Hub Group's Q3 earnings up slightly from a year ago at US$18.6M as revenue rises 10% to US$679M; CEO says intermodal, truck brokerage business lines were affected by challenging market conditions
Cindy Allen
Oct 18, 2013 – PR Newswire
DOWNER'S GROVE, Illinois
,
October 18, 2013
(press release)
– Hub Group, Inc. (HUBG) announced financial results for the quarter ended September 30, 2013.
Hub Group reported income of $18.6 million for the third quarter ended September 30, 2013. Hub Group's diluted earnings per share was $0.50 for the third quarter of 2013, which was equal to the third quarter of 2012. Hub Group's revenue increased 10% to $883 million.
The Hub segment's revenue increased 10% to $679 million. Third quarter intermodal revenue increased 5% to $467 million on a 5% increase in volume. Truck brokerage revenue increased 1% to $88 million this quarter. Third quarter Unyson Logistics revenue increased 42% to $124 million. The Hub segment's operating income was $25.4 million.
The Mode segment's revenue increased 9% to $217 million. Operating income was $5.9 million, an increase of 18% compared to the prior year period.
Hub Group ended the quarter with $92 million in cash.
"As explained in our earnings update, results for the quarter for our intermodal and truck brokerage business lines were impacted by challenging market conditions as well as unfavorable mix," said David P. Yeager, Chairman and Chief Executive Officer of Hub Group. "We will continue to deliver the highest degree of customer service during this peak season and remain optimistic about our opportunities for future growth."
CONFERENCE CALL
Hub will hold a conference call at 5:00 p.m. Eastern Time on Thursday, October 17, 2013 to discuss its third quarter 2013 results.
Hosting the conference call will be David Yeager, Chief Executive Officer, Mark Yeager, Chief Operating Officer, and Terri Pizzuto, 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 call ten minutes early by dialing (888) 680-0869. The conference call participant code is 94947913#. Participants may pre-register for the call at https://www.theconferencingservice.com/prereg/key.process?key=PRDMKTW4Q . 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, 2012 and the report on Form 10-Q for the periods ended March 31, 2013 and June 30, 2013. 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,
2013
2012
2013
2012
Revenue
$ 882,981
$ 804,888
$ 2,488,646
$ 2,323,085
Transportation costs
789,857
713,301
2,212,711
2,060,398
Gross margin
93,124
91,587
275,935
262,687
Costs and expenses:
Salaries and benefits
31,888
31,385
101,473
96,120
Agent fees and commissions
14,557
13,810
41,517
41,106
General and administrative
13,757
14,430
41,676
39,741
Depreciation and amortization
1,627
1,611
4,773
5,008
Total costs and expenses
61,829
61,236
189,439
181,975
Operating income
31,295
30,351
86,496
80,712
Other income (expense):
Interest expense
(323)
(300)
(918)
(908)
Interest and dividend income
25
37
69
104
Other, net
(35)
(17)
(23)
(58)
Total other expense
(333)
(280)
(872)
(862)
Income before provision for income taxes
30,962
30,071
85,624
79,850
Provision for income taxes
12,362
11,576
33,050
30,741
Net income
$ 18,600
$ 18,495
$ 52,574
$ 49,109
Basic earnings per common share
$ 0.50
$ 0.50
$ 1.43
$ 1.32
Diluted earnings per common share
$ 0.50
$ 0.50
$ 1.42
$ 1.32
Basic weighted average number of shares outstanding
36,873
37,079
36,866
37,064
Diluted weighted average number of shares outstanding
37,050
37,206
36,996
37,180
HUB GROUP, INC.
UNAUDITED FINANCIAL INFORMATION BY SEGMENT
(in thousands)
Three Months
Ended September 30, 2013
Hub
Mode
Inter-Segment
Elims
Hub Group
Total
Revenue
$ 678,573
$ 217,424
$ (13,016)
$ 882,981
Transportation costs
611,344
191,529
(13,016)
789,857
Gross margin
67,229
25,895
-
93,124
Costs and expenses:
Salaries and benefits
28,274
3,614
-
31,888
Agent fees and commissions
425
14,132
-
14,557
General and administrative
12,065
1,692
-
13,757
Depreciation and amortization
1,088
539
-
1,627
Total costs and expenses
41,852
19,977
-
61,829
Operating income
$ 25,377
$ 5,918
$ -
$ 31,295
HUB GROUP, INC.
UNAUDITED FINANCIAL INFORMATION BY SEGMENT
(in thousands)
Three Months
Ended September 30, 2012
Hub
Mode
Inter-Segment
Elims
Hub Group
Total
Revenue
$ 619,336
$ 199,903
$ (14,351)
$ 804,888
Transportation costs
552,071
175,581
(14,351)
713,301
Gross margin
67,265
24,322
-
91,587
Costs and expenses:
Salaries and benefits
27,852
3,533
-
31,385
Agent fees and commissions
401
13,409
-
13,810
General and administrative
12,566
1,864
-
14,430
Depreciation and amortization
1,118
493
-
1,611
Total costs and expenses
41,937
19,299
-
61,236
Operating income
$ 25,328
$ 5,023
$ -
$ 30,351
HUB GROUP, INC.
UNAUDITED FINANCIAL INFORMATION BY SEGMENT
(in thousands)
Nine Months
Ended September 30, 2013
Hub
Mode
Inter-Segment
Elims
Hub Group
Total
Revenue
$ 1,916,149
$ 608,802
$ (36,305)
$ 2,488,646
Transportation costs
1,712,314
536,702
(36,305)
2,212,711
Gross margin
203,835
72,100
-
275,935
Costs and expenses:
Salaries and benefits
90,259
11,214
-
101,473
Agent fees and commissions
1,223
40,294
-
41,517
General and administrative
37,101
4,575
-
41,676
Depreciation and amortization
3,169
1,604
-
4,773
Total costs and expenses
131,752
57,687
-
189,439
Operating income
$ 72,083
$ 14,413
$ -
$ 86,496
HUB GROUP, INC.
UNAUDITED FINANCIAL INFORMATION BY SEGMENT
(in thousands)
Nine Months
Ended September 30, 2012
Hub
Mode
Inter-Segment
Elims
Hub Group
Total
Revenue
$ 1,778,436
$ 581,378
$ (36,729)
$ 2,323,085
Transportation costs
1,584,844
512,283
(36,729)
2,060,398
Gross margin
193,592
69,095
-
262,687
Costs and expenses:
Salaries and benefits
84,523
11,597
-
96,120
Agent fees and commissions
1,526
39,580
-
41,106
General and administrative
34,004
5,737
-
39,741
Depreciation and amortization
3,338
1,670
-
5,008
Total costs and expenses
123,391
58,584
-
181,975
Operating income
$ 70,201
$ 10,511
$ -
$ 80,712
HUB GROUP, INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
September 30,
December 31,
2013
2012
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$ 92,150
$ 70,760
Accounts receivable trade, net
408,279
346,917
Accounts receivable other
21,894
25,945
Prepaid taxes
589
139
Deferred taxes
5,884
4,965
Prepaid expenses and other current assets
10,432
10,619
TOTAL CURRENT ASSETS
539,228
459,345
Restricted investments
19,142
17,218
Property and equipment, net
220,210
157,584
Other intangibles, net
18,957
20,068
Goodwill, net
263,087
263,251
Other assets
3,182
2,387
TOTAL ASSETS
$ 1,063,806
$ 919,853
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable trade
$ 259,863
$ 206,497
Accounts payable other
26,487
22,925
Accrued payroll
17,085
17,210
Accrued other
41,243
28,633
Current portion of capital lease
2,390
2,120
Current portion of long term debt
1,763
-
TOTAL CURRENT LIABILITIES
348,831
277,385
Long term debt
6,921
-
Non-current liabilities
20,841
20,041
Long term capital lease
19,096
21,099
Deferred taxes
112,298
100,431
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value; 2,000,000 shares authorized; no shares issued or outstanding in 2013 and 2012
-
-
Common stock
Class A: $.01 par value; 97,337,700 shares authorized and 41,224,792 shares issued in 2013 and 2012; 36,979,841 shares outstanding in 2013 and 36,767,485 shares outstanding in 2012
412
412
Class B: $.01 par value; 662,300 shares authorized;
662,296 shares issued and outstanding in 2013 and 2012
7
7
Additional paid-in capital
165,243
167,765
Purchase price in excess of predecessor basis, net of tax
benefit of $10,306
(15,458)
(15,458)
Retained earnings
521,715
469,141
Accumulated other comprehensive (loss) income
(106)
1
Treasury stock; at cost, 4,244,951 shares in 2013
and 4,457,307 shares in 2012
(115,994)
(120,971)
TOTAL STOCKHOLDERS' EQUITY
555,819
500,897
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$ 1,063,806
$ 919,853
HUB GROUP, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Nine Months Ended
September 30,
2013
2012
Cash flows from operating activities:
Net income
$ 52,574
$ 49,109
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization
15,479
16,300
Deferred taxes
10,945
7,693
Compensation expense related to share-based compensation plans
5,638
4,826
(Gain) loss on sale of assets
(345)
42
Excess tax benefits from share-based compensation
(11)
(97)
Changes in operating assets and liabilities:
Restricted investments
(1,924)
(2,206)
Accounts receivable, net
(57,439)
(57,417)
Prepaid taxes
(504)
2,253
Prepaid expenses and other current assets
156
(1,913)
Other assets
(803)
685
Accounts payable
55,641
38,386
Accrued expenses
1,330
8,917
Non-current liabilities
1,164
1,210
Net cash provided by operating activities
81,901
67,788
Cash flows from investing activities:
Proceeds from sale of equipment
1,788
819
Purchases of property and equipment
(66,079)
(34,671)
Cash used in acquisitions, net of cash acquired
-
(425)
Net cash used in investing activities
(64,291)
(34,277)
Cash flows from financing activities:
Proceeds from issuance of debt
9,120
-
Repayments of long term debt
(436)
-
Proceeds from stock options exercised
42
46
Stock tendered for payments of withholding taxes
(2,621)
(1,800)
Purchase of treasury stock
(903)
-
Capital lease payments
(1,733)
(1,697)
Excess tax benefits from share-based compensation
310
443
Net cash provided by (used in) financing activities
3,779
(3,008)
Effect of exchange rate changes on cash and cash equivalents
1
(9)
Net increase in cash and cash equivalents
21,390
30,494
Cash and cash equivalents beginning of period
70,760
49,091
Cash and cash equivalents end of period
$ 92,150
$ 79,585
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