Hub Group, Inc. Reports Record First Quarter 2013 Earnings

HUB GROUP, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

Three Months

Ended March 31,

2013

2012

Revenue

$ 768,980

$ 739,885

Transportation costs

681,642

656,143

Gross margin

87,338

83,742

Costs and expenses:

Salaries and benefits

34,583

33,299

Agent fees and commissions

13,274

13,695

General and administrative

13,191

12,577

Depreciation and amortization

1,553

1,660

Total costs and expenses

62,601

61,231

Operating income

24,737

22,511

Other income (expense):

Interest expense

(290)

(307)

Interest and dividend income

29

34

Other, net 

(11)

(23)

Total other (expense) income 

(272)

(296)

Income before provision for income taxes

24,465

22,215

Provision for income taxes

9,101

8,553

Net income

$  15,364

$  13,662

Basic earnings per common share

$      0.42

$      0.37

Diluted earnings per common share

$      0.42

$      0.37

Basic weighted average number of shares outstanding

36,855

37,043

Diluted weighted average number of shares outstanding

36,949

37,143

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 FINANCIAL INFORMATION BY SEGMENT

(in thousands)

Three Months

Ended March 31, 2012

Hub

Mode

Inter-Segment Elims

Hub Group Consolidated

Revenue

$ 563,212

$ 187,183

$                (10,510)

$      739,885

Transportation costs

501,694

164,959

(10,510)

656,143

Gross margin

61,518

22,224

–

83,742

Costs and expenses:

Salaries and benefits

29,080

4,219

–

33,299

Agent fees and commissions

634

13,061

–

13,695

General and administrative

10,732

1,845

–

12,577

Depreciation and amortization

1,121

539

–

1,660

Total costs and expenses

41,567

19,664

–

61,231

Operating income

19,951

2,560

–

22,511

HUB GROUP, INC.

UNAUDITED CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

March 31,

December 31,

2013

2012

(Unaudited)

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$      86,251

$         70,760

Accounts receivable trade, net

366,296

346,917

Accounts receivable other

18,503

25,945

Prepaid taxes

175

139

Deferred taxes

4,401

4,965

Prepaid expenses and other current assets

8,395

10,619

TOTAL CURRENT ASSETS

484,021

459,345

Restricted investments

17,399

17,218

Property and equipment, net

161,867

157,584

Other intangibles, net

19,691

20,068

Goodwill, net

263,196

263,251

Other assets

2,533

2,387

TOTAL ASSETS

$    948,707

$       919,853

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:

Accounts payable trade

$    221,072

$       206,497

Accounts payable other

24,585

22,925

Accrued payroll

11,751

17,210

Accrued other

31,333

28,633

Current portion of capital leases

2,345

2,120

TOTAL CURRENT LIABILITIES

291,086

277,385

Non-current liabilities

19,714

20,041

Non-current portion of capital leases

20,314

21,099

Deferred taxes

102,659

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; 36,986,810 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

161,161

167,765

Purchase price in excess of predecessor basis, net of tax benefit of $10,306

(15,458)

(15,458)

Retained earnings

484,505

469,141

Other comprehensive income

27

1

Treasury stock; at cost, 4,237,982 shares in 2013 and 4,457,307 shares in 2012

(115,720)

(120,971)

    TOTAL STOCKHOLDERS’ EQUITY

514,934

500,897

 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$    948,707

$       919,853

HUB GROUP, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Three Months Ended

March 31,

2013

2012

Cash flows from operating activities:

Net income

$ 15,364

$ 13,662

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

5,096

5,516

Deferred taxes

2,669

3,352

Compensation expense related to share-based compensation plans

1,882

1,637

(Gain) loss on sale of assets

(214)

1

Excess tax benefits from share-based compensation

(3)

(83)

Changes in operating assets and liabilities:

Restricted investments

(181)

(1,509)

Accounts receivable, net

(11,893)

(14,043)

Prepaid taxes

(30)

2,243

Prepaid expenses and other current assets

2,227

2,205

Other assets

(146)

445

Accounts payable

16,230

8,377

Accrued expenses

(2,801)

22

Non-current liabilities

(198)

1,010

Net cash provided by operating activities

28,002

22,835

Cash flows from investing activities:

Proceeds from sale of equipment

734

52

Purchases of property and equipment

(9,456)

(17,013)

Cash used in acquisitions

–

(150)

Net cash used in investing activities

(8,722)

(17,111)

Cash flows from financing activities:

Proceeds from stock options exercised

42

16

Stock tendered for payments of withholding taxes

(2,469)

(1,665)

Purchase of treasury stock

(903)

–

Capital lease payments

(560)

(546)

Excess tax benefits from share-based compensation

98

74

Net cash used in financing activities

(3,792)

(2,121)

Effect of exchange rate changes on cash and cash equivalents

3

1

Net increase in cash and cash equivalents

15,491

3,604

Cash and cash equivalents beginning of period

70,760

49,091

Cash and cash equivalents end of period

$ 86,251

$ 52,695