News Press Releases

Hub Group, Inc. Reports Record Third Quarter 2015 Earnings

HUBG | October 28, 2015

OAK BROOK, Ill., Oct. 28, 2015 /PRNewswire/ -- Hub Group, Inc. (NASDAQ: HUBG) today announced financial results for the quarter ended September 30, 2015.

Hub Group reported net income of $19.8 million for the third quarter ended September 30, 2015 compared to $4.5 million in the third quarter of 2014. Hub Group's diluted earnings per share was $0.55 for the third quarter of 2015 compared to earnings per share of $0.12 in third quarter of 2014. Excluding the effect of one time costs, non-GAAP earnings per share was $0.49 for the third quarter of 2014 (see table below). Hub Group's revenue decreased 1% to $900 million. The revenue decline related primarily to lower fuel revenue.

The Hub segment's revenue decreased 2% to $681 million. Third quarter intermodal revenue decreased 0.2% to $460 million. Truck brokerage revenue was flat at $84 million this quarter. Third quarter Unyson Logistics revenue decreased 7% to $137 million.

The Mode segment's revenue decreased 2% to $239 million. Operating income was $7.2 million, an increase of 2% compared to the prior year period.

Hub Group ended the quarter with $184 million in cash.

CONFERENCE CALL
Hub will hold a conference call at 5:00 p.m. Eastern Time on Wednesday, October 28, 2015 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=UofPMhPZfVRwAI. 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) 206-4074 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 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, 2014 and the report on Form 10-Q for the period ended June 30, 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		Nine Months
			Ended September 30,		Ended September 30,
			2015	2014	2015	2014
Revenue			$ 899,869	$ 913,386	$ 2,635,323	$ 2,655,765

Transportation costs			794,805	820,190	2,339,402	2,375,240
	Gross margin		105,064	93,196	295,921	280,525

Costs and expenses:
	Salaries and benefits		36,357	30,868	114,670	103,516
	Agent fees and commissions		17,862	16,592	49,374	45,802
	General and administrative		15,461	13,868	44,295	43,981
	Depreciation and amortization		1,966	1,967	5,893	5,902
	Driver settlements and related costs		-	10,343	-	10,343
	Impairment of software		-	11,881	-	11,881
		Total costs and expenses	71,646	85,519	214,232	221,425

Operating income			33,418	7,677	81,689	59,100

Other income (expense):
	Interest expense		(757)	(361)	(2,218)	(1,166)
	Interest and dividend income		22	(4)	47	21
	Other, net		(952)	39	(2,095)	(191)
		Total other expense	(1,687)	(326)	(4,266)	(1,336)

Income before provision for income taxes			31,731	7,351	77,423	57,764

Provision for income taxes			11,899	2,860	28,848	22,562

Net income			$ 19,832	$ 4,491	$ 48,575	$ 35,202



Basic earnings per common share			$ 0.55	$ 0.12	$ 1.35	$ 0.96

Diluted earnings per common share			$ 0.55	$ 0.12	$ 1.35	$ 0.96

Basic weighted average number of shares outstanding			35,769	36,676	35,970	36,670
Diluted weighted average number of shares outstanding			35,903	36,858	36,049	36,799

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
	Driver settlements and related costs		-	-	-	-
	Impairment of software		-	-	-	-
		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)

			Three Months
			Ended September 30, 2014
			Hub	Mode	Inter-Segment Elims	Hub Group Total
Revenue			$ 691,835	$ 245,421	$ (23,870)	$ 913,386

Transportation costs			627,752	216,308	(23,870)	820,190
	Gross margin		64,083	29,113	-	93,196

Costs and expenses:
	Salaries and benefits		27,428	3,440	-	30,868
	Agent fees and commissions		15	16,577	-	16,592
	General and administrative		12,144	1,724	-	13,868
	Depreciation and amortization		1,627	340	-	1,967
	Driver settlements and related costs		10,343	-	-	10,343
	Impairment of software		11,881	-	-	11,881
		Total costs and expenses	63,438	22,081	-	85,519

Operating income			$ 645	$ 7,032	$ -	$ 7,677

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
	Driver settlements and related costs		-	-	-	-
	Impairment of software		-	-	-	-
		Total costs and expenses	147,871	66,361	-	214,232

Operating income			$ 61,954	$ 19,735	$ -	$ 81,689

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

			Nine Months
			Ended September 30, 2014
			Hub	Mode	Inter-Segment Elims	Hub Group Total
Revenue			$ 2,027,293	$ 685,865	$ (57,393)	$ 2,655,765

Transportation costs			1,828,014	604,619	(57,393)	2,375,240
	Gross margin		199,279	81,246	-	280,525

Costs and expenses:
	Salaries and benefits		92,812	10,704	-	103,516
	Agent fees and commissions		31	45,771	-	45,802
	General and administrative		38,701	5,280	-	43,981
	Depreciation and amortization		4,682	1,220	-	5,902
	Driver settlements and related costs		10,343	-	-	10,343
	Impairment of software		11,881	-	-	11,881
		Total costs and expenses	158,450	62,975	-	221,425

Operating income			$ 40,829	$ 18,271	$ -	$ 59,100

HUB GROUP, INC.
UNAUDITED NON-GAAP TO GAAP RECONCILIATION
(earnings per share)


	Three Months				Nine Months
	Ended, September 30,				Ended, September 30,
			Change	Change			Change	Change
	2015	2014	$	%	2015	2014	$	%

Diluted GAAP EPS	$ 0.55	$ 0.12	$ 0.43	358.3%	$ 1.35	$ 0.96	$ 0.39	40.6%

Driver settlements and related costs, net of tax	$ -	$ 0.17	$ (0.17)		$ -	$ 0.17	$ (0.17)

Impairment of Software, net of tax	$ -	$ 0.20	$ (0.20)		$ -	$ 0.20	$ (0.20)

Canadian currency loss, net of tax	$ -	$ -	$ -		$ 0.02	$ -	$ 0.02

Severance Cost, net of tax	$ -	$ -	$ -		$ 0.02	$ -	$ 0.02

Diluted NON-GAAP EPS (adjusted)	$ 0.55	$ 0.49	$ 0.06	12.2%	$ 1.39	$ 1.33	$ 0.06	4.5%

Diluted Shares	35,903	36,858			36,049	36,799

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)


						September 30,	December 31,
						2015	2014
						(unaudited)
ASSETS
	CURRENT ASSETS:
		Cash and cash equivalents				$ 183,547	$ 109,769
		Accounts receivable trade, net				411,849	401,803
		Accounts receivable other				9,206	24,886
		Prepaid taxes				1,358	14,937
		Deferred taxes				7,712	4,816
		Prepaid expenses and other current assets				15,797	14,355
				TOTAL CURRENT ASSETS		629,469	570,566

	Restricted investments					20,555	21,944
	Property and equipment, net					350,726	338,327
	Other intangibles, net					13,463	14,434
	Goodwill, net					262,649	262,813
	Other assets					4,099	4,043
					TOTAL ASSETS	$ 1,280,961	$ 1,212,127


LIABILITIES AND STOCKHOLDERS' EQUITY
	CURRENT LIABILITIES:
		Accounts payable trade				$ 273,284	$ 256,345
		Accounts payable other				25,726	21,333
		Accrued payroll				21,037	16,192
		Accrued other				45,920	43,523
		Current portion of capital lease				2,584	2,504
		Current portion of long term debt				25,929	19,619
				TOTAL CURRENT LIABILITIES		394,480	359,516

	Long term debt					80,690	72,460
	Non-current liabilities					19,562	22,929
	Long term capital lease					13,974	15,937
	Deferred taxes					148,754	140,501

	STOCKHOLDERS' EQUITY:
		Preferred stock, $.01 par value; 2,000,000 shares authorized; no shares issued or outstanding in 2015 and 2014
						-	-
		Common stock
			Class A: $.01 par value; 97,337,700 shares authorized and 41,224,792 shares issued in 2015 and 2014; 35,698,057 shares outstanding in 2015 and 36,247,324 shares outstanding in 2014			412	412


			Class B: $.01 par value; 662,300 shares authorized; 662,296 shares issued and outstanding in 2015 and 2014			7	7
						7	7
		Additional paid-in capital				169,979	171,235
		Purchase price in excess of predecessor basis, net of tax benefit of $10,306				(15,458)	(15,458)
						(15,458)	(15,458)
		Retained earnings				638,384	589,809
		Accumulated other comprehensive loss				(177)	(77)
		Treasury stock; at cost, 5,526,735 shares in 2015 and 4,977,468 shares in 2014
						(169,646)	(145,144)
			TOTAL STOCKHOLDERS' EQUITY			623,501	600,784
				TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$ 1,280,961	$ 1,212,127

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

						Nine Months Ended
						September 30,
						2015	2014


Cash flows from operating activities:
	Net income					$ 48,575	$ 35,202
	Adjustments to reconcile net income
		to net cash provided by operating activities:
			Depreciation and amortization			26,662	21,165
			Impairment of software			-	11,881
			Deferred taxes			5,757	8,288
			Compensation expense related to share-based compensation plans			5,843	6,238
			Gain on sale of assets			(116)	(20)
			Excess tax benefits from share-based compensation			(40)	-
	Changes in operating assets and liabilities:
			Restricted investments			1,389	(875)
			Accounts receivable, net			6,540	(49,102)
			Prepaid taxes			13,579	(5,794)
			Prepaid expenses and other current assets			(1,442)	(7,104)
			Other assets			(56)	(1,572)
			Accounts payable			21,308	38,281
			Accrued expenses			8,337	2,581
			Non-current liabilities			(3,505)	(534)
					Net cash provided by operating activities	132,831	58,635

Cash flows from investing activities:
	Proceeds from sale of equipment					922	420
	Purchases of property and equipment					(40,951)	(75,881)
				Net cash used in investing activities		(40,029)	(75,461)

Cash flows from financing activities:
	Proceeds from issuance of debt					31,376	49,268
	Repayments of long term debt					(16,836)	(4,198)
	Stock tendered for payments of withholding taxes					(2,902)	(3,184)
	Purchase of treasury stock					(28,823)	-
	Capital lease payments					(1,883)	(1,632)
	Excess tax benefits from share-based compensation					166	434
				Net cash (used in) provided by financing activities		(18,902)	40,688


	Effect of exchange rate changes on cash and cash equivalents					(122)	1

Net increase in cash and cash equivalents						73,778	23,863
Cash and cash equivalents beginning of period						109,769	68,964
Cash and cash equivalents end of period						$ 183,547	$ 92,827