Hub Group, Inc. Reports First Quarter 2014 Earnings

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Apr 17, 2014, 04:01 ET

OAK BROOK, Ill., April 17, 2014 /PRNewswire/ -- Hub Group, Inc. (NASDAQ: HUBG) today announced financial results for the quarter ended March 31, 2014.

Hub Group reported income of $12.0 million for the first quarter ended March 31, 2014 compared to $15.4 million for the first quarter of 2013. Hub Group's diluted earnings per share was $0.33 for the quarter. Hub Group's revenue increased 10% to $848 million.

The Hub segment's revenue increased 10% to $653 million. First quarter intermodal revenue increased 2% to $435 million on a 2% increase in volume. Truck brokerage revenue increased 3% to $84 million this quarter. First quarter Unyson Logistics revenue increased 64% to $134 million. The Hub segment's operating income was $15.9 million.

The Mode segment's revenue increased 11% to $209 million. Operating income was $4.6 million, an increase of 31% compared to the prior year period.

Hub Group ended the quarter with $75 million in cash.

"The first quarter of 2014 was marked by a truly challenging operating environment due to the extreme weather in many markets. While this negatively impacted our financial results, we are pleased with the way our organization responded to these challenges," said David P. Yeager, Chairman and Chief Executive Officer of Hub Group.

CONFERENCE CALL

Hub Group will hold a conference call at 5:00 p.m. Eastern Time on Thursday, April 17, 2014 to discuss its first 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. 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) 713-4218. The conference call participant code is 82741607#. Participants may pre-register for the call at https://www.theconferencingservice.com/prereg/key.process?key=PXFKJ89CD. 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 $3 billion 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. 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, 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
			Ended March 31,
			2014	2013
Revenue			$ 848,449	$ 768,980

Transportation costs			759,705	681,642
	Gross margin		88,744	87,338

Costs and expenses:
	Salaries and benefits		37,092	34,583
	Agent fees and commissions		13,666	13,274
	General and administrative		15,432	13,191
	Depreciation and amortization		2,058	1,553
		Total costs and expenses	68,248	62,601

Operating income			20,496	24,737

Other income (expense):
	Interest expense		(407)	(290)
	Interest and dividend income		14	29
	Other, net		(205)	(11)
		Total other (expense) income	(598)	(272)

Income before provision for income taxes			19,898	24,465

Provision for income taxes			7,863	9,101

Net income			$ 12,035	$ 15,364

Basic earnings per common share			$ 0.33	$ 0.42

Diluted earnings per common share			$ 0.33	$ 0.42

Basic weighted average number of shares outstanding			36,661	36,855
Diluted weighted average number of shares outstanding			36,724	36,949

HUB GROUP, INC.
UNAUDITED FINANCIAL INFORMATION BY SEGMENT
(in thousands)

			Three Months
			Ended March 31, 2014
			Hub	Mode	Inter-Segment Elims	Hub Group Consolidated
Revenue			$ 653,409	$ 208,906	$ (13,866)	$ 848,449

Transportation costs			588,912	184,659	(13,866)	759,705
	Gross margin		64,497	24,247	-	88,744

Costs and expenses:
	Salaries and benefits		33,337	3,755	-	37,092
	Agent fees and commissions		11	13,655	-	13,666
	General and administrative		13,739	1,693	-	15,432
	Depreciation and amortization		1,517	541	-	2,058
		Total costs and expenses	48,604	19,644	-	68,248

Operating income			15,893	4,603	-	20,496

HUB GROUP, INC.
UNAUDITED FINANCIAL INFORMATION BY SEGMENT
(in thousands)

			Three Months
			Ended March 31, 2013
			Hub	Mode	Inter-Segment Elims	Hub Group Consolidated
Revenue			$ 592,651	$ 187,460	$ (11,131)	$ 768,980

Transportation costs			527,471	165,302	(11,131)	681,642
	Gross margin		65,180	22,158	-	87,338

Costs and expenses:
	Salaries and benefits		30,777	3,806	-	34,583
	Agent fees and commissions		449	12,825	-	13,274
	General and administrative		11,698	1,493	-	13,191
	Depreciation and amortization		1,020	533	-	1,553
		Total costs and expenses	43,944	18,657	-	62,601

Operating income			21,236	3,501	-	24,737

HUB GROUP, INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)


				March 31,	December 31,
				2014	2013
				(Unaudited)
ASSETS
	CURRENT ASSETS:
		Cash and cash equivalents		$ 75,297	$ 68,964
		Accounts receivable trade, net		413,426	371,528
		Accounts receivable other		16,127	26,569
		Prepaid taxes		319	409
		Deferred taxes		7,227	5,826
		Prepaid expenses and other current assets		13,334	12,738
			TOTAL CURRENT ASSETS	525,730	486,034

	Restricted investments			20,871	20,754
	Property and equipment, net			276,743	260,400
	Other intangibles, net			15,405	15,729
	Goodwill, net			262,978	263,032
	Other assets			2,831	1,994
			TOTAL ASSETS	$ 1,104,558	$ 1,047,943


LIABILITIES AND STOCKHOLDERS' EQUITY
	CURRENT LIABILITIES:
		Accounts payable trade		$ 263,697	$ 232,350
		Accounts payable other		22,589	24,957
		Accrued payroll		13,971	17,000
		Accrued other		37,201	42,834
		Current portion of capital lease		2,433	2,413
		Current portion of long term debt		5,974	1,771
			TOTAL CURRENT LIABILITIES	345,865	321,325

	Long term debt			26,509	6,475
	Non-current liabilities			20,399	22,304
	Non-current portion of capital lease			17,841	18,477
	Deferred taxes			121,171	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; 36,778,746 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		163,481	167,357
		Purchase price in excess of predecessor basis, net of tax benefit of $10,306		(15,458)	(15,458)
		Retained earnings		550,286	538,251
		Other comprehensive income		(98)	(85)
		Treasury stock; at cost, 4,446,046 shares in 2014 and 4,598,408 shares in 2013		(125,857)	(128,957)
			TOTAL STOCKHOLDERS' EQUITY	572,773	561,527
			TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 1,104,558	$ 1,047,943

HUB GROUP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

						Three Months Ended
						March 31,
						2014	2013


Cash flows from operating activities:
	Net income					$ 12,035	$ 15,364
	Adjustments to reconcile net income
		to net cash provided by operating activities:
			Depreciation and amortization			6,779	5,096
			Deferred taxes			1,991	2,669
			Compensation expense related to share-based compensation plans			2,143	1,882
			Gain on sale of assets			(6)	(214)
			Excess tax benefits from share-based compensation			-	(3)
	Changes in operating assets and liabilities:
			Restricted investments			(117)	(181)
			Accounts receivable, net			(31,471)	(11,893)
			Prepaid taxes			86	(30)
			Prepaid expenses and other current assets			(597)	2,227
			Other assets			(837)	(146)
			Accounts payable			29,286	16,230
			Accrued expenses			1,128	(2,801)
			Non-current liabilities			(1,839)	(198)
					Net cash provided by operating activities	18,581	28,002

Cash flows from investing activities:
	Proceeds from sale of equipment					85	734
	Purchases of property and equipment					(33,035)	(9,456)
				Net cash used in investing activities		(32,950)	(8,722)

Cash flows from financing activities:
	Proceeds from issuance of debt					25,361	-
	Repayments of long term debt					(1,124)	-
	Proceeds from stock options exercised					-	42
	Stock tendered for payments of withholding taxes					(3,023)	(2,469)
	Purchase of treasury stock					-	(903)
	Capital lease payments					(616)	(560)
	Excess tax benefits from share-based compensation					104	98
				Net cash provided by (used in) financing activities		20,702	(3,792)


	Effect of exchange rate changes on cash and cash equivalents					-	3

Net increase in cash and cash equivalents						6,333	15,491
Cash and cash equivalents beginning of period						68,964	70,760
Cash and cash equivalents end of period						$ 75,297	$ 86,251

SOURCE Hub Group, Inc.