Hub Group, Inc. (Nasdaq: HUBG) announced second quarter 2024 net
income of $29 million and diluted earnings per share of $0.47. Net
income for second quarter 2023 was $47 million or $0.72 per diluted
share.
“I am pleased with the team’s performance in the
second quarter with Intermodal volume growth of 8% and the strong
contribution from Final Mile, resulting in $1.0 billion of revenue.
Although market conditions remain challenging, Hub Group benefitted
from our disciplined market approach, recent diversification
efforts, and strong balance sheet. We continue to enhance earnings
stability and growth over the long term by focusing on yield
management, our capital structure, and providing excellent service
to our customers,” said Phil Yeager, Hub Group’s President, Chief
Executive Officer and Vice Chairman.
Second Quarter
2024 Results
Consolidated revenue for the second quarter of
2024 was $986 million, down 5.2% from the $1,040 million reported
in second quarter of 2023. Revenue was impacted by the freight
market, lower revenue per load including fuel and accessorial
revenue in Intermodal and Brokerage, partially offset by higher
volumes in Intermodal and contributions from the Final Mile
acquisition.
Purchased transportation and warehousing costs
of $727 million were $36 million lower than prior year. Salaries
and benefits of $142 million were comparable to prior year as we
continue to manage headcount. Total legacy headcount, which
excludes acquisition employees, drivers and warehouse employees,
declined by 7%. Depreciation and amortization increased $2.4
million, or 40 basis points, due to the Final Mile acquisition.
Insurance and claims increased by 20 basis points due to higher
claim costs. General and administrative expenses increased 20 basis
points as compared to prior year driven by costs associated with
the Final Mile acquisition, partially offset by cost management
efforts. Gain on sale was $0.4 million in the quarter.
Operating income for the second quarter was $40
million, or 4.0% of revenue, as compared to $62 million or 6.0% of
revenue in the prior year. EBITDA (non-GAAP) was $89 million and
net debt/EBITDA (non-GAAP) was 0.3x for the quarter.
Intermodal and Transportation Solutions (“ITS”)
Segment revenue was $561 million in the second quarter, down from
$615 million in the prior year. Higher Intermodal volume and
Dedicated revenue partially offset lower revenue per load,
accessorial revenue and fuel revenue. ITS operating income was $14
million, or 2.4% of revenue, down from $32 million in the prior
year.
Second quarter Logistics Segment revenue of $459
million increased $6 million from prior year, as higher Final Mile
revenue more than offset lower revenue in our Brokerage business.
Second quarter operating income was $26 million, or 5.6% of
revenue, a decline of $4 million from prior year as positive
contribution from the acquisition only partially offset lower
Brokerage margin.
Capital expenditures for the second quarter of
2024 totaled $14 million as we continued to invest in our tractor
fleet, technology, and expansion of our multipurpose warehouse
footprint. As of June 30, 2024, we had cash and cash equivalents of
$220 million. Year-to-date the company returned $48 million to
shareholders through dividend payments of $15 million and stock
repurchases of $33 million.
2024
Outlook
We expect our 2024 diluted earnings per share
will range from $1.75 to $2.05. We estimate revenue of
approximately $4.0 to $4.3 billion for the full year. We continue
to project an effective tax rate of approximately 24% and capital
expenditures in the range of $45 million to $65 million for the
full year.
Non-GAAP Financial
Measure
In this press release, we present certain
non-GAAP financial measures. As required by the rules of the
Securities and Exchange Commission (“SEC”), we have provided herein
a reconciliation of these non-GAAP financial measures to the most
directly comparable measures under GAAP, along with an explanation
why management believes these non-GAAP financial measures provide
relevant and useful information. This non-GAAP financial measures
should be viewed in addition to, and not as an alternative to or
substitute for, measures determined in accordance with GAAP, and
are not necessarily comparable to non-GAAP measures that may be
presented by other companies.
Certain
Forward-Looking Statements:
Statements in this press release that are not
historical facts are forward-looking statements, provided pursuant
to the safe harbor established under the Private Securities
Litigation Reform Act of 1995. These forward- looking statements
are not guarantees of future performance and involve risks,
uncertainties and other factors that might cause the actual
performance of Hub Group to differ materially from those expressed
or implied by this discussion and, therefore, should be viewed with
caution. Further information on the risks that may affect Hub
Group’s business is included in filings it makes with the SEC from
time to time, including those discussed under the “Risk Factors”
section in Hub Group’s most recently filed periodic reports on Form
10-K and Form 10-Q and subsequent filings. Hub Group assumes no
obligation to update any such forward-looking statements.
Conference
Call
Hub Group, Inc. will hold a conference call at
5:00 p.m. Eastern Time on August 1, 2024, to discuss our second
quarter 2024 results. Hosting the conference call will be Phil
Yeager, President, CEO and Vice Chairman. Also participating on the
call will be Brian Alexander, Executive Vice President, Chief
Operating Officer, and Kevin Beth, 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. 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 pre-register at
https://register.vevent.com/register/BI21706b737b064d989a92b2348172f8d3
to receive the dial-in number and unique PIN. On the day of the
call, dial in approximately ten minutes prior to the scheduled call
time and enter the unique participant 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.
About Hub
Group
Hub Group offers comprehensive transportation
and logistics management solutions. Keeping our customers’ needs in
focus, Hub Group designs, continually optimizes, and applies
industry-leading technology to our customers’ supply chains for
better service, greater efficiency, and total visibility. As an
award-winning, publicly traded company (Nasdaq: HUBG) with over $4
billion in revenue, our nearly 6,000 employees and drivers across
the globe are always in pursuit of “The Way Ahead” – a commitment
to service, integrity and innovation. For more information, visit
hubgroup.com.
SOURCE: Hub Group, Inc.CONTACT: Lorna Williams,
Investor Relations, lornawilliams@hubgroup.com
HUB GROUP, INC.
CONSOLIDATED STATEMENTS OF EARNINGS |
(in thousands, except per share
amounts)(unaudited) |
|
|
Three Months
Ended June
30, |
|
2024 |
|
2023 |
|
|
Amount |
|
% ofRevenue |
|
|
Amount |
|
% ofRevenue |
Operating revenue |
$ |
986,495 |
|
100.0% |
|
$ |
1,040,462 |
|
100.0% |
Operating expenses: |
|
|
|
|
|
|
|
|
|
Purchased transportation and warehousing |
|
727,236 |
|
73.7% |
|
|
763,609 |
|
73.4% |
Salaries and benefits |
|
141,856 |
|
14.4% |
|
|
141,823 |
|
13.6% |
Depreciation and amortization |
|
37,772 |
|
3.8% |
|
|
35,386 |
|
3.4% |
Insurance and claims |
|
12,639 |
|
1.3% |
|
|
11,676 |
|
1.1% |
General and administrative |
|
27,877 |
|
2.8% |
|
|
26,757 |
|
2.6% |
Gain on sale of assets, net |
|
(413 |
) |
0.0% |
|
|
(859 |
) |
-0.1% |
Total operating expenses |
|
946,967 |
|
96.0% |
|
|
978,392 |
|
94.0% |
Operating income |
|
39,528 |
|
4.0% |
|
|
62,070 |
|
6.0% |
Other income (expense): |
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
(1,881 |
) |
-0.2% |
|
|
(1,029 |
) |
-0.1% |
Other, net |
|
(66 |
) |
0.0% |
|
|
69 |
|
0.0% |
Total other expense, net |
|
(1,947 |
) |
-0.2% |
|
|
(960 |
) |
-0.1% |
Income before provision for
income taxes |
|
37,581 |
|
3.8% |
|
|
61,110 |
|
5.9% |
Provision for income taxes |
|
8,566 |
|
0.9% |
|
|
14,605 |
|
1.4% |
Net income |
$ |
29,015 |
|
|
|
$ |
46,505 |
|
|
Earnings per share |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.48 |
|
|
|
$ |
0.73 |
|
|
Diluted |
$ |
0.47 |
|
|
|
$ |
0.72 |
|
|
Basic weighted average number of
shares outstanding |
|
60,710 |
|
|
|
|
64,074 |
|
|
Diluted weighted average number
of shares outstanding |
|
61,108 |
|
|
|
|
64,586 |
|
|
HUB GROUP, INC.
CONSOLIDATED STATEMENTS OF EARNINGS |
(in thousands, except per share amounts)
(unaudited) |
|
|
Six Months Ended
June 30, |
|
2024 |
|
2023 |
|
|
Amount |
|
% ofRevenue |
|
|
Amount |
|
% ofRevenue |
Operating revenue |
$ |
1,985,988 |
|
100.0% |
|
$ |
2,192,727 |
|
100.0% |
Operating expenses: |
|
|
|
|
|
|
|
|
|
Purchased transportation and warehousing |
|
1,467,408 |
|
73.9% |
|
|
1,630,540 |
|
74.4% |
Salaries and benefits |
|
286,352 |
|
14.4% |
|
|
279,254 |
|
12.7% |
Depreciation and amortization |
|
76,103 |
|
3.8% |
|
|
70,835 |
|
3.2% |
Insurance and claims |
|
25,257 |
|
1.3% |
|
|
24,359 |
|
1.1% |
General and administrative |
|
55,111 |
|
2.8% |
|
|
52,298 |
|
2.4% |
Gain on sale of assets, net |
|
(910 |
) |
-0.1% |
|
|
(4,834 |
) |
-0.2% |
Total operating expenses |
|
1,909,321 |
|
96.1% |
|
|
2,052,452 |
|
93.6% |
Operating income |
|
76,667 |
|
3.9% |
|
|
140,275 |
|
6.4% |
Other income
(expense): |
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
(4,387 |
) |
-0.2% |
|
|
(2,623 |
) |
-0.1% |
Other, net |
|
(236 |
) |
0.0% |
|
|
108 |
|
0.0% |
Total other expense, net |
|
(4,623 |
) |
-0.2% |
|
|
(2,515 |
) |
-0.1% |
Income before provision for
income taxes |
|
72,044 |
|
3.7% |
|
|
137,760 |
|
6.3% |
Provision for income taxes |
|
15,976 |
|
0.8% |
|
|
29,475 |
|
1.3% |
Net income |
$ |
56,068 |
|
|
|
$ |
108,285 |
|
|
Earnings per share |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.92 |
|
|
|
$ |
1.68 |
|
|
Diluted |
$ |
0.91 |
|
|
|
$ |
1.66 |
|
|
Basic weighted average number of
shares outstanding |
|
61,018 |
|
|
|
|
64,586 |
|
|
Diluted weighted average number
of shares outstanding |
|
61,387 |
|
|
|
|
65,132 |
|
|
HUB GROUP, INC. CONSOLIDATED
BALANCE SHEETS |
(in thousands,
except share
data) |
|
|
|
June 30, |
|
|
|
December 31, |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
(unaudited) |
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
220,247 |
|
|
$ |
187,270 |
|
Accounts receivable trade, net |
|
583,759 |
|
|
|
600,197 |
|
Accounts receivable other |
|
3,771 |
|
|
|
3,358 |
|
Prepaid taxes |
|
12,791 |
|
|
|
17,331 |
|
Prepaid expenses and other current assets |
|
16,139 |
|
|
|
41,089 |
|
TOTAL CURRENT ASSETS |
|
836,707 |
|
|
|
849,245 |
|
Restricted investments |
|
21,044 |
|
|
|
20,763 |
Property and equipment, net |
|
759,779 |
|
|
|
791,692 |
Right-of-use assets - operating
leases |
|
196,465 |
|
|
|
210,742 |
Right-of-use assets - financing
leases |
|
1,538 |
|
|
|
2,522 |
Other intangibles, net |
|
248,391 |
|
|
|
304,607 |
Goodwill |
|
771,894 |
|
|
|
733,695 |
Other non-current assets |
|
22,885 |
|
|
|
22,781 |
TOTAL ASSETS |
$ |
2,858,703 |
|
|
$ |
2,936,047 |
LIABILITIES AND
STOCKHOLDERS' EQUITY |
CURRENT LIABILITIES: |
|
Accounts payable trade |
$ |
325,569 |
|
|
$ |
349,378 |
|
Accounts payable other |
|
24,143 |
|
|
|
14,471 |
|
Accrued payroll |
|
29,429 |
|
|
|
21,731 |
|
Accrued other |
|
111,874 |
|
|
|
121,253 |
|
Lease liability - operating leases |
|
40,142 |
|
|
|
44,690 |
|
Lease liability - financing leases |
|
805 |
|
|
|
1,579 |
|
Current portion of long-term debt |
|
103,192 |
|
|
|
105,108 |
|
TOTAL CURRENT LIABILITIES |
|
635,154 |
|
|
|
658,210 |
|
Long-term debt |
|
209,875 |
|
|
|
245,574 |
|
Other non-current
liabilities |
|
53,213 |
|
|
|
55,287 |
|
Lease liability - operating
leases |
|
163,669 |
|
|
|
177,699 |
|
Lease liability - financing
leases |
|
664 |
|
|
|
865 |
|
Deferred taxes |
|
154,998 |
|
|
|
163,767 |
|
STOCKHOLDERS' EQUITY: |
|
|
|
|
|
Preferred stock, $.01 par value; 2,000,000 shares authorized; |
|
|
no shares issued or outstanding in 2024 and 2023. |
|
- |
|
- |
|
Common stock |
|
|
Class A: $.01 par value; 97,337,700 shares authorized;
72,303,228 |
|
|
shares issued in 2024 and 75,524,189 shares issued in 2023; |
|
|
61,653,003 shares outstanding in 2024 and 62,200,921 shares
outstanding in 2023. |
|
723 |
|
755 |
|
Class B: $.01 par value; 662,300 shares authorized; |
|
|
574,903 shares issued and outstanding in both 2024 and 2023. |
|
6 |
|
|
|
6 |
|
Additional paid-in capital |
|
211,346 |
|
|
|
209,830 |
|
Retained earnings |
|
1,989,600 |
|
|
|
1,949,110 |
|
Accumulated other comprehensive loss |
|
(200 |
) |
|
|
(129 |
) |
Treasury stock; at cost, 10,650,225 shares in 2024 |
|
|
|
and 13,323,268 shares in 2023 |
|
(560,345 |
) |
|
|
(524,927 |
) |
TOTAL STOCKHOLDERS' EQUITY |
|
1,641,130 |
|
|
|
1,634,645 |
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
2,858,703 |
|
|
$ |
2,936,047 |
|
HUB GROUP, INC. CONSOLIDATED STATEMENTS OF
CASH FLOWS |
(in thousands)(unaudited) |
|
|
|
Six Months Ended June 30, |
|
|
2024 |
|
|
|
2023 |
|
Cash flows from operating
activities: |
|
|
|
|
|
|
|
Net income |
$ |
56,068 |
|
|
$ |
108,285 |
|
Adjustments to reconcile net income |
|
|
|
|
|
|
|
to net cash provided by operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization of intangibles and right-of-use
assets |
|
99,100 |
|
|
|
91,474 |
|
Impairment of right-of-use asset |
|
- |
|
|
|
2,012 |
|
Deferred taxes |
|
(9,249 |
) |
|
|
10,837 |
|
Non-cash share-based compensation expense |
|
9,433 |
|
|
|
10,615 |
|
Gain on sale of assets, net |
|
(910 |
) |
|
|
(4,834 |
) |
Changes in operating assets and liabilities, net of
acquisitions: |
|
|
|
|
|
|
|
Restricted investments |
|
(281 |
) |
|
|
(2,197 |
) |
Accounts receivable, net |
|
15,784 |
|
|
|
103,270 |
|
Prepaid taxes |
|
4,537 |
|
|
|
1,729 |
|
Prepaid expenses and other current assets |
|
19,697 |
|
|
|
17,469 |
|
Other non-current assets |
|
(1,503 |
) |
|
|
(1,899 |
) |
Accounts payable |
|
(14,270 |
) |
|
|
(55,085 |
) |
Accrued expenses |
|
(6,542 |
) |
|
|
(47,700 |
) |
Non-current liabilities |
|
(21,399 |
) |
|
|
(12,595 |
) |
Net cash provided by operating activities |
|
150,465 |
|
|
|
221,381 |
|
Cash flows from investing activities: Proceeds from sale of
equipment |
|
5,750 |
|
|
|
15,135 |
|
Purchases of property and equipment |
|
(31,255 |
) |
|
|
(65,635 |
) |
Acquisitions, net of cash acquired |
|
3,701 |
|
|
|
108 |
|
Net cash used in investing activities |
|
(21,804 |
) |
|
|
(50,392 |
) |
Cash flows from financing
activities: Repayments of long term debt |
|
(53,233 |
) |
|
|
(56,191 |
) |
Purchase of treasury stock |
|
(32,938 |
) |
|
|
(100,026 |
) |
Dividends paid |
|
(15,230 |
) |
|
|
- |
|
Stock withheld for payments of withholding taxes |
|
(8,664 |
) |
|
|
(7,818 |
) |
Finance lease payments |
|
(1,217 |
) |
|
|
(1,501 |
) |
Proceeds from issuance of debt |
|
15,618 |
|
|
|
50,289 |
|
Net cash used in financing activities |
|
(95,664 |
) |
|
|
(115,247 |
) |
Effect of exchange rate changes on cash and cash equivalents |
|
(20 |
) |
|
|
45 |
|
Net increase in cash and cash
equivalents |
|
32,977 |
|
|
|
55,787 |
|
Cash and cash equivalents
beginning of period |
|
187,270 |
|
|
|
286,642 |
|
Cash and cash equivalents end of
period |
$ |
220,247 |
|
|
$ |
342,429 |
|
HUB GROUP, INC. FINANCIAL
INFORMATION BY
SEGMENT |
(in thousands)
(unaudited) |
|
|
Three Months
Ended June
30, |
Operating Revenue |
|
2024 |
|
|
|
2023 |
|
Intermodal and Transportation
Services |
$ |
561,033 |
|
|
$ |
614,632 |
|
Logistics |
|
459,088 |
|
|
|
453,549 |
|
Inter-segment eliminations |
|
(33,626 |
) |
|
|
(27,719 |
) |
Total operating
revenue |
$ |
986,495 |
|
|
$ |
1,040,462 |
|
|
Three MonthsEnded June 30, |
Operating Income |
|
2024 |
|
|
|
2023 |
|
Intermodal and Transportation
Services |
$ |
13,639 |
|
|
$ |
31,777 |
|
Logistics |
|
25,889 |
|
|
|
30,293 |
|
Totaloperatingincome |
$ |
39,528 |
|
|
$ |
62,070 |
|
|
Three Months Ended
June 30, |
Depreciation and
Amortization |
|
2024 |
|
|
|
2023 |
|
Intermodal and Transportation
Services |
$ |
27,270 |
|
|
$ |
27,117 |
|
Logistics |
|
10,502 |
|
|
|
8,269 |
|
Total depreciation
and amortization |
$ |
37,772 |
|
|
$ |
35,386 |
|
HUB GROUP,
INC.FINANCIAL INFORMATION BY SEGMENT |
(in thousands)(unaudited) |
|
|
Six MonthsEnded June 30, |
Operating Revenue |
2024 |
|
2023 |
Intermodal and Transportation Services |
$ |
1,113,066 |
|
|
$ |
1,323,881 |
|
Logistics |
|
939,312 |
|
|
|
922,690 |
|
Inter-segment eliminations |
|
(66,390 |
) |
|
|
(53,844 |
) |
Total operating revenue |
$ |
1,985,988 |
|
|
$ |
2,192,727 |
|
|
Six MonthsEnded June 30, |
Operating Income |
|
2024 |
|
|
|
2023 |
|
Intermodal and Transportation
Services |
$ |
26,670 |
|
|
$ |
80,981 |
|
Logistics |
|
49,997 |
|
|
|
59,294 |
|
Total operating income |
$ |
76,667 |
|
|
$ |
140,275 |
|
|
Six MonthsEnded
June 30, |
Depreciation and
Amortization |
|
2024 |
|
|
|
2023 |
|
Intermodal and Transportation
Services |
$ |
54,319 |
|
|
$ |
54,003 |
|
Logistics |
|
21,784 |
|
|
|
16,832 |
|
Total depreciation
and amortization |
$ |
76,103 |
|
|
$ |
70,835 |
|
RECONCILIATION OF NET INCOME TO EBITDA (1) AND NET DEBT /
EBITDA LEVERAGE |
(in
thousands) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
2024 |
|
|
|
2023 |
|
2023 |
|
2023 |
|
2023 |
|
Q1 |
|
Q2 |
|
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income |
$ |
27,053 |
|
$ |
29,015 |
|
|
|
$ |
61,780 |
|
$ |
46,505 |
|
$ |
30,459 |
|
$ |
28,785 |
Interest
Expense, net |
|
2,506 |
|
|
1,881 |
|
|
|
|
1,594 |
|
|
1,029 |
|
|
699 |
|
|
103 |
Depreciation
and Amortization (2) |
|
49,605 |
|
|
49,495 |
|
|
|
|
45,810 |
|
|
45,664 |
|
|
45,301 |
|
|
47,674 |
Provision
for Income Taxes |
|
7,410 |
|
|
8,566 |
|
|
|
|
14,870 |
|
|
14,605 |
|
|
11,209 |
|
|
992 |
EBITDA |
$ |
86,574 |
|
$ |
88,957 |
|
|
|
$ |
124,054 |
|
$ |
107,803 |
|
$ |
87,668 |
|
$ |
77,554 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA LTM
(3) |
$ |
359,599 |
|
$ |
340,753 |
|
|
|
|
|
|
|
|
|
|
Net Debt
(4) |
$ |
141,524 |
|
$ |
94,289 |
|
|
|
|
|
|
|
|
|
|
Net Debt /
EBITDA LTM |
|
0.4 |
|
|
0.3 |
|
|
|
|
|
|
|
|
|
|
(1) |
|
By
providing this non-GAAP measure of EBITDA and Net Debt / EBITDA
Leverage, management intends to provide investors with a
meaningful, consistent comparison of the Company’s profitability
for the periods presented. |
(2) |
|
Includes depreciation of property
and equipment, amortization of intangible assets and amortization
of right-of-use assets. |
(3) |
|
Last twelve months |
(4) |
|
Total debt (including finance
leases) less cash and cash equivalents |
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