Hub Group, Inc. Reports Record Second Quarter 2013 Earnings

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Jul 18, 2013, 04:01 ET

DOWNERS GROVE, Ill., July 18, 2013 /PRNewswire/ -- Hub Group, Inc. (NASDAQ: HUBG) today announced financial results for the quarter ended June 30, 2013.

Hub Group reported record income of $18.6 million for the second quarter ended June 30, 2013, an increase of 10% compared to the second quarter of 2012. Hub Group's diluted earnings per share was $0.50 for the second quarter of 2013, which represents an increase of 9% when compared with the prior year period. Hub Group's revenue increased 8% to $837 million.

The Hub segment's revenue increased 8% to $645 million. Second quarter intermodal revenue increased 4% to $448 million. Truck brokerage revenue increased 5% to $84 million this quarter. Second quarter Unyson Logistics revenue increased 34% to $113 million. The Hub segment's operating income was $25.5 million.

The Mode segment's revenue increased 5% to $204 million. Operating income was $5.0 million, an increase of 71% compared to the prior year period.

Hub Group ended the quarter with $72 million in cash.

"All of our business lines contributed to a record second quarter. We remain focused on growing profitably and expect continued growth in the second half of the year," 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 Thursday, July 18, 2013 to discuss its second 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) 713-4209. The conference call participant code is 65076828#. Participants may pre-register for the call at https://www.theconferencingservice.com/prereg/key.process?key=PUU983CAH. 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, 2012 and the report on Form 10-Q for the period ended March 31, 2013. 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,
			2013	2012	2013	2012
Revenue			$ 836,685	$ 778,312	$ 1,605,665	$ 1,518,197

Transportation costs			741,212	690,954	1,422,854	1,347,097
	Gross margin		95,473	87,358	182,811	171,100

Costs and expenses:
	Salaries and benefits		35,002	31,436	69,585	64,735
	Agent fees and commissions		13,686	13,601	26,960	27,296
	General and administrative		14,728	12,734	27,919	25,311
	Depreciation and amortization		1,593	1,737	3,146	3,397
		Total costs and expenses	65,009	59,508	127,610	120,739

Operating income			30,464	27,850	55,201	50,361

Other income (expense):
	Interest expense		(305)	(301)	(595)	(608)
	Interest and dividend income		15	33	44	67
	Other, net		23	(18)	12	(41)
		Total other (expense) income	(267)	(286)	(539)	(582)

Income before provision for income taxes			30,197	27,564	54,662	49,779

Provision for income taxes			11,587	10,612	20,688	19,165

Net income			$ 18,610	$ 16,952	$ 33,974	$ 30,614



Basic earnings per common share			$ 0.50	$ 0.46	$ 0.92	$ 0.83

Diluted earnings per common share			$ 0.50	$ 0.46	$ 0.92	$ 0.82

Basic weighted average number of shares outstanding			36,870	37,070	36,863	37,057
Diluted weighted average number of shares outstanding			36,989	37,190	36,969	37,167

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

			Three Months
			Ended June 30, 2013
			Hub	Mode	Inter-Segment Elims	Hub Group Consolidated
Revenue			$ 644,924	$ 203,918	$ (12,157)	$ 836,685

Transportation costs			573,498	179,871	(12,157)	741,212
	Gross margin		71,426	24,047	-	95,473

Costs and expenses:
	Salaries and benefits		31,208	3,794	-	35,002
	Agent fees and commissions		350	13,336	-	13,686
	General and administrative		13,338	1,390	-	14,728
	Depreciation and amortization		1,061	532	-	1,593
		Total costs and expenses	45,957	19,052	-	65,009

Operating income			$ 25,469	$ 4,995	$ -	$ 30,464

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)

			Six Months
			Ended June 30, 2013
			Hub	Mode	Inter-Segment Elims	Hub Group Consolidated
Revenue			$ 1,237,575	$ 391,378	$ (23,288)	$ 1,605,665

Transportation costs			1,100,969	345,173	(23,288)	1,422,854
	Gross margin		136,606	46,205	-	182,811

Costs and expenses:
	Salaries and benefits		61,985	7,600	-	69,585
	Agent fees and commissions		799	26,161	-	26,960
	General and administrative		25,036	2,883	-	27,919
	Depreciation and amortization		2,081	1,065	-	3,146
		Total costs and expenses	89,901	37,709	-	127,610

Operating income			$ 46,705	$ 8,496	$ -	$ 55,201

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 CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)


						June 30,	December 31,
						2013	2012

ASSETS
	CURRENT ASSETS:
		Cash and cash equivalents				$ 72,000	$ 70,760
		Accounts receivable trade, net				395,387	346,917
		Accounts receivable other				22,955	25,945
		Prepaid taxes				173	139
		Deferred taxes				5,432	4,965
		Prepaid expenses and other current assets				11,033	10,619
				TOTAL CURRENT ASSETS		506,980	459,345

	Restricted investments					17,759	17,218
	Property and equipment, net					189,396	157,584
	Other intangibles, net					19,319	20,068
	Goodwill, net					263,142	263,251
	Other assets					2,504	2,387
					TOTAL ASSETS	$ 999,100	$ 919,853


LIABILITIES AND STOCKHOLDERS' EQUITY
	CURRENT LIABILITIES:
		Accounts payable trade				$ 234,224	$ 206,497
		Accounts payable other				25,875	22,925
		Accrued payroll				14,822	17,210
		Accrued other				30,309	28,633
		Current portion of capital lease				2,367	2,120
		Current portion of long term debt				1,755	-
				TOTAL CURRENT LIABILITIES		309,352	277,385

	Long term debt					7,365	-
	Non-current liabilities					19,847	20,041
	Long term capital lease					19,709	21,099
	Deferred taxes					107,510	100,431

	STOCKHOLDERS' EQUITY:
		Preferred stock, $.01 par value; 2,000,000 shares authorized;
			no shares issued or outstanding in 2013 and 2012			-	-
		Common stock
			Class A: $.01 par value; 97,337,700 shares authorized and
				41,224,792 shares issued in 2013 and 2012; 36,984,705 shares outstanding in 2013 and 36,767,485 shares outstanding in 2012		412	412
			Class B: $.01 par value; 662,300 shares authorized;
				662,296 shares issued and outstanding in 2013 and 2012		7	7
		Additional paid-in capital				163,104	167,765
		Purchase price in excess of predecessor basis, net of tax
		benefit of $10,306				(15,458)	(15,458)
		Retained earnings				503,115	469,141
		Other comprehensive (loss) income				(32)	1
		Treasury stock; at cost, 4,240,087 shares in 2013
			and 4,457,307 shares in 2012			(115,831)	(120,971)
			TOTAL STOCKHOLDERS' EQUITY			535,317	500,897
				TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$ 999,100	$ 919,853

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

						Six Months Ended
						June 30,
						2013	2012


Cash flows from operating activities:
	Net income					$ 33,974	$ 30,614
	Adjustments to reconcile net income
		to net cash provided by operating activities:
			Depreciation and amortization			9,954	11,004
			Deferred taxes			6,548	4,432
			Compensation expense related to share-based compensation plans			3,757	3,229
			Gain on sale of assets			(287)	(48)
			Excess tax benefits from share-based compensation			(8)	(83)
	Changes in operating assets and liabilities, net of effects of acquisition:
			Restricted investments			(541)	(1,113)
			Accounts receivable, net			(45,558)	(29,883)
			Prepaid taxes			(48)	1,389
			Prepaid expenses and other current assets			(417)	(3,329)
			Other assets			(120)	589
			Accounts payable			30,685	9,877
			Accrued expenses			(3,680)	(741)
			Non-current liabilities			118	200
					Net cash provided by operating activities	34,377	26,137

Cash flows from investing activities:
	Proceeds from sale of equipment					1,358	643
	Purchases of property and equipment					(39,202)	(21,043)
	Cash used in acquisitions, net of cash acquired					-	(300)
				Net cash used in investing activities		(37,844)	(20,700)

Cash flows from financing activities:
	Proceeds from issuance of debt					9,120	-
	Proceeds from stock options exercised					41	45
	Stock tendered for payments of withholding taxes					(2,585)	(1,770)
	Purchase of treasury stock					(903)	-
	Capital lease payments					(1,143)	(1,107)
	Excess tax benefits from share-based compensation					177	492
				Net cash provided by (used in) financing activities		4,707	(2,340)


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

Net increase in cash and cash equivalents						1,240	3,094
Cash and cash equivalents beginning of period						70,760	49,091
Cash and cash equivalents end of period						$ 72,000	$ 52,185