News Press Releases

Hub Group, Inc. Reports Fourth Quarter Earnings per Share of $0.41 Excluding One-Time Benefit for Effective Tax Rate

HUBG | February 4, 2015

OAK BROOK, Ill., Feb. 4, 2015 /PRNewswire/ -- Hub Group, Inc. (NASDAQ: HUBG) today announced financial results for the quarter and year ended December 31, 2014.

Hub Group reported net income of $16.4 million for the fourth quarter ended December 31, 2014. Hub Group's diluted earnings per share was $0.45 for the fourth quarter of 2014. Hub Group's fourth quarter income included a one-time benefit of $1.5 million related to changes in state tax apportionment. Excluding the effect of this item, non-GAAP earnings per share was $0.41 for the quarter (see table below). Hub Group's revenue increased 3% to $915 million.

The Hub segment's revenue increased 2% to $696 million. Fourth quarter intermodal revenue decreased 1% to $464 million. Truck brokerage revenue decreased 2% to $84 million this quarter. Fourth quarter Unyson Logistics revenue increased 14% to $148 million. The Hub segment's operating income was $19 million.

The Mode segment's revenue increased 14% to $245 million for the fourth quarter. Operating income was $6 million, an increase of 22% compared to the prior year period.

FULL YEAR 2014

Income for the year ended December 31, 2014 was $52 million. Hub Group's diluted earnings per share for 2014 was $1.40. Full year 2014 pre-tax income included one-time costs of $10.3 million for driver settlements and related costs, a non-cash impairment charge of $11.9 million associated with the write off of software development costs and the one-time $1.5 million benefit related to changes in state tax apportionment. Excluding the effects of these items, non-GAAP earnings per share was $1.73 for the year (see table below). Hub Group's revenue increased 6% to $3.6 billion.

Hub Group ended the year with $110 million in cash.

CONFERENCE CALL

Hub will hold a conference call at 5:00 p.m. Eastern Time on Wednesday, February 4, 2015 to discuss its fourth quarter and full year results and provide 2015 guidance.

Hosting the conference call will be David Yeager, Chairman and Chief Executive Officer, Mark Yeager, Vice-Chairman, President and Chief Operating Officer, and Terri 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. 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 call ten minutes early by dialing (888) 206-4074. The conference call participant code is 38766345#. Participants may pre-register for the call at http://www.yourconferencecenter.com/r.aspx?p=1&a=UUEApQvuMvrAlX. Pre-registrants will be issued a passcode and 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 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, 2013 and our report on Form 10-Q for the period ended September 30, 2014. 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		Twelve Months
			Ended December 31,		Ended December 31,
			2014	2013	2014	2013
Revenue			$ 915,361	$ 885,252	$ 3,571,126	$ 3,373,898

Transportation costs			825,451	790,164	3,200,691	3,002,875
	Gross margin		89,910	95,088	370,435	371,023

Costs and expenses:
	Salaries and benefits		32,964	33,868	136,480	135,341
	Agent fees and commissions		16,239	14,272	62,041	55,789
	General and administrative		14,033	15,096	58,014	56,772
	Depreciation and amortization		1,897	1,697	7,799	6,470
	Driver settlements and related costs		-	-	10,343	-
	Impairment of software		-	-	11,881	-
	Impairment of trade name		-	2,904	-	2,904
		Total costs and expenses	65,133	67,837	286,558	257,276

Operating income			24,777	27,251	83,877	113,747

Other income (expense):
	Interest expense		(619)	(328)	(1,785)	(1,246)
	Interest and dividend income		11	13	32	82
	Other, net		(66)	(5)	(257)	(28)
		Total other expense	(674)	(320)	(2,010)	(1,192)

Income before provision for income taxes			24,103	26,931	81,867	112,555

Provision for income taxes			7,747	10,395	30,309	43,445

Net income			$ 16,356	$ 16,536	$ 51,558	$ 69,110

Basic earnings per common share			$ 0.45	$ 0.45	$ 1.41	$ 1.88

Diluted earnings per common share			$ 0.45	$ 0.45	$ 1.40	$ 1.87

Basic weighted average number of shares outstanding			36,350	36,719	36,590	36,829
Diluted weighted average number of shares outstanding			36,533	36,942	36,732	36,982

HUB GROUP, INC.
UNAUDITED FINANCIAL INFORMATION BY SEGMENT
(in thousands)

			Three Months
			Ended December 31, 2014
			Hub	Mode	Inter-Segment Elims	Hub Group Consolidated
Revenue			$ 695,507	$ 245,266	$ (25,412)	$ 915,361

Transportation costs			633,131	217,732	(25,412)	825,451
	Gross margin		62,376	27,534	-	89,910

Costs and expenses:
	Salaries and benefits		29,285	3,679	-	32,964
	Agent fees and commissions		14	16,225	-	16,239
	General and administrative		12,408	1,625	-	14,033
	Depreciation and amortization		1,556	341	-	1,897
		Total costs and expenses	43,263	21,870	-	65,133

Operating income			19,113	5,664	-	24,777


HUB GROUP, INC.
UNAUDITED FINANCIAL INFORMATION BY SEGMENT
(in thousands)

			Three Months
			Ended December 31, 2013
			Hub	Mode	Inter-Segment Elims	Hub Group Consolidated
Revenue			$ 683,614	$ 214,357	$ (12,719)	$ 885,252

Transportation costs			613,198	189,685	(12,719)	790,164
	Gross margin		70,416	24,672	-	95,088

Costs and expenses:
	Salaries and benefits		30,219	3,649	-	33,868
	Agent fees and commissions		148	14,124	-	14,272
	General and administrative		13,383	1,713	-	15,096
	Depreciation and amortization		1,157	540	-	1,697
	Impairment of trade name		2,904	-	-	2,904
		Total costs and expenses	47,811	20,026	-	67,837
Operating income
			22,605	4,646	-	27,251

HUB GROUP, INC.
UNAUDITED FINANCIAL INFORMATION BY SEGMENT
(in thousands)

			Twelve Months
			Ended December 31, 2014
			Hub	Mode	Inter-Segment Elims	Hub Group Consolidated
Revenue			$ 2,722,799	$ 931,131	$ (82,804)	$ 3,571,126

Transportation costs			2,461,144	822,351	(82,804)	3,200,691
	Gross margin		261,655	108,780	-	370,435

Costs and expenses:
	Salaries and benefits		122,097	14,383	-	136,480
	Agent fees and commissions		45	61,996	-	62,041
	General and administrative		51,108	6,906	-	58,014
	Depreciation and amortization		6,238	1,561	-	7,799
	Driver settlements and related costs		10,343			10,343
	Impairment of software		11,881	-	-	11,881
		Total costs and expenses	201,712	84,846	-	286,558

Operating income			59,943	23,934	-	83,877


HUB GROUP, INC.
UNAUDITED FINANCIAL INFORMATION BY SEGMENT
(in thousands)

			Twelve Months
			Ended December 31, 2013
			Hub	Mode	Inter-Segment Elims	Hub Group Consolidated
Revenue			$ 2,599,763	$ 823,159	$ (49,024)	$ 3,373,898

Transportation costs			2,325,512	726,387	(49,024)	3,002,875
	Gross margin		274,251	96,772	-	371,023

Costs and expenses:
	Salaries and benefits		120,478	14,863	-	135,341
	Agent fees and commissions		1,372	54,417	-	55,789
	General and administrative		50,484	6,288	-	56,772
	Depreciation and amortization		4,326	2,144	-	6,470
	Impairment of trade name		2,904	-	-	2,904
		Total costs and expenses	179,564	77,712	-	257,276
Operating income
			94,687	19,060	-	113,747

UNAUDITED NON-GAAP TO GAAP RECONCILIATION
(earnings per share)


	Three Months				Twelve Months
	Ended, December 31,				Ended, December 31,
			Change	Change			Change	Change
	2014	2013	$	%	2014	2013	$	%

Diluted GAAP EPS	$ 0.45	$ 0.45	$ -	0.0%	$ 1.40	$ 1.87	$ (0.47)	-25.1%

Impairment of trade name, net of tax	-	0.05	(0.05)		-	0.05	(0.05)

Driver settlements & related costs, net of tax	-	-	-		0.17	-	0.17

Impairment of software, net of tax	-	-	-		0.20	-	0.20

Benefit related to changes in state tax apportionment	(0.04)	-	(0.04)		(0.04)	-	(0.04)

Diluted NON-GAAP EPS (adjusted)	$ 0.41	$ 0.50	$ (0.09)	-18.0%	$ 1.73	$ 1.92	$ (0.19)	-9.9%

Diluted shares	36,533	36,942			36,732	36,982

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.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)


					December 31,	December 31,
					2014	2013

ASSETS
	CURRENT ASSETS:
		Cash and cash equivalents			$ 109,769	$ 68,964
		Accounts receivable trade, net			401,803	371,528
		Accounts receivable other			24,886	26,569
		Prepaid taxes			14,937	409
		Deferred taxes			4,816	5,826
		Prepaid expenses and other current assets			14,355	12,738
				TOTAL CURRENT ASSETS	570,566	486,034

		Restricted investments			21,944	20,754
		Property and equipment, net			338,327	260,400
		Other intangibles, net			14,434	15,729
		Goodwill, net			262,813	263,032
		Other assets			4,043	1,994
				TOTAL ASSETS	$ 1,212,127	$ 1,047,943


LIABILITIES AND STOCKHOLDERS' EQUITY
	CURRENT LIABILITIES:
		Accounts payable trade			$ 256,345	$ 232,350
		Accounts payable other			21,333	24,957
		Accrued payroll			16,192	17,000
		Accrued other			43,523	42,834
		Current portion of capital lease			2,504	2,413
		Current portion of long term debt			19,619	1,771
				TOTAL CURRENT LIABILITIES	359,516	321,325

	Long term debt				72,460	6,475
	Non-current liabilities				22,929	22,304
	Long term portion of capital lease				15,937	18,477
	Deferred taxes				140,501	117,835

	STOCKHOLDERS' EQUITY:
		Preferred stock, $.01 par value; 2,000,000 shares authorized; no shares issued or outstanding in 2014 and 2013			-	-
		Common stock
			Class A: $.01 par value; 97,337,700 shares authorized and 41,224,792 shares issued in 2014 and 2013; 36,247,324 shares outstanding in 2014 and 36,626,384 shares outstanding in 2013		412	412
			Class B: $.01 par value; 662,300 shares authorized; 662,296 shares issued and outstanding in 2014 and 2013		7	7
		Additional paid-in capital			171,235	167,357
		Purchase price in excess of predecessor basis, net of tax benefit of $10,306			(15,458)	(15,458)
		Retained earnings			589,809	538,251
		Accumulated other comprehensive loss			(77)	(85)
		Treasury stock; at cost, 4,977,468 shares in 2014 and 4,598,408 shares in 2013			(145,144)	(128,957)
			TOTAL STOCKHOLDERS' EQUITY		600,784	561,527
				TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 1,212,127	$ 1,047,943

HUB GROUP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

				Twelve Months Ended
				December 31,
				2014	2013


Cash flows from operating activities:
	Net income			$ 51,558	$ 69,110
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization		29,380	21,302
		Impairment of software		11,881	-
		Impairment of trade name		-	2,904
		Deferred taxes		24,501	16,438
		Compensation expense related to share-based compensation plans		8,258	7,667
		Gain on sale of assets		(46)	(167)
		Excess tax benefits from share based compensation		-	(13)
	Changes in operating assets and liabilities:
		Restricted investments		(1,190)	(3,536)
		Accounts receivable, net		(28,621)	(25,420)
		Prepaid taxes		(14,533)	(308)
		Prepaid expenses and other current assets		(1,621)	(2,137)
		Other assets		(2,047)	(682)
		Accounts payable		20,370	27,635
		Accrued expenses		367	1,736
		Non-current liabilities		284	2,888
			Net cash provided by operating activities	98,541	117,417

Cash flows from investing activities:
	Proceeds from sale of equipment			612	1,837
	Purchases of property and equipment			(119,171)	(110,917)
			Net cash used in investing activities	(118,559)	(109,080)

Cash flows from financing activities:
	Proceeds from issuance of debt			91,084	9,120
	Repayments of long term debt			(7,251)	(874)
	Proceeds from stock options exercised			-	41
	Stock tendered for payments of withholding taxes			(3,195)	(2,634)
	Purchase of treasury stock			(18,024)	(13,791)
	Capital lease payments			(2,449)	(2,329)
	Excess tax benefits from share-based compensation			652	336
			Net cash provided by (used in) financing activities	60,817	(10,131)


	Effect of exchange rate changes on cash and cash equivalents			6	(2)

Net increase (decrease) in cash and cash equivalents				40,805	(1,796)
Cash and cash equivalents beginning of the year				68,964	70,760
Cash and cash equivalents end of the year				$ 109,769	$ 68,964