• Hub Group, Inc. Reports Second Quarter 2023 Results

    Источник: Nasdaq GlobeNewswire / 27 июл 2023 16:05:01   America/New_York

    Highlights:        

    • Diluted earnings per share (EPS) of $1.44 for the quarter
    • Second quarter revenue of $1.0 billion
    • Quarterly operating income of $62 million (6.0% of revenue) driven by performance of our Logistics Segment
    • Continued focus on return of capital with $100 million of shares repurchased in the quarter
    • Exceptionally strong balance sheet, ending the quarter with cash and cash equivalents of $342 million

    OAK BROOK, Ill., July 27, 2023 (GLOBE NEWSWIRE) -- Hub Group, Inc. (NASDAQ:HUBG) announced second quarter 2023 net income of $47 million, and diluted earnings per share of $1.44.   Net income for second quarter 2022 was $103 million, or $3.03 per diluted share.

    “Challenging market conditions have persisted throughout 2023 that have impacted demand for our services. We are seeing the benefits of our strategy to diversify and expand into less cyclical and non-asset-based services, with our Logistics Segment contributing nearly half of our operating income in the quarter, which has helped offset softer profitability at our ITS Segment. We performed well during this year’s intermodal bid season and are providing excellent service which has positioned us to grow as inventory levels normalize and demand increases. We returned $100 million of capital to our shareholders through share repurchases in the second quarter. We remain focused on managing our costs and capital structure and supporting our customers with great service while investing in our core business and technology to drive success in a variety of market conditions,” said Phil Yeager, Hub Group’s President and Chief Executive Officer.   

    Second Quarter 2023 Results

    Consolidated revenue for the second quarter of 2023 was $1.0 billion as compared to $1.4 billion in second quarter 2022. The decline in revenue was driven by changes in customer rate and volumes in our ITS and Logistics Segments. Purchased transportation and warehousing costs declined as compared to prior year due to lower volumes, reductions in third-party carrier costs and a higher percentage of insourced drayage, partially offset by higher equipment and rail costs. Salaries and benefits costs increased $12 million relative to prior year due to $30 million of incremental expense related to growth of our driver and warehouse employee headcount, partially offset by an $18 million reduction in office employee compensation due to lower headcount and lower incentive compensation expense. General and administrative expense decreased as compared to prior year due to lower legal and acquisition-related outside services spending. Depreciation and amortization expense increased as compared to prior year due to investments in our container and tractor fleets, as well as amortization of intangible assets related to the acquisition of TAGG Logistics, LLC (“TAGG”). Operating income for the quarter was $62 million (6.0% of revenue) as compared to $138 million (9.8% of revenue) in the prior year. EBITDA (non-GAAP)1 for the quarter was $108 million.

    Second quarter Intermodal and Transportation Solutions (“ITS”) Segment revenue was $615 million. Intermodal volume for the quarter decreased 17% as compared to prior year, driven by elevated retailer inventory levels and soft import activity that impacted demand for our services. Intermodal revenue per load was impacted by changes in customer rates, fuel and mix. ITS operating income decreased to $32 million (5.2% of revenue) as compared to $101 million (11.5% of revenue) in the prior year due to lower volume, lower customer rates, higher equipment costs and lower surcharges and accessorial income. These headwinds were partially offset by lower drayage costs as we increased the portion of drayage handled on our own fleet to 79% in second quarter 2023 as compared to 62% in the prior year, as well as an improvement in profitability at our Dedicated service line.

    Second quarter Logistics Segment revenue was $454 million, as compared to $549 million in the prior year. The decline in revenue was driven by lower revenue per load in our brokerage service line and lower managed transportation service line revenue, partially offset by revenue from TAGG. Brokerage volumes were down slightly as compared to the prior year but increased relative to first quarter. Second quarter operating income was 6.7% of revenue as compared to 6.8% last year. Operating income was $30 million as compared to $37 million last year, as lower revenue was partially offset by lower purchased transportation costs and our yield management initiatives.

    Capital expenditures for the second quarter of 2023 totaled $39 million. As of June 30, 2023, we had cash and cash equivalents of $342 million.  

    2023 Outlook

    We expect our 2023 diluted earnings per share will range from $5.80 to $6.40. We estimate revenue will range from $4.3 to $4.5 billion. We project our effective tax rate for the year will be 20.0-21.0%. We expect capital expenditures for containers, tractors, warehousing equipment and technology will range from $140 to $150 million.

    Non-GAAP Financial Measure

    In this press release, we present EBITDA, a non-GAAP financial measure of profitability defined as earnings before interest, taxes, depreciation and amortization. As required by the rules of the Securities and Exchange Commission (“SEC”), we have provided herein a reconciliation of this non-GAAP financial measure to Net Income, the most directly comparable measure under GAAP. Management believes that EBITDA provides relevant and useful information, which is used by our management as well as by many analysts, investors and competitors in our industry. By providing this non-GAAP measure, management intends to provide investors with a meaningful, consistent comparison of the Company’s profitability for the periods presented. EBITDA should be viewed in addition to, and not as an alternative to or substitute for, measures determined in accordance with GAAP, and is not necessarily comparable to non-GAAP measures that may be presented by other companies.   

    CONFERENCE CALL

    Hub Group, Inc. will hold a conference call at 5:00 p.m. Eastern Time on July 27, 2023 to discuss our second quarter 2023 results.

    Hosting the conference call will be Phil Yeager, President and CEO. Also participating on the call will be Brian Alexander, Chief Operating Officer, and Geoff DeMartino, 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/BIc90f715b9f6743c8b6a0cc30dedd99b9

    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.

    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.

    SOURCE:   Hub Group, Inc.

    CONTACT: Geoff DeMartino of Hub Group, Inc., +1-630-271-3623

     
    HUB GROUP, INC.
    CONSOLIDATED STATEMENTS OF EARNINGS
    (in thousands, except per share amounts)
    (unaudited)
           
      Three Months Ended June 30,
      2023  2022 
       % of  % of
      AmountRevenue AmountRevenue
    Operating revenue $1,040,462 100.0% $1,401,456 100.0%
           
    Operating expenses:      
    Purchased transportation and warehousing  763,609 73.4%  1,062,983 75.9%
    Salaries and benefits  141,823 13.6%  129,499 9.2%
    Depreciation and amortization  35,386 3.4%  32,244 2.3%
    Insurance and claims  11,676 1.1%  10,645 0.8%
    General and administrative  26,757 2.6%  36,213 2.6%
    Gain on sale of assets, net  (859)-0.1%  (7,764)-0.6%
    Total operating expenses  978,392 94.0%  1,263,820 90.2%
           
    Operating income  62,070 6.0%  137,636 9.8%
           
    Other income (expense):      
    Interest expense, net  (3,116)-0.3%  (1,407)-0.1%
    Interest income  2,087 0.2%  5 0.0%
    Other, net  69 0.0%  (195)-0.0%
    Total other expense, net  (960)-0.1%  (1,597)-0.1%
           
    Income before provision for income taxes  61,110 5.9%  136,039 9.7%
           
    Provision for income taxes  14,605 1.4%  33,193 2.4%
           
    Net income $46,505   $102,846  
           
    Earnings per share      
    Basic $1.45   $3.06  
    Diluted $1.44   $3.03  
           
    Basic weighted average number of shares outstanding  32,037    33,651  
    Diluted weighted average number of shares outstanding  32,293    33,935  
           


     
    HUB GROUP, INC.
    CONSOLIDATED STATEMENTS OF EARNINGS
    (in thousands, except per share amounts)
    (unaudited)
           
      Six Months Ended June 30,
      2023 2022
       % of  % of
      AmountRevenue AmountRevenue
    Operating revenue $2,192,727 100.0% $2,699,579 100.0%
           
    Operating expenses:      
    Purchased transportation and warehousing  1,630,540 74.4%  2,058,248 76.2%
    Salaries and benefits  279,254 12.7%  258,238 9.6%
    Depreciation and amortization  70,835 3.2%  63,533 2.4%
    Insurance and claims  24,359 1.1%  19,938 0.7%
    General and administrative  52,298 2.4%  59,435 2.2%
    Gain on sale of assets, net  (4,834)-0.2%  (12,509)-0.5%
    Total operating expenses  2,052,452 93.6%  2,446,883 90.6%
           
    Operating income  140,275 6.4%  252,696 9.4%
           
    Other income (expense):      
    Interest expense, net  (6,086)-0.3%  (3,110)-0.1%
    Interest income  3,463 0.2%  9 0.0%
    Other, net  108 0.0%  (63)-0.0%
    Total other expense, net  (2,515)-0.1%  (3,164)-0.1%
           
    Income before provision for income taxes  137,760 6.3%  249,532 9.3%
           
    Provision for income taxes  29,475 1.3%  59,183 2.2%
           
    Net income $108,285   $190,349  
           
    Earnings per share      
    Basic $3.35   $5.66  
    Diluted $3.33   $5.61  
           
    Basic weighted average number of shares outstanding  32,293    33,647  
    Diluted weighted average number of shares outstanding  32,566    33,950  
           


     
    HUB GROUP, INC.
    CONSOLIDATED BALANCE SHEETS
    (in thousands, except share data)
     
      June 30, December 31,
      2023 2022
      (unaudited)  
    ASSETS    
    CURRENT ASSETS:    
    Cash and cash equivalents $342,429  $286,642 
    Accounts receivable trade, net  612,163   716,190 
    Accounts receivable other  4,612   3,967 
    Prepaid taxes  15,258   16,987 
    Prepaid expenses and other current assets 15,445   32,914 
    TOTAL CURRENT ASSETS  989,907   1,056,700 
         
    Restricted investments  20,262   18,065 
    Property and equipment, net  783,127   783,683 
    Right-of-use assets - operating leases  167,681   102,114 
    Right-of-use assets - financing leases  3,744   1,194 
    Other intangibles, net  183,634   197,386 
    Goodwill  629,407   629,402 
    Other assets  22,280   21,537 
    TOTAL ASSETS $2,800,042  $2,810,081 
         
         
    LIABILITIES AND STOCKHOLDERS' EQUITY   
    CURRENT LIABILITIES:    
    Accounts payable trade $293,005  $344,751 
    Accounts payable other  12,213   15,563 
    Accrued payroll  23,292   66,669 
    Accrued other  128,825   132,324 
    Lease liability - operating leases  35,687   29,547 
    Lease liability - financing leases  2,365   1,175 
    Current portion of long term debt  98,350   101,741 
    TOTAL CURRENT LIABILITIES 593,737   691,770 
         
    Long term debt  238,213   240,724 
    Non-current liabilities  48,832   43,505 
    Lease liability - operating leases  141,450   78,557 
    Lease liability - financing leases  1,288   - 
    Deferred taxes  165,786   155,923 
         
    STOCKHOLDERS' EQUITY:    
    Preferred stock, $.01 par value; 2,000,000 shares authorized;   
    no shares issued or outstanding in 2023 and 2022. -   - 
    Common stock    
    Class A: $.01 par value; 97,337,700 shares authorized; 41,312,185   
    shares issued in both 2023 and 2022; 31,402,008 shares outstanding   
    in 2023 and 32,646,621 shares outstanding in 2022. 413   413 
    Class B: $.01 par value; 662,300 shares authorized;   
    574,903 shares issued and outstanding in both 2023 and 2022. 6   6 
         
    Additional paid-in capital  214,356   208,165 
    Purchase price in excess of predecessor basis, net of tax   
     benefit of $10,306  (15,458)  (15,458)
    Retained earnings  1,889,867   1,781,582 
    Accumulated other comprehensive loss (136)  (214)
    Treasury stock; at cost, 9,910,177 shares in 2023   
    and 8,665,564 shares in 2022  (478,312)  (374,892)
    TOTAL STOCKHOLDERS' EQUITY 1,610,736   1,599,602 
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$2,800,042  $2,810,081 
         


     
    HUB GROUP, INC.
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (in thousands)
    (unaudited)
         
      Six Months Ended June 30,
      2023 2022
         
         
    Cash flows from operating activities:    
    Net income $108,285  $190,349 
    Adjustments to reconcile net income    
    to net cash provided by operating activities:   
    Depreciation and amortization  91,474   71,922 
    Impairment of right-of-use asset  2,012   - 
    Deferred taxes  10,837   3,279 
    Compensation expense related to share-based compensation plans 10,615   10,237 
    Gain on sale of assets, net  (4,834)  (12,509)
    Changes in operating assets and liabilities, net of acquisitions:   
    Restricted investments  (2,197)  5,200 
    Accounts receivable, net  103,270   (93,767)
    Prepaid taxes  1,729   (2,166)
    Prepaid expenses and other current assets 17,469   9,664 
    Other assets  (1,899)  (2,517)
    Accounts payable  (55,085)  3,380 
    Accrued expenses  (47,700)  23,251 
    Non-current liabilities  (12,595)  (5,588)
    Net cash provided by operating activities 221,381   200,735 
         
    Cash flows from investing activities:    
    Proceeds from sale of equipment  15,135   18,584 
    Purchases of property and equipment  (65,635)  (85,942)
    Acquisitions, net of cash acquired  108   - 
    Net cash used in investing activities (50,392)  (67,358)
         
    Cash flows from financing activities:    
    Purchase of treasury stock  (100,026)  - 
    Repayments of long term debt  (56,191)  (54,114)
    Stock withheld for payments of withholding taxes (7,818)  (5,715)
    Finance lease payments  (1,501)  (1,059)
    Proceeds from issuance of debt  50,289   66,194 
    Net cash (used in) provided by financing activities (115,247)  5,306 
         
         
    Effect of exchange rate changes on cash and cash equivalents 45   9 
         
    Net increase in cash and cash equivalents 55,787   138,692 
    Cash and cash equivalents beginning of period 286,642   159,784 
    Cash and cash equivalents end of period $342,429  $298,476 
         


     
    HUB GROUP, INC.
    FINANCIAL INFORMATION BY SEGMENT
    (in thousands)
    (unaudited)
            
     Three Months Six Months
     Ended June 30, Ended June 30,
    Operating Revenue2023 2022 2023 2022
    Intermodal and Transportation Solutions$614,632  $875,150  $1,323,881  $1,651,720 
    Logistics 453,549   548,613   922,690   1,089,597 
    Inter-segment eliminations (27,719)  (22,307)  (53,844)  (41,738)
    Total operating revenue$1,040,462  $1,401,456  $2,192,727  $2,699,579 
            
            
     Three Months Six Months
     Ended June 30, Ended June 30,
    Operating Income2023 2022 2023 2022
    Intermodal and Transportation Solutions$31,777  $100,601  $80,981  $186,297 
    Logistics 30,293   37,035   59,294   66,399 
    Total operating income$62,070  $137,636  $140,275  $252,696 
            
            
     Three Months Six Months
     Ended June 30, Ended June 30,
    Depreciation and Amortization2023 2022 2023 2022
    Intermodal and Transportation Solutions$27,117  $25,383  $54,003  $49,758 
    Logistics 8,269   6,861   16,832   13,775 
    Total depreciation and amortization$35,386  $32,244  $70,835  $63,533 
            


     
    RECONCILIATION OF NET INCOME TO EBITDA (1)
    (in thousands)
    (unaudited)
            
     Three Months Six Months
     Ended June 30, Ended June 30,
            
     2023 2022 2023 2022
            
    Net Income$46,505  $102,846  $108,285  $190,349 
            
    Interest Expense, net 1,029   1,402   2,623   3,101 
            
    Depreciation and Amortization 45,664   36,729   91,474   71,922 
            
    Provision for Income Taxes 14,605   33,193   29,475   59,183 
            
    EBITDA$107,803  $174,170  $231,857  $324,555 
            

    (1)   See the “Non-GAAP Financial Measure” section of this release for the definition of EBITDA and a discussion of this non-GAAP financial measure.


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