2014

Hub Group, Inc. Reports Third Quarter 2013 Earnings

DOWNERS GROVE, Ill., Oct. 17, 2013 /PRNewswire/ -- Hub Group, Inc. (NASDAQ: HUBG) announced financial results for the quarter ended September 30, 2013.

Hub Group reported income of $18.6 million for the third quarter ended September 30, 2013.  Hub Group's diluted earnings per share was $0.50 for the third quarter of 2013, which was equal to the third quarter of 2012.  Hub Group's revenue increased 10% to $883 million

The Hub segment's revenue increased 10% to $679 million.  Third quarter intermodal revenue increased 5% to $467 million on a 5% increase in volume.  Truck brokerage revenue increased 1% to $88 million this quarter.  Third quarter Unyson Logistics revenue increased 42% to $124 million.  The Hub segment's operating income was $25.4 million

The Mode segment's revenue increased 9% to $217 million.  Operating income was $5.9 million, an increase of 18% compared to the prior year period.

Hub Group ended the quarter with $92 million in cash.

"As explained in our earnings update, results for the quarter for our intermodal and truck brokerage business lines were impacted by challenging market conditions as well as unfavorable mix," said David P. Yeager, Chairman and Chief Executive Officer of Hub Group. "We will continue to deliver the highest degree of customer service during this peak season and remain optimistic about our opportunities for future growth."

CONFERENCE CALL

Hub will hold a conference call at 5:00 p.m. Eastern Time on Thursday, October 17, 2013 to discuss its third quarter 2013 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) 680-0869.  The conference call participant code is 94947913#. Participants may pre-register for the call at https://www.theconferencingservice.com/prereg/key.process?key=PRDMKTW4Q .  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, 2012 and the report on Form 10-Q for the periods ended March 31, 2013 and June 30, 2013.  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,





2013


2012


2013


2012

Revenue


$ 882,981


$ 804,888


$ 2,488,646


$ 2,323,085












Transportation costs

789,857


713,301


2,212,711


2,060,398


Gross margin

93,124


91,587


275,935


262,687












Costs and expenses:









Salaries and benefits

31,888


31,385


101,473


96,120


Agent fees and commissions

14,557


13,810


41,517


41,106


General and administrative

13,757


14,430


41,676


39,741


Depreciation and amortization

1,627


1,611


4,773


5,008



Total costs and expenses

61,829


61,236


189,439


181,975












Operating income

31,295


30,351


86,496


80,712












Other income (expense):









Interest expense

(323)


(300)


(918)


(908)


Interest and dividend income

25


37


69


104


Other, net 

(35)


(17)


(23)


(58)



Total other expense

(333)


(280)


(872)


(862)












Income before provision for income taxes

30,962


30,071


85,624


79,850












Provision for income taxes

12,362


11,576


33,050


30,741












Net income


$  18,600


$  18,495


$     52,574


$     49,109


































Basic earnings per common share

$      0.50


$      0.50


$         1.43


$         1.32












Diluted earnings per common share

$      0.50


$      0.50


$         1.42


$         1.32












Basic weighted average number of shares outstanding

36,873


37,079


36,866


37,064

Diluted weighted average number of shares outstanding

37,050


37,206


36,996


37,180


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)






Three Months



Ended September 30, 2012



Hub


Mode


Inter-Segment

 Elims


Hub Group

Total

Revenue


$ 619,336


$ 199,903


$         (14,351)


$  804,888













Transportation costs


552,071


175,581


(14,351)


713,301


Gross margin


67,265


24,322


-


91,587













Costs and expenses:










Salaries and benefits


27,852


3,533


-


31,385


Agent fees and commissions


401


13,409


-


13,810


General and administrative


12,566


1,864


-


14,430


Depreciation and amortization


1,118


493


-


1,611



Total costs and expenses


 

41,937


 

19,299


 

-


61,236













Operating income


$   25,328


$    5,023


$                 -


$    30,351

 

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 FINANCIAL INFORMATION BY SEGMENT

(in thousands)












Nine Months



Ended September 30, 2012



Hub


Mode


Inter-Segment

Elims


Hub Group

Total

Revenue


$ 1,778,436


$ 581,378


$         (36,729)


$ 2,323,085












Transportation costs


1,584,844


512,283


(36,729)


2,060,398


Gross margin


193,592


69,095


-


262,687












Costs and expenses:










Salaries and benefits


84,523


11,597


-


96,120


Agent fees and commissions


1,526


39,580


-


41,106


General and administrative


34,004


5,737


-


39,741


Depreciation and amortization


3,338


1,670


-


5,008



Total costs and expenses


123,391


58,584


-


181,975












Operating income


$     70,201


$   10,511


$                 -


$     80,712

 

 

HUB GROUP, INC.

UNAUDITED CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)













September 30,


December 31,



2013


2012






ASSETS






CURRENT ASSETS:







Cash and cash equivalents


$          92,150


$           70,760



Accounts receivable trade, net


408,279


346,917



Accounts receivable other


21,894


25,945



Prepaid taxes


589


139



Deferred taxes


5,884


4,965



Prepaid expenses and other current assets


10,432


10,619




TOTAL CURRENT ASSETS


539,228


459,345










Restricted investments


19,142


17,218


Property and equipment, net


220,210


157,584


Other intangibles, net


18,957


20,068


Goodwill, net


263,087


263,251


Other assets


3,182


2,387






TOTAL ASSETS


$ 1,063,806


$ 919,853





















LIABILITIES AND STOCKHOLDERS' EQUITY






CURRENT LIABILITIES:







Accounts payable trade


$        259,863


$         206,497



Accounts payable other


26,487


22,925



Accrued payroll


17,085


17,210



Accrued other


41,243


28,633



Current portion of capital lease


2,390


2,120



Current portion of long term debt


1,763


-





TOTAL CURRENT LIABILITIES


348,831


277,385












Long term debt


6,921


-


Non-current liabilities


20,841


20,041


Long term capital lease


19,096


21,099


Deferred taxes


112,298


100,431












STOCKHOLDERS' EQUITY:







Preferred stock, $.01 par value; 2,000,000 shares authorized; no shares issued or outstanding in 2013 and 2012








-


-



Common stock








Class A: $.01 par value; 97,337,700 shares authorized and 41,224,792 shares issued in 2013 and 2012; 36,979,841 shares outstanding in 2013 and 36,767,485 shares outstanding in 2012
















412


412




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

662,296 shares issued and outstanding in 2013 and 2012









7


7



Additional paid-in capital


165,243


167,765



Purchase price in excess of predecessor basis, net of tax

 benefit of $10,306








(15,458)


(15,458)



Retained earnings


521,715


469,141



Accumulated other comprehensive (loss) income


(106)


1



Treasury stock; at cost, 4,244,951 shares in 2013

and 4,457,307 shares in 2012








(115,994)


(120,971)




TOTAL STOCKHOLDERS' EQUITY


555,819


500,897





     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY


$ 1,063,806


$ 919,853

 

HUB GROUP, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)








Nine Months Ended



September 30,



2013


2012











Cash flows from operating activities:






Net income


$ 52,574


$        49,109


Adjustments to reconcile net income

to net cash provided by operating activities:












Depreciation and amortization 


15,479


16,300



Deferred taxes


10,945


7,693



Compensation expense related to share-based compensation plans


5,638


4,826



(Gain) loss on sale of assets


(345)


42



Excess tax benefits from share-based compensation


(11)


(97)


Changes in operating assets and liabilities:







Restricted investments


(1,924)


(2,206)



Accounts receivable, net


(57,439)


(57,417)



Prepaid taxes


(504)


2,253



Prepaid expenses and other current assets


156


(1,913)



Other assets


(803)


685



Accounts payable


55,641


38,386



Accrued expenses


1,330


8,917



Non-current liabilities


1,164


1,210




Net cash provided by operating activities


81,901


67,788










Cash flows from investing activities:






Proceeds from sale of equipment


1,788


819


Purchases of property and equipment


(66,079)


(34,671)


Cash used in acquisitions, net of cash acquired


-


(425)




Net cash used in investing activities


(64,291)


(34,277)











Cash flows from financing activities:






Proceeds from issuance of debt


9,120


-


Repayments of long term debt


(436)


-


Proceeds from stock options exercised


42


46


Stock tendered for payments of withholding taxes


(2,621)


(1,800)


Purchase of treasury stock


(903)


-


Capital lease payments


(1,733)


(1,697)


Excess tax benefits from share-based compensation


310


443




Net cash provided by (used in) financing activities


3,779


(3,008)




















Effect of exchange rate changes on cash and cash equivalents


1


(9)









Net increase in cash and cash equivalents


21,390


30,494

Cash and cash equivalents beginning of period


70,760


49,091

Cash and cash equivalents end of period


$ 92,150


$        79,585

SOURCE Hub Group, Inc.



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