was $68 million. Hub Group's diluted earnings per share for 2012 was $1.83 compared to $1.57 for 2011. Earnings per share increased 11% when compared with the non-GAAP earnings per share of $1.65 in the prior year period, which excludes $4.6 million of pre-tax expense related to integration and restructuring (see table below). Hub Group's revenue increased 14% to $3.1 billion.

Hub Group ended the year with $71 million in cash.

"Despite the challenging business environment, 2012 was a record year for Hub Group. For the first time in our history, we surpassed $3 billion in annual revenue. We also achieved record earnings with growth coming from all of our business units. We are proud of our results this year and expect to deliver another year of solid operating performance in 2013," said David P. 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 Tuesday, January 29, 2013 to discuss its fourth quarter and full year results and provide 2013 guidance.

Hosting the conference call will be David P. Yeager, Chairman and Chief Executive Officer, Mark A. Yeager, Vice-Chairman, President and Chief Operating Officer, and Terri A. 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 . 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) 679-8035. The conference call participant code is 70579010. Participants may pre-register for the call at https://www.theconferencingservice.com/prereg/key.process?key=PA674RJ6Y . Pre-registrants will be issued a 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's SEC reports including, but not limited to, the annual report on Form 10-K for the year ended December 31, 2011 and the reports on Form 10-Q for the periods ended March 31, 2012, June 30, 2012 and September 30, 2012. 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		Twelve Months
			Ended December 31,		Ended December 31,
			2012	2011	2012	2011
Revenue			$ 801,023	$ 762,775	$ 3,124,108	$ 2,751,534

Transportation costs			707,644	678,964	2,768,042	2,438,986
	Gross margin		93,379	83,811	356,066	312,548

Costs and expenses:
	Salaries and benefits		33,023	29,522	129,143	121,044
	Agent fees and commissions		14,006	13,091	55,112	41,491
	General and administrative		13,091	12,425	52,832	49,951
	Depreciation and amortization		1,611	1,635	6,619	5,603
		Total costs and expenses	61,731	56,673	243,706	218,089

Operating income			31,648	27,138	112,360	94,459

Other income (expense):
	Interest expense		(299)	(319)	(1,207)	(638)
	Interest and dividend income		30	30	134	148
	Other, net		28	42	(30)	328
		Total other (expense) income	(241)	(247)	(1,103)	(162)

Income before provision for income taxes			31,407	26,891	111,257	94,297

Provision for income taxes			12,563	9,877	43,304	36,119

Net income			$ 18,844	$ 17,014	$ 67,953	$ 58,178

Basic earnings per common share			$ 0.51	$ 0.46	$ 1.83	$ 1.58

Diluted earnings per common share			$ 0.51	$ 0.46	$ 1.83	$ 1.57

Basic weighted average number of shares outstanding			37,021	36,943	37,053	36,913
Diluted weighted average number of shares outstanding			37,199	37,104	37,185	37,063

HUB GROUP, INC.
UNAUDITED FINANCIAL INFORMATION BY SEGMENT
(in thousands)

			Three Months
			Ended December 31, 2012
			Hub	Mode	Inter-Segment Elims	Hub Group Consolidated
Revenue			$ 613,853	$ 198,550	$ (11,380)	$ 801,023

Transportation costs			544,098	174,926	(11,380)	707,644
	Gross margin		69,755	23,624	-	93,379

Costs and expenses:
	Salaries and benefits		29,332	3,691	-	33,023
	Agent fees and commissions		374	13,632	-	14,006
	General and administrative		11,407	1,684	-	13,091
	Depreciation and amortization		1,110	501	-	1,611
		Total costs and expenses	42,223	19,508	-	61,731

Operating income			27,532	4,116	-	31,648

HUB GROUP, INC.
UNAUDITED FINANCIAL INFORMATION BY SEGMENT
(in thousands)

			Twelve Months
			Ended December 31, 2012
			Hub	Mode	Inter-Segment Elims	Hub Group Consolidated
Revenue			$ 2,392,289	$ 779,928	$ (48,109)	$ 3,124,108

Transportation costs			2,128,942	687,209	(48,109)	2,768,042
	Gross margin		263,347	92,719	-	356,066

Costs and expenses:
	Salaries and benefits		113,855	15,288	-	129,143
	Agent fees and commissions		1,900	53,212	-	55,112
	General and administrative		45,411	7,421	-	52,832
	Depreciation and amortization		4,448	2,171	-	6,619
		Total costs and expenses	165,614	78,092	-	243,706

Operating income			97,733	14,627	-	112,360

HUB GROUP, INC.
UNAUDITED NON-GAAP TO GAAP RECONCILIATION
(earnings per share)


	Three Months				Twelve Months
	Ended, Dec. 31,				Ended, Dec. 31,
			Change	Change			Change	Change
	2012	2011	$	%	2012	2011	$	%

Diluted GAAP EPS	$ 0.51	$ 0.46	$ 0.05	10.9%	$ 1.83	$ 1.57	$ 0.26	16.6%

Integration expenses and restructuring costs	$ -	$ 0.02	$ (0.02)		$ -	$ 0.08	$ (0.08)

Diluted NON-GAAP EPS (adjusted)	$ 0.51	$ 0.48	$ 0.03	6.2%	$ 1.83	$ 1.65	$ 0.18	10.9%



Diluted Shares	37,199	37,104			37,185	37,063

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


						December 31,	December 31,
						2012	2011

ASSETS
	CURRENT ASSETS:
		Cash and cash equivalents				$ 70,760	$ 49,091
		Accounts receivable trade, net				346,917	326,537
		Accounts receivable other				25,945	23,878
		Prepaid taxes				139	2,392
		Deferred taxes				4,965	4,838
		Prepaid expenses and other current assets				10,619	9,056
				TOTAL CURRENT ASSETS		459,345	415,792

		Restricted investments				17,218	14,323
		Property and equipment, net				157,584	124,587
		Other intangibles, net				20,068	21,667
		Goodwill, net				263,251	263,470
		Other assets				2,387	2,845
					TOTAL ASSETS	$ 919,853	$ 842,684


LIABILITIES AND STOCKHOLDERS' EQUITY
	CURRENT LIABILITIES:
		Accounts payable trade				$ 206,497	$ 204,693
		Accounts payable other				22,925	17,289
		Accrued payroll				17,210	16,721
		Accrued other				28,633	29,962
		Current portion of capital lease				2,120	2,237
				TOTAL CURRENT LIABILITIES		277,385	270,902

	Non-current liabilities					20,041	17,717
	Non-current portion of capital lease					21,099	23,436
	Deferred taxes					100,431	91,764

	STOCKHOLDERS' EQUITY:
		Preferred stock, $.01 par value; 2,000,000 shares authorized; no shares issued or outstanding in 2012 and 2011				-	-
		Common stock
			Class A: $.01 par value; 97,337,700 shares authorized and 41,224,792 shares issued in 2012 and 2011; 36,767,485 shares outstanding in 2012 and 36,860,260 shares outstanding in 2011			412	412
			Class B: $.01 par value; 662,300 shares authorized; 662,296 shares issued and outstanding in 2012 and 2011			7	7
		Additional paid-in capital				167,765	168,800
		Purchase price in excess of predecessor basis, net of tax benefit of $10,306				(15,458)	(15,458)
		Retained earnings				469,141	401,188
		Other comprehensive income				1	4
		Treasury stock; at cost, 4,457,307 shares in 2012 and 4,364,532 shares in 2011				(120,971)	(116,088)
			TOTAL STOCKHOLDERS' EQUITY			500,897	438,865
				TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$ 919,853	$ 842,684

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

					Twelve Months Ended
					December 31,
					2012	2011


Cash flows from operating activities:
	Net income				$ 67,953	$ 58,178
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization			21,575	16,340
		Deferred taxes			8,786	18,821
		Compensation expense related to share-based compensation plans			6,539	4,788
		Loss (gain) on sale of assets			108	(17)
		Excess tax benefits from share based compensation			(29)	-
	Changes in operating assets and liabilities, net of effects of acquisition:
		Restricted investments			(2,895)	(724)
		Accounts receivable, net			(22,429)	(45,047)
		Prepaid taxes			2,253	(2,097)
		Prepaid expenses and other current assets			(1,562)	(1,728)
		Other assets			459	(33)
		Accounts payable			7,438	23,095
		Accrued expenses			2,779	2,989
		Non-current liabilities			1,942	301
				Net cash provided by operating activities	92,917	74,866

Cash flows from investing activities:
	Proceeds from sale of equipment				1,071	410
	Purchases of property and equipment				(56,882)	(55,010)
	Cash used in acquisitions, net of cash acquired				(550)	(85,182)
			Net cash used in investing activities		(56,361)	(139,782)

Cash flows from financing activities:
	Proceeds from stock options exercised				69	86
	Purchase of treasury stock				(13,020)	(1,523)
	Capital lease payments				(2,454)	(729)
	Excess tax benefits from share-based compensation				523	1,034
			Net cash used in financing activities		(14,882)	(1,132)


	Effect of exchange rate changes on cash and cash equivalents				(5)	(5)

Net increase (decrease) in cash and cash equivalents					21,669	(66,053)
Cash and cash equivalents beginning of the year					49,091	115,144
Cash and cash equivalents end of the year					$ 70,760	$ 49,091

SOURCE Hub Group, Inc.

Amy Lisek of Hub Group, Inc., +1-630-795-2214

Press Releases

Hub Group, Inc. Reports Record Fourth Quarter and Full Year 2012 Earnings