Hub Group, Inc. Reports Record First Quarter 2016 Earnings per Share of $0.51
OAK BROOK, Ill., April 26, 2016 /PRNewswire/ -- Hub Group, Inc. (NASDAQ: HUBG) today announced financial results for the quarter ended March 31, 2016.
Hub Group reported net income of $18.0 million for the first quarter ended March 31, 2016 compared to $10.3 million for the first quarter of 2015. Hub Group's diluted earnings per share was $0.51 for the quarter. Earnings per share increased 82% when compared with the prior year period. Hub Group's pre-tax income included one-time costs of $4.1 million including $3.1 million of costs related to the closure of the Hub Group Trucking terminal in Los Angeles and $1.0 million of severance resulting from management changes. Excluding the effect of these items, non-GAAP earnings per share was $0.58 for the quarter (see table below). Hub Group's revenue decreased 4% to $806 million due to lower fuel revenue.
The Hub segment's revenue decreased 4% to $615 million due primarily to a decrease in fuel revenue. First quarter intermodal revenue decreased 2% to $414 million. Intermodal volume increased 1%. Truck brokerage revenue decreased 9% to $81 million this quarter. First quarter Unyson Logistics revenue decreased 10% to $120 million. The Hub segment's operating income was $22.5 million.
The Mode segment's revenue decreased 2% to $209 million. Operating income was $6.3 million, an increase of 24% compared to the prior year period.
Hub Group ended the quarter with $200 million in cash.
CONFERENCE CALL
Hub Group will hold a conference call at 5:00 p.m. Eastern Time on Tuesday, April 26, 2016 to discuss its first 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=UWPVrIWNdEuuMN. 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 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, our annual report on Form 10-K for the year ended December 31, 2015. 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 |
|||||||||||||||
| Ended March 31, |
|||||||||||||||
| 2016 |
2015 |
||||||||||||||
| Revenue |
$ 805,859 |
$ 835,941 |
|||||||||||||
| Transportation costs |
697,472 |
746,813 |
|||||||||||||
| Gross margin |
108,387 |
89,128 |
|||||||||||||
| Costs and expenses: |
|||||||||||||||
| Salaries and benefits |
43,863 |
39,476 |
|||||||||||||
| Agent fees and commissions |
16,901 |
14,826 |
|||||||||||||
| General and administrative |
16,644 |
14,071 |
|||||||||||||
| Depreciation and amortization |
2,136 |
1,960 |
|||||||||||||
| Total costs and expenses |
79,544 |
70,333 |
|||||||||||||
| Operating income |
28,843 |
18,795 |
|||||||||||||
| Other income (expense): |
|||||||||||||||
| Interest expense |
(911) |
(741) |
|||||||||||||
| Interest and dividend income |
61 |
6 |
|||||||||||||
| Other, net |
936 |
(1,404) |
|||||||||||||
| Total other income (expense) |
86 |
(2,139) |
|||||||||||||
| Income before provision for income taxes |
28,929 |
16,656 |
|||||||||||||
| Provision for income taxes |
10,964 |
6,380 |
|||||||||||||
| Net income |
$ 17,965 |
$ 10,276 |
|||||||||||||
| Basic earnings per common share |
$ 0.51 |
$ 0.28 |
|||||||||||||
| Diluted earnings per common share |
$ 0.51 |
$ 0.28 |
|||||||||||||
| Basic weighted average number of shares outstanding |
35,137 |
36,156 |
|||||||||||||
| Diluted weighted average number of shares outstanding |
35,122 |
36,169 |
|||||||||||||
| HUB GROUP, INC. |
||||||||||||||||||
| UNAUDITED FINANCIAL INFORMATION BY SEGMENT |
||||||||||||||||||
| (in thousands) |
||||||||||||||||||
| Three Months |
||||||||||||||||||
| Ended March 31, 2016 |
||||||||||||||||||
| Hub |
Mode |
Inter-Segment Elims |
Hub Group Consolidated |
|||||||||||||||
| Revenue |
$ 615,227 |
$ 208,832 |
$ (18,200) |
$ 805,859 |
||||||||||||||
| Transportation costs |
536,073 |
179,599 |
(18,200) |
697,472 |
||||||||||||||
| Gross margin |
79,154 |
29,233 |
- |
108,387 |
||||||||||||||
| Costs and expenses: |
||||||||||||||||||
| Salaries and benefits |
40,096 |
3,767 |
- |
43,863 |
||||||||||||||
| Agent fees and commissions |
13 |
16,888 |
- |
16,901 |
||||||||||||||
| General and administrative |
14,722 |
1,922 |
- |
16,644 |
||||||||||||||
| Depreciation and amortization |
1,815 |
321 |
- |
2,136 |
||||||||||||||
| Total costs and expenses |
56,646 |
22,898 |
- |
79,544 |
||||||||||||||
| Operating income |
22,508 |
6,335 |
- |
28,843 |
||||||||||||||
| HUB GROUP, INC. |
||||||||||||||||||
| UNAUDITED FINANCIAL INFORMATION BY SEGMENT |
||||||||||||||||||
| (in thousands) |
||||||||||||||||||
| Three Months |
||||||||||||||||||
| Ended March 31, 2015 |
||||||||||||||||||
| Hub |
Mode |
Inter-Segment Elims |
Hub Group Consolidated |
|||||||||||||||
| Revenue |
$ 643,443 |
$ 213,522 |
$ (21,024) |
$ 835,941 |
||||||||||||||
| Transportation costs |
580,258 |
187,579 |
(21,024) |
746,813 |
||||||||||||||
| Gross margin |
63,185 |
25,943 |
- |
89,128 |
||||||||||||||
| Costs and expenses: |
||||||||||||||||||
| Salaries and benefits |
35,660 |
3,816 |
- |
39,476 |
||||||||||||||
| Agent fees and commissions |
15 |
14,811 |
- |
14,826 |
||||||||||||||
| General and administrative |
12,198 |
1,873 |
- |
14,071 |
||||||||||||||
| Depreciation and amortization |
1,618 |
342 |
- |
1,960 |
||||||||||||||
| Total costs and expenses |
49,491 |
20,842 |
- |
70,333 |
||||||||||||||
| Operating income |
13,694 |
5,101 |
- |
18,795 |
||||||||||||||
| HUB GROUP, INC. |
||||
| UNAUDITED NON-GAAP TO GAAP RECONCILIATION |
||||
| (earnings per share) |
||||
| Three Months |
||||
| Ended, March 31, |
||||
| Change |
Change |
|||
| 2016 |
2015 |
$ |
% |
|
| Diluted GAAP EPS |
$ 0.51 |
$ 0.28 |
$ 0.23 |
82.1% |
| Hub Group Trucking Los Angeles shutdown costs, net of tax |
0.05 |
- |
0.05 |
|
| Severance costs, net of tax |
0.02 |
0.02 |
- |
|
| Canadian currency translation loss, net of tax |
- |
0.02 |
(0.02) |
|
| Diluted non-GAAP EPS (adjusted) |
$ 0.58 |
$ 0.32 |
$ 0.26 |
81.3% |
| Diluted shares |
35,122 |
36,169 |
||
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. |
||||||||||
| CONSOLIDATED BALANCE SHEETS |
||||||||||
| (in thousands, except share amounts) |
||||||||||
| March 31, |
December 31, |
|||||||||
| 2016 |
2015 |
|||||||||
| (unaudited) |
||||||||||
| ASSETS |
||||||||||
| CURRENT ASSETS: |
||||||||||
| Cash and cash equivalents |
$ 200,256 |
$ 207,749 |
||||||||
| Accounts receivable trade, net |
365,149 |
379,987 |
||||||||
| Accounts receivable other |
3,848 |
10,344 |
||||||||
| Prepaid taxes |
336 |
362 |
||||||||
| Deferred taxes |
- |
8,412 |
||||||||
| Prepaid expenses and other current assets |
16,347 |
17,756 |
||||||||
| TOTAL CURRENT ASSETS |
585,936 |
624,610 |
||||||||
| Restricted investments |
19,423 |
21,108 |
||||||||
| Property and equipment, net |
379,484 |
374,847 |
||||||||
| Other intangibles, net |
12,815 |
13,139 |
||||||||
| Goodwill, net |
262,540 |
262,594 |
||||||||
| Other assets |
4,448 |
4,848 |
||||||||
| TOTAL ASSETS |
$ 1,264,646 |
$ 1,301,146 |
||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||||
| CURRENT LIABILITIES: |
||||||||||
| Accounts payable trade |
$ 234,196 |
$ 230,432 |
||||||||
| Accounts payable other |
23,150 |
21,495 |
||||||||
| Accrued payroll |
14,355 |
33,020 |
||||||||
| Accrued other |
54,469 |
38,733 |
||||||||
| Current portion of capital lease |
2,624 |
2,608 |
||||||||
| Current portion of long term debt |
32,524 |
32,409 |
||||||||
| TOTAL CURRENT LIABILITIES |
361,318 |
358,697 |
||||||||
| Long term debt |
92,648 |
100,895 |
||||||||
| Non-current liabilities |
20,754 |
20,233 |
||||||||
| Long term portion of capital lease |
12,640 |
13,299 |
||||||||
| Deferred taxes |
154,039 |
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; 34,675,173 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 |
166,803 |
174,285 |
||||||||
| Purchase price in excess of predecessor basis, net of tax |
||||||||||
| benefit of $10,306 |
(15,458) |
(15,458) |
||||||||
| Retained earnings |
678,723 |
660,758 |
||||||||
| Accumulated other comprehensive loss |
(177) |
(178) |
||||||||
| Treasury stock; at cost, 6,549,619 shares in 2016 |
||||||||||
| and 5,590,831 shares in 2015 |
(207,063) |
(171,986) |
||||||||
| TOTAL STOCKHOLDERS' EQUITY |
623,247 |
647,840 |
||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ 1,264,646 |
$ 1,301,146 |
||||||||
| HUB GROUP, INC. |
|||||||||||
| UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||||||
| (in thousands) |
|||||||||||
| Three Months Ended |
|||||||||||
| March 31, |
|||||||||||
| 2016 |
2015 |
||||||||||
| Cash flows from operating activities: |
|||||||||||
| Net income |
$ 17,965 |
$ 10,276 |
|||||||||
| Adjustments to reconcile net income |
|||||||||||
| to net cash provided by operating activities: |
|||||||||||
| Depreciation and amortization |
10,639 |
8,731 |
|||||||||
| Deferred taxes |
2,383 |
1,593 |
|||||||||
| Compensation expense related to share-based compensation plans |
2,181 |
2,034 |
|||||||||
| Gain on sale of assets |
(83) |
- |
|||||||||
| Excess tax benefits from share-based compensation |
(30) |
(13) |
|||||||||
| Changes in operating assets and liabilities: |
|||||||||||
| Restricted investments |
1,685 |
98 |
|||||||||
| Accounts receivable, net |
21,332 |
2,874 |
|||||||||
| Prepaid taxes |
26 |
4,557 |
|||||||||
| Prepaid expenses and other current assets |
1,409 |
(3,246) |
|||||||||
| Other assets |
400 |
330 |
|||||||||
| Accounts payable |
5,421 |
13,414 |
|||||||||
| Accrued expenses |
(13,517) |
5,733 |
|||||||||
| Non-current liabilities |
481 |
(1,052) |
|||||||||
| Net cash provided by operating activities |
50,292 |
45,329 |
|||||||||
| Cash flows from investing activities: |
|||||||||||
| Proceeds from sale of equipment |
592 |
26 |
|||||||||
| Purchases of property and equipment |
(4,893) |
(15,057) |
|||||||||
| Net cash used in investing activities |
(4,301) |
(15,031) |
|||||||||
| Cash flows from financing activities: |
|||||||||||
| Proceeds from issuance of debt |
- |
11,480 |
|||||||||
| Repayments of long term debt |
(8,132) |
(5,553) |
|||||||||
| Stock tendered for payments of withholding taxes |
(2,208) |
(2,754) |
|||||||||
| Purchase of treasury stock |
(42,368) |
(13,419) |
|||||||||
| Capital lease payments |
(643) |
(605) |
|||||||||
| Excess tax benefits from share-based compensation |
(134) |
42 |
|||||||||
| Net cash used in financing activities |
(53,485) |
(10,809) |
|||||||||
| Effect of exchange rate changes on cash and cash equivalents |
1 |
3 |
|||||||||
| Net (decrease) increase in cash and cash equivalents |
(7,493) |
19,492 |
|||||||||
| Cash and cash equivalents beginning of period |
207,749 |
109,769 |
|||||||||
| Cash and cash equivalents end of period |
$ 200,256 |
$ 129,261 |
|||||||||
SOURCE Hub Group, Inc.
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