Hub Group, Inc. Reports Fourth Quarter Earnings per Share of $0.50 Excluding Non-Cash Impairment Charge

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Jan 28, 2014, 04:00 ET

OAK BROOK, Ill., Jan. 28, 2014 /PRNewswire/ -- Hub Group, Inc. (NASDAQ: HUBG) today announced financial results for the quarter and year ended December 31, 2013.

Hub Group reported income of $16.5 million for the fourth quarter ended December 31, 2013. Hub Group's diluted earnings per share was $0.45 for the fourth quarter of 2013. Hub Group's pre-tax income included a non-cash impairment charge of $2.9 million related to changing the trade name of Comtrak Logistics to Hub Group Trucking. Excluding the effect of this item, non-GAAP earnings per share was $0.50 for the quarter (see table below). Non-GAAP earnings per share decreased 2% when compared with the prior year period. Hub Group's revenue increased 11% to $885 million.

The Hub segment's revenue increased 11% to $684 million. Fourth quarter intermodal revenue increased 3% to $466 million on a 4% increase in volume. Truck brokerage revenue increased 1% to $88 million this quarter. Fourth quarter Unyson Logistics revenue increased 72% to $130 million. The Hub segment's operating income was $22.6 million.

The Mode segment's revenue increased 8% to $214 million for the fourth quarter. Operating income was $4.6 million.

FULL YEAR 2013

Income for the year ended December 31, 2013 was $69.1 million. Hub Group's diluted earnings per share for 2013 was $1.87. Full year 2013 pre-tax income included the previously discussed non-cash impairment charge of $2.9 million. Excluding the effect of this item, non-GAAP earnings per share was $1.92 for the year (see table below). Full year non-GAAP earnings per share increased 5% when compared with the prior year. Hub Group's revenue increased 8% to $3.4 billion.

Hub Group ended the year with $69 million in cash.

"We had a solid year and are focused on our strategic initiatives to deliver strong results in 2014," said David P. Yeager, Chairman and Chief Executive Officer of Hub Group.

CONFERENCE CALL

Hub will hold a conference call at 5:00 p.m. Eastern Time on Tuesday, January 28, 2014 to discuss its fourth quarter and full year results and provide 2014 guidance.

Hosting the conference call will be David Yeager, Chairman and Chief Executive Officer, Mark Yeager, Vice-Chairman, President and Chief Operating Officer, and Terri 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) 713-4199. The conference call participant code is 73244762. Participants may pre-register for the call at https://www.theconferencingservice.com/prereg/key.process?key=PKKA9TATJ . 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, 2012 and the reports on Form 10-Q for the periods ended March 31, 2013, June 30, 2013 and September 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		Twelve Months
			Ended December 31,		Ended December 31,
			2013	2012	2013	2012
Revenue			$ 885,252	$ 801,023	$ 3,373,898	$ 3,124,108

Transportation costs			790,164	707,644	3,002,875	2,768,042
	Gross margin		95,088	93,379	371,023	356,066

Costs and expenses:
	Salaries and benefits		33,868	33,023	135,341	129,143
	Agent fees and commissions		14,272	14,006	55,789	55,112
	General and administrative		15,096	13,091	56,772	52,832
	Depreciation and amortization		1,697	1,611	6,470	6,619
	Impairment of trade name		2,904	-	2,904	-
		Total costs and expenses	67,837	61,731	257,276	243,706

Operating income			27,251	31,648	113,747	112,360

Other income (expense):
	Interest expense		(328)	(299)	(1,246)	(1,207)
	Interest and dividend income		13	30	82	134
	Other, net		(5)	28	(28)	(30)
		Total other expense	(320)	(241)	(1,192)	(1,103)

Income before provision for income taxes			26,931	31,407	112,555	111,257

Provision for income taxes			10,395	12,563	43,445	43,304

Net income			$ 16,536	$ 18,844	$ 69,110	$ 67,953

Basic earnings per common share			$ 0.45	$ 0.51	$ 1.88	$ 1.83

Diluted earnings per common share			$ 0.45	$ 0.51	$ 1.87	$ 1.83

Basic weighted average number of shares outstanding			36,719	37,021	36,829	37,053
Diluted weighted average number of shares outstanding			36,942	37,199	36,982	37,185

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

			Three Months
			Ended December 31, 2013
			Hub	Mode	Inter-Segment Elims	Hub Group Consolidated
Revenue			$ 683,614	$ 214,357	$ (12,719)	$ 885,252

Transportation costs			613,198	189,685	(12,719)	790,164
	Gross margin		70,416	24,672	-	95,088

Costs and expenses:
	Salaries and benefits		30,219	3,649	-	33,868
	Agent fees and commissions		148	14,124	-	14,272
	General and administrative		13,383	1,713	-	15,096
	Depreciation and amortization		1,157	540	-	1,697
	Impairment of trade name		2,904	-	-	2,904
		Total costs and expenses	47,811	20,026	-	67,837

Operating income			22,605	4,646	-	27,251

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

			Three Months
			Ended December 31, 2012
			Hub	Mode	Inter-Segment Elims	Hub Group Consolidated
Revenue			$ 613,853	$ 198,550	$ (11,380)	$ 801,023

Transportation costs			544,098	174,926	(11,380)	707,644
	Gross margin		69,755	23,624	-	93,379

Costs and expenses:
	Salaries and benefits		29,332	3,691	-	33,023
	Agent fees and commissions		374	13,632	-	14,006
	General and administrative		11,407	1,684	-	13,091
	Depreciation and amortization		1,110	501	-	1,611
		Total costs and expenses	42,223	19,508	-	61,731

Operating income			27,532	4,116	-	31,648

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

			Twelve Months
			Ended December 31, 2013
			Hub	Mode	Inter-Segment Elims	Hub Group Consolidated
Revenue			$ 2,599,763	$ 823,159	$ (49,024)	$ 3,373,898

Transportation costs			2,325,512	726,387	(49,024)	3,002,875
	Gross margin		274,251	96,772	-	371,023

Costs and expenses:
	Salaries and benefits		120,478	14,863	-	135,341
	Agent fees and commissions		1,372	54,417	-	55,789
	General and administrative		50,484	6,288	-	56,772
	Depreciation and amortization		4,326	2,144	-	6,470
	Impairment of trade name		2,904	-	-	2,904
		Total costs and expenses	179,564	77,712	-	257,276

Operating income			94,687	19,060	-	113,747

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

			Twelve Months
			Ended December 31, 2012
			Hub	Mode	Inter-Segment Elims	Hub Group Consolidated
Revenue			$ 2,392,289	$ 779,928	$ (48,109)	$ 3,124,108

Transportation costs			2,128,942	687,209	(48,109)	2,768,042
	Gross margin		263,347	92,719	-	356,066

Costs and expenses:
	Salaries and benefits		113,855	15,288	-	129,143
	Agent fees and commissions		1,900	53,212	-	55,112
	General and administrative		45,411	7,421	-	52,832
	Depreciation and amortization		4,448	2,171	-	6,619
		Total costs and expenses	165,614	78,092	-	243,706

Operating income			97,733	14,627	-	112,360

HUB GROUP, INC.
UNAUDITED NON-GAAP TO GAAP RECONCILIATION
(earnings per share)


	Three Months				Twelve Months
	Ended, Dec. 31,				Ended, Dec. 31,
			Change	Change			Change	Change
	2013	2012	$	%	2013	2012	$	%

Diluted GAAP EPS	$ 0.45	$ 0.51	$ (0.06)	-11.8%	$ 1.87	$ 1.83	$ 0.04	2.2%


Impairment of trade name, net of tax	$ 0.05	$ -	$ 0.05		$ 0.05	$ -	$ 0.05

Diluted NON-GAAP EPS (adjusted)	$ 0.50	$ 0.51	$ (0.01)	-2.0%	$ 1.92	$ 1.83	$ 0.09	4.9%



Diluted Shares	36,942	37,199			36,982	37,185

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
UNAUDITED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)



					December 31,	December 31,
					2013	2012

ASSETS
	CURRENT ASSETS:
		Cash and cash equivalents			$ 68,964	$ 70,760
		Accounts receivable trade, net			371,528	346,917
		Accounts receivable other			26,569	25,945
		Prepaid taxes			409	139
		Deferred taxes			5,826	4,965
		Prepaid expenses and other current assets			12,738	10,619
			TOTAL CURRENT ASSETS		486,034	459,345

		Restricted investments			20,754	17,218
		Property and equipment, net			260,400	157,584
		Other intangibles, net			15,729	20,068
		Goodwill, net			263,032	263,251
		Other assets			1,994	2,387
			TOTAL ASSETS		$ 1,047,943	$ 919,853


LIABILITIES AND STOCKHOLDERS' EQUITY
	CURRENT LIABILITIES:
		Accounts payable trade			$ 232,350	$ 206,497
		Accounts payable other			24,957	22,925
		Accrued payroll			17,000	17,210
		Accrued other			42,834	28,633
		Current portion of capital lease			2,413	2,120
		Current portion of long term debt			1,771	-
			TOTAL CURRENT LIABILITIES		321,325	277,385

	Non-current liabilities				22,304	20,041
	Non-current portion of capital lease				18,477	21,099
	Long term debt				6,475	-
	Deferred taxes				117,835	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; 36,626,384 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			167,357	167,765
		Purchase price in excess of predecessor basis, net of tax
		benefit of $10,306			(15,458)	(15,458)
		Retained earnings			538,251	469,141
		Accumulated other comprehensive (loss) income			(85)	1
		Treasury stock; at cost, 4,598,408 shares in 2013
			and 4,457,307 shares in 2012		(128,957)	(120,971)
			TOTAL STOCKHOLDERS' EQUITY		561,527	500,897
				TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 1,047,943	$ 919,853

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

					Twelve Months Ended
					December 31,
					2013	2012


Cash flows from operating activities:
	Net income				$ 69,110	$ 67,953
	Adjustments to reconcile net income
		to net cash provided by operating activities:
			Depreciation and amortization		21,302	21,575
			Impairment of trade name		2,904	-
			Deferred taxes		16,438	8,786
			Compensation expense related to share-based compensation plans		7,667	6,539
			(Gain) loss on sale of assets		(167)	108
			Excess tax benefits from share based compensation		(13)	(29)
	Changes in operating assets and liabilities:
			Restricted investments		(3,536)	(2,895)
			Accounts receivable, net		(25,420)	(22,429)
			Prepaid taxes		(308)	2,253
			Prepaid expenses and other current assets		(2,137)	(1,562)
			Other assets		(682)	459
			Accounts payable		27,635	7,438
			Accrued expenses		1,736	2,779
			Non-current liabilities		2,888	1,942
				Net cash provided by operating activities	117,417	92,917

Cash flows from investing activities:
	Proceeds from sale of equipment				1,837	1,071
	Purchases of property and equipment				(110,917)	(56,882)
	Cash used in acquisitions				-	(550)
				Net cash used in investing activities	(109,080)	(56,361)

Cash flows from financing activities:
	Proceeds from issuance of debt				9,120	-
	Repayments of long term debt				(874)	-
	Proceeds from stock options exercised				41	69
	Stock tendered for payments of withholding taxes				(2,634)	(1,812)
	Purchase of treasury stock				(13,791)	(11,208)
	Capital lease payments				(2,329)	(2,454)
	Excess tax benefits from share-based compensation				336	523
				Net cash used in financing activities	(10,131)	(14,882)


	Effect of exchange rate changes on cash and cash equivalents				(2)	(5)

Net (decrease) increase in cash and cash equivalents					(1,796)	21,669
Cash and cash equivalents beginning of the year					70,760	49,091
Cash and cash equivalents end of the year					$ 68,964	$ 70,760