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Hub Group, Inc. Reports Third Quarter 2019 Results

Highlights of the quarter

  • Earnings per share of $0.78 includes a reduction of $0.19 per share for legal settlements and consulting costs.  Non-GAAP adjusted earnings per share is $0.97 excluding these costs.  

  • Operating margin is 4.1% and includes $8.5 million of legal settlements and consulting costs. Non-GAAP adjusted operating margin excluding these costs is 5.0%.

  • Net income was $26.1 million.  EBITDA increased 21% to $66.9 million

OAK BROOK, Ill., Oct. 30, 2019 (GLOBE NEWSWIRE) -- Hub Group, Inc. (HUBG) announced third quarter 2019 net income of $26.1 million, or diluted earnings per share of $0.78. Results were negatively impacted by $8.5 million of pretax costs, or $0.19 per share, which are comprised of $4.8 million for settlement of claims first made in 2013 for alleged misclassification of drivers (in general and administrative expenses), $3.0 million for settlement of a 2016 auto liability claim (in transportation costs) and $0.7 million for consulting costs (in general and administrative expense).  Excluding these costs, adjusted earnings per share is $0.97.  Income from continuing operations for the third quarter 2018 was $25.8 million, or $0.77 per diluted share. 

Update on Profit Improvement Initiatives

“We have been focused on executing our strategy, key tenets of which include delivering a best-in-class experience for both our customers and employees, diversifying our service offerings and investing in technology while increasing profitability and our return on invested capital. We’ve improved profitability through operational enhancements, revenue management, and procurement savings in transportation and general and administrative costs. These initiatives have driven our adjusted operating margin to our goal of 5.0% in the third quarter, and more importantly, position Hub for success,” said Dave Yeager, Hub’s Chairman and Chief Executive Officer.

Based on actions taken through the third quarter, the profit improvement initiatives identified above are projected to provide over $60 million of run-rate savings.  These actions include a 9% reduction in non-driver headcount since year-end 2018, reductions in purchased transportation costs, savings related to improved driver and tractor utilization in our drayage operation, investments in efficiency enhancing technologies and profitability improvements at Dedicated.  We expect an additional $40 million of annualized savings based on actions we anticipate taking over the next year.

We continue to invest in technology and anticipate that by mid-2021 we will have fully implemented our Elevate technology program across all business lines.  This program is expected to result in additional operating savings and profitability of over $20 million in 2022, while also fueling our growth as customers will benefit from our enhanced capabilities and freight visibility.

Results of Continuing Operations

Revenue for the current quarter decreased by 2% to $913 million compared with $933 million for the third quarter 2018 as a result of a soft freight market, partially offset by our success in providing multimodal solutions to our customers.  Operating income for the current quarter includes $8.5 million of legal settlements and consulting costs.  Operating income for the current quarter increased 7% to $37.2 million versus $34.7 million for the third quarter 2018, primarily as a result of improved yield management, our diversified model and our intense focus on profit improvement initiatives while maintaining the highest levels of service.  Adjusted operating income excluding the $8.5 million of costs was $45.7 million and increased 32%.

Third quarter intermodal revenue decreased 7% to $539 million due primarily to a 9% decline in volume. Volume was down compared to the prior year due to a soft demand environment, increased truckload and intermodal competition, and a 1% volume decrease from lane cancellations.  Intermodal gross margin decreased compared to the third quarter of 2018 primarily due to the decline in volumes, the $3.0 million 2016 auto liability settlement, and rail cost increases, partially offset by the benefits from revenue management, operational improvements, network balance, and better purchasing.

Truck brokerage revenue decreased 10% to $110 million in the third quarter of 2019 compared to the same quarter of last year.  Truck brokerage handled 14% more loads while fuel, price and mix combined were down 24% due primarily to the addition of the CaseStack LTL brokerage business.  Contractual truckload volume represented 91% of total truckload volume compared to 78% in the third quarter of 2018.  Truck brokerage gross margin increased due to a higher load count, further benefits from our new operating model and yield management strategy, as well as our new technology platform.    

Third quarter logistics revenue grew 27% to $189 million.  Revenue and gross margin expanded due to the addition of CaseStack, benefits from continuous improvements, revenue management, new service lines and cross selling to our customers.   

Dedicated revenue decreased 5% to $75 million compared to the same quarter in the prior year due to the impact of lost business, partially offset by growth with new accounts.  Dedicated gross margin improved compared to the third quarter of 2018 due to revenue management initiatives and improved operational discipline.  We ended the quarter with approximately 1,300 tractors and 5,200 trailers for Dedicated. 

Costs and expenses increased to $98 million in the third quarter of 2019 compared to $80 million in the third quarter of 2018 due primarily to costs and expenses of $12.9 million related to CaseStack (which includes $2.3 million of non-cash amortization expense), $4.8 million related to settlement of claims first made in 2013 for alleged misclassification of drivers, $1.5 million of higher technology expenses, $1.6 million lower gain on sale of equipment, the $1.1 million contingent consideration adjustment for Dedicated in 2018 and $0.7 million for a consulting project, partially offset by a decrease of $5.1 million in compensation expense. Costs and expenses include a total of $3.4 million of non-cash amortization expense related to CaseStack and Hub Group Dedicated and $0.6 million of compensation expense associated with restricted stock issued to CaseStack management in connection with the acquisition.

Results of Discontinued Operations

Income from discontinued operations related to the sale of our Mode segment for the third quarter of 2018 was $88.8 million, or $2.64 per diluted share. 

Cash Flow and Capitalization

Our capital expenditures for the third quarter 2019 totaled $27 million, primarily for tractors and technology investments.  At September 30, 2019, we had cash and cash equivalents of $89.6 million.    

2019 Outlook

We expect that our fourth quarter 2019 diluted earnings per share will range from $0.81 to $0.85, resulting in an expected 2019 adjusted earnings per share range from $3.36 to $3.40. We estimate flat revenue growth for the full year. We expect gross margin as a percentage of sales to range from 13.9% to 14.2% in the fourth quarter. We estimate our costs and expenses will range from $89 million to $91 million in the fourth quarter.  We expect annual amortization expense associated with the CaseStack and Hub Group Dedicated acquisitions will be approximately $13.6 million and compensation expense related to restricted stock issued to CaseStack management in connection with the acquisition will be approximately $2.5 million in 2019. We project our effective tax rate for 2019 will range from 25% to 26%.  We forecast we will spend between $90 million and $95 million on capital expenditures in 2019.

Non-GAAP Financial Measure

As required by the rules of the Securities and Exchange Commission (“SEC”), we provide a reconciliation of the non-GAAP financial measure contained in this press release to the most directly comparable measure under GAAP, which is set forth in the attached tables. Management believes that EBITDA provides relevant and useful information, which is widely used by analysts, investors and competitors in our industry as well as by our management.  We adjusted GAAP earnings per share and operating margin to exclude the effect of unusually high costs for legal settlements and a consulting project that is non-recurring. We excluded the items we believe may obscure trends in our underlying profitability. By providing these non-GAAP profitability measures, management intends to provide investors with a meaningful, consistent comparison of the Company’s profitability measures for the periods presented.   

CONFERENCE CALL

Hub will hold a conference call at 5:00 p.m. Eastern Time on October 30, 2019 to discuss its third quarter 2019 results.

Hosting the conference call will be Dave Yeager, Chief Executive Officer.  Also participating on the call will be Phil Yeager, President and Chief Operating Officer and Terri Pizzuto, Executive Vice President and 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 register at http://www.yourconferencecenter.com/r.aspx?]=1&a=UjvLetfIjInEoB. Registrants will be issued a passcode and PIN to use when dialing into the live call which will provide quickest access to the conference.  You may register at any time, including up to and after the call start time.  On the day of the call, dial (888) 206-4064 approximately ten minutes prior to the scheduled call time; enter the participant passcode and PIN received during registration.   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.

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, and should be viewed with caution. Forward-looking statements may contain words such as “expects”, “expected”, “believe”, “projected”, “estimate”, or similar words, and are based on management's experience and perception of historical trends, current conditions, and anticipated future developments, as well as other factors believed to be appropriate. We believe these statements and the assumptions and estimates contained in this release are reasonable based on information that is currently available to us. 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 intermodal costs and prices, the integration of any acquisitions and expenses relating thereto, the future performance of Hub’s Intermodal, Truck Brokerage, Dedicated and Logistics business lines, driver shortages, the amount and timing of strategic investments or divestitures by Hub, the failure to implement and integrate critical information technology systems, cyber security incidents, retail customers encountering adverse economic conditions and 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, 2018.  Hub Group assumes no liability to update any such forward-looking statements.

 

 

HUB GROUP, INC.

CONSOLIDATED STATEMENTS OF EARNINGS

(in thousands, except per share amounts)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

 

 

 

 

 

 

 

2019

 

2018

 

 

 

 

 

 

 

 

% of

 

 

% of

 

 

 

 

 

 

 

Amount

Revenue

 

Amount

Revenue

Revenue

 

 

 

$

913,275

 

100.0

%

 

$

933,224

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Transportation costs

 

 

 

 

778,057

 

85.2

%

 

 

818,240

 

87.7

%

 

Gross margin

 

 

 

 

135,218

 

14.8

%

 

 

114,984

 

12.3

%

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

Salaries and benefits

 

 

 

 

59,765

 

6.5

%

 

 

57,123

 

6.1

%

 

General and administrative

 

 

 

30,906

 

3.4

%

 

 

19,327

 

2.1

%

 

Depreciation and amortization

 

 

 

7,301

 

0.8

%

 

 

3,800

 

0.4

%

 

 

Total costs and expenses

 

 

 

97,972

 

10.7

%

 

 

80,250

 

8.6

%

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

 

 

37,246

 

4.1

%

 

 

34,734

 

3.7

%

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 

 

(2,780

)

-0.3

%

 

 

(2,411

)

-0.2

%

 

Interest and dividend income

 

 

 

613

 

0.1

%

 

 

340

 

0.0

%

 

Other, net

 

 

 

 

56

 

0.0

%

 

 

251

 

0.0

%

 

 

Total other expense

 

 

 

 

(2,111

)

-0.2

%

 

 

(1,820

)

-0.2

%

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before income taxes

 

35,135

 

3.9

%

 

 

32,914

 

3.5

%

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

 

9,030

 

1.0

%

 

 

7,150

 

0.7

%

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

 

 

26,105

 

2.9

%

 

 

25,764

 

2.8

%

 

 

 

 

 

 

 

 

 

 

 

 

Income from discontinued operations, net of income taxes

 

-

 

 

 

 

88,846

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

$

26,105

 

 

 

$

114,610

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share from continuing operations

 

 

 

 

 

 

 

 

Basic

 

 

 

$

0.79

 

 

 

$

0.77

 

 

 

Diluted

 

 

 

$

0.78

 

 

 

$

0.77

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share from discontinued operations

 

 

 

 

 

 

 

 

Basic

 

 

 

$

-

 

 

 

$

2.66

 

 

 

Diluted

 

 

 

$

-

 

 

 

$

2.64

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share net income

 

 

 

 

 

 

 

 

Basic

 

 

 

$

0.79

 

 

 

$

3.43

 

 

 

Diluted

 

 

 

$

0.78

 

 

 

$

3.41

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average number of shares outstanding

 

33,034

 

 

 

 

33,399

 

 

Diluted weighted average number of shares outstanding

 

33,265

 

 

 

 

33,605

 

 


 

HUB GROUP, INC.

CONSOLIDATED STATEMENTS OF EARNINGS

(in thousands, except per share amounts)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

 

 

 

 

 

2019

 

2018

 

 

 

 

 

 

 

 

% of

 

 

% of

 

 

 

 

 

 

 

Amount

Revenue

 

Amount

Revenue

Revenue

 

 

 

$

2,767,436

 

100.0

%

 

$

2,665,300

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Transportation costs

 

 

 

 

2,372,226

 

85.7

%

 

 

2,358,286

 

88.5

%

 

Gross margin

 

 

 

 

395,210

 

14.3

%

 

 

307,014

 

11.5

%

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

Salaries and benefits

 

 

 

 

182,652

 

6.6

%

 

 

163,496

 

6.1

%

 

General and administrative

 

 

 

 

77,852

 

2.8

%

 

 

55,557

 

2.1

%

 

Depreciation and amortization

 

 

 

21,150

 

0.8

%

 

 

11,286

 

0.4

%

 

 

Total costs and expenses

 

 

 

281,654

 

10.2

%

 

 

230,339

 

8.6

%

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

 

 

113,556

 

4.1

%

 

 

76,675

 

2.9

%

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 

 

(8,526

)

-0.3

%

 

 

(6,702

)

-0.3

%

 

Interest and dividend income

 

 

 

1,581

 

0.1

%

 

 

365

 

0.0

%

 

Other, net

 

 

 

 

(14

)

0.0

%

 

 

20

 

0.0

%

 

 

Total other expense

 

 

 

 

(6,959

)

-0.2

%

 

 

(6,317

)

-0.3

%

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations before income taxes

 

 

 

106,597

 

3.9

%

 

 

70,358

 

2.6

%

 

 

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

 

 

 

27,381

 

1.0

%

 

 

16,371

 

0.6

%

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

 

 

79,216

 

2.9

%

 

 

53,987

 

2.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Income from discontinued operations, net of income taxes

 

 

-

 

 

 

 

98,842

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

 

 

$

79,216

 

 

 

$

152,829

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share from continuing operations

 

 

 

 

 

 

 

 

Basic

 

 

 

$

2.37

 

 

 

$

1.62

 

 

 

Diluted

 

 

 

$

2.36

 

 

 

$

1.61

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share from discontinued operations

 

 

 

 

 

 

 

 

Basic

 

 

 

$

-

 

 

 

$

2.96

 

 

 

Diluted

 

 

 

$

-

 

 

 

$

2.95

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share net income

 

 

 

 

 

 

 

 

Basic

 

 

 

$

2.37

 

 

 

$

4.58

 

 

 

Diluted

 

 

 

$

2.36

 

 

 

$

4.56

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average number of shares outstanding

 

 

 

33,385

 

 

 

 

33,387

 

 

Diluted weighted average number of shares outstanding

 

 

 

33,522

 

 

 

 

33,548

 

 


 

HUB GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

December 31,

 

 

 

 

 

 

 

 

 

2019

 

 

 

2018

 

ASSETS

 

 

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

89,628

 

 

$

61,435

 

 

 

Accounts receivable trade, net

 

 

434,552

 

 

 

477,088

 

 

 

Other receivables

 

 

 

3,945

 

 

 

22,021

 

 

 

Prepaid taxes

 

 

 

5,238

 

 

 

616

 

 

 

Prepaid expenses and other current assets

 

26,234

 

 

 

27,533

 

 

 

 

 

TOTAL CURRENT ASSETS

 

 

559,597

 

 

 

588,693

 

 

 

 

 

 

 

 

 

 

 

 

 

Restricted investments

 

 

21,428

 

 

 

19,236

 

 

Property and equipment, net

 

 

657,826

 

 

 

681,859

 

 

Right-of-use assets - operating leases

 

37,509

 

 

 

-

 

 

Right-of-use assets - financing leases

 

6,432

 

 

 

-

 

 

Other intangibles, net

 

 

 

124,422

 

 

 

134,788

 

 

Goodwill, net

 

 

 

484,514

 

 

 

483,584

 

 

Other assets

 

 

 

18,955

 

 

 

16,738

 

 

 

 

 

TOTAL ASSETS

 

$

1,910,683

 

 

$

1,924,898

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

 

Accounts payable trade

 

$

180,490

 

 

$

272,859

 

 

 

Accounts payable other

 

 

13,487

 

 

 

10,906

 

 

 

Accrued payroll

 

 

 

46,915

 

 

 

55,535

 

 

 

Accrued other

 

 

 

96,575

 

 

 

82,900

 

 

 

Lease liability - operating leases

 

 

8,665

 

 

 

-

 

 

 

Lease liability - financing leases

 

 

3,021

 

 

 

2,845

 

 

 

Current portion of long term debt

 

 

95,772

 

 

 

101,713

 

 

 

 

 

TOTAL CURRENT LIABILITIES

 

444,925

 

 

 

526,758

 

 

 

 

 

 

 

 

 

 

 

 

 

Long term debt

 

 

 

192,422

 

 

 

229,071

 

 

Non-current liabilities

 

 

 

35,011

 

 

 

29,619

 

 

Lease liability - operating leases

 

 

30,444

 

 

 

-

 

 

Lease liability - financing leases

 

 

2,600

 

 

 

4,739

 

 

Deferred taxes

 

 

 

160,725

 

 

 

153,877

 

 

 

 

 

 

 

 

 

 

 

 

 

STOCKHOLDERS' EQUITY:

 

 

 

 

 

 

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

 

 

 

 

 

 

no shares issued or outstanding in 2019 and 2018

 

-

 

 

 

-

 

 

 

Common stock

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

41,224,792 shares issued in 2019 and 2018; 33,375,328 shares

 

 

 

 

 

 

 

outstanding in 2019 and 33,793,709 shares outstanding in 2018

 

412

 

 

 

412

 

 

 

 

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

 

 

 

 

 

 

 

662,296 shares issued and outstanding in 2019 and 2018

 

7

 

 

 

7

 

 

 

Additional paid-in capital

 

 

175,749

 

 

 

172,220

 

 

 

Purchase price in excess of predecessor basis, net of tax

 

 

 

 

 

benefit of $10,306

 

 

 

(15,458

)

 

 

(15,458

)

 

 

Retained earnings

 

 

 

1,151,646

 

 

 

1,072,456

 

 

 

Accumulated other comprehensive loss

 

(211

)

 

 

(182

)

 

 

Treasury stock; at cost, 7,849,464 shares in 2019

 

 

 

 

 

 

and 7,431,083 shares in 2018

 

 

(267,589

)

 

 

(248,621

)

 

 

 

TOTAL STOCKHOLDERS' EQUITY

 

1,044,556

 

 

 

980,834

 

 

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

1,910,683

 

 

$

1,924,898

 


 

HUB GROUP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

 

 

 

 

 

 

 

 

 

2019

 

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

 

 

$

79,216

 

 

$

152,829

 

 

Adjustments to reconcile net income

 

 

 

 

 

 

to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

 

 

86,719

 

 

 

59,184

 

 

 

 

Deferred taxes

 

 

 

 

7,145

 

 

 

33,989

 

 

 

 

Compensation expense related to share-based compensation plans

 

 

12,434

 

 

 

9,490

 

 

 

 

Contingent consideration adjustment

 

 

-

 

 

 

(4,703

)

 

 

 

Gain on sale of assets

 

 

 

(1,313

)

 

 

(1,458

)

 

 

 

Gain on disposition

 

 

 

-

 

 

 

(113,601

)

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Restricted investments

 

 

 

(2,192

)

 

 

(2,454

)

 

 

 

Accounts receivable, net

 

 

 

41,000

 

 

 

(44,138

)

 

 

 

Prepaid taxes

 

 

 

 

(4,622

)

 

 

11,918

 

 

 

 

Prepaid expenses and other current assets

 

 

1,299

 

 

 

438

 

 

 

 

Other assets

 

 

 

 

(3,365

)

 

 

1,572

 

 

 

 

Accounts payable

 

 

 

(89,800

)

 

 

8,070

 

 

 

 

Accrued expenses

 

 

 

2,408

 

 

 

30,952

 

 

 

 

Non-current liabilities

 

 

 

(225

)

 

 

4,358

 

 

 

 

Transaction costs for disposition

 

 

-

 

 

 

(5,665

)

 

 

 

 

Net cash provided by operating activities

 

 

128,704

 

 

 

140,781

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

Proceeds from sale of equipment

 

 

 

9,072

 

 

 

4,035

 

 

Purchases of property and equipment

 

 

(55,616

)

 

 

(138,847

)

 

Proceeds from the disposition of discontinued operations

 

 

19,439

 

 

 

227,986

 

 

Cash used in acquisitions

 

 

 

(734

)

 

 

-

 

 

 

 

 

Net cash (used in) provided by investing activities

 

 

(27,839

)

 

 

93,174

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

Purchase of treasury stock

 

 

 

(24,998

)

 

 

-

 

 

Proceeds from issuance of debt

 

 

 

36,557

 

 

 

118,809

 

 

Repayments of long term debt

 

 

 

(79,147

)

 

 

(107,341

)

 

Stock tendered for payments of withholding taxes

 

 

(2,875

)

 

 

(4,262

)

 

Finance lease payments

 

 

 

(2,206

)

 

 

(2,181

)

 

 

 

 

Net cash (used in) provided by financing activities

 

 

(72,669

)

 

 

5,025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

 

(3

)

 

 

(30

)

 

 

 

 

 

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

 

 

28,193

 

 

 

238,950

 

Cash and cash equivalents beginning of period

 

 

61,435

 

 

 

28,557

 

Cash and cash equivalents end of period

 

$

89,628

 

 

$

267,507

 


 

HUB GROUP, INC.

FINANCIAL INFORMATION BY BUSINESS LINE

(in thousands)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months

 

Nine Months

 

 

 

 

Ended September 30,

 

Ended September 30,

 

 

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

Intermodal

 

 

$

539,484

 

$

582,878

 

$

1,618,407

 

$

1,615,453

Truck brokerage

 

 

 

109,543

 

 

122,059

 

 

334,211

 

 

357,013

Logistics

 

 

 

189,470

 

 

149,642

 

 

586,196

 

 

479,940

Dedicated

 

 

 

74,778

 

 

78,645

 

 

228,622

 

 

212,894

 

Total Revenue

 

$

913,275

 

$

933,224

 

$

2,767,436

 

$

2,665,300


 

 

HUB GROUP, INC. 

 

UNAUDITED RECONCILIATION OF NET INCOME TO EBITDA

 

(in thousands)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

Three Months      

 

 

Ended, September 30,    

 

 

 

 

 

 

Change

 

Change

 

 

2019

 

2018

 

$

 

%

 

 

 

 

 

 

 

 

 

 

Net income from continuing operations

$

  26,105

 

 

$

  25,764

 

 

$

  341

 

 

1.3

%

 

 

 

 

 

 

 

 

 

 

Interest expense

 

  2,780

 

 

 

  2,411

 

 

 

  369

 

 

15.3

%

 

 

 

 

 

 

 

 

 

 

Interest and dividend income

 

  (613

)

 

 

  (340

)

 

 

  (273

)

 

80.3

%

 

 

 

 

 

 

 

 

 

 

Other income, net

 

  (56

)

 

 

  (251

)

 

 

  195

 

 

-77.7

%

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

  29,690

 

 

 

  20,780

 

 

 

  8,910

 

 

42.9

%

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

  9,030

 

 

 

  7,150

 

 

 

  1,880

 

 

26.3

%

 

 

 

 

 

 

 

 

 

 

EBITDA

$

  66,936

 

 

$

  55,514

 

 

$

  11,422

 

 

20.6

%

 


 

 

 

 

 

 

 

 

 

HUB GROUP, INC.       

 

UNAUDITED RECONCILIATION OF NET INCOME TO EBITDA    

 

(in thousands)       

 

(unaudited)       

 

 

 

 

 

 

 

 

 

 

 

Nine Months      

 

 

Ended, September 30,    

 

 

 

 

 

 

Change

 

Change

 

 

 

2019

 

 

 

2018

 

 

$

 

%

 

 

 

 

 

 

 

 

 

 

Net income from continuing operations

$

  79,216

 

 

$

  53,987

 

 

$

  25,229

 

 

46.7

%

 

 

 

 

 

 

 

 

 

 

Interest expense

 

  8,526

 

 

 

  6,702

 

 

 

  1,824

 

 

27.2

%

 

 

 

 

 

 

 

 

 

 

Interest and dividend income

 

  (1,581

)

 

 

  (365

)

 

 

  (1,216

)

 

333.2

%

 

 

 

 

 

 

 

 

 

 

Other income, net

 

  14

 

 

 

  (20

)

 

 

  34

 

 

-170.0

%

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

  86,719

 

 

 

  58,552

 

 

 

  28,167

 

 

48.1

%

 

 

 

 

 

 

 

 

 

 

Provision for income taxes

 

  27,381

 

 

 

  16,371

 

 

 

  11,010

 

 

67.3

%

 

 

 

 

 

 

 

 

 

 

EBITDA

$

  200,275

 

 

$

  135,227

 

 

$

  65,048

 

 

48.1

%

 


 

 

 

 

 

 

HUB GROUP, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(in thousands, except per share amounts)

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

 

September 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

% of

 

 

 

 

 

 

 

Amount

Revenue

Revenue

 

 

 

$

  913,275

 

100.0

%

 

 

 

 

 

 

 

 

 

Transportation costs

 

 

 

 

  778,057

 

85.2

%

 

Settlement of 2016 auto claim liability

 

 

 

  (3,000

)

-0.3

%

Adjusted transportation costs

 

 

 

  775,057

 

84.9

%

 

 

 

 

 

 

 

 

 

 

Adjusted gross margin

 

 

 

 

  138,218

 

15.1

%

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

Salaries and benefits

 

 

 

 

  59,765

 

6.5

%

 

 

 

 

 

 

 

 

 

 

General and administrative

 

 

 

  30,906

 

3.4

%

 

 

Settlement of claims for alleged misclassification of drivers

 

  (4,750

)

-0.5

%

 

 

Consulting project

 

 

 

 

  (700

)

-0.1

%

 

Adjusted general and administrative

 

 

 

  25,456

 

2.8

%

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

 

  7,301

 

0.8

%

 

 

 

 

 

 

 

 

 

 

 

Adjusted total costs and expenses

 

 

 

  92,522

 

10.1

%

 

 

 

 

 

 

 

 

 

Adjusted operating income

 

 

 

  45,696

 

5.0

%

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

Interest expense

 

 

 

 

  (2,780

)

-0.3

%

 

Interest and dividend income

 

 

 

  613

 

0.1

%

 

Other, net

 

 

 

 

  56

 

0.0

%

 

 

Total other expense

 

 

 

 

  (2,111

)

-0.2

%

 

 

 

 

 

 

 

 

 

Adjusted income before income taxes

 

 

 

  43,585

 

4.8

%

 

 

 

 

 

 

 

 

 

Adjusted provision for income taxes

 

 

 

  11,201

 

1.2

%

 

 

 

 

 

 

 

 

 

Adjusted net income

 

 

 

$

  32,384

 

 

 

 

 

 

 

 

 

 

 

Adjusted earnings per share

 

 

 

 

 

Basic

 

 

 

$

  0.98

 

 

 

Diluted

 

 

 

$

  0.97

 

 

 

 

 

 

 

 

 

 

 

Basic weighted average number of shares outstanding

 

 

  33,034

 

 

Diluted weighted average number of shares outstanding

 

 

  33,265

 

 

 

 

 

 

 

 

CONTACT: Maralee Volchko of Hub Group, Inc., +1-630-271-3745