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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________

Form 8-K
_____________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): April 26, 2018  

HUB GROUP, INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or Other Jurisdiction of Incorporation)

 

0-2775436-4007085
(Commission File Number)(I.R.S. Employer Identification No.)

 

2000 Clearwater Drive, Oak Brook, Illinois 60523
(Address, including zip code, of principal executive offices)

(630) 271-3600
(Registrant’s telephone number, including area code)

NOT APPLICABLE
(Former Name or Former Address, If Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 [ ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 [ ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 [ ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 [ ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company [   ]

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [   ]

 
 

Item 2.02. Results of Operations and Financial Condition.

     On April 26, 2018, Hub Group, Inc. issued a press release announcing its first quarter 2018 operating results. The press release is furnished as Exhibit 99.1 to this Form 8-K.

Item 7.01. Regulation FD Disclosure.

     On April 26, 2018, Hub Group, Inc. will make available on its website an Investor Presentation, which includes business information and first quarter 2018 results. The presentation can be accessed by going to www.hubgroup.com, selecting the “Investors” tab, and then selecting the “Presentations” tab. The presentation will be available on the company’s website until the next regular update.

     In accordance with General Instruction B.2 of Form 8-K, the information under this heading shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth in such a filing.

Item 9.01. Financial Statements and Exhibits.

(a) Not Applicable.
(b) Not Applicable.
(c) Not Applicable.
(d) A list of exhibits filed herewith is contained on the Exhibit Index which immediately precedes such exhibits and is incorporated herein by reference.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 HUB GROUP, INC.
   
  
Date: April 26, 2018By: /s/ Terri A. Pizzuto        
  Terri Pizzuto
  Executive Vice President, Chief Financial Officer and Treasurer
  

EXHIBIT INDEX

Exhibit No.  
   
99.1 Press release, issued on April 26, 2018, announcing first quarter 2018 operating results for Hub Group, Inc.

EdgarFiling

EXHIBIT 99.1

Hub Group, Inc. Reports First Quarter 2018 Results

    Highlights of the quarter

OAK BROOK, Ill., April 26, 2018 (GLOBE NEWSWIRE) -- Hub Group, Inc. (NASDAQ:HUBG) announced first quarter 2018 net income of $16.2 million, or diluted earnings per share of $0.48 versus first quarter 2017 net income of $10.3 million, or $0.31 per diluted share.

Revenue for the current quarter was $1.1 billion compared with $892.8 million for the first quarter 2017. Hub segment revenue increased 23% and Mode segment revenue increased 19%.  Operating income for the current quarter increased to $23.1 million versus $17.2 million for the first quarter 2017. Hub segment operating income increased 39% and Mode segment operating income increased 26%.

Segment Information:

Hub
·  First quarter 2018 Segment Revenue:    $831.6 million, up 23%
·  First quarter 2018 Segment Operating Income:    $16.1 million, up 39%

Hub’s revenue increased 23% to $831.6 million compared to the first quarter of 2017 as a result of our success in providing multi-modal solutions to our customers.  This increase includes Hub Group Dedicated revenue totaling $60.4 million.

First quarter intermodal revenue increased 14% to $482.5 million reflecting a 6% increase in loads, price increases and higher fuel revenue.  Intermodal gross margin increased compared to the first quarter of 2017 primarily due to an increase in customer prices and volume, partially offset by higher rail, driver, and third party drayage costs.   

Truck brokerage revenue increased 13% to $120.0 million this quarter compared to the same quarter of last year.  Truck brokerage handled 1% fewer loads while fuel, price and mix combined were up 14%.  Truck brokerage gross margin increased primarily because of growth with strategic customers and increased spot activity.

First quarter Unyson Logistics revenue increased 16% to $168.7 million due primarily to growth from new customers on-boarded in 2017 and growth with existing customers.  Unyson Logistics gross margin declined primarily due to unfavorable customer mix and higher purchased transportation costs. 

Hub Group Dedicated revenue of $60.4 million in the first quarter of 2018 is up 6% sequentially from the fourth quarter of 2017 revenue of $57.1 million.  We project dedicated revenue in the last half of the year will increase between 30%-40% over last year. 

Costs and expenses increased $14.0 million to $74.2 million in the first quarter of 2018 compared to $60.2 million in the first quarter of 2017 due primarily to the addition of $10.7 million of costs and expenses for Hub Group Dedicated and higher bonus and commission expense partially offset by lower due diligence and severance costs.   

Operating income was $16.1 million compared to $11.6 million in the first quarter 2017.

Mode
·  First quarter 2018 Segment Revenue:    $287.9 million, up 19%
·  First quarter 2018 Segment Operating Income:    $7.0 million, up 26%

Mode’s revenue increased 19% to $287.9 million compared to the first quarter 2017.   Revenue consisted of $129.8 million in intermodal which was up 6%, $100.7 million in truck brokerage which was up 29% and $57.4 million in logistics which was up 38%. 

Gross margin increased $2.6 million compared to the first quarter of 2017 due primarily to increases in logistics and truck brokerage margin.

Operating income was $7.0 million compared to $5.6 million in the first quarter 2017.

Cash Flow and Capitalization:

Our capital expenditures for the first quarter totaled $22.2 million, primarily for tractors, trailers, technology investments, and containers. At March 31, 2018, we had cash and cash equivalents of $17.9 million. 

At March 31, 2018, we had total debt outstanding of $284.3 million on various debt instruments compared to $302.5 million at December 31, 2017. 

2018 and Long Term Outlook

We expect that our 2018 diluted earnings per share will range from $2.34 to $2.44.  We estimate that our 2018 capital expenditures will range from $190 million to $210 million.  We project our effective tax rate will be approximately 25%.

“Strong revenue and margin growth in the first quarter driven by a healthy intermodal pricing environment, spot opportunities, and new dedicated business position us well for a successful year,” said Dave Yeager, Hub’s Chief Executive Officer.

CONFERENCE CALL

Hub will hold a conference call at 5:00 p.m. Eastern Time on Thursday, April 26, 2018, to discuss its first quarter 2018 results. 

Hosting the conference call will be Dave Yeager, Chief Executive Officer.  Also participating on the call will be Don Maltby, 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 register at http://www.yourconferencecenter.com/r.aspx?p=1&a=UTeYFbrpkjuxyE. 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) 206-4064 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.

On April 26, 2018, the company will make available on its website an Investor Presentation, which includes updated business information and first quarter 2018 results, among other things. The presentation can be accessed by going to www.hubgroup.com, selecting the “Investors” tab, and then selecting the “Presentations” tab. The presentation will be available on the company’s website until the next regular update.

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, and should be viewed with caution. Forward-looking statements may contain words such as “expects”, “expected”, “believe”, “projected”, “estimate”, or similar words, and are based on management's experience and perception of historical trends, current conditions, and anticipated future developments, as well as other factors believed to be appropriate. We believe these statements and the assumptions and estimates contained in this release are reasonable based on information that is currently available to us. 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 intermodal costs and prices, the integration of any acquisitions and expenses relating thereto, the future performance of Hub’s Intermodal, Truck Brokerage, Dedicated and Unyson Logistics business lines, the future performance of Mode, the amount and timing of strategic investments or divestitures by Hub, the failure to integrate critical information technology systems, retail customers encountering adverse economic conditions and 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, 2017.  Hub Group assumes no liability to update any such forward-looking statements.


HUB GROUP, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands, except per share amounts)
(unaudited)
        
   Three Months Ended March 31,
    2018  2017
    % of  % of
   AmountRevenue AmountRevenue
Revenue$  1,095,971 100.0% $  892,756 100.0%
        
Transportation costs   973,180 88.8%    791,171 88.6%
 Gross margin   122,791 11.2%    101,585 11.4%
        
Costs and expenses:     
 Salaries and benefits   56,007 5.1%    43,179 4.8%
 Agent fees and commissions   19,142 1.7%    17,993 2.0%
 General and administrative   20,504 1.9%    20,824 2.4%
 Depreciation and amortization   4,005 0.4%    2,412 0.3%
  Total costs and expenses   99,658 9.1%    84,408 9.5%
        
Operating income   23,133 2.1%    17,177 1.9%
        
Other income (expense):     
 Interest expense   (2,104)-0.2%    (1,098)-0.1%
 Interest and dividend income   22 0.0%    130 0.0%
 Other, net   (55)0.0%    194 0.0%
  Total other expense   (2,137)-0.2%    (774)-0.1%
        
Income before provision for income taxes   20,996 1.9%    16,403 1.8%
        
Income tax expense   4,829 0.4%    6,069 0.7%
        
Net income$  16,167 1.5% $  10,334 1.1%
        
        
Basic earnings per common share$  0.48   $  0.31  
        
Diluted earnings per common share$  0.48   $  0.31  
        
Basic weighted average number of shares outstanding   33,375      33,205  
Diluted weighted average number of shares outstanding   33,478      33,373  
        

 

HUB GROUP, INC.
FINANCIAL INFORMATION BY SEGMENT
(in thousands)
(unaudited)
          
   Three Months
   Ended March 31, 2018
   Hub Mode Inter-Segment
Elims		 Hub Group Total
Revenue$  831,585 $  287,899 $  (23,513) $  1,095,971
          
Transportation costs   741,211    255,482    (23,513)    973,180
 Gross margin   90,374    32,417    -      122,791
          
Costs and expenses:       
 Salaries and benefits   52,070    3,937    -      56,007
 Agent fees and commissions   13    19,129    -      19,142
 General and administrative   18,402    2,102    -      20,504
 Depreciation and amortization   3,760    245    -      4,005
  Total costs and expenses   74,245    25,413    -      99,658
          
Operating income$  16,129 $  7,004 $  -   $  23,133
          

 

HUB GROUP, INC.
FINANCIAL INFORMATION BY SEGMENT
(in thousands)
(unaudited)
          
   Three Months
   Ended March 31, 2017
   Hub Mode Inter-Segment
Elims		 Hub Group Total
Revenue$  676,480 $  241,834 $  (25,558) $  892,756
          
Transportation costs   604,674    212,055    (25,558)    791,171
 Gross margin   71,806    29,779    -      101,585
          
Costs and expenses:       
 Salaries and benefits   39,596    3,583    -      43,179
 Agent fees and commissions   17    17,976    -      17,993
 General and administrative   18,479    2,345    -      20,824
 Depreciation and amortization   2,109    303    -      2,412
  Total costs and expenses   60,201    24,207    -      84,408
          
Operating income$  11,605 $  5,572 $  -   $  17,177
          


HUB GROUP, INC.
FINANCIAL INFORMATION BY SEGMENT AND BUSINESS LINE
(in thousands)
(unaudited)
         
  Three Months
  Ended March 31, 2018
  Hub Mode Inter-Segment
Elims		 Hub Group Total
Intermodal$  482,495 $  129,773 $  (11,270) $  600,998
Truck brokerage   120,019    100,721    (358)    220,382
Logistics   168,676    57,405    (11,870)    214,211
Dedicated   60,395    -     (15)    60,380
 Total Revenue$  831,585 $  287,899 $  (23,513) $  1,095,971
         


HUB GROUP, INC.
FINANCIAL INFORMATION BY SEGMENT AND BUSINESS LINE
(in thousands)
(unaudited)
         
  Three Months
  Ended March 31, 2017
  Hub Mode Inter-Segment
Elims		 Hub Group Total
Intermodal$  424,423 $  122,181 $  (15,237) $  531,367
Truck brokerage   106,185    78,161    (385)    183,961
Logistics   145,872    41,492    (9,936)    177,428
 Total Revenue$  676,480 $  241,834 $  (25,558) $  892,756
         


HUB GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
        
     March 31, December 31,
      2018   2017 
        
ASSETS    
 CURRENT ASSETS:   
  Cash and cash equivalents$  17,930  $  28,557 
  Accounts receivable trade, net   573,722     583,994 
  Accounts receivable other   4,467     5,722 
  Prepaid taxes   12,136     12,088 
  Prepaid expenses and other current assets   19,009     25,697 
    TOTAL CURRENT ASSETS   627,264     656,058 
        
 Restricted investments   23,265     24,181 
 Property and equipment, net   568,048     562,150 
 Other intangibles, net   72,925     74,348 
 Goodwill, net   348,161     348,661 
 Other assets   3,607     5,543 
    TOTAL ASSETS$  1,643,270  $  1,670,941 
        
        
LIABILITIES AND STOCKHOLDERS' EQUITY   
 CURRENT LIABILITIES:   
  Accounts payable trade$  318,962  $  338,933 
  Accounts payable other   13,389     12,268 
  Accrued payroll   22,622     28,994 
  Accrued other   54,992     59,305 
  Current portion of capital lease   2,798     2,777 
  Current portion of long term debt   80,004     77,266 
    TOTAL CURRENT LIABILITIES   492,767     519,543 
        
 Long term debt   194,553     214,808 
 Non-current liabilities   37,687     37,927 
 Long term capital lease   6,980     7,696 
 Deferred taxes   125,611     121,095 
        
 STOCKHOLDERS' EQUITY:   
  Preferred stock, $.01 par value; 2,000,000 shares authorized;   
   no shares issued or outstanding in 2018 and 2017   -      -  
  Common stock   
   Class A: $.01 par value; 97,337,700 shares authorized and   
    41,224,792 shares issued in 2018 and 2017; 33,714,605 shares   
    outstanding in 2018 and 33,447,070 shares outstanding in 2017   412     412 
   Class B:  $.01 par value; 662,300 shares authorized;   
    662,296 shares issued and outstanding in 2018 and 2017   7     7 
  Additional paid-in capital   165,076     173,011 
  Purchase price in excess of predecessor basis, net of tax   
    benefit of $10,306   (15,458)    (15,458)
  Retained earnings   886,883     870,716 
  Accumulated other comprehensive loss   (165)    (194)
  Treasury stock; at cost, 7,510,187 shares in 2018   
   and 7,777,722 shares in 2017   (251,083)    (258,622)
   TOTAL STOCKHOLDERS' EQUITY   785,672     769,872 
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$  1,643,270  $  1,670,941 
        


HUB GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
      
     Three Months Ended March 31,
      2018   2017 
        
        
Cash flows from operating activities:   
 Net income$  16,167  $  10,334 
 Adjustments to reconcile net income   
  to net cash provided by operating activities:   
   Depreciation and amortization    18,599     12,522 
   Deferred taxes   4,714     5,279 
   Compensation expense related to share-based compensation plans   3,501     2,609 
   Gain on sale of assets   (115)    (48)
 Changes in operating assets and liabilities:   
   Restricted investments   916     (1,436)
   Accounts receivable, net   11,643     54,600 
   Prepaid taxes   (47)    (171)
   Prepaid expenses and other current assets   6,694     2,795 
   Other assets   1,866     373 
   Accounts payable   (19,465)    (13,175)
   Accrued expenses   (10,913)    (25,990)
   Non-current liabilities   (386)    12 
    Net cash provided by operating activities   33,174     47,704 
        
Cash flows from investing activities:   
 Proceeds from sale of equipment   516     1,127 
 Purchases of property and equipment   (22,179)    (6,625)
    Net cash used in investing activities   (21,663)    (5,498)
        
Cash flows from financing activities:   
 Proceeds from issuance of debt   16,783     -  
 Repayments of long term debt   (34,300)    (11,782)
 Stock tendered for payments of withholding taxes   (3,896)    (3,157)
 Capital lease payments   (695)    (727)
    Net cash used in financing activities   (22,108)    (15,666)
        
        
 Effect of exchange rate changes on cash and cash equivalents   (30)    56 
        
Net (decrease) increase in cash and cash equivalents   (10,627)    26,596 
Cash and cash equivalents beginning of period   28,557     127,404 
Cash and cash equivalents end of period$  17,930  $  154,000 
        

CONTACT: Maralee Volchko of Hub Group, Inc., +1-630-271-3745