Hub Group, Inc. Reports Third Quarter 2014 Earnings per Share of $0.49 Excluding One-Time Costs and Non-Cash Impairment Charge

News provided by

Hub Group, Inc.

Oct 23, 2014, 04:02 ET

OAK BROOK, Ill., Oct. 23, 2014 /PRNewswire/ -- Hub Group, Inc. (NASDAQ: HUBG) today announced financial results for the quarter ended September 30, 2014.

Hub Group reported income of $4.5 million for the third quarter ended September 30, 2014 compared to $18.6 million in the third quarter of 2013.  Hub Group's diluted earnings per share was $0.12 for the third quarter of 2014.  Hub Group's pre-tax income included one-time costs of $10.3 million for driver settlements and related costs and a non-cash impairment charge of $11.9 million associated with the write off of software development costs. Excluding the effect of these items, non-GAAP earnings per share was $0.49 for the quarter (see table below).  Non-GAAP earnings per share decreased 2% when compared with the prior year period.  Hub Group's revenue increased 3% to $913 million. 

The Hub segment's revenue increased 2% to $692 million.  Third quarter intermodal revenue decreased 2% to $461 million.  Truck brokerage revenue was flat at $84 million this quarter.  Third quarter Unyson Logistics revenue increased 18% to $147 million.   

The Mode segment's revenue increased 13% to $245 million.  Operating income was $7 million, an increase of 19% compared to the prior year period.

Hub Group ended the quarter with $93 million in cash.

Yesterday the Board of Directors authorized the purchase of up to $75 million of Hub's Class A common stock.  The authorization expires December 31, 2015.  Hub intends to make purchases from time to time as market conditions warrant.  Hub intends to hold the repurchased shares in treasury for future use.

CONFERENCE CALL
Hub will hold a conference call at 5:00 p.m. Eastern Time on Thursday, October 23, 2014 to discuss its third 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) 206-4074.  The conference call participant code is 38233721#.  Participants may pre-register for the call at http://www.yourconferencecenter.com/r.aspx?p=1&a=UvoXrefUAYiZbp .   Pre-registrants will be issued a passcode and 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, 2013 and the report on Form 10-Q for the period ended June 30, 2014.  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,







2014

2013

2014

2013

Revenue


$ 913,386

$ 882,981

$ 2,655,765

$ 2,488,646














Transportation costs


820,190

789,857

2,375,240

2,212,711

Gross margin


93,196

93,124

280,525

275,935














Costs and expenses:










Salaries and benefits


30,868

31,888

103,516

101,473

Agent fees and commissions

16,592

14,557

45,802

41,517

General and administrative

13,868

13,757

43,981

41,676

Depreciation and amortization

1,967

1,627

5,902

4,773

Driver settlements and related costs

10,343

-

10,343

-

Impairment of software

11,881

-

11,881

-


Total costs and expenses

85,519

61,829

221,425

189,439














Operating income


7,677

31,295

59,100

86,496














Other income (expense):









Interest expense


(361)

(323)

(1,166)

(918)

Interest and dividend income

(4)

25

21

69

Other, net 


39

(35)

(191)

(23)


Total other (expense) income 

(326)

(333)

(1,336)

(872)














Income before provision for income taxes

7,351

30,962

57,764

85,624














Provision for income taxes

2,860

12,362

22,562

33,050














Net income


$    4,491

$  18,600

$     35,202

$     52,574










































Basic earnings per common share

$      0.12

$      0.50

$         0.96

$         1.43














Diluted earnings per common share

$      0.12

$      0.50

$         0.96

$         1.42














Basic weighted average number of shares outstanding

36,676

36,873

36,670

36,866

Diluted weighted average number of shares outstanding

36,858

37,050

36,799

36,996

    

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)





















Three Months







Ended September 30, 2013







Hub

Mode

Inter-Segment Elims

Hub Group Total

Revenue


$ 678,573

$ 217,424

$                 (13,016)

$           882,981














Transportation costs


611,344

191,529

(13,016)

789,857

Gross margin


67,229

25,895

-

93,124














Costs and expenses:










Salaries and benefits


28,274

3,614

-

31,888

Agent fees and commissions

425

14,132

-

14,557

General and administrative

12,065

1,692

-

13,757

Depreciation and amortization

1,088

539

-

1,627


Total costs and expenses

41,852

19,977

-

61,829














Operating income


$  25,377

$    5,918

$                         -

$             31,295

    

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 FINANCIAL INFORMATION BY SEGMENT

(in thousands)





















Nine Months







Ended September 30, 2013







Hub

Mode

Inter-Segment Elims

Hub Group Total

Revenue


$ 1,916,149

$ 608,802

$         (36,305)

$        2,488,646














Transportation costs


1,712,314

536,702

(36,305)

2,212,711

Gross margin


203,835

72,100

-

275,935














Costs and expenses:










Salaries and benefits


90,259

11,214

-

101,473

Agent fees and commissions

1,223

40,294

-

41,517

General and administrative

37,101

4,575

-

41,676

Depreciation and amortization

3,169

1,604

-

4,773


Total costs and expenses

131,752

57,687

-

189,439














Operating income


$     72,083

$  14,413

$                 -

$             86,496

    

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

2014

2013

$

%

2014

2013

$

%










Diluted GAAP EPS

$  0.12

$  0.50

$ (0.38)

-76.0%

$  0.96

$  1.42

$ (0.46)

-32.4%










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










Diluted NON-GAAP EPS (adjusted)

$  0.49

$  0.50

$ (0.01)

-2.0%

$  1.33

$  1.42

$ (0.09)

-6.3%










Diluted Shares

36,858

37,050


36,799

36,996

In accordance with U.S. generally accepted accounting principles (GAAP), reported earnings per share include the after-tax impact, using our effective tax rate of 39%, 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)



























September 30,

December 31,







2014

2013










ASSETS



CURRENT ASSETS:




Cash and cash equivalents

$           92,827

$          68,964


Accounts receivable trade, net

426,627

371,528


Accounts receivable other

20,572

26,569


Prepaid taxes

6,203

409


Deferred taxes

5,100

5,826


Prepaid expenses and other current assets

19,842

12,738




TOTAL CURRENT ASSETS

571,171

486,034











Restricted investments

21,629

20,754

Property and equipment, net

315,151

260,400

Other intangibles, net

14,758

15,729

Goodwill, net

262,868

263,032

Other assets

3,566

1,994





TOTAL ASSETS

$      1,189,143

$     1,047,943




















LIABILITIES AND STOCKHOLDERS' EQUITY



CURRENT LIABILITIES:




Accounts payable trade

$         272,250

$        232,350


Accounts payable other

23,336

24,957


Accrued payroll

17,477

17,000


Accrued other

56,449

42,834


Current portion of capital lease

2,679

2,413


Current portion of long term debt

11,559

1,771




TOTAL CURRENT LIABILITIES

383,750

321,325











Long term debt

41,757

6,475

Non-current liabilities

21,793

22,304

Long term capital lease

16,579

18,477

Deferred taxes

125,002

117,835











STOCKHOLDERS' EQUITY:




Preferred stock, $.01 par value; 2,000,000 shares authorized; no shares issued or outstanding in 2014 and 2013




-

-


Common stock





Class A: $.01 par value; 97,337,700 shares authorized and 41,224,792 shares issued in 2014 and 2013; 36,750,359 shares outstanding in 2014 and 36,626,384 shares outstanding in 2013

412


412



Class B:  $.01 par value; 662,300 shares authorized; 662,296 shares issued and outstanding in 2014 and 2013


7

7


Additional paid-in capital

168,941

167,357


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




(15,458)

(15,458)


Retained earnings

573,453

538,251


Accumulated other comprehensive loss

(38)

(85)


Treasury stock; at cost, 4,474,433 shares in 2014 and 4,598,408 shares in 2013




(127,055)

(128,957)



TOTAL STOCKHOLDERS' EQUITY

600,262

561,527




     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$      1,189,143

$     1,047,943

HUB GROUP, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)





















Nine Months Ended









September 30,









2014

2013
























Cash flows from operating activities:




Net income


$ 35,202

$ 52,574

Adjustments to reconcile net income





to net cash provided by operating activities:






Depreciation and amortization 

21,165

15,479



Impairment of software

11,881

-



Deferred taxes

8,288

10,945



Compensation expense related to share-based compensation plans

6,238

5,638



Gain on sale of assets

(20)

(345)



Excess tax benefits from share-based compensation

-

(11)

Changes in operating assets and liabilities:






Restricted investments

(875)

(1,924)



Accounts receivable, net

(49,102)

(57,439)



Prepaid taxes

(5,794)

(504)



Prepaid expenses and other current assets

(7,104)

156



Other assets


(1,572)

(803)



Accounts payable

38,281

55,641



Accrued expenses

2,581

1,330



Non-current liabilities

(534)

1,164





Net cash provided by operating activities

58,635

81,901












Cash flows from investing activities:




Proceeds from sale of equipment

420

1,788

Purchases of property and equipment

(75,881)

(66,079)




Net cash used in investing activities

(75,461)

(64,291)












Cash flows from financing activities:




Proceeds from issuance of debt

49,268

9,120

Repayments of long term debt

(4,198)

(436)

Proceeds from stock options exercised

-

42

Stock tendered for payments of withholding taxes

(3,184)

(2,621)

Purchase of treasury stock

-

(903)

Capital lease payments

(1,632)

(1,733)

Excess tax benefits from share-based compensation

434

310




Net cash provided by financing activities

40,688

3,779

























Effect of exchange rate changes on cash and cash equivalents

1

1












Net increase in cash and cash equivalents

23,863

21,390

Cash and cash equivalents beginning of period

68,964

70,760

Cash and cash equivalents end of period

$ 92,827

$ 92,150

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/hub-group-inc-reports-third-quarter-2014-earnings-per-share-of-049-excluding-one-time-costs-and-non-cash-impairment-charge-579916772.html

SOURCE Hub Group, Inc.

Related Links

http://www.hubgroup.com

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