Hub Group, Inc. Reports Third Quarter 2014 Earnings per Share of $0.49 Excluding One-Time Costs and Non-Cash Impairment Charge - Hub Group (NASDAQ:HUBG)

OAK BROOK, Ill., Oct. 23, 2014 /PRNewswire/ -- Hub Group, Inc. HUBG today announced financial results for the quarter ended September 30, 2014.

Hub Group reported income of $4.5 million for the third quarter ended September 30, 2014 compared to $18.6 million in the third quarter of 2013. Hub Group's diluted earnings per share was $0.12 for the third quarter of 2014. Hub Group's pre-tax income included one-time costs of $10.3 million for driver settlements and related costs and a non-cash impairment charge of $11.9 million associated with the write off of software development costs. Excluding the effect of these items, non-GAAP earnings per share was $0.49 for the quarter (see table below). Non-GAAP earnings per share decreased 2% when compared with the prior year period. Hub Group's revenue increased 3% to $913 million.

The Hub segment's revenue increased 2% to $692 million. Third quarter intermodal revenue decreased 2% to $461 million. Truck brokerage revenue was flat at $84 million this quarter. Third quarter Unyson Logistics revenue increased 18% to $147 million.

The Mode segment's revenue increased 13% to $245 million. Operating income was $7 million, an increase of 19% compared to the prior year period.

Hub Group ended the quarter with $93 million in cash.

Yesterday the Board of Directors authorized the purchase of up to $75 million of Hub's Class A common stock. The authorization expires December 31, 2015. Hub intends to make purchases from time to time as market conditions warrant. Hub intends to hold the repurchased shares in treasury for future use.

CONFERENCE CALL
Hub will hold a conference call at 5:00 p.m. Eastern Time on Thursday, October 23, 2014 to discuss its third quarter 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) 206-4074. The conference call participant code is 38233721#. Participants may pre-register for the call at http://www.yourconferencecenter.com/r.aspx?p=1&a=UvoXrefUAYiZbp . 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 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, 2013 and the report on Form 10-Q for the period ended June 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		Nine Months
			Ended September 30,		Ended September 30,
			2014	2013	2014	2013
Revenue			$ 913,386	$ 882,981	$ 2,655,765	$ 2,488,646

Transportation costs			820,190	789,857	2,375,240	2,212,711
	Gross margin		93,196	93,124	280,525	275,935

Costs and expenses:
	Salaries and benefits		30,868	31,888	103,516	101,473
	Agent fees and commissions		16,592	14,557	45,802	41,517
	General and administrative		13,868	13,757	43,981	41,676
	Depreciation and amortization		1,967	1,627	5,902	4,773
	Driver settlements and related costs		10,343	-	10,343	-
	Impairment of software		11,881	-	11,881	-
		Total costs and expenses	85,519	61,829	221,425	189,439

Operating income			7,677	31,295	59,100	86,496

Other income (expense):
	Interest expense		(361)	(323)	(1,166)	(918)
	Interest and dividend income		(4)	25	21	69
	Other, net		39	(35)	(191)	(23)
		Total other (expense) income	(326)	(333)	(1,336)	(872)

Income before provision for income taxes			7,351	30,962	57,764	85,624

Provision for income taxes			2,860	12,362	22,562	33,050

Net income			$ 4,491	$ 18,600	$ 35,202	$ 52,574



Basic earnings per common share			$ 0.12	$ 0.50	$ 0.96	$ 1.43

Diluted earnings per common share			$ 0.12	$ 0.50	$ 0.96	$ 1.42

Basic weighted average number of shares outstanding			36,676	36,873	36,670	36,866
Diluted weighted average number of shares outstanding			36,858	37,050	36,799	36,996

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)

			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)

			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 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 NON-GAAP TO GAAP RECONCILIATION
(earnings per share)


	Three Months				Nine Months
	Ended, September 30,				Ended, September 30,
			Change	Change			Change	Change
	2014	2013	$	%	2014	2013	$	%

Diluted GAAP EPS	$ 0.12	$ 0.50	$ (0.38)	-76.0%	$ 0.96	$ 1.42	$ (0.46)	-32.4%

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

Diluted NON-GAAP EPS (adjusted)	$ 0.49	$ 0.50	$ (0.01)	-2.0%	$ 1.33	$ 1.42	$ (0.09)	-6.3%

Diluted Shares	36,858	37,050			36,799	36,996

In accordance with U.S. generally accepted accounting principles (GAAP), reported earnings per share include the after-tax impact, using our effective tax rate of 39%, 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)


						September 30,	December 31,
						2014	2013

ASSETS
	CURRENT ASSETS:
		Cash and cash equivalents				$ 92,827	$ 68,964
		Accounts receivable trade, net				426,627	371,528
		Accounts receivable other				20,572	26,569
		Prepaid taxes				6,203	409
		Deferred taxes				5,100	5,826
		Prepaid expenses and other current assets				19,842	12,738
				TOTAL CURRENT ASSETS		571,171	486,034

	Restricted investments					21,629	20,754
	Property and equipment, net					315,151	260,400
	Other intangibles, net					14,758	15,729
	Goodwill, net					262,868	263,032
	Other assets					3,566	1,994
					TOTAL ASSETS	$ 1,189,143	$ 1,047,943


LIABILITIES AND STOCKHOLDERS' EQUITY
	CURRENT LIABILITIES:
		Accounts payable trade				$ 272,250	$ 232,350
		Accounts payable other				23,336	24,957
		Accrued payroll				17,477	17,000
		Accrued other				56,449	42,834
		Current portion of capital lease				2,679	2,413
		Current portion of long term debt				11,559	1,771
				TOTAL CURRENT LIABILITIES		383,750	321,325

	Long term debt					41,757	6,475
	Non-current liabilities					21,793	22,304
	Long term capital lease					16,579	18,477
	Deferred taxes					125,002	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; 36,750,359 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				168,941	167,357
		Purchase price in excess of predecessor basis, net of tax benefit of $10,306
						(15,458)	(15,458)
		Retained earnings				573,453	538,251
		Accumulated other comprehensive loss				(38)	(85)
		Treasury stock; at cost, 4,474,433 shares in 2014 and 4,598,408 shares in 2013
						(127,055)	(128,957)
			TOTAL STOCKHOLDERS' EQUITY			600,262	561,527
				TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$ 1,189,143	$ 1,047,943

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

						Nine Months Ended
						September 30,
						2014	2013


Cash flows from operating activities:
	Net income					$ 35,202	$ 52,574
	Adjustments to reconcile net income
		to net cash provided by operating activities:
			Depreciation and amortization			21,165	15,479
			Impairment of software			11,881	-
			Deferred taxes			8,288	10,945
			Compensation expense related to share-based compensation plans			6,238	5,638
			Gain on sale of assets			(20)	(345)
			Excess tax benefits from share-based compensation			-	(11)
	Changes in operating assets and liabilities:
			Restricted investments			(875)	(1,924)
			Accounts receivable, net			(49,102)	(57,439)
			Prepaid taxes			(5,794)	(504)
			Prepaid expenses and other current assets			(7,104)	156
			Other assets			(1,572)	(803)
			Accounts payable			38,281	55,641
			Accrued expenses			2,581	1,330
			Non-current liabilities			(534)	1,164
					Net cash provided by operating activities	58,635	81,901

Cash flows from investing activities:
	Proceeds from sale of equipment					420	1,788
	Purchases of property and equipment					(75,881)	(66,079)
				Net cash used in investing activities		(75,461)	(64,291)

Cash flows from financing activities:
	Proceeds from issuance of debt					49,268	9,120
	Repayments of long term debt					(4,198)	(436)
	Proceeds from stock options exercised					-	42
	Stock tendered for payments of withholding taxes					(3,184)	(2,621)
	Purchase of treasury stock					-	(903)
	Capital lease payments					(1,632)	(1,733)
	Excess tax benefits from share-based compensation					434	310
				Net cash provided by financing activities		40,688	3,779


	Effect of exchange rate changes on cash and cash equivalents					1	1

Net increase in cash and cash equivalents						23,863	21,390
Cash and cash equivalents beginning of period						68,964	70,760
Cash and cash equivalents end of period						$ 92,827	$ 92,150

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/hub-group-inc-reports-third-quarter-2014-earnings-per-share-of-049-excluding-one-time-costs-and-non-cash-impairment-charge-579916772.html

SOURCE Hub Group, Inc.

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