Hub Group, Inc. Reports Second Quarter 2011 Earnings

Jul 27, 2011, 16:00 ET from Hub Group, Inc.

DOWNERS GROVE, Ill., July 27, 2011 /PRNewswire/ -- Hub Group, Inc. (NASDAQ: HUBG) today announced financial results for the quarter ended June 30, 2011.

"We had a solid quarter with a 66% increase in revenue that came from organic growth and our acquisition.  We are executing well against our strategic priorities which resulted in 50% growth in EPS," said David P. Yeager, Chairman and Chief Executive Officer.  

Hub Group reported income of $14.4 million for the second quarter ended June 30, 2011, an increase of 49% compared to the second quarter of 2010.  Hub Group's diluted earnings per share was $0.39 for the second quarter of 2011, which represents an increase of 50% when compared with the prior year period.    

Hub Group acquired Exel Transportation Services, renamed Mode Transportation, on April 1, 2011.  Hub Group will now report two distinct business segments: Hub and Mode.  The Mode segment includes only the newly acquired business.  The Hub segment includes all Hub Group business excluding Mode.  

The Hub segment's revenue increased 22% to $560 million.  Second quarter intermodal revenue increased 24% to $396 million.  The increase was attributable to a 12% volume increase and a 12% increase for fuel, price and mix.  Truck brokerage revenue increased 4% to $90 million this quarter.  Second quarter Unyson Logistics revenue increased 45% to $74 million.  Hub's operating income increased $6.9 million, which represents an increase of 44% when compared with the prior year period.  The Hub results include approximately $400,000 of severance related primarily to truck brokerage operations.

The Mode segment's revenue was $202 million for the second quarter.  Operating income was $1.3 million.  The Mode results include approximately $350,000 of costs related to the acquisition and integration.

Hub Group ended the quarter with $18 million in cash.

CONFERENCE CALL

Hub will hold a conference call at 5:00 p.m. Eastern Time on Wednesday, July 27, 2011 to discuss its second quarter results.

Hosting the conference call will be David P. Yeager, Chairman and Chief Executive Officer and Terri A. Pizzuto, Executive Vice-President, Chief Financial Officer and Treasurer.

This call is being webcast and can be accessed through the Investors link on Hub Group's Web site at www.hubgroup.com .  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) 679-8034.  The conference call participant code is 64829656. Participants may pre-register for the call at https://www.theconferencingservice.com/prereg/key.process?key=P8YKYVAKA.  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, 2010 and the report on Form 10-Q for the period ended March 31, 2011.  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,

2011

2010

2011

2010

Revenue

$ 759,709

$ 458,113

$ 1,245,088

$ 875,407

Transportation costs

674,956

407,537

1,103,028

776,013

Gross margin

84,753

50,576

142,060

99,394

Costs and expenses:

Salaries and benefits

32,746

23,863

59,547

47,321

Agent fees and commissions

13,765

584

14,516

1,133

General and administrative

12,852

9,480

24,911

19,076

Depreciation and amortization

1,472

934

2,408

1,907

Total costs and expenses

60,835

34,861

101,382

69,437

Operating income

23,918

15,715

40,678

29,957

Other income (expense):

Interest expense

(69)

(12)

(83)

(26)

Interest and dividend income

45

23

77

48

Other, net

60

84

269

152

Total other income

36

95

263

174

Income before provision for income taxes

23,954

15,810

40,941

30,131

Provision for income taxes

9,564

6,180

16,053

11,799

Net income

$   14,390

$     9,630

$      24,888

$   18,332

Basic earnings per common share

$       0.39

$       0.26

$          0.67

$       0.49

Diluted earnings per common share

$       0.39

$       0.26

$          0.67

$       0.49

Basic weighted average number of shares outstanding

36,901

37,429

36,893

37,478

Diluted weighted average number of shares outstanding

37,060

37,580

37,041

37,611

HUB GROUP, INC.

FINANCIAL INFORMATION BY SEGMENT

(in thousands)

Three Months

Ended June 30, 2011

Hub

Mode

Inter-Segment Elims

Hub Group Consolidated

Revenue

$ 560,418

$ 201,756

$ (2,465)

$ 759,709

Transportation costs

497,832

179,589

(2,465)

674,956

Gross margin

62,586

22,167

-

84,753

Costs and expenses:

Salaries and benefits

28,111

4,635

32,746

Agent fees and commissions

638

13,127

13,765

General and administrative

10,264

2,588

12,852

Depreciation and amortization

951

521

1,472

Total costs and expenses

39,964

20,871

-

60,835

Operating income

22,622

1,296

-

23,918

HUB GROUP, INC.

FINANCIAL INFORMATION BY SEGMENT

(in thousands)

Six Months

Ended June 30, 2011

Hub

Mode

Inter-Segment Elims

Hub Group Consolidated

Revenue

$ 1,045,797

$ 201,756

$ (2,465)

$ 1,245,088

Transportation costs

925,904

179,589

(2,465)

1,103,028

Gross margin

119,893

22,167

-

142,060

Costs and expenses:

Salaries and benefits

54,912

4,635

59,547

Agent fees and commissions

1,389

13,127

14,516

General and administrative

22,323

2,588

24,911

Depreciation and amortization

1,887

521

2,408

Total costs and expenses

80,511

20,871

-

101,382

Operating income

39,382

1,296

-

40,678

HUB GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

June 30,

December 31,

2011

2010

(Unaudited)

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$      18,279

$       115,144

Accounts receivable trade, net

348,314

185,879

Accounts receivable other

28,256

17,958

Prepaid taxes

128

296

Deferred taxes

3,426

3,314

Prepaid expenses and other current assets

11,309

6,569

TOTAL CURRENT ASSETS

409,712

329,160

Restricted investments

14,642

11,421

Property and equipment, net

69,373

47,806

Other intangibles, net

20,876

5,856

Goodwill, net

262,223

233,029

Other assets

2,509

2,135

TOTAL ASSETS

$    779,335

$       629,407

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable trade

$    215,087

$       121,078

Accounts payable other

14,880

10,064

Accrued payroll

14,499

14,378

Accrued other

39,152

21,898

TOTAL CURRENT LIABILITIES

283,618

167,418

Non-current liabilities

18,463

13,950

Deferred taxes

74,500

71,739

STOCKHOLDERS' EQUITY:

Preferred stock, $.01 par value; 2,000,000 shares authorized;

no shares issued or outstanding in 2011 and 2010

-

-

Common stock

Class A: $.01 par value; 97,337,700 shares authorized and

41,224,792 shares issued in 2011 and 2010; 36,828,747 shares

outstanding in 2011 and 36,638,359 shares outstanding in 2010

412

412

Class B:  $.01 par value; 662,300 shares authorized;

662,296 shares issued and outstanding in 2011 and 2010

7

7

Additional paid-in capital

166,742

169,722

Purchase price in excess of predecessor basis, net of tax

benefit of $10,306

(15,458)

(15,458)

Retained earnings

367,898

343,010

Other comprehensive income

6

6

Treasury stock; at cost, 4,396,045 shares in 2011

and 4,586,433 shares in 2010

(116,853)

(121,399)

TOTAL STOCKHOLDERS' EQUITY

402,754

376,300

    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$    779,335

$       629,407

HUB GROUP, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Six Months Ended

June 30,

2011

2010

Cash flows from operating activities:

Net income

$  24,888

$   18,332

Adjustments to reconcile net income

to net cash provided by operating activities:

Depreciation and amortization

6,292

3,945

Deferred taxes

2,733

4,644

Compensation expense related to share-based compensation plans

2,433

1,822

(Gain) loss on sale of assets

(8)

19

Changes in operating assets and liabilities:

Restricted investments

(1,043)

289

Accounts receivable, net

(62,743)

(52,505)

Prepaid taxes

169

240

Prepaid expenses and other current assets

(3,976)

(66)

Other assets

305

(520)

Accounts payable

31,079

36,312

Accrued expenses

8,445

2,939

Non-current liabilities

1,400

(441)

Net cash provided by operating activities

9,974

15,010

Cash flows from investing activities:

Proceeds from sale of equipment

214

720

Purchases of property and equipment

(15,281)

(2,051)

Cash used in acquisitions, net of cash acquired

(90,909)

-

Net cash used in investing activities

(105,976)

(1,331)

Cash flows from financing activities:

Proceeds from stock options exercised

26

14

Purchase of treasury stock

(1,477)

(12,365)

Excess tax benefits from share-based compensation

584

154

Net cash used in financing activities

(867)

(12,197)

Effect of exchange rate changes on cash and cash equivalents

4

11

Net (decrease) increase in cash and cash equivalents

(96,865)

1,493

Cash and cash equivalents beginning of period

115,144

126,863

Cash and cash equivalents end of period

$  18,279

$ 128,356

SOURCE Hub Group, Inc.



RELATED LINKS

http://www.hubgroup.com