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Hub Group, Inc. Reports Record Fourth Quarter and Full Year 2012 Earnings

DOWNERS GROVE, Ill., Jan. 29, 2013 /PRNewswire/ -- Hub Group, Inc. (NASDAQ: HUBG) today announced financial results for the quarter and year ended December 31, 2012.

Hub Group reported record net income of $18.8 million for the fourth quarter ended December 31, 2012, an increase of 11% compared to the fourth quarter of 2011.  Diluted earnings per share for the fourth quarter of 2012 was $0.51 compared to diluted earnings per share of $0.46 in the fourth quarter of 2011.  Earnings per share increased 6% when compared with the non-GAAP earnings per share of $0.48 in the prior year period, which excludes $1 million of pre-tax expense related to integration and restructuring (see table below).  

The Hub segment's revenue increased 6% to $614 million.  Fourth quarter intermodal revenue increased 8% to $451 million.  The increase was primarily attributable to 7% volume growth.  Truck brokerage revenue increased 7% to $87 million this quarter.  Fourth quarter Unyson Logistics revenue decreased 1% to $76 million.  The Hub segment's operating income was $27.5 million

The Mode segment's revenue increased 2% to $199 million for the fourth quarter.  Operating income was $4.1 million

FULL YEAR 2012

Net income for the year ended December 31, 2012 was $68 millionHub Group's diluted earnings per share for 2012 was $1.83 compared to $1.57 for 2011.  Earnings per share increased 11% when compared with the non-GAAP earnings per share of $1.65 in the prior year period, which excludes $4.6 million of pre-tax expense related to integration and restructuring (see table below).  Hub Group's revenue increased 14% to $3.1 billion.

Hub Group ended the year with $71 million in cash.

"Despite the challenging business environment, 2012 was a record year for Hub Group.  For the first time in our history, we surpassed $3 billion in annual revenue.  We also achieved record earnings with growth coming from all of our business units.  We are proud of our results this year and expect to deliver another year of solid operating performance in 2013," said David P. 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 Tuesday, January 29, 2013 to discuss its fourth quarter and full year results and provide 2013 guidance.

Hosting the conference call will be David P. Yeager, Chairman and Chief Executive Officer, Mark A. Yeager, Vice-Chairman, President and Chief Operating Officer, and Terri A. 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 .  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) 679-8035.  The conference call participant code is 70579010. Participants may pre-register for the call at https://www.theconferencingservice.com/prereg/key.process?key=PA674RJ6Y .  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, 2011 and the reports on Form 10-Q for the periods ended March 31, 2012, June 30, 2012 and September 30, 2012.  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,





2012


2011


2012


2011

Revenue


$ 801,023


$ 762,775


$ 3,124,108


$ 2,751,534












Transportation costs


707,644


678,964


2,768,042


2,438,986


Gross margin


93,379


83,811


356,066


312,548












Costs and expenses:










Salaries and benefits


33,023


29,522


129,143


121,044


Agent fees and commissions


14,006


13,091


55,112


41,491


General and administrative


13,091


12,425


52,832


49,951


Depreciation and amortization


1,611


1,635


6,619


5,603



Total costs and expenses


61,731


56,673


243,706


218,089












Operating income


31,648


27,138


112,360


94,459












Other income (expense):










Interest expense


(299)


(319)


(1,207)


(638)


Interest and dividend income


30


30


134


148


Other, net 


28


42


(30)


328



Total other (expense) income 


(241)


(247)


(1,103)


(162)












Income before provision for income taxes


31,407


26,891


111,257


94,297












Provision for income taxes


12,563


9,877


43,304


36,119












Net income


$   18,844


$   17,014


$     67,953


$     58,178












Basic earnings per common share


$      0.51


$      0.46


$         1.83


$         1.58












Diluted earnings per common share


$      0.51


$      0.46


$         1.83


$         1.57












Basic weighted average number of shares outstanding


37,021


36,943


37,053


36,913

Diluted weighted average number of shares outstanding


37,199


37,104


37,185


37,063












 

 

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)
















Three Months





Ended December 31, 2012





Hub


Mode


Inter-Segment Elims


Hub Group Consolidated

Revenue


$ 613,853


$ 198,550


$         (11,380)


$      801,023












Transportation costs


544,098


174,926


(11,380)


707,644


Gross margin


69,755


23,624


-


93,379












Costs and expenses:










Salaries and benefits


29,332


3,691


-


33,023


Agent fees and commissions


374


13,632


-


14,006


General and administrative


11,407


1,684


-


13,091


Depreciation and amortization


1,110


501


-


1,611



Total costs and expenses


42,223


19,508


-


61,731












Operating income


27,532


4,116


-


31,648












 

 

 

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)
















Twelve Months





Ended December 31, 2012





Hub


Mode


Inter-Segment Elims


Hub Group Consolidated

Revenue


$ 2,392,289


$ 779,928


$         (48,109)


$   3,124,108












Transportation costs


2,128,942


687,209


(48,109)


2,768,042


Gross margin


263,347


92,719


-


356,066












Costs and expenses:










Salaries and benefits


113,855


15,288


-


129,143


Agent fees and commissions


1,900


53,212


-


55,112


General and administrative


45,411


7,421


-


52,832


Depreciation and amortization


4,448


2,171


-


6,619



Total costs and expenses


165,614


78,092


-


243,706












Operating income


97,733


14,627


-


112,360












 

 

 

HUB GROUP, INC.

UNAUDITED NON-GAAP TO GAAP RECONCILIATION

(earnings per share)




















Three Months


Twelve Months


Ended, Dec. 31,


Ended, Dec. 31,




Change

Change




Change

Change


2012

2011

$

%


2012

2011

$

%











Diluted GAAP EPS

$  0.51

$  0.46

$  0.05

10.9%


$  1.83

$  1.57

$  0.26

16.6%











Integration expenses and restructuring costs

$     -

$  0.02

$ (0.02)



$     -

$  0.08

$ (0.08)












Diluted NON-GAAP EPS (adjusted)

$  0.51

$  0.48

$  0.03

6.2%


$  1.83

$  1.65

$  0.18

10.9%































Diluted Shares

37,199

37,104




37,185

37,063













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,







2012


2011










ASSETS






CURRENT ASSETS:






Cash and cash equivalents

$         70,760


$         49,091



Accounts receivable trade, net

346,917


326,537



Accounts receivable other

25,945


23,878



Prepaid taxes

139


2,392



Deferred taxes

4,965


4,838



Prepaid expenses and other current assets

10,619


9,056





TOTAL CURRENT ASSETS

459,345


415,792












Restricted investments

17,218


14,323



Property and equipment, net

157,584


124,587



Other intangibles, net

20,068


21,667



Goodwill, net

263,251


263,470



Other assets

2,387


2,845






TOTAL ASSETS

$       919,853


$       842,684



















LIABILITIES AND STOCKHOLDERS' EQUITY





CURRENT LIABILITIES:






Accounts payable trade

$       206,497


$       204,693



Accounts payable other

22,925


17,289



Accrued payroll

17,210


16,721



Accrued other

28,633


29,962



Current portion of capital lease

2,120


2,237





TOTAL CURRENT LIABILITIES

277,385


270,902











Non-current liabilities

20,041


17,717


Non-current portion of capital lease

21,099


23,436


Deferred taxes

100,431


91,764











STOCKHOLDERS' EQUITY:






Preferred stock, $.01 par value; 2,000,000 shares authorized; no shares issued or outstanding in 2012 and 2011

-


-



Common stock







Class A: $.01 par value; 97,337,700 shares authorized and 41,224,792 shares issued in 2012 and 2011; 36,767,485 shares outstanding in 2012 and 36,860,260 shares outstanding in 2011

412


412




Class B:  $.01 par value; 662,300 shares authorized; 662,296 shares issued and outstanding in 2012 and 2011

7


7



Additional paid-in capital

167,765


168,800



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

(15,458)


(15,458)



Retained earnings

469,141


401,188



Other comprehensive income

1


4



Treasury stock; at cost, 4,457,307 shares in 2012 and 4,364,532 shares in 2011

(120,971)


(116,088)




TOTAL STOCKHOLDERS' EQUITY

500,897


438,865





     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$       919,853


$       842,684










 

 

 

HUB GROUP, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)
















Twelve Months Ended







December 31,







2012


2011



















Cash flows from operating activities:





Net income

$ 67,953


$   58,178


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







Depreciation and amortization 

21,575


16,340




Deferred taxes

8,786


18,821




Compensation expense related to share-based compensation plans

6,539


4,788




Loss (gain) on sale of assets

108


(17)




Excess tax benefits from share based compensation

(29)


-


Changes in operating assets and liabilities, net of effects of acquisition:







Restricted investments

(2,895)


(724)




Accounts receivable, net

(22,429)


(45,047)




Prepaid taxes

2,253


(2,097)




Prepaid expenses and other current assets

(1,562)


(1,728)




Other assets

459


(33)




Accounts payable

7,438


23,095




Accrued expenses

2,779


2,989




Non-current liabilities

1,942


301






Net cash provided by operating activities

92,917


74,866










Cash flows from investing activities:





Proceeds from sale of equipment

1,071


410


Purchases of property and equipment

(56,882)


(55,010)


Cash used in acquisitions, net of cash acquired

(550)


(85,182)





Net cash used in investing activities

(56,361)


(139,782)










Cash flows from financing activities:





Proceeds from stock options exercised

69


86


Purchase of treasury stock

(13,020)


(1,523)


Capital lease payments

(2,454)


(729)


Excess tax benefits from share-based compensation

523


1,034





Net cash used in financing activities

(14,882)


(1,132)




















Effect of exchange rate changes on cash and cash equivalents

(5)


(5)










Net increase (decrease) in cash and cash equivalents

21,669


(66,053)

Cash and cash equivalents beginning of the year

49,091


115,144

Cash and cash equivalents end of the year

$ 70,760


$   49,091










SOURCE Hub Group, Inc.

Amy Lisek of Hub Group, Inc., +1-630-795-2214