Hub Group, Inc. Reports Record Third Quarter 2015 Earnings

News provided by

Hub Group, Inc.

Oct 28, 2015, 04:03 ET

OAK BROOK, Ill., Oct. 28, 2015 /PRNewswire/ -- Hub Group, Inc. (NASDAQ: HUBG) today announced financial results for the quarter ended September 30, 2015.

Hub Group reported net income of $19.8 million for the third quarter ended September 30, 2015 compared to $4.5 million in the third quarter of 2014.  Hub Group's diluted earnings per share was $0.55 for the third quarter of 2015 compared to earnings per share of $0.12 in third quarter of 2014.  Excluding the effect of one time costs, non-GAAP earnings per share was $0.49 for the third quarter of 2014 (see table below).  Hub Group's revenue decreased 1% to $900 million.  The revenue decline related primarily to lower fuel revenue.

The Hub segment's revenue decreased 2% to $681 million.  Third quarter intermodal revenue decreased 0.2% to $460 million.  Truck brokerage revenue was flat at $84 million this quarter.  Third quarter Unyson Logistics revenue decreased 7% to $137 million.   

The Mode segment's revenue decreased 2% to $239 million.  Operating income was $7.2 million, an increase of 2% compared to the prior year period.

Hub Group ended the quarter with $184 million in cash.

CONFERENCE CALL
Hub will hold a conference call at 5:00 p.m. Eastern Time on Wednesday, October 28, 2015 to discuss its third 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=UofPMhPZfVRwAI.  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) 206-4074 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 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, 2014 and the report on Form 10-Q for the period ended June 30, 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

Nine Months







Ended September 30,

Ended September 30,







2015

2014

2015

2014

Revenue

$ 899,869

$ 913,386

$ 2,635,323

$ 2,655,765














Transportation costs

794,805

820,190

2,339,402

2,375,240

Gross margin

105,064

93,196

295,921

280,525














Costs and expenses:








Salaries and benefits

36,357

30,868

114,670

103,516

Agent fees and commissions

17,862

16,592

49,374

45,802

General and administrative

15,461

13,868

44,295

43,981

Depreciation and amortization

1,966

1,967

5,893

5,902

Driver settlements and related costs

-

10,343

-

10,343

Impairment of software

-

11,881

-

11,881


Total costs and expenses

71,646

85,519

214,232

221,425














Operating income


33,418

7,677

81,689

59,100














Other income (expense):









Interest expense

(757)

(361)

(2,218)

(1,166)

Interest and dividend income

22

(4)

47

21

Other, net 

(952)

39

(2,095)

(191)


Total other expense

(1,687)

(326)

(4,266)

(1,336)














Income before provision for income taxes

31,731

7,351

77,423

57,764














Provision for income taxes

11,899

2,860

28,848

22,562














Net income

$   19,832

$     4,491

$      48,575

$      35,202










































Basic earnings per common share

$       0.55

$       0.12

$          1.35

$          0.96














Diluted earnings per common share

$       0.55

$       0.12

$          1.35

$          0.96














Basic weighted average number of shares outstanding

35,769

36,676

35,970

36,670

Diluted weighted average number of shares outstanding

35,903

36,858

36,049

36,799

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)





















Three Months







Ended September 30, 2015







Hub

Mode

Inter-Segment Elims

Hub Group Total

Revenue

$       680,559

$       239,375

$           (20,065)

$       899,869














Transportation costs

606,081

208,789

(20,065)

794,805

Gross margin

74,478

30,586

-

105,064














Costs and expenses:








Salaries and benefits

32,917

3,440

-

36,357

Agent fees and commissions

14

17,848

-

17,862

General and administrative

13,659

1,802

-

15,461

Depreciation and amortization

1,647

319

-

1,966

Driver settlements and related costs

-

-

-

-

Impairment of software

-

-

-

-


Total costs and expenses

48,237

23,409

-

71,646














Operating income

$        26,241

$          7,177

$                   -

$        33,418

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)





















Three Months







Ended September 30, 2014







Hub

Mode

Inter-Segment Elims

Hub Group Total

Revenue

$       691,835

$       245,421

$           (23,870)

$       913,386














Transportation costs

627,752

216,308

(23,870)

820,190

Gross margin

64,083

29,113

-

93,196














Costs and expenses:








Salaries and benefits

27,428

3,440

-

30,868

Agent fees and commissions

15

16,577

-

16,592

General and administrative

12,144

1,724

-

13,868

Depreciation and amortization

1,627

340

-

1,967

Driver settlements and related costs

10,343

-

-

10,343

Impairment of software

11,881

-

-

11,881


Total costs and expenses

63,438

22,081

-

85,519














Operating income

$             645

$          7,032

$                   -

$          7,677

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)





















Nine Months







Ended September 30, 2015







Hub

Mode

Inter-Segment Elims

Hub Group Total

Revenue

$    2,010,453

$       686,744

$          (61,874)

$    2,635,323














Transportation costs

1,800,628

600,648

(61,874)

2,339,402

Gross margin

209,825

86,096

-

295,921














Costs and expenses:








Salaries and benefits

103,865

10,805

-

114,670

Agent fees and commissions

43

49,331

-

49,374

General and administrative

39,051

5,244

-

44,295

Depreciation and amortization

4,912

981

-

5,893

Driver settlements and related costs

-

-

-

-

Impairment of software

-

-

-

-


Total costs and expenses

147,871

66,361

-

214,232














Operating income

$        61,954

$        19,735

$                  -

$        81,689

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)





















Nine Months







Ended September 30, 2014







Hub

Mode

Inter-Segment Elims

Hub Group Total

Revenue

$    2,027,293

$       685,865

$          (57,393)

$    2,655,765














Transportation costs

1,828,014

604,619

(57,393)

2,375,240

Gross margin

199,279

81,246

-

280,525














Costs and expenses:








Salaries and benefits

92,812

10,704

-

103,516

Agent fees and commissions

31

45,771

-

45,802

General and administrative

38,701

5,280

-

43,981

Depreciation and amortization

4,682

1,220

-

5,902

Driver settlements and related costs

10,343

-

-

10,343

Impairment of software

11,881

-

-

11,881


Total costs and expenses

158,450

62,975

-

221,425














Operating income

$        40,829

$        18,271

$                  -

$        59,100

HUB GROUP, INC.

UNAUDITED NON-GAAP TO GAAP RECONCILIATION

(earnings per share)



















Three Months

Nine Months

Ended, September 30,

Ended, September 30,



Change

Change


Change

Change

2015

2014

$

%

2015

2014

$

%










Diluted GAAP EPS

$   0.55

$     0.12

$   0.43

358.3%

$   1.35

$   0.96

$   0.39

40.6%










Driver settlements and related costs, net of tax

$         -

$     0.17

$ (0.17)

$         -

$   0.17

$ (0.17)










Impairment of Software, net of tax

$         -

$     0.20

$ (0.20)

$         -

$   0.20

$ (0.20)










Canadian currency loss, net of tax

$         -

$           -

$         -

$   0.02

$        -

$   0.02










Severance Cost, net of tax

$         -

$           -

$         -

$   0.02

$        -

$   0.02










Diluted NON-GAAP EPS (adjusted)

$   0.55

$     0.49

$   0.06

12.2%

$   1.39

$   1.33

$   0.06

4.5%










Diluted Shares

35,903

36,858


36,049

36,799

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)






























September 30,

December 31,








2015

2014








(unaudited)

ASSETS



CURRENT ASSETS:




Cash and cash equivalents

$         183,547

$         109,769


Accounts receivable trade, net

411,849

401,803


Accounts receivable other

9,206

24,886


Prepaid taxes

1,358

14,937


Deferred taxes

7,712

4,816


Prepaid expenses and other current assets

15,797

14,355




TOTAL CURRENT ASSETS

629,469

570,566












Restricted investments

20,555

21,944

Property and equipment, net

350,726

338,327

Other intangibles, net

13,463

14,434

Goodwill, net

262,649

262,813

Other assets

4,099

4,043





TOTAL ASSETS

$      1,280,961

$      1,212,127






















LIABILITIES AND STOCKHOLDERS' EQUITY



CURRENT LIABILITIES:





Accounts payable trade

$         273,284

$         256,345


Accounts payable other

25,726

21,333


Accrued payroll

21,037

16,192


Accrued other

45,920

43,523


Current portion of capital lease

2,584

2,504


Current portion of long term debt

25,929

19,619




TOTAL CURRENT LIABILITIES

394,480

359,516












Long term debt

80,690

72,460

Non-current liabilities

19,562

22,929

Long term capital lease

13,974

15,937

Deferred taxes

148,754

140,501












STOCKHOLDERS' EQUITY:





Preferred stock, $.01 par value; 2,000,000 shares authorized; no shares issued or outstanding in 2015 and 2014




-

-


Common stock





Class A: $.01 par value; 97,337,700 shares authorized and 41,224,792 shares issued in 2015 and 2014; 35,698,057 shares outstanding in 2015 and 36,247,324 shares outstanding in 2014

412

412









Class B:  $.01 par value; 662,300 shares authorized; 662,296 shares issued and outstanding in 2015 and 2014

7

7





Additional paid-in capital

169,979

171,235


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

(15,458)

(15,458)




Retained earnings

638,384

589,809


Accumulated other comprehensive loss

(177)

(77)


Treasury stock; at cost, 5,526,735 shares in 2015 and 4,977,468 shares in 2014




(169,646)

(145,144)



TOTAL STOCKHOLDERS' EQUITY

623,501

600,784




TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$      1,280,961

$      1,212,127

HUB GROUP, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)





















Nine Months Ended









September 30,









2015

2014
























Cash flows from operating activities:




Net income


$        48,575

$        35,202

Adjustments to reconcile net income





to net cash provided by operating activities:






Depreciation and amortization 

26,662

21,165



Impairment of software

-

11,881



Deferred taxes

5,757

8,288



Compensation expense related to share-based compensation plans

5,843

6,238



Gain on sale of assets

(116)

(20)



Excess tax benefits from share-based compensation

(40)

-

Changes in operating assets and liabilities:






Restricted investments

1,389

(875)



Accounts receivable, net

6,540

(49,102)



Prepaid taxes

13,579

(5,794)



Prepaid expenses and other current assets

(1,442)

(7,104)



Other assets


(56)

(1,572)



Accounts payable

21,308

38,281



Accrued expenses

8,337

2,581



Non-current liabilities

(3,505)

(534)





Net cash provided by operating activities

132,831

58,635












Cash flows from investing activities:




Proceeds from sale of equipment

922

420

Purchases of property and equipment

(40,951)

(75,881)




Net cash used in investing activities

(40,029)

(75,461)












Cash flows from financing activities:




Proceeds from issuance of debt

31,376

49,268

Repayments of long term debt

(16,836)

(4,198)

Stock tendered for payments of withholding taxes

(2,902)

(3,184)

Purchase of treasury stock

(28,823)

-

Capital lease payments

(1,883)

(1,632)

Excess tax benefits from share-based compensation

166

434




Net cash (used in) provided by financing activities

(18,902)

40,688

























Effect of exchange rate changes on cash and cash equivalents

(122)

1












Net increase in cash and cash equivalents

73,778

23,863

Cash and cash equivalents beginning of period

109,769

68,964

Cash and cash equivalents end of period

$      183,547

$        92,827

SOURCE Hub Group, Inc.

Related Links

http://www.hubgroup.com

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