UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM
_________________
CURRENT REPORT
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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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. ☐
On August 1, 2024, Hub Group, Inc. issued a press release announcing its second quarter 2024 results from operations. The press release is furnished as Exhibit 99.1 to this Form 8-K.
The information furnished in Item 2.02 of this Current Report on Form 8-K and Exhibit 99.1 attached hereto shall not be deemed to be filed for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended, and shall not be deemed to be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended.
(d)Exhibits
| Exhibit No. | Description | |
| 99.1 | Press release issued on August 1, 2024, announcing second quarter 2024 operating results for Hub Group, Inc. | |
| 104 | The cover page from this Current Report on Form 8-K, formatted in Inline XBRL |
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: August 1, 2024 | By: | /s/ Kevin W. Beth |
| Kevin W. Beth | ||
| Executive Vice President, Chief Financial Officer and Treasurer | ||
EXHIBIT 99.1
Hub Group Reports Second Quarter 2024 Results
Highlights:
- Diluted earnings per share (EPS) of $0.47 for the quarter
- Second quarter revenue of $1.0 billion
- Quarterly operating income of $40 million or 4.0% of revenue
- Executing on Capital Allocation Plan by returning $48 million to shareholders year-to-date through dividend payments of $15 million and stock repurchases of $33 million
- Strong balance sheet with cash and cash equivalents of $220 million and net debt/EBITDA of 0.3x (non-GAAP) as of June 30, 2024
- Awarded Domestic Partner of the Year by Target®
OAK BROOK, Ill., Aug. 01, 2024 (GLOBE NEWSWIRE) -- 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 | % of Revenue | Amount | % of Revenue | ||||||
| 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 | % of Revenue | Amount | % of Revenue | ||||||
| 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 Months Ended 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 Months Ended 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 Months Ended 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 Months Ended 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 |