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

Feb 03, 2016, 16:02 ET from Hub Group, Inc.

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