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8-K - HUB GROUP EARNINGS RELEASE 2012 Q4 - Hub Group, Inc.hg8k2012q4.htm

Exhibit 99.1
Hub Group, Inc. Reports Record Fourth Quarter and Full Year 2012 Earnings
 
 
DOWNERS GROVE, IL, January 29, 2013, -- 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 million.  Hub 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.


SOURCE: Hub Group, Inc.


CONTACT: Amy Lisek of Hub Group, Inc., +1-630-795-2214
 
 
 
 
 
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 December 31,        Ended December 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,
 
   
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 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 acquisitions:
               
          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