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

PR Newswire

OAK BROOK, Ill., Jan. 28, 2014 /PRNewswire/ -- Hub Group, Inc. (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

 

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