Hub Group, Inc. Reports Record Fourth Quarter and Full Year 2012 Earnings

HUB GROUP, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except per share amounts)

Three Months

Twelve Months

Ended December 31,

Ended December 31,

2012

2011

2012

2011

Revenue

$ 801,023

$ 762,775

$ 3,124,108

$ 2,751,534

Transportation costs

707,644

678,964

2,768,042

2,438,986

Gross margin

93,379

83,811

356,066

312,548

Costs and expenses:

Salaries and benefits

33,023

29,522

129,143

121,044

Agent fees and commissions

14,006

13,091

55,112

41,491

General and administrative

13,091

12,425

52,832

49,951

Depreciation and amortization

1,611

1,635

6,619

5,603

Total costs and expenses

61,731

56,673

243,706

218,089

Operating income

31,648

27,138

112,360

94,459

Other income (expense):

Interest expense

(299)

(319)

(1,207)

(638)

Interest and dividend income

30

30

134

148

Other, net 

28

42

(30)

328

Total other (expense) income 

(241)

(247)

(1,103)

(162)

Income before provision for income taxes

31,407

26,891

111,257

94,297

Provision for income taxes

12,563

9,877

43,304

36,119

Net income

$   18,844

$   17,014

$     67,953

$     58,178

Basic earnings per common share

$      0.51

$      0.46

$         1.83

$         1.58

Diluted earnings per common share

$      0.51

$      0.46

$         1.83

$         1.57

Basic weighted average number of shares outstanding

37,021

36,943

37,053

36,913

Diluted weighted average number of shares outstanding

37,199

37,104

37,185

37,063

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, 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

2012

2011

$

%

2012

2011

$

%

Diluted GAAP EPS

$  0.51

$  0.46

$  0.05

10.9%

$  1.83

$  1.57

$  0.26

16.6%

Integration expenses and restructuring costs

$     –

$  0.02

$ (0.02)

$     –

$  0.08

$ (0.08)

Diluted NON-GAAP EPS (adjusted)

$  0.51

$  0.48

$  0.03

6.2%

$  1.83

$  1.65

$  0.18

10.9%

Diluted Shares

37,199

37,104

37,185

37,063

HUB GROUP, INC.

UNAUDITED CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

December 31,

December 31,

2012

2011

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$         70,760

$         49,091

Accounts receivable trade, net

346,917

326,537

Accounts receivable other

25,945

23,878

Prepaid taxes

139

2,392

Deferred taxes

4,965

4,838

Prepaid expenses and other current assets

10,619

9,056

TOTAL CURRENT ASSETS

459,345

415,792

Restricted investments

17,218

14,323

Property and equipment, net

157,584

124,587

Other intangibles, net

20,068

21,667

Goodwill, net

263,251

263,470

Other assets

2,387

2,845

TOTAL ASSETS

$       919,853

$       842,684

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:

Accounts payable trade

$       206,497

$       204,693

Accounts payable other

22,925

17,289

Accrued payroll

17,210

16,721

Accrued other

28,633

29,962

Current portion of capital lease

2,120

2,237

TOTAL CURRENT LIABILITIES

277,385

270,902

Non-current liabilities

20,041

17,717

Non-current portion of capital lease

21,099

23,436

Deferred taxes

100,431

91,764

STOCKHOLDERS’ EQUITY:

Preferred stock, $.01 par value; 2,000,000 shares authorized; no shares issued or outstanding in 2012 and 2011

–

–

Common stock

Class A: $.01 par value; 97,337,700 shares authorized and 41,224,792 shares issued in 2012 and 2011; 36,767,485 shares outstanding in 2012 and 36,860,260 shares outstanding in 2011

412

412

Class B:  $.01 par value; 662,300 shares authorized; 662,296 shares issued and outstanding in 2012 and 2011

7

7

Additional paid-in capital

167,765

168,800

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

(15,458)

(15,458)

Retained earnings

469,141

401,188

Other comprehensive income

1

4

Treasury stock; at cost, 4,457,307 shares in 2012 and 4,364,532 shares in 2011

(120,971)

(116,088)

TOTAL STOCKHOLDERS’ EQUITY

500,897

438,865

     TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$       919,853

$       842,684

HUB GROUP, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Twelve Months Ended

December 31,

2012

2011

Cash flows from operating activities:

Net income

$ 67,953

$   58,178

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

Depreciation and amortization 

21,575

16,340

Deferred taxes

8,786

18,821

Compensation expense related to share-based compensation plans

6,539

4,788

Loss (gain) on sale of assets

108

(17)

Excess tax benefits from share based compensation

(29)

–

Changes in operating assets and liabilities, net of effects of acquisition:

Restricted investments

(2,895)

(724)

Accounts receivable, net

(22,429)

(45,047)

Prepaid taxes

2,253

(2,097)

Prepaid expenses and other current assets

(1,562)

(1,728)

Other assets

459

(33)

Accounts payable

7,438

23,095

Accrued expenses

2,779

2,989

Non-current liabilities

1,942

301

Net cash provided by operating activities

92,917

74,866

Cash flows from investing activities:

Proceeds from sale of equipment

1,071

410

Purchases of property and equipment

(56,882)

(55,010)

Cash used in acquisitions, net of cash acquired

(550)

(85,182)

Net cash used in investing activities

(56,361)

(139,782)

Cash flows from financing activities:

Proceeds from stock options exercised

69

86

Purchase of treasury stock

(13,020)

(1,523)

Capital lease payments

(2,454)

(729)

Excess tax benefits from share-based compensation

523

1,034

Net cash used in financing activities

(14,882)

(1,132)

Effect of exchange rate changes on cash and cash equivalents

(5)

(5)

Net increase (decrease) in cash and cash equivalents

21,669

(66,053)

Cash and cash equivalents beginning of the year

49,091

115,144

Cash and cash equivalents end of the year

$ 70,760

$   49,091