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Hub Group, Inc. Reports Third Quarter 2016 Earnings

OAK BROOK, Ill., Oct. 26, 2016 /PRNewswire/ — Hub Group, Inc. (NASDAQ: HUBG) today announced financial results for the quarter ended September 30, 2016.

Hub Group reported net income of $17.9 million for the third quarter ended September 30, 2016 compared to $19.8 million in the third quarter of 2015.  Hub Group’s diluted earnings per share was $0.54 for the quarter.  Earnings per share decreased 2% when compared with the prior year period.  Hub Group’s revenue increased 4% to $933 million

The Hub segment’s revenue increased 5% to $717 million.  Third quarter intermodal revenue increased 1% to $466 million.  Intermodal volume increased 5%.  Truck brokerage revenue increased 16% to $97 million this quarter.  Third quarter Unyson Logistics revenue increased 12% to $154 million.  The Hub segment’s operating income was $21.8 million

The Mode segment’s revenue increased 5% to $252 million.  Operating income was $8.0 million compared to $7.2 million in the prior year period.

Hub Group ended the quarter with $135 million in cash.

“The challenging intermodal pricing environment contributed to the decline in income this quarter.  We remain focused on providing excellent service and realizing the benefits of our cost savings initiatives,” said Dave Yeager, Chairman and Chief Executive Officer of Hub Group.

CONFERENCE CALL
Hub will hold a conference call at 5:00 p.m. Eastern Time on Wednesday, October 26, 2016 to discuss its third 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=UVVbfMMitwEGXv. 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 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, 2015 and the report on Form 10-Q for the period ended June 30, 2016.  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

Nine Months

Ended September 30,

Ended September 30,

2016

2015

2016

2015

Revenue

$ 932,814

$ 899,869

$ 2,594,230

$ 2,635,323

Transportation costs

821,360

794,805

2,259,899

2,339,402

Gross margin

111,454

105,064

334,331

295,921

Costs and expenses:

Salaries and benefits

42,610

36,357

130,075

114,670

Agent fees and commissions

19,072

17,862

54,334

49,374

General and administrative

17,641

15,461

50,368

44,295

Depreciation and amortization

2,276

1,966

6,559

5,893

Total costs and expenses

81,599

71,646

241,336

214,232

Operating income

29,855

33,418

92,995

81,689

Other income (expense):

Interest expense

(888)

(757)

(2,655)

(2,218)

Interest and dividend income

104

22

286

47

Other, net 

27

(952)

1,178

(2,095)

Total other expense

(757)

(1,687)

(1,191)

(4,266)

Income before provision for income taxes

29,098

31,731

91,804

77,423

Provision for income taxes

11,174

11,899

35,243

28,848

Net income

$   17,924

$   19,832

$     56,561

$     48,575

Basic earnings per common share

$       0.54

$       0.55

$         1.66

$         1.35

Diluted earnings per common share

$       0.54

$       0.55

$         1.66

$         1.35

Basic weighted average number of shares outstanding

33,212

35,769

34,098

35,970

Diluted weighted average number of shares outstanding

33,366

35,903

34,172

36,049

 

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)

Three Months

Ended September 30, 2016

Hub

Mode

Inter-Segment Elims

Hub Group Total

Revenue

$       716,699

$       251,611

$           (35,496)

$       932,814

Transportation costs

638,154

218,702

(35,496)

821,360

Gross margin

78,545

32,909

111,454

Costs and expenses:

Salaries and benefits

38,775

3,835

42,610

Agent fees and commissions

20

19,052

19,072

General and administrative

15,969

1,672

17,641

Depreciation and amortization

1,959

317

2,276

Total costs and expenses

56,723

24,876

81,599

Operating income

$        21,822

$          8,033

$                   –

$        29,855

 

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)

Three Months

Ended September 30, 2015

Hub

Mode

Inter-Segment Elims

Hub Group Total

Revenue

$       680,559

$       239,375

$           (20,065)

$       899,869

Transportation costs

606,081

208,789

(20,065)

794,805

Gross margin

74,478

30,586

105,064

Costs and expenses:

Salaries and benefits

32,917

3,440

36,357

Agent fees and commissions

14

17,848

17,862

General and administrative

13,659

1,802

15,461

Depreciation and amortization

1,647

319

1,966

Total costs and expenses

48,237

23,409

71,646

Operating income

$        26,241

$          7,177

$                   –

$        33,418

 

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)

Nine Months

Ended September 30, 2016

Hub

Mode

Inter-Segment Elims

Hub Group Total

Revenue

$    1,980,450

$       692,366

$          (78,586)

$    2,594,230

Transportation costs

1,739,676

598,809

(78,586)

2,259,899

Gross margin

240,774

93,557

334,331

Costs and expenses:

Salaries and benefits

118,658

11,417

130,075

Agent fees and commissions

47

54,287

54,334

General and administrative

44,917

5,451

50,368

Depreciation and amortization

5,603

956

6,559

Total costs and expenses

169,225

72,111

241,336

Operating income

$        71,549

$        21,446

$                  –

$        92,995

 

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)

Nine Months

Ended September 30, 2015

Hub

Mode

Inter-Segment Elims

Hub Group Total

Revenue

$    2,010,453

$       686,744

$          (61,874)

$    2,635,323

Transportation costs

1,800,628

600,648

(61,874)

2,339,402

Gross margin

209,825

86,096

295,921

Costs and expenses:

Salaries and benefits

103,865

10,805

114,670

Agent fees and commissions

43

49,331

49,374

General and administrative

39,051

5,244

44,295

Depreciation and amortization

4,912

981

5,893

Total costs and expenses

147,871

66,361

214,232

Operating income

$        61,954

$        19,735

$                  –

$        81,689

 

HUB GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

September 30,

December 31,

2016

2015

(unaudited)

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$        135,195

$       207,749

Accounts receivable trade, net

445,574

379,987

Accounts receivable other

7,036

10,344

Prepaid taxes

1,971

362

Deferred taxes

8,412

Prepaid expenses and other current assets

16,508

17,756

     TOTAL CURRENT ASSETS

606,284

624,610

Restricted investments

20,563

21,108

Property and equipment, net

406,885

374,847

Other intangibles, net

12,167

13,139

Goodwill, net

262,431

262,594

Other assets

3,887

4,848

TOTAL ASSETS

$     1,312,217

$    1,301,146

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:

Accounts payable trade

$        265,659

$       230,432

Accounts payable other

23,330

21,495

Accrued payroll

23,989

33,020

Accrued other

45,846

38,733

Current portion of capital lease

2,672

2,608

Current portion of long term debt

39,769

32,409

     TOTAL CURRENT LIABILITIES

401,265

358,697

Long term debt

104,561

100,895

Non-current liabilities

22,562

20,233

Long term capital lease

11,270

13,299

Deferred taxes

164,699

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; 33,195,497 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

171,371

174,285

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

(15,458)

(15,458)

Retained earnings

717,319

660,758

Accumulated other comprehensive loss

(241)

(178)

Treasury stock; at cost, 8,029,295 shares in 2016 and 5,590,831 shares in 2015

(265,550)

(171,986)

     TOTAL STOCKHOLDERS’ EQUITY

607,860

647,840

          TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$     1,312,217

$    1,301,146

 

HUB GROUP, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Nine Months Ended

September 30,

2016

2015

Cash flows from operating activities:

Net income

$        56,561

$        48,575

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

Depreciation and amortization 

32,665

26,662

Deferred taxes

13,269

5,757

Compensation expense related to share-based compensation plans

6,318

5,843

Gain on sale of assets

(382)

(116)

Excess tax benefits from share-based compensation

(524)

(40)

Changes in operating assets and liabilities:

Restricted investments

545

1,389

Accounts receivable, net

(62,324)

6,540

Prepaid taxes

(1,609)

13,579

Prepaid expenses and other current assets

1,244

(1,442)

Other assets

961

(56)

Accounts payable

37,080

21,308

Accrued expenses

(6,968)

8,337

Non-current liabilities

2,181

(3,505)

Net cash provided by operating activities

79,017

132,831

Cash flows from investing activities:

Proceeds from sale of equipment

1,573

922

Purchases of property and equipment

(59,883)

(40,951)

Net cash used in investing activities

(58,310)

(40,029)

Cash flows from financing activities:

Proceeds from issuance of debt

36,100

31,376

Repayments of long term debt

(25,074)

(16,836)

Stock tendered for payments of withholding taxes

(2,484)

(2,902)

Purchase of treasury stock

(100,000)

(28,823)

Capital lease payments

(1,965)

(1,883)

Excess tax benefits from share-based compensation

212

166

Net cash used in financing activities

(93,211)

(18,902)

Effect of exchange rate changes on cash and cash equivalents

(50)

(122)

Net (decrease) increase in cash and cash equivalents

(72,554)

73,778

Cash and cash equivalents beginning of period

207,749

109,769

Cash and cash equivalents end of period

$      135,195

$      183,547

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/hub-group-inc-reports-third-quarter-2016-earnings-300351824.html

SOURCE Hub Group, Inc.

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

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