Hub Group, Inc. Reports Record Second Quarter 2012 Earnings

07/19/12

DOWNERS GROVE, Ill., July 19, 2012 /PRNewswire/ -- Hub Group, Inc. (NASDAQ: HUBG) today announced financial results for the quarter ended June 30, 2012.

Hub Group reported record net income of $16.9 million for the second quarter ended June 30, 2012, an increase of 18% compared to the second quarter of 2011. Diluted earnings per share for the second quarter of 2012 was $0.46.

Hub Group's second quarter 2011 pre-tax income included approximately $750,000 of costs related to Mode Transportation integration and Hub's Truck Brokerage restructuring. Excluding the effects of these costs, non-GAAP earnings per share was $0.40 for the 2011 second quarter (see table below). Earnings per share increased 15% when compared with the non-GAAP earnings per share in the prior year period.

The Hub segment's revenue increased 6% to $596 million. Second quarter intermodal revenue increased 9% to $432 million. The increase was attributable to a 9% volume increase. Truck brokerage revenue decreased 11% to $80 million this quarter. Second quarter Unyson Logistics revenue increased 13% to $84 million. The Hub segment's operating income was $24.9 million.

The Mode segment's revenue increased 1% to $194 million for the second quarter. Operating income was $2.9 million.

Hub Group ended the quarter with $52 million in cash.

"Hub Group continues to execute well in a tough economic climate," said David P. Yeager, Chairman and Chief Executive Officer.

CONFERENCE CALL

Hub will hold a conference call at 5:00 p.m. Eastern Time on Thursday, July 19, 2012 to discuss its second quarter results and outlook for the year.

Hosting the conference call will be David P. Yeager, Chairman and Chief Executive 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. 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) 679-8034. The conference call participant code is 90092162. Participants may pre-register for the call at https://www.theconferencingservice.com/prereg/key.process?key=PT6C7YLTY . 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 report on Form 10-Q for the period ended March 31, 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		Six Months
			Ended June 30,		Ended June 30,
			2012	2011	2012	2011

Revenue			$778,312	$751,201	$1,518,197	$1,236,580

Transportation costs			690,954	666,472	1,347,097	1,094,544
	Gross margin		87,358	84,729	171,100	142,036

Costs and expenses:
	Salaries and benefits		31,436	32,722	64,735	59,523
	Agent fees and commissions		13,601	13,765	27,296	14,516
	General and administrative		12,734	12,852	25,311	24,911
	Depreciation and amortization		1,737	1,472	3,397	2,408
		Total costs and expenses	59,508	60,811	120,739	101,358

Operating income			27,850	23,918	50,361	40,678

Other income (expense):
	Interest expense		(301)	(69)	(608)	(83)
	Interest and dividend income		33	45	67	77
	Other, net		(18)	60	(41)	269
		Total other (expense) income	(286)	36	(582)	263

Income before provision for income taxes			27,564	23,954	49,779	40,941

Provision for income taxes			10,612	9,564	19,165	16,053

Net income			$ 16,952	$ 14,390	$ 30,614	$ 24,888



Basic earnings per common share			$ 0.46	$ 0.39	$ 0.83	$ 0.67

Diluted earnings per common share			$ 0.46	$ 0.39	$ 0.82	$ 0.67

Basic weighted average number of shares outstanding			37,070	36,901	37,057	36,893
Diluted weighted average number of shares outstanding			37,190	37,060	37,167	37,041

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


			Three Months
			Ended June 30, 2012
			Hub	Mode	Inter-Segment Elims	Hub Group Consolidated

Revenue			$595,888	$194,292	$(11,868)	$ 778,312

Transportation costs			531,080	171,742	(11,868)	690,954
	Gross margin		64,808	22,550	-	87,358

Costs and expenses:
	Salaries and benefits		27,590	3,846	-	31,436
	Agent fees and commissions		490	13,111	-	13,601
	General and administrative		10,707	2,027	-	12,734
	Depreciation and amortization		1,099	638	-	1,737
		Total costs and expenses	39,886	19,622	-	59,508

Operating income			24,922	2,928	-	27,850

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


			Three Months
			Ended June 30, 2011
			Hub	Mode	Inter-Segment Elims	Hub Group Consolidated

Revenue			$560,418	$193,248	$ (2,465)	$ 751,201

Transportation costs			497,832	171,105	(2,465)	666,472
	Gross margin		62,586	22,143	-	84,729

Costs and expenses:
	Salaries and benefits		28,111	4,611	-	32,722
	Agent fees and commissions		638	13,127	-	13,765
	General and administrative		10,264	2,588	-	12,852
	Depreciation and amortization		951	521	-	1,472
		Total costs and expenses	39,964	20,847	-	60,811

Operating income			22,622	1,296	-	23,918

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


			Six Months
			Ended June 30, 2012
			Hub	Mode	Inter-Segment Elims	Hub Group Consolidated

Revenue			$1,159,100	$381,475	$(22,378)	$ 1,518,197

Transportation costs			1,032,773	336,702	(22,378)	1,347,097
	Gross margin		126,327	44,773	-	171,100

Costs and expenses:
	Salaries and benefits		56,671	8,064	-	64,735
	Agent fees and commissions		1,125	26,171	-	27,296
	General and administrative		21,438	3,873	-	25,311
	Depreciation and amortization		2,221	1,176	-	3,397
		Total costs and expenses	81,455	39,284	-	120,739

Operating income			44,872	5,489	-	50,361

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


			Six Months
			Ended June 30, 2011
			Hub	Mode	Inter-Segment Elims	Hub Group Consolidated

Revenue			$1,045,797	$193,248	$ (2,465)	$ 1,236,580

Transportation costs			925,904	171,105	(2,465)	1,094,544
	Gross margin		119,893	22,143	-	142,036

Costs and expenses:
	Salaries and benefits		54,912	4,611	-	59,523
	Agent fees and commissions		1,389	13,127	-	14,516
	General and administrative		22,323	2,588	-	24,911
	Depreciation and amortization		1,887	521	-	2,408
		Total costs and expenses	80,511	20,847	-	101,358

Operating income			39,382	1,296	-	40,678

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


	Three Months				Six Months
	Ended June 30,				Ended June 30,
			Change	Change			Change	Change
	2012	2011	$	%	2012	2011	$	%

Diluted GAAP EPS	$ 0.46	$ 0.39	$ 0.07	17.9%	$ 0.82	$ 0.67	$ 0.15	22.4%

Integration expenses and
restructuring costs	$ -	$ 0.01	$(0.01)		$ -	$ 0.04	$(0.04)

Diluted NON-GAAP EPS (adjusted)	$ 0.46	$ 0.40	$ 0.06	15.0%	$ 0.82	$ 0.71	$ 0.11	15.5%



Diluted Shares	37,190	37,060			37,167	37,041

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)


					June 30,	December 31,
					2012	2011

ASSETS
	CURRENT ASSETS:
		Cash and cash equivalents			$ 52,185	$ 49,091
		Accounts receivable trade, net			357,645	326,537
		Accounts receivable other			22,658	23,878
		Prepaid taxes			1,003	2,392
		Deferred taxes			5,523	4,838
		Prepaid expenses and other current assets			12,386	9,056
			TOTAL CURRENT ASSETS		451,400	415,792

	Restricted investments				15,436	14,323
	Property and equipment, net				131,988	124,587
	Other intangibles, net				20,842	21,667
	Goodwill, net				263,361	263,470
	Other assets				2,257	2,845
			TOTAL ASSETS		$885,284	$ 842,684


LIABILITIES AND STOCKHOLDERS' EQUITY
	CURRENT LIABILITIES:
		Accounts payable trade			$211,067	$ 204,693
		Accounts payable other			20,792	17,289
		Accrued payroll			12,465	16,721
		Accrued other			30,094	29,962
		Current portion of capital lease			2,271	2,237
			TOTAL CURRENT LIABILITIES		276,689	270,902

	Non-current liabilities				18,169	17,717
	Deferred taxes				96,757	91,764
	Non-current portion of capital lease				22,279	23,436

	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; 37,111,252 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			164,459	168,800
		Purchase price in excess of predecessor basis, net of tax
		benefit of $10,306			(15,458)	(15,458)
		Retained earnings			431,802	401,188
		Other comprehensive income			2	4
		Treasury stock; at cost, 4,113,540 shares in 2012
			and 4,364,532 shares in 2011		(109,834)	(116,088)
			TOTAL STOCKHOLDERS' EQUITY		471,390	438,865
				TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$885,284	$ 842,684

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

					Six Months Ended
					June 30,
					2012	2011


Cash flows from operating activities:
	Net income				$30,614	$ 24,888
	Adjustments to reconcile net income
		to net cash provided by operating activities:
			Depreciation and amortization		11,004	6,292
			Deferred taxes		4,432	2,733
			Compensation expense related to share-based compensation plans		3,229	2,433
			Gain on sale of assets		(48)	(8)
			Excess tax benefits from share-based compensation		(83)	-
	Changes in operating assets and liabilities, net of effects of acquisition:
			Restricted investments		(1,113)	(1,043)
			Accounts receivable, net		(29,883)	(62,743)
			Prepaid taxes		1,389	169
			Prepaid expenses and other current assets		(3,329)	(3,976)
			Other assets		589	305
			Accounts payable		9,877	31,079
			Accrued expenses		(741)	8,445
			Non-current liabilities		200	1,400
				Net cash provided by operating activities	26,137	9,974

Cash flows from investing activities:
	Proceeds from sale of equipment				643	214
	Purchases of property and equipment				(21,043)	(15,281)
	Cash used in acquisitions, net of cash acquired				(300)	(90,909)
				Net cash used in investing activities	(20,700)	(105,976)

Cash flows from financing activities:
	Proceeds from stock options exercised				45	26
	Stock tendered for payments of withholding taxes				(1,770)	(1,477)
	Capital lease payments				(1,107)	-
	Excess tax benefits from share-based compensation				492	584
				Net cash used in financing activities	(2,340)	(867)


	Effect of exchange rate changes on cash and cash equivalents				(3)	4

Net decrease in cash and cash equivalents					3,094	(96,865)
Cash and cash equivalents beginning of period					49,091	115,144
Cash and cash equivalents end of period					$52,185	$ 18,279

SOURCE Hub Group, Inc.

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

Press Releases

Hub Group, Inc. Reports Record Second Quarter 2012 Earnings