Hub Group, Inc. Reports Record Second Quarter 2016 Earnings

News provided by

Hub Group, Inc.

Jul 26, 2016, 04:01 ET

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

Hub Group reported net income of $20.7 million for the second quarter ended June 30, 2016 compared to $18.5 million in the second quarter of 2015.  Hub Group's diluted earnings per share was $0.61 for the quarter.  Earnings per share increased 20% when compared with the prior year period.  Hub Group's revenue decreased 5% to $856 million due primarily to lower fuel revenue. 

The Hub segment's revenue decreased 6% to $649 million due primarily to a decrease in fuel revenue.  Second quarter intermodal revenue decreased 6% to $438 million.  Intermodal volume decreased 2%.  Truck brokerage revenue decreased 11% to $83 million this quarter.  Second quarter Unyson Logistics revenue decreased 1% to $127 million.  The Hub segment's operating income was $27.2 million, an increase of 24% compared to the prior year period. 

The Mode segment's revenue decreased 1% to $232 million.  Operating income was $7.1 million compared to $7.5 million in the prior year period.

Hub Group ended the quarter with $164 million in cash.

CONFERENCE CALL

Hub Group will hold a conference call at 5:00 p.m. Eastern Time on Tuesday, July 26, 2016 to discuss its second 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=UVdYOgtaldUyqs. 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 and our report on Form 10-Q for the period ended March 31, 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

Six Months







Ended June 30,

Ended June 30,







2016

2015

2016

2015

Revenue


$ 855,557

$ 899,513

$ 1,661,416

$ 1,735,454














Transportation costs


741,067

797,784

1,438,539

1,544,597

Gross margin


114,490

101,729

222,877

190,857














Costs and expenses:










Salaries and benefits


43,602

38,837

87,465

78,313

Agent fees and commissions

18,360

16,686

35,262

31,512

General and administrative

16,083

14,763

32,727

28,834

Depreciation and amortization

2,148

1,967

4,283

3,927


Total costs and expenses

80,193

72,253

159,737

142,586














Operating income


34,297

29,476

63,140

48,271














Other income (expense):









Interest expense


(857)

(720)

(1,767)

(1,461)

Interest and dividend income

120

19

181

25

Other, net 


216

261

1,152

(1,143)


Total other expense


(521)

(440)

(434)

(2,579)














Income before provision for income taxes

33,776

29,036

62,706

45,692














Provision for income taxes

13,105

10,569

24,069

16,949














Net income


$  20,671

$  18,467

$     38,637

$     28,743




























Basic earnings per common share

$      0.61

$      0.51

$         1.12

$         0.80














Diluted earnings per common share

$      0.61

$      0.51

$         1.12

$         0.80














Basic weighted average number of shares outstanding

33,944

35,986

34,541

36,071

Diluted weighted average number of shares outstanding

34,027

36,075

34,575

36,122

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)





















Three Months







Ended June 30, 2016







Hub

Mode

Inter-Segment Elims

Hub Group Total

Revenue


$ 648,523

$ 231,924

$                (24,890)

$          855,557














Transportation costs


565,448

200,509

(24,890)

741,067

Gross margin


83,075

31,415

-

114,490














Costs and expenses:










Salaries and benefits


39,787

3,815

-

43,602

Agent fees and commissions

13

18,347

-

18,360

General and administrative

14,226

1,857

-

16,083

Depreciation and amortization

1,830

318

-

2,148


Total costs and expenses

55,856

24,337

-

80,193














Operating income


$  27,219

$    7,078

$                        -

$            34,297

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)





















Three Months







Ended June 30, 2015







Hub

Mode

Inter-Segment Elims

Hub Group Total

Revenue


$ 686,451

$ 233,847

$                (20,785)

$          899,513














Transportation costs


614,289

204,280

(20,785)

797,784

Gross margin


72,162

29,567

-

101,729














Costs and expenses:










Salaries and benefits


35,288

3,549

-

38,837

Agent fees and commissions

14

16,672

-

16,686

General and administrative

13,194

1,569

-

14,763

Depreciation and amortization

1,647

320

-

1,967


Total costs and expenses

50,143

22,110

-

72,253














Operating income


$  22,019

$    7,457

$                        -

$            29,476

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)





















Six Months







Ended June 30, 2016







Hub

Mode

Inter-Segment Elims

Hub Group Total

Revenue


$ 1,263,751

$ 440,755

$         (43,090)

$        1,661,416














Transportation costs


1,101,522

380,107

(43,090)

1,438,539

Gross margin


162,229

60,648

-

222,877














Costs and expenses:










Salaries and benefits


79,883

7,582

-

87,465

Agent fees and commissions

27

35,235

-

35,262

General and administrative

28,948

3,779

-

32,727

Depreciation and amortization

3,644

639

-

4,283


Total costs and expenses

112,502

47,235

-

159,737














Operating income


$     49,727

$  13,413

$                 -

$            63,140

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)





















Six Months







Ended June 30, 2015







Hub

Mode

Inter-Segment Elims

Hub Group Total

Revenue


$ 1,329,894

$ 447,369

$         (41,809)

$        1,735,454














Transportation costs


1,194,547

391,859

(41,809)

1,544,597

Gross margin


135,347

55,510

-

190,857














Costs and expenses:










Salaries and benefits


70,948

7,365

-

78,313

Agent fees and commissions

29

31,483

-

31,512

General and administrative

25,392

3,442

-

28,834

Depreciation and amortization

3,265

662

-

3,927


Total costs and expenses

99,634

42,952

-

142,586














Operating income


$     35,713

$  12,558

$                 -

$            48,271

HUB GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)






























June 30,

December 31,








2016

2015








(unaudited)












ASSETS






CURRENT ASSETS:





Cash and cash equivalents

$    164,150

$       207,749


Accounts receivable trade, net

399,207

379,987


Accounts receivable other

3,917

10,344


Prepaid taxes

3,339

362


Deferred taxes

-

8,412


Prepaid expenses and other current assets

15,071

17,756




TOTAL CURRENT ASSETS

585,684

624,610












Restricted investments

19,991

21,108

Property and equipment, net

381,532

374,847

Other intangibles, net

12,491

13,139

Goodwill, net

262,485

262,594

Other assets

4,287

4,848




TOTAL ASSETS

$ 1,266,470

$    1,301,146






















LIABILITIES AND STOCKHOLDERS' EQUITY



CURRENT LIABILITIES:





Accounts payable trade

$    251,815

$       230,432


Accounts payable other

24,841

21,495


Accrued payroll

22,883

33,020


Accrued other

38,005

38,733


Current portion of capital lease

2,648

2,608


Current portion of long term debt

35,430

32,409




TOTAL CURRENT LIABILITIES

375,622

358,697












Long term debt

94,968

100,895

Non-current liabilities

21,536

20,233

Long term portion of capital lease

11,962

13,299

Deferred taxes

159,319

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; 33,567,862 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

169,229

174,285


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




(15,458)

(15,458)


Retained earnings

699,395

660,758


Accumulated other comprehensive loss

(231)

(178)


Treasury stock; at cost, 7,656,930 shares in 2016 and 5,590,831 shares in 2015




(250,291)

(171,986)



TOTAL STOCKHOLDERS' EQUITY

603,063

647,840




TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$ 1,266,470

$    1,301,146

HUB GROUP, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)





















Six Months Ended









June 30,









2016

2015
























Cash flows from operating activities:




Net income


$   38,637

$   28,743

Adjustments to reconcile net income





to net cash provided by operating activities:






Depreciation and amortization 

21,426

17,526



Deferred taxes

7,777

2,489



Compensation expense related to share-based compensation plans

4,245

4,110



Gain on sale of assets

(255)

(60)



Excess tax benefits from share-based compensation

132

(33)

Changes in operating assets and liabilities:






Restricted investments

1,117

(295)



Accounts receivable, net

(12,826)

(11,407)



Prepaid taxes

(2,977)

13,284



Prepaid expenses and other current assets

2,685

3,030



Other assets


561

216



Accounts payable

24,740

15,132



Accrued expenses

(14,031)

8,943



Non-current liabilities

1,211

(1,226)




Net cash provided by operating activities

72,442

80,452












Cash flows from investing activities:




Proceeds from sale of equipment

1,148

136

Purchases of property and equipment

(25,217)

(23,716)




Net cash used in investing activities

(24,069)

(23,580)












Cash flows from financing activities:




Proceeds from issuance of debt

13,274

18,548

Repayments of long term debt

(16,180)

(10,938)

Stock tendered for payments of withholding taxes

(2,379)

(2,877)

Purchase of treasury stock

(85,000)

(13,419)

Capital lease payments

(1,297)

(1,243)

Excess tax benefits from share-based compensation

(359)

89




Net cash used in financing activities

(91,941)

(9,840)

























Effect of exchange rate changes on cash and cash equivalents

(31)

(21)












Net (decrease) increase in cash and cash equivalents

(43,599)

47,011

Cash and cash equivalents beginning of period

207,749

109,769

Cash and cash equivalents end of period

$ 164,150

$ 156,780

SOURCE Hub Group, Inc.

Related Links

http://www.hubgroup.com

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