Hub Group, Inc. Reports Record Second Quarter 2014 Earnings

OAK BROOK, Ill., July 17, 2014 /PRNewswire/ -- Hub Group, Inc. (NASDAQ: HUBG) today announced financial results for the quarter ended June 30, 2014.

Hub Group reported record income of $18.7 million for the second quarter ended June 30, 2014 compared to $18.6 million in the second quarter of 2013.  Hub Group's diluted earnings per share was $0.51 for the second quarter of 2014, which represents an increase of 2% when compared with the prior year period.  Hub Group's revenue increased 7% to $894 million

The Hub segment's revenue increased 6% to $682 million.  Second quarter intermodal revenue increased 1% to $456 million.  Truck brokerage revenue increased 6% to $86 million this quarter.  Second quarter Unyson Logistics revenue increased 24% to $140 million.  The Hub segment's operating income was $24.3 million

The Mode segment's revenue increased 14% to $232 million.  Operating income was $6.6 million, an increase of 33% compared to the prior year period.

Hub Group ended the quarter with $73 million in cash.

CONFERENCE CALL

Hub will hold a conference call at 5:00 p.m. Eastern Time on Thursday, July 17, 2014 to discuss its second 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) 713-4199.  The conference call participant code is 72182809#. Participants may pre-register for the call at https://www.theconferencingservice.com/prereg/key.process?key=PYQBFLY7P.  Pre-registrants will be issued a 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 March 31, 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


Six Months








Ended June 30,


Ended June 30,








2014


2013


2014


2013

Revenue


$ 893,930


$ 836,685


$ 1,742,379


$ 1,605,665















Transportation costs


795,345


741,212


1,555,050


1,422,854


Gross margin


98,585


95,473


187,329


182,811















Costs and expenses:










Salaries and benefits


35,556


35,002


72,648


69,585


Agent fees and commissions


15,544


13,686


29,210


26,960


General and administrative


14,681


14,728


30,113


27,919


Depreciation and amortization


1,877


1,593


3,935


3,146



Total costs and expenses


67,658


65,009


135,906


127,610















Operating income


30,927


30,464


51,423


55,201















Other income (expense):










Interest expense


(398)


(305)


(805)


(595)


Interest and dividend income


11


15


25


44


Other, net 


(25)


23


(230)


12



Total other expense


(412)


(267)


(1,010)


(539)















Income before provision for income taxes

30,515


30,197


50,413


54,662















Provision for income taxes


11,839


11,587


19,702


20,688















Net income


$  18,676


$  18,610


$     30,711


$     33,974





























Basic earnings per common share


$      0.51


$      0.50


$         0.84


$         0.92















Diluted earnings per common share


$      0.51


$      0.50


$         0.84


$         0.92















Basic weighted average number of shares outstanding


36,674


36,870


36,667


36,863

Diluted weighted average number of shares outstanding


36,814


36,989


36,769


36,969

    

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)






















Three Months








Ended June 30, 2014








Hub


Mode


Inter-Segment Elims


Hub Group Total

Revenue


$ 682,049


$ 231,538


$                 (19,657)


$           893,930















Transportation costs


611,351


203,651


(19,657)


795,345


Gross margin


70,698


27,887


-


98,585















Costs and expenses:










Salaries and benefits


32,047


3,509


-


35,556


Agent fees and commissions


5


15,539


-


15,544


General and administrative


12,817


1,864


-


14,681


Depreciation and amortization


1,538


339


-


1,877



Total costs and expenses


46,407


21,251


-


67,658















Operating income


$  24,291


$    6,636


$                         -


$             30,927

    

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)






















Three Months








Ended June 30, 2013








Hub


Mode


Inter-Segment Elims


Hub Group Total

Revenue


$ 644,924


$ 203,918


$                 (12,157)


$           836,685















Transportation costs


573,498


179,871


(12,157)


741,212


Gross margin


71,426


24,047


-


95,473















Costs and expenses:










Salaries and benefits


31,208


3,794


-


35,002


Agent fees and commissions


350


13,336


-


13,686


General and administrative


13,338


1,390


-


14,728


Depreciation and amortization


1,061


532


-


1,593



Total costs and expenses


45,957


19,052


-


65,009















Operating income


$  25,469


$    4,995


$                         -


$             30,464

    

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)






















Six Months








Ended June 30, 2014








Hub


Mode


Inter-Segment Elims


Hub Group Total

Revenue


$ 1,335,458


$ 440,444


$         (33,523)


$        1,742,379















Transportation costs


1,200,262


388,311


(33,523)


1,555,050


Gross margin


135,196


52,133


-


187,329















Costs and expenses:










Salaries and benefits


65,384


7,264


-


72,648


Agent fees and commissions


16


29,194


-


29,210


General and administrative


26,557


3,556


-


30,113


Depreciation and amortization


3,055


880


-


3,935



Total costs and expenses


95,012


40,894


-


135,906















Operating income


$     40,184


$  11,239


$                 -


$             51,423

    

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)






















Six Months








Ended June 30, 2013








Hub


Mode


Inter-Segment Elims


Hub Group Total

Revenue


$ 1,237,575


$ 391,378


$         (23,288)


$        1,605,665















Transportation costs


1,100,969


345,173


(23,288)


1,422,854


Gross margin


136,606


46,205


-


182,811















Costs and expenses:










Salaries and benefits


61,985


7,600


-


69,585


Agent fees and commissions


799


26,161


-


26,960


General and administrative


25,036


2,883


-


27,919


Depreciation and amortization


2,081


1,065


-


3,146



Total costs and expenses


89,901


37,709


-


127,610















Operating income


$     46,705


$    8,496


$                 -


$             55,201

    

HUB GROUP, INC.

UNAUDITED CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)




June 30,


December 31,


2014


2013





ASSETS






CURRENT ASSETS:







Cash and cash equivalents

$      73,164


$          68,964



Accounts receivable trade, net

417,880


371,528



Accounts receivable other

20,871


26,569



Prepaid taxes


574


409



Deferred taxes


7,432


5,826



Prepaid expenses and other current assets

14,801


12,738




     TOTAL CURRENT ASSETS

534,722


486,034













Restricted investments


21,960


20,754


Property and equipment, net

286,133


260,400


Other intangibles, net


15,081


15,729


Goodwill, net



262,923


263,032


Other assets



2,595


1,994





TOTAL ASSETS


$ 1,123,414


$     1,047,943























LIABILITIES AND STOCKHOLDERS' EQUITY





CURRENT LIABILITIES:







Accounts payable trade


$    255,782


$        232,350



Accounts payable other


23,279


24,957



Accrued payroll



15,816


17,000



Accrued other



37,739


42,834



Current portion of capital lease

2,456


2,413



Current portion of long term debt

6,712


1,771




     TOTAL CURRENT LIABILITIES

341,784


321,325













Long term debt



24,360


6,475


Non-current liabilities


21,629


22,304


Non-current portion of capital lease

17,215


18,477


Deferred taxes



124,887


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; 36,764,442 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


166,113


167,357



Purchase price in excess of predecessor basis, net of tax






 benefit of $10,306


(15,458)


(15,458)



Retained earnings


568,962


538,251



Accumulated other comprehensive loss

(52)


(85)



Treasury stock; at cost, 4,460,350 shares in 2014 and 4,598,408 shares in 2013






(126,445)


(128,957)




TOTAL STOCKHOLDERS' EQUITY

593,539


561,527




     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$ 1,123,414


$     1,047,943

    

HUB GROUP, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)






















Six Months Ended










June 30,










2014


2013

























Cash flows from operating activities:






Net income




$ 30,711


$ 33,974


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












Depreciation and amortization 


13,780


9,954



Deferred taxes



5,557


6,548



Compensation expense related to share-based compensation plans

4,191


3,757



Gain on sale of assets



(10)


(287)



Excess tax benefits from share-based compensation


-


(8)


Changes in operating assets and liabilities:







Restricted investments



(1,206)


(541)



Accounts receivable, net


(40,654)


(45,558)



Prepaid taxes



(165)


(48)



Prepaid expenses and other current assets


(2,063)


(417)



Other assets




(601)


(120)



Accounts payable



21,756


30,685



Accrued expenses



882


(3,680)



Non-current liabilities



(537)


118




  Net cash provided by operating activities


31,641


34,377













Cash flows from investing activities:






Proceeds from sale of equipment


319


1,358


Purchases of property and equipment


(46,443)


(39,202)




Net cash used in investing activities


(46,124)


(37,844)













Cash flows from financing activities:






Proceeds from issuance of debt


25,361


9,120


Repayments of long-term debt


(2,535)


-


Proceeds from stock options exercised


-


41


Stock tendered for payments of withholding taxes


(3,151)


(2,585)


Purchase of treasury stock



-


(903)


Capital lease payments



(1,219)


(1,143)


Excess tax benefits from share-based compensation


228


177




Net cash provided by financing activities


18,684


4,707


























Effect of exchange rate changes on cash and cash equivalents


(1)


-













Net increase in cash and cash equivalents


4,200


1,240

Cash and cash equivalents beginning of period


68,964


70,760

Cash and cash equivalents end of period


$ 73,164


$ 72,000













SOURCE Hub Group, Inc.



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