Hub Group, Inc. Reports Third Quarter 2011 Earnings
DOWNERS GROVE, Ill., Oct. 24, 2011 /PRNewswire via COMTEX/ —
Hub Group, Inc. (NASDAQ: HUBG) today announced financial results for the quarter ended September 30, 2011.
Hub Group reported income of $16.3 million for the third quarter ended September 30, 2011, an increase of 29% compared to the third quarter of 2010. Hub Group’s diluted earnings per share was $0.44 for the third quarter of 2011, which represents an increase of 29% when compared with the prior year period.
The Hub segment’s revenue increased 17% to $561 million. Third quarter intermodal revenue increased 19% to $402 million. The increase was attributable to a 10% volume increase and a 9% increase for fuel, price and mix. Truck brokerage revenue decreased 3% to $83 million this quarter. Third quarter Unyson Logistics revenue increased 39% to $76 million. Hub’s operating income increased $4.2 million, which represents an increase of 20% when compared with the prior year period. The Hub results include approximately $335,000 of restructuring costs related to truck brokerage operations.
The Mode segment’s revenue was $206 million for the third quarter. Operating income was $1.7 million. The Mode results include approximately $800,000 of costs related to integration.
Hub Group ended the quarter with $43 million in cash.
CONFERENCE CALL
Hub will hold a conference call at 5:00 p.m. Eastern Time on Monday, October 24, 2011 to discuss its third quarter results.
Hosting the conference call will be David P. Yeager, Chairman and Chief Executive Officer, and Terri A. 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) 713-4211. The conference call participant code is 96261580. Participants may pre-register for the call at https://www.theconferencingservice.com/prereg/key.process?key=PH9K4Q4KR. 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 leading 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.
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, 2010 and the reports on Form 10-Q for the periods ended March 31, 2011 and June 30, 2011. Hub Group assumes no liability to update any such forward-looking statements.
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HUB GROUP, INC. |
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UNAUDITED CONSOLIDATED STATEMENTS OF INCOME |
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(in thousands, except per share amounts) |
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Three Months |
Nine Months |
|||||||||||||
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Ended September 30, |
Ended September 30, |
|||||||||||||
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2011 |
2010 |
2011 |
2010 |
|||||||||||
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Revenue |
$ 760,379 |
$ 478,417 |
$ 2,005,467 |
$ 1,353,824 |
||||||||||
|
Transportation costs |
673,657 |
421,020 |
1,776,685 |
1,197,033 |
||||||||||
|
Gross margin |
86,722 |
57,397 |
228,782 |
156,791 |
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Costs and expenses: |
||||||||||||||
|
Salaries and benefits |
32,023 |
25,547 |
91,570 |
72,868 |
||||||||||
|
Agent fees and commissions |
13,884 |
641 |
28,400 |
1,774 |
||||||||||
|
General and administrative |
12,612 |
9,564 |
37,523 |
28,640 |
||||||||||
|
Depreciation and amortization |
1,560 |
938 |
3,968 |
2,845 |
||||||||||
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Total costs and expenses |
60,079 |
36,690 |
161,461 |
106,127 |
||||||||||
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Operating income |
26,643 |
20,707 |
67,321 |
50,664 |
||||||||||
|
Other income (expense): |
||||||||||||||
|
Interest expense |
(236) |
(12) |
(319) |
(38) |
||||||||||
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Interest and dividend income |
41 |
35 |
118 |
83 |
||||||||||
|
Other, net |
17 |
(68) |
286 |
84 |
||||||||||
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Total other (expense) income |
(178) |
(45) |
85 |
129 |
||||||||||
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Income before provision for income taxes |
26,465 |
20,662 |
67,406 |
50,793 |
||||||||||
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Provision for income taxes |
10,189 |
8,045 |
26,242 |
19,844 |
||||||||||
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Net income |
$ 16,276 |
$ 12,617 |
$ 41,164 |
$ 30,949 |
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Basic earnings per common share |
$ 0.44 |
$ 0.34 |
$ 1.12 |
$ 0.83 |
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Diluted earnings per common share |
$ 0.44 |
$ 0.34 |
$ 1.11 |
$ 0.83 |
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Basic weighted average number of shares outstanding |
36,923 |
37,118 |
36,903 |
37,358 |
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Diluted weighted average number of shares outstanding |
37,065 |
37,288 |
37,049 |
37,504 |
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HUB GROUP, INC. |
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FINANCIAL INFORMATION BY SEGMENT |
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(in thousands) |
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Three Months |
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Ended September 30, 2011 |
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Hub |
Mode |
Inter-Segment |
Hub Group |
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Revenue |
$ 560,810 |
$ 205,961 |
$ (6,392) |
$ 760,379 |
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Transportation costs |
497,204 |
182,845 |
(6,392) |
673,657 |
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Gross margin |
63,606 |
23,116 |
– |
86,722 |
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Costs and expenses: |
||||||||||||||
|
Salaries and benefits |
26,884 |
5,139 |
– |
32,023 |
||||||||||
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Agent fees and commissions |
660 |
13,224 |
– |
13,884 |
||||||||||
|
General and administrative |
10,141 |
2,471 |
– |
12,612 |
||||||||||
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Depreciation and amortization |
1,003 |
557 |
– |
1,560 |
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Total costs and expenses |
38,688 |
21,391 |
– |
60,079 |
||||||||||
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Operating income |
24,918 |
1,725 |
– |
26,643 |
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HUB GROUP, INC. |
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FINANCIAL INFORMATION BY SEGMENT |
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(in thousands) |
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Nine Months |
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Ended September 30, 2011 |
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Hub |
Mode |
Inter-Segment |
Hub Group |
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Revenue |
$ 1,606,607 |
$ 407,717 |
$ (8,857) |
$ 2,005,467 |
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Transportation costs |
1,423,108 |
362,434 |
(8,857) |
1,776,685 |
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Gross margin |
183,499 |
45,283 |
– |
228,782 |
|||||||||||
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Costs and expenses: |
|||||||||||||||
|
Salaries and benefits |
81,796 |
9,774 |
– |
91,570 |
|||||||||||
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Agent fees and commissions |
2,049 |
26,351 |
– |
28,400 |
|||||||||||
|
General and administrative |
32,464 |
5,059 |
– |
37,523 |
|||||||||||
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Depreciation and amortization |
2,890 |
1,078 |
– |
3,968 |
|||||||||||
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Total costs and expenses |
119,199 |
42,262 |
– |
161,461 |
|||||||||||
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Operating income |
64,300 |
3,021 |
– |
67,321 |
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HUB GROUP, INC. |
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CONSOLIDATED BALANCE SHEETS |
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(in thousands, except share amounts) |
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September 30, |
December 31, |
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2011 |
2010 |
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(Unaudited) |
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ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents |
$ 42,652 |
$ 115,144 |
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Accounts receivable trade, net |
343,579 |
185,879 |
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Accounts receivable other |
19,068 |
17,958 |
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Prepaid taxes |
128 |
296 |
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Deferred taxes |
7,421 |
3,314 |
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Prepaid expenses and other current assets |
9,603 |
6,569 |
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TOTAL CURRENT ASSETS |
422,451 |
329,160 |
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Restricted investments |
13,237 |
11,421 |
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Property and equipment, net |
110,055 |
47,806 |
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Other intangibles, net |
20,496 |
5,856 |
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Goodwill, net |
262,640 |
233,029 |
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Other assets |
2,406 |
2,135 |
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TOTAL ASSETS |
$ 831,285 |
$ 629,407 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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CURRENT LIABILITIES: |
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Accounts payable trade |
$ 210,993 |
$ 121,078 |
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Accounts payable other |
17,209 |
10,064 |
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Accrued payroll |
18,535 |
14,378 |
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Accrued other |
37,824 |
21,898 |
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Current portion of capital lease |
2,219 |
– |
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TOTAL CURRENT LIABILITIES |
286,780 |
167,418 |
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Non-current liabilities |
16,971 |
13,950 |
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Deferred taxes |
82,728 |
71,739 |
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Non-current portion of capital lease |
24,038 |
– |
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STOCKHOLDERS’ EQUITY: |
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Preferred stock, $.01 par value; 2,000,000 shares authorized; |
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no shares issued or outstanding in 2011 and 2010 |
– |
– |
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Common stock |
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Class A: $.01 par value; 97,337,700 shares authorized and |
|||||||||||
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41,224,792 shares issued in 2011 and 2010; 36,855,343 shares |
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outstanding in 2011 and 36,638,359 shares outstanding in 2010 |
412 |
412 |
|||||||||
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Class B: $.01 par value; 662,300 shares authorized; |
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662,296 shares issued and outstanding in 2011 and 2010 |
7 |
7 |
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Additional paid-in capital |
167,846 |
169,722 |
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Purchase price in excess of predecessor basis, net of tax |
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benefit of $10,306 |
(15,458) |
(15,458) |
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Retained earnings |
384,174 |
343,010 |
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Other comprehensive income |
1 |
6 |
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Treasury stock; at cost, 4,369,449 shares in 2011 |
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and 4,586,433 shares in 2010 |
(116,214) |
(121,399) |
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TOTAL STOCKHOLDERS’ EQUITY |
420,768 |
376,300 |
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ 831,285 |
$ 629,407 |
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HUB GROUP, INC. |
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UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS |
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(in thousands) |
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Nine Months Ended |
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September 30, |
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2011 |
2010 |
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Cash flows from operating activities: |
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Net income |
$ 41,164 |
$ 30,949 |
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Adjustments to reconcile net income |
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to net cash provided by operating activities: |
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Depreciation and amortization |
10,944 |
6,078 |
||||||||||
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Deferred taxes |
7,189 |
7,325 |
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Compensation expense related to share-based compensation plans |
3,675 |
2,720 |
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(Gain) loss on sale of assets |
(16) |
46 |
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Changes in operating assets and liabilities, net of effects of acquisition: |
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Restricted investments |
362 |
(938) |
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Accounts receivable, net |
(57,275) |
(66,443) |
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Prepaid taxes |
167 |
464 |
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Prepaid expenses and other current assets |
(2,275) |
517 |
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Other assets |
406 |
(491) |
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Accounts payable |
29,316 |
39,692 |
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Accrued expenses |
12,881 |
6,497 |
||||||||||
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Non-current liabilities |
(344) |
847 |
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Net cash provided by operating activities |
46,194 |
27,263 |
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Cash flows from investing activities: |
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Proceeds from sale of equipment |
316 |
871 |
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Purchases of property and equipment |
(35,382) |
(13,362) |
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Cash used in acquisitions, net of cash acquired |
(83,057) |
– |
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Net cash used in investing activities |
(118,123) |
(12,491) |
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Cash flows from financing activities: |
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Proceeds from stock options exercised |
78 |
18 |
||||||||||
|
Purchase of treasury stock |
(1,513) |
(23,822) |
||||||||||
|
Capital lease payments |
(185) |
– |
||||||||||
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Excess tax benefits from share-based compensation |
1,069 |
198 |
||||||||||
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Net cash used in financing activities |
(551) |
(23,606) |
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Effect of exchange rate changes on cash and cash equivalents |
(12) |
14 |
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Net decrease in cash and cash equivalents |
(72,492) |
(8,820) |
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Cash and cash equivalents beginning of period |
115,144 |
126,863 |
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Cash and cash equivalents end of period |
$ 42,652 |
$ 118,043 |
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SOURCE Hub Group, Inc.