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Hub Group, Inc. Reports Record First Quarter 2016 Earnings per Share of $0.51

OAK BROOK, Ill., April 26, 2016 /PRNewswire/ — Hub Group, Inc. (NASDAQ: HUBG) today announced financial results for the quarter ended March 31, 2016.

Hub Group reported net income of $18.0 million for the first quarter ended March 31, 2016 compared to $10.3 million for the first quarter of 2015.  Hub Group’s diluted earnings per share was $0.51 for the quarter.  Earnings per share increased 82% when compared with the prior year period.  Hub Group’s pre-tax income included one-time costs of $4.1 million including $3.1 million of costs related to the closure of the Hub Group Trucking terminal in Los Angeles and $1.0 million of severance resulting from management changes.  Excluding the effect of these items, non-GAAP earnings per share was $0.58 for the quarter (see table below).  Hub Group’s revenue decreased 4% to $806 million due to lower fuel revenue.

The Hub segment’s revenue decreased 4% to $615 million due primarily to a decrease in fuel revenue.  First quarter intermodal revenue decreased 2% to $414 million.  Intermodal volume increased 1%.  Truck brokerage revenue decreased 9% to $81 million this quarter.  First quarter Unyson Logistics revenue decreased 10% to $120 million.  The Hub segment’s operating income was $22.5 million.

The Mode segment’s revenue decreased 2% to $209 million.  Operating income was $6.3 million, an increase of 24% compared to the prior year period.

Hub Group ended the quarter with $200 million in cash.

CONFERENCE CALL

Hub Group will hold a conference call at 5:00 p.m. Eastern Time on Tuesday, April 26, 2016 to discuss its first quarter results.

Hosting the conference call will be Dave Yeager, Chairman and Chief Executive Officer.  Also participating on the call will be Don Maltby, 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?p=1&a=UWPVrIWNdEuuMN.  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) 771-4384 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.

ABOUT HUB GROUP: Hub Group, Inc. is a transportation management company that provides multi-modal solutions throughout North America, including intermodal, truck brokerage and logistics services. As a publicly traded company with over $3.5 billion in revenue, Hub Group’s organization of over 2,500 employees delivers innovative, customer-focused solutions and industry leading service to help customers better control supply chains and their costs.  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 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, our annual report on Form 10-K for the year ended December 31, 2015. 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,

2016

2015

Revenue

$ 805,859

$ 835,941

Transportation costs

697,472

746,813

Gross margin

108,387

89,128

Costs and expenses:

Salaries and benefits

43,863

39,476

Agent fees and commissions

16,901

14,826

General and administrative

16,644

14,071

Depreciation and amortization

2,136

1,960

Total costs and expenses

79,544

70,333

Operating income

28,843

18,795

Other income (expense):

Interest expense

(911)

(741)

Interest and dividend income

61

6

Other, net 

936

(1,404)

Total other income (expense) 

86

(2,139)

Income before provision for income taxes

28,929

16,656

Provision for income taxes

10,964

6,380

Net income

$   17,965

$   10,276

Basic earnings per common share

$       0.51

$       0.28

Diluted earnings per common share

$       0.51

$       0.28

Basic weighted average number of shares outstanding

35,137

36,156

Diluted weighted average number of shares outstanding

35,122

36,169

 

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)

Three Months

Ended March 31, 2016

Hub

Mode

Inter-Segment

Elims

Hub Group

Consolidated

Revenue

$ 615,227

$ 208,832

$              (18,200)

$              805,859

Transportation costs

536,073

179,599

(18,200)

697,472

Gross margin

79,154

29,233

108,387

Costs and expenses:

Salaries and benefits

40,096

3,767

43,863

Agent fees and commissions

13

16,888

16,901

General and administrative

14,722

1,922

16,644

Depreciation and amortization

1,815

321

2,136

Total costs and expenses

56,646

22,898

79,544

Operating income

22,508

6,335

28,843

 

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)

Three Months

Ended March 31, 2015

Hub

Mode

Inter-Segment

Elims

Hub Group

Consolidated

Revenue

$ 643,443

$ 213,522

$                  (21,024)

$                  835,941

Transportation costs

580,258

187,579

(21,024)

746,813

Gross margin

63,185

25,943

89,128

Costs and expenses:

Salaries and benefits

35,660

3,816

39,476

Agent fees and commissions

15

14,811

14,826

General and administrative

12,198

1,873

14,071

Depreciation and amortization

1,618

342

1,960

Total costs and expenses

49,491

20,842

70,333

Operating income

13,694

5,101

18,795

 

HUB GROUP, INC.

UNAUDITED NON-GAAP TO GAAP RECONCILIATION

(earnings per share)

Three Months

Ended, March 31,

Change

Change

2016

2015

$

%

Diluted GAAP EPS

$  0.51

$  0.28

$  0.23

82.1%

Hub Group Trucking Los Angeles shutdown costs, net of tax

0.05

0.05

Severance costs, net of tax

0.02

0.02

Canadian currency translation loss, net of tax

0.02

(0.02)

Diluted non-GAAP EPS (adjusted)

$  0.58

$  0.32

$  0.26

81.3%

Diluted shares

35,122

36,169

 

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.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

March 31,

December 31,

2016

2015

(unaudited)

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$    200,256

$       207,749

Accounts receivable trade, net

365,149

379,987

Accounts receivable other

3,848

10,344

Prepaid taxes

336

362

Deferred taxes

8,412

Prepaid expenses and other current assets

16,347

17,756

TOTAL CURRENT ASSETS

585,936

624,610

Restricted investments

19,423

21,108

Property and equipment, net

379,484

374,847

Other intangibles, net

12,815

13,139

Goodwill, net

262,540

262,594

Other assets

4,448

4,848

TOTAL ASSETS

$ 1,264,646

$    1,301,146

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:

Accounts payable trade

$    234,196

$       230,432

Accounts payable other

23,150

21,495

Accrued payroll

14,355

33,020

Accrued other

54,469

38,733

Current portion of capital lease

2,624

2,608

Current portion of long term debt

32,524

32,409

TOTAL CURRENT LIABILITIES

361,318

358,697

Long term debt

92,648

100,895

Non-current liabilities

20,754

20,233

Long term portion of capital lease

12,640

13,299

Deferred taxes

154,039

160,182

STOCKHOLDERS’ EQUITY:

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

no shares issued or outstanding in 2016 and 2015

Common stock

Class A: $.01 par value; 97,337,700 shares authorized and 41,224,792 shares issued in 2016 and 2015; 34,675,173 shares outstanding in 2016 and 35,633,961 shares outstanding in 2015

412

412

Class B:  $.01 par value; 662,300 shares authorized; 662,296 shares issued and outstanding in 2016 and 2015

7

7

Additional paid-in capital

166,803

174,285

Purchase price in excess of predecessor basis, net of tax

 benefit of $10,306

(15,458)

(15,458)

Retained earnings

678,723

660,758

Accumulated other comprehensive loss

(177)

(178)

Treasury stock; at cost, 6,549,619 shares in 2016

and 5,590,831 shares in 2015

(207,063)

(171,986)

TOTAL STOCKHOLDERS’ EQUITY

623,247

647,840

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$ 1,264,646

$    1,301,146

 

HUB GROUP, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Three Months Ended

March 31,

2016

2015

Cash flows from operating activities:

Net income

$        17,965

$        10,276

Adjustments to reconcile net income

to net cash provided by operating activities:

Depreciation and amortization 

10,639

8,731

Deferred taxes

2,383

1,593

Compensation expense related to share-based compensation plans

2,181

2,034

Gain on sale of assets

(83)

Excess tax benefits from share-based compensation

(30)

(13)

Changes in operating assets and liabilities:

Restricted investments

1,685

98

Accounts receivable, net

21,332

2,874

Prepaid taxes

26

4,557

Prepaid expenses and other current assets

1,409

(3,246)

Other assets

400

330

Accounts payable

5,421

13,414

Accrued expenses

(13,517)

5,733

Non-current liabilities

481

(1,052)

Net cash provided by operating activities

50,292

45,329

Cash flows from investing activities:

Proceeds from sale of equipment

592

26

Purchases of property and equipment

(4,893)

(15,057)

Net cash used in investing activities

(4,301)

(15,031)

Cash flows from financing activities:

Proceeds from issuance of debt

11,480

Repayments of long term debt

(8,132)

(5,553)

Stock tendered for payments of withholding taxes

(2,208)

(2,754)

Purchase of treasury stock

(42,368)

(13,419)

Capital lease payments

(643)

(605)

Excess tax benefits from share-based compensation

(134)

42

Net cash used in financing activities

(53,485)

(10,809)

Effect of exchange rate changes on cash and cash equivalents

1

3

Net (decrease) increase in cash and cash equivalents

(7,493)

19,492

Cash and cash equivalents beginning of period

207,749

109,769

Cash and cash equivalents end of period

$      200,256

$      129,261

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/hub-group-inc-reports-record-first-quarter-2016-earnings-per-share-of-051-300257600.html

SOURCE Hub Group, Inc.

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

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