Hub Group, Inc. Reports Record Fourth Quarter 2015 Earnings & Announces Share Repurchase Program

News provided by

Hub Group, Inc.

Feb 03, 2016, 04:02 ET

OAK BROOK, Ill., Feb. 3, 2016 /PRNewswire/ -- Hub Group, Inc. (NASDAQ: HUBG) today announced financial results for the quarter and year ended December 31, 2015.

Hub Group reported net income of $22.4 million for the fourth quarter ended December 31, 2015 compared to $16.4 million in the fourth quarter of 2014.  Hub Group's diluted earnings per share was $0.63 in the fourth quarter of 2015 compared to earnings per share of $0.45 in fourth quarter of 2014.  Hub Group's revenue decreased 3% to $890 million compared to fourth quarter 2014 revenue.  The revenue decline related primarily to lower fuel revenue.

The Hub segment's revenue decreased 4% to $669 million compared to fourth quarter 2014 revenue.  Fourth quarter intermodal revenue decreased 4% to $446 million.  Truck brokerage revenue increased 6% to $89 million this quarter.  Fourth quarter Unyson Logistics revenue decreased 10% to $134 million.  Operating income was $28.4 million, an increase of 49% compared to the prior year period.

The Mode segment's revenue decreased 1% to $242 million compared to fourth quarter 2014 revenue.  Operating income was $6.9 million, an increase of 22% compared to the prior year period.

Hub Group, Inc. announced today that the Board of Directors has authorized the purchase of up to $100 million of its Class A common stock.  This authorization expires in December 2016.

FULL YEAR 2015

Income for the year ended December 31, 2015 was $71 million.  Hub Group's diluted earnings per share for 2015 was $1.97.  Full year 2015 pre-tax income included one-time costs of $2.3 million including a $1.4 million Canadian currency translation loss and $0.9 million of severance in the first quarter.  Excluding the effects of these items, non-GAAP earnings per share was $2.01 for the year (see table below).  Hub Group's revenue decreased 1% to $3.5 billion.

Hub Group ended the quarter with $208 million in cash.

CONFERENCE CALL

Hub will hold a conference call at 5:00 p.m. Eastern Time on Wednesday, February 3, 2016 to discuss its fourth quarter and full year 2015 results and provide 2016 guidance. 

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=UPglXcxOTHkGPE. 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) 771-4371 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 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 September 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

Twelve Months Ended

Ended December 31,

December 31,

2015

2014

2015

2014
















Revenue

$

890,272

$

915,361

$

3,525,595

$

3,571,126

Transportation costs

773,498


825,451


3,112,900


3,200,691

Gross margin

116,774


89,910


412,695


370,435
















Costs and expenses:














Salaries and benefits

44,268


32,964


158,938


136,480

Agent fees and commissions

19,350


16,239


68,724


62,041

General and administrative

15,720


14,033


60,015


58,014

Depreciation and amortization

2,095


1,897


7,988


7,799

Driver settlements and related costs

-


-


-


10,343

Impairment of software

-


-


-


11,881

Total costs and expenses

81,433


65,133


295,665


286,558
















Operating income

35,341


24,777


117,030


83,877
















Other income (expense):














Interest expense

(753)


(619)


(2,971)


(1,785)

Interest and dividend income

36


11


83


32

Other, net

(465)


(66)


(2,560)


(257)

Total other expense

(1,182)


(674)


(5,448)


(2,010)
















Income before provision for income taxes

34,159


24,103


111,582


81,867
















Provision for income taxes

11,785


7,747


40,633


30,309
















Net income

$

22,374

$

16,356

$

70,949

$

51,558
































Basic earnings per common share

$

0.63

$

0.45

$

1.98

$

1.41
















Diluted earnings per common share

$

0.63

$

0.45

$

1.97

$

1.40
















Basic weighted average number of shares outstanding

35,595


36,350


35,876


36,590

Diluted weighted average number of shares outstanding

35,726


36,533


35,968


36,732

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)




Three Months

Ended December 31, 2015







Inter-

Hub







Segment

Group

Hub

Mode

Elims

Total

Revenue

$

668,865

$

241,917

$

(20,510)

$

890,272

Transportation costs

584,569

209,439

(20,510)

773,498

Gross margin

84,296

32,478

-

116,774













Costs and expenses:











Salaries and benefits

40,128

4,140

-

44,268

Agent fees and commissions

13

19,337

-

19,350

General and administrative

13,972

1,748

-

15,720

Depreciation and amortization

1,775

320

-

2,095

Total costs and expenses

55,888

25,545

-

81,433













Operating income

$

28,408

$

6,933

$

-

$

35,341

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)




Three Months

Ended December 31, 2014







Inter-

Hub







Segment

Group

Hub

Mode

Elims

Total

Revenue

$

695,507

$

245,266

$

(25,412)

$

915,361

Transportation costs

633,131

217,732

(25,412)

825,451

Gross margin

62,376

27,534

-

89,910













Costs and expenses:











Salaries and benefits

29,285

3,679

-

32,964

Agent fees and commissions

14

16,225

-

16,239

General and administrative

12,408

1,625

-

14,033

Depreciation and amortization

1,556

341

-

1,897

Total costs and expenses

43,263

21,870

-

65,133













Operating income

$

19,113

$

5,664

$

-

$

24,777

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT
(in thousands)




Twelve Months

Ended December 31, 2015







Inter-

Hub







Segment

Group

Hub

Mode

Elims

Total

Revenue

$

2,679,318

$

928,661

$

(82,384)

$

3,525,595

Transportation costs

2,385,197

810,087

(82,384)

3,112,900

Gross margin

294,121

118,574

-

412,695













Costs and expenses:











Salaries and benefits

143,993

14,945

-

158,938

Agent fees and commissions

56

68,668

-

68,724

General and administrative

53,023

6,992

-

60,015

Depreciation and amortization

6,688

1,300

-

7,988

Driver settlements and related costs

-

-

-

-

Impairment of software

-

-

-

-

Total costs and expenses

203,760

91,905

-

295,665













Operating income

$

90,361

$

26,669

$

-

$

117,030

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)




Twelve Months

Ended December 31, 2014







Inter-

Hub







Segment

Group

Hub

Mode

Elims

Total

Revenue

$

2,722,799

$

931,131

$

(82,804)

$

3,571,126

Transportation costs

2,461,144

822,351

(82,804)

3,200,691

Gross margin

261,655

108,780

-

370,435













Costs and expenses:











Salaries and benefits

122,097

14,383

-

136,480

Agent fees and commissions

45

61,996

-

62,041

General and administrative

51,108

6,906

-

58,014

Depreciation and amortization

6,238

1,561

-

7,799

Driver settlements and related costs

10,343

-

-

10,343

Impairment of software

11,881

-

-

11,881

Total costs and expenses

201,712

84,846

-

286,558













Operating income

$

59,943

$

23,934

$

-

$

83,877

HUB GROUP, INC.

UNAUDITED NON-GAAP TO GAAP RECONCILIATION
(earnings per share)


Twelve Months Ended,December 31,

2015

2014

Change $

Change %
















Diluted GAAP EPS

$

1.97

$

1.40

$

0.57


40.7%
















Driver settlements and related costs, net of tax

$

-

$

0.17

$

(0.17)




















Impairment of Software, net of tax

$

-

$

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)

$

2.01

$

1.77

$

0.24


13.6%
















Diluted Shares

35,968


36,732








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)



December 31,

2015

2014

ASSETS

unaudited






CURRENT ASSETS:






Cash and cash equivalents

$

207,749

$

109,769

Accounts receivable trade, net

379,987


401,803

Accounts receivable other

10,344


24,886

Prepaid taxes

362


14,937

Deferred taxes

8,412


4,816

Prepaid expenses and other current assets

17,756


14,355

TOTAL CURRENT ASSETS

624,610


570,566








Restricted investments

21,108


21,944

Property and equipment, net

374,847


338,327

Other intangibles, net

13,139


14,434

Goodwill, net

262,594


262,813

Other assets

4,848


4,043

TOTAL ASSETS

$

1,301,146

$

1,212,127








LIABILITIES AND STOCKHOLDERS' EQUITY






CURRENT LIABILITIES:






Accounts payable trade

$

230,432

$

256,345

Accounts payable other

21,495


21,333

Accrued payroll

33,020


16,192

Accrued other

38,733


43,523

Current portion of capital lease

2,608


2,504

Current portion of long term debt

32,409


19,619

TOTAL CURRENT LIABILITIES

358,697


359,516








Long term debt

100,895


72,460

Non-current liabilities

20,233


22,929

Long term portion of capital lease

13,299


15,937

Deferred taxes

160,182


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; 35,633,961 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

174,285


171,235

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

(15,458)


(15,458)

Retained earnings

660,758


589,809

Accumulated other comprehensive loss

(178)


(77)

Treasury stock; at cost, 5,590,831 shares in 2015 and 4,977,468 shares in 2014

(171,986)


(145,144)

TOTAL STOCKHOLDERS' EQUITY

647,840


600,784

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

1,301,146

$

1,212,127

HUB GROUP, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)


Years Ended December 31,

2015

2014

Cash flows from operating activities:






    Net Income

$

70,949

$

51,558

    Adjustments to reconcile net income to net cash provided by operating activities:






       Depreciation and amortization

37,042


29,380

       Impairment of software

-


11,881

       Deferred taxes

16,378


24,501

       Compensation expense related to share-based compensation plans

7,833


8,258

       Gain on sale of assets

(129)


(46)

       Excess tax benefits from share based compensation

(81)


-

       Changes in operating assets and liabilities:






          Restricted investments

836


(1,190)

          Accounts receivable, net

36,373


(28,621)

          Prepaid taxes

14,575


(14,533)

          Prepaid expenses and other current assets

(3,401)


(1,621)

          Other assets

(805)


(2,047)

          Accounts payable

(25,736)


20,370

          Accrued expenses

20,505


367

          Non-current liabilities

(2,642)


284

            Net cash provided by operating activities

171,697


98,541








Cash flows from investing activities:






   Proceeds from sale of equipment

2,309


612

   Purchases of property and equipment

(83,042)


(119,171)

            Net cash used in investing activities

(80,733)


(118,559)








Cash flows from financing activities:






   Proceeds from issuance of debt

64,442


91,084

   Repayments of long term debt

(23,217)


(7,251)

   Stock tendered for payments of withholding taxes

(2,916)


(3,195)

   Purchase of treasury stock

(28,823)


(18,024)

   Capital lease payments

(2,534)


(2,449)

   Excess tax benefits from share-based compensation

195


652

            Net cash provided by financing activities

7,147


60,817
















   Effect of exchange rate changes on cash and cash equivalents

(131)


6








Net increase in cash and cash equivalents

97,980


40,805

Cash and cash equivalents beginning of the year

109,769


68,964

Cash and cash equivalents end of the year

$

207,749

$

109,769

SOURCE Hub Group, Inc.

Related Links

http://www.hubgroup.com

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