Hub Group Reports Fourth Quarter 2024 Results

Highlights:

• Fourth quarter revenue of $1 billion; Full year revenue of $4 billion
• Fourth quarter and full year GAAP EPS of $0.40 and $1.70. Fourth quarter and full year GAAP operating income margin percentage of 3.2% and 3.6% of revenue
• Fourth quarter and full year adjusted EPS of $0.48 and $1.91. Fourth quarter and full year adjusted operating income percentage of 3.9% and 4.0% of revenue
• Returned nearly $100 million to shareholders in 2024 through share repurchases and dividends
• Strong balance sheet with cash of $127 million and net debt/adjusted EBITDA of 0.5x as of December 31, 2024
• Completed joint venture with EASO in October, expanding Hub Group’s North American intermodal presence
• Introduced 2025 outlook with expected revenue of $4.0 billion to $4.3 billion and EPS of $1.90 to $2.40
  

OAK BROOK, Ill., Feb. 06, 2025 (GLOBE NEWSWIRE) -- Hub Group, Inc. (Nasdaq: HUBG) announced fourth quarter 2024 net income of $24 million and diluted earnings per share of $0.40. Adjusting for network alignment and transaction related expenses of $6 million (pre-tax), fourth quarter 2024 adjusted net income was $29 million and adjusted EPS was $0.48 per diluted share. Full year 2024 net income was $104 million, or $1.70 per diluted share. Adjusted full year net income was $117 million, or $1.91 per diluted share.

“I am proud of the team’s performance in 2024 as our disciplined market approach resulted in Intermodal volume growth of 14% and ITS adjusted operating margin of 3.1% in the quarter, a 50-basis point improvement over Q4 2023. We closed on the joint venture with EASO to enhance solutions for our customers and add significant scale to our Intermodal capabilities in Mexico. We continue to implement our key strategic priorities that position us for growth in the long term. We are excited to continue the momentum and deliver for our customers and shareholders in 2025,” said Phil Yeager, Hub Group’s President, Chief Executive Officer and Vice Chairman.

Fourth Quarter and Full Year 2024 Results

Consolidated revenue for the fourth quarter of 2024 of $974 million, a 1% decline from $985 million reported in the fourth quarter of 2023. Strong Intermodal volume growth, surcharge revenue, and Final Mile growth was offset by lower fuel, Brokerage, Consolidation and Fulfillment, and Managed Transportation revenue. Full year 2024 revenue of $3.95 billion was down 6% compared to 2023 revenue of $4.20 billion.

Fourth quarter purchased transportation and warehousing costs of $723 million decreased $19 million compared to prior year due to lower rail and third-party warehouse costs. Salaries and benefits of $148 million were $13 million higher than prior year due to the Final Mile acquisition, EASO transaction, and more normalized bonus expense. Total legacy headcount, which excludes acquisition employees, drivers and warehouse employees, declined by 3%. Depreciation and amortization expenses was $33 million, a decrease of $4 million. Insurance and claims totaled $9 million, a $4 million decrease due to lower claim costs in the quarter. General and administrative expenses of $29 million were comparable to prior year and included transaction expenses related to the joint venture and operating costs associated with the Final Mile acquisition which were offset by cost management efforts.

GAAP operating income for the fourth quarter was $32 million or 3.2% of revenue, a 7% or 20-basis point improvement over last year. Adjusted operating income for the fourth quarter was $38 million or 3.9% of revenue, a 9% or 40-basis point improvement over the adjusted fourth quarter of last year. Adjusted EBITDA for the fourth quarter was $85 million. Full year GAAP operating income was $140 million or 3.6% and adjusted operating income was $157 million or 4.0% of revenue. Full year adjusted EBITDA was $349 million. Net debt/adjusted EBITDA was 0.5x, below the leverage target range of 0.75 to 1.25x.

Fourth Quarter and Full Year 2024 Segment Results

Fourth quarter Intermodal and Transportation Solutions (“ITS”) Segment revenue of $570 million was a 1% decline over prior year but quarterly GAAP ITS operating income was $17 million or 2.9% of revenue, an increase of $5 million over the prior year. Quarterly revenue was driven by 14% Intermodal volume growth and surcharge revenue partially offsetting lower revenue per load and fuel revenue. Full year revenue was $2.24 billion. Adjusted ITS operating income was $18 million or 3.1% of revenue, a 17% or 50-basis point improvement over last year’s adjusted numbers. Adjusted ITS operating margin excludes expenses of $1 million related to the EASO transaction and other adjustments in the quarter. Full year adjusted ITS operating income was $59 million or 2.6% of revenue.

Fourth quarter Logistics Segment revenue of $429 million was a 2% decline over prior year as growth in Final Mile partially offset lower Brokerage, Consolidation and Fulfillment, and Managed Transportation revenue. Full year revenue for the Logistics Segment was $1.83 billion. Quarterly GAAP Logistics operating income was $15 million or 3.4% of revenue, down from $17 million in the prior year due to expenses related to the network alignment project. Quarterly adjusted Logistics operating income was $20 million, or 4.6% of revenue, a 3% or 20-basis point improvement over last year’s results. Adjusted operating income excludes network alignment expenses and other adjustments of $5 million. Full year adjusted Logistics Segment operating income was $97 million or 5.3% of revenue.

Capital expenditures for the full year of 2024 totaled $51 million as we continued to manage our spend. As of December 31, 2024, we had cash of $127 million. For the full year 2024 the company returned nearly $100 million to shareholders through stock repurchases and dividend payments.

2025 Outlook

We expect 2025 diluted earnings per share will range from $1.90 to $2.40. We estimate revenue of approximately $4.0 to $4.3 billion for the full year. We project an effective tax rate of approximately 25% and capital expenditures in the range of $50 million to $70 million for the full year.

Non-GAAP Financial Measures

In this press release, we present certain non-GAAP financial measures, including adjusted EPS, adjusted operating income, adjusted EBITDA, and net debt/adjusted EBITDA. 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. These 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 February 6, 2025, to discuss our fourth quarter 2024 results. Hosting the conference call will be Phil Yeager, President, CEO and Vice Chairman 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/BI9c827a9578db45de9cefd5da256614fd 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 approximately $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 December 31,
								2024						2023
										% of						% of
							Amount			Revenue			Amount			Revenue
Operating revenue							$	973,510		100.0	%		$	985,023		100.0	%
Operating expenses:
	Purchased transportation and warehousing							723,159		74.3	%			742,405		75.4	%
	Salaries and benefits							148,164		15.2	%			135,569		13.7	%
	Depreciation and amortization							32,980		3.4	%			36,624		3.7	%
	Insurance and claims							8,707		0.9	%			12,999		1.3	%
	General and administrative							28,912		3.0	%			29,260		3.0	%
	Loss (gain) on sale of assets, net							63		0.0	%			(1,236	)	-0.1	%
Total operating expenses								941,985		96.8	%			955,621		97.0	%
Operating income								31,525		3.2	%			29,402		3.0	%
Other income (expense):
	Interest expense, net							(1,858	)	-0.2	%			(103	)	-0.0	%
	Other, net							92		0.0	%			478		0.0	%
Total other (expense) income, net								(1,766	)	-0.2	%			375		0.0	%
Income before provision for income taxes								29,759		3.0	%			29,777		3.0	%
Provision for income taxes								5,387		0.6	%			992		0.1	%
Net income								24,372						28,785
Less: Net income attributable to non-controlling interests								50						-
Net income attributable to Hub Group, Inc.							$	24,322					$	28,785
Earnings per share
	Basic						$	0.40					$	0.47
	Diluted						$	0.40					$	0.46
Basic weighted average number of shares outstanding								60,081						61,850
Diluted weighted average number of shares outstanding								60,694						62,562

HUB GROUP, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands, except per share amounts)
(unaudited)
							Years Ended December 31,
								2024						2023
										% of						% of
							Amount			Revenue			Amount			Revenue
Operating revenue							$	3,946,390		100.0	%		$	4,202,585		100.0	%
Operating expenses:
	Purchased transportation and warehousing							2,930,562		74.2	%			3,145,595		74.8	%
	Salaries and benefits							577,464		14.6	%			553,326		13.2	%
	Depreciation and amortization							141,469		3.6	%			143,523		3.4	%
	Insurance and claims							44,180		1.1	%			49,040		1.2	%
	General and administrative							113,698		2.9	%			105,705		2.5	%
	Gain on sale of assets, net							(1,274	)	-0.0	%			(6,835	)	-0.2	%
Total operating expenses								3,806,099		96.4	%			3,990,354		94.9	%
Operating income								140,291		3.6	%			212,231		5.1	%
Other income (expense):
	Interest expense, net							(7,578	)	-0.2	%			(3,424	)	-0.1	%
	Other, net							(167	)	-0.0	%			397		0.0	%
Total other expense, net								(7,745	)	-0.2	%			(3,027	)	-0.1	%
Income before provision for income taxes								132,546		3.4	%			209,204		5.0	%
Provision for income taxes								28,503		0.7	%			41,676		1.0	%
Net income								104,043						167,528
Less: Net income attributable to non-controlling interests								50						-
Net income attributable to Hub Group, Inc.							$	103,993					$	167,528
Earnings per share
	Basic						$	1.72					$	2.65
	Diluted						$	1.70					$	2.62
Basic weighted average number of shares outstanding								60,623						63,324
Diluted weighted average number of shares outstanding								61,104						63,954

HUB GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
								December 31,				December 31,
									2024				2023
								(unaudited)
ASSETS
	CURRENT ASSETS:
		Cash and cash equivalents						$	98,248			$	187,270
		Restricted cash							28,700				-
		Accounts receivable trade, net							581,516				600,197
		Accounts receivable other							10,880				3,358
		Prepaid taxes							15,115				17,331
		Prepaid expenses and other current assets							33,870				41,089
				TOTAL CURRENT ASSETS					768,329				849,245
	Restricted investments								21,642				20,763
	Property and equipment, net								739,896				791,692
	Right-of-use assets - operating leases								233,651				210,742
	Right-of-use assets - financing leases								1,062				2,522
	Other intangibles, net								267,357				304,607
	Goodwill								814,309				733,695
	Other non-current assets								22,097				22,781
				TOTAL ASSETS				$	2,868,343			$	2,936,047
LIABILITIES AND STOCKHOLDERS' EQUITY
	CURRENT LIABILITIES:
		Accounts payable trade						$	279,982			$	349,378
		Accounts payable other							29,069				14,471
		Accrued payroll							32,833				21,731
		Accrued other							91,441				121,253
		Lease liability - operating leases							45,492				44,690
		Lease liability - financing leases							663				1,579
		Current portion of long-term debt							100,001				105,108
				TOTAL CURRENT LIABILITIES					579,481				658,210
	Deferred consideration								30,639				-
	Long-term debt								164,361				245,574
	Other non-current liabilities								51,004				55,287
	Lease liability - operating leases								197,664				177,699
	Lease liability - financing leases								330				865
	Deferred taxes								152,913				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;
				60,746,745 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							222,039				209,830
		Retained earnings							2,022,265				1,949,110
		Accumulated other comprehensive loss							(1,453	)			(129	)
		Treasury stock; at cost, 11,556,483 shares in 2024 and 13,323,268 shares in 2023							(598,583	)			(524,927	)
			Total Hub Group, Inc. equity						1,644,997				1,634,645
		Non-controlling interests							46,954				-
			TOTAL STOCKHOLDERS' EQUITY						1,691,951				1,634,645
				TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY				$	2,868,343			$	2,936,047

 

HUB GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
								Years Ended December 31,
									2024				2023
Cash flows from operating activities:
	Net income							$	104,043			$	167,528
	Adjustments to reconcile net income
		to net cash provided by operating activities:
			Depreciation and amortization of intangibles and right-of-use assets						192,562				184,449
			Impairment of right-of-use asset						-				2,012
			Deferred taxes						(13,814	)			9,587
			Non-cash share-based compensation expense						19,157				21,348
			Gain on sale of assets, net						(1,273	)			(6,835	)
	Changes in operating assets and liabilities, net of acquisitions:
			Restricted investments						(879	)			(2,698	)
			Accounts receivable, net						33,648				145,088
			Prepaid taxes						3,367				(344	)
			Prepaid expenses and other current assets						5,305				(5,974	)
			Other non-current assets						(2,299	)			(3,732	)
			Accounts payable						(73,897	)			1,215
			Accrued expenses						(26,644	)			(63,626	)
			Non-current liabilities						(44,857	)			(25,860	)
			Net cash provided by operating activities						194,419				422,158
Cash flows from investing activities:
	Proceeds from sale of equipment								12,158				27,717
	Purchases of property and equipment								(50,847	)			(140,068	)
	Acquisitions, net of cash acquired								(14,637	)			(260,810	)
			Net cash used in investing activities						(53,326	)			(373,161	)
Cash flows from financing activities:
	Repayments of long term debt								(107,007	)			(105,771	)
	Purchase of treasury stock								(68,273	)			(143,770	)
	Dividends paid								(30,246	)			-
	Stock withheld for payments of withholding taxes								(10,782	)			(10,148	)
	Finance lease payments								(1,693	)			(2,708	)
	Distribution to non-controlling interest holders								(1,089	)			-
	Proceeds from issuance of debt								17,764				113,988
			Net cash used in financing activities						(201,326	)			(148,409	)
	Effect of exchange rate changes on cash, cash equivalents and restricted cash								(89	)			40
Net decrease in cash, cash equivalents and restricted cash									(60,322	)			(99,372	)
Cash, cash equivalents and restricted cash at beginning of period									187,270				286,642
Cash, cash equivalents and restricted cash at end of period								$	126,948			$	187,270

HUB GROUP, INC.
FINANCIAL INFORMATION BY SEGMENT (NON-GAAP)
(in thousands)
(unaudited)
	Three Months Ended December 31,								Three Months Ended December 31,
Operating Revenue		2024								2023
Intermodal and Transportation Services	$	570,406			-		-		$	576,474			-		-
Logistics		429,291			-		-			437,857			-		-
Inter-segment eliminations		(26,187	)		-		-			(29,308	)		-		-
Total operating revenue	$	973,510			-		-		$	985,023			-		-
	Three Months Ended December 31,								Three Months Ended December 31,
				NON-GAAP		NON-GAAP						NON-GAAP		NON-GAAP
				Adjustments (1)		Adjusted						Adjustments (1)		Adjusted
Operating Income		2024			2024		2024			2023			2023		2023
Intermodal and Transportation Services	$	16,766		$	907	$	17,673		$	12,141		$	2,989	$	15,130
Logistics		14,759			5,168		19,927			17,261			2,103		19,364
Total operating income	$	31,525		$	6,075	$	37,600		$	29,402		$	5,092	$	34,494
	Three Months Ended December 31,								Three Months Ended December 31,
Depreciation and Amortization		2024								2023
Intermodal and Transportation Services	$	21,884			-		-		$	27,483			-		-
Logistics		11,096			-		-			9,141			-		-
Total depreciation and amortization	$	32,980			-		-		$	36,624			-		-
(1) See Reconciliation of GAAP to Non-GAAP Financial Measures for further discussion.

HUB GROUP, INC.
FINANCIAL INFORMATION BY SEGMENT (NON-GAAP)
(in thousands)
(unaudited)
	Years Ended December 31,								Years Ended December 31,
Operating Revenue		2024								2023
Intermodal and Transportation Services	$	2,243,440			-		-		$	2,495,663			-		-
Logistics		1,829,450			-		-			1,820,856			-		-
Inter-segment eliminations		(126,500	)		-		-			(113,934	)		-		-
Total operating revenue	$	3,946,390			-		-		$	4,202,585			-		-
	Years Ended December 31,								Years Ended December 31,
				Non-GAAP		Non-GAAP						Non-GAAP		Non-GAAP
				Adjustments (1)		Adjusted						Adjustments (1)		Adjusted
Operating Income		2024			2024		2024			2023			2023		2023
Intermodal and Transportation Services	$	56,952		$	2,347	$	59,299		$	106,780		$	2,989	$	109,769
Logistics		83,339			14,117		97,456			105,451			2,103		107,554
Total operating income	$	140,291		$	16,464	$	156,755		$	212,231		$	5,092	$	217,323
	Years Ended December 31,								Years Ended December 31,
Depreciation and Amortization		2024								2023
Intermodal and Transportation Services	$	97,452			-		-		$	109,234			-		-
Logistics		44,017			-		-			34,289			-		-
Total depreciation and amortization	$	141,469			-		-		$	143,523			-		-
(1) See Reconciliation of GAAP to Non-GAAP Financial Measures for further discussion.

HUB GROUP, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(in millions, except per share amounts)
(unaudited)
	The following is a reconciliation of GAAP earnings to Non-GAAP Adjusted Earnings, excluding certain items, for income before provision for income taxes (Pre-Tax), net income (After-Tax) and diluted earnings per share (Per Share):
						Three Months Ended									Year Ended
						December 31, 2024									December 31, 2024
						Pre-Tax			After-Tax			Per Share			Pre-Tax			After-Tax			Per Share
	GAAP Earnings					$	29.8		$	24.4		$	0.40		$	132.5		$	104.0		$	1.70
	Network Alignment (i)						4.8			3.8			0.06			13.2			10.4			0.17
	Transaction Related (ii)						1.2			0.9			0.02			2.1			1.7			0.03
	Other (iii)						0.1			0.1			-			1.1			0.9			0.01
	Non-GAAP Adjusted Earnings					$	35.9		$	29.2		$	0.48		$	148.9		$	117.0		$	1.91
	By providing this measure of Non-GAAP Adjusted Earnings, management intends to provide investors with a useful measure of Hub Group's performance that excludes certain non-ordinary expense items and allowing better evaluation of underlying business performance and period-to-period comparability.
	(i) Network alignment consolidation expenses include transfer costs, legal fees and other expenses related to consolidating from existing warehouses to improve operational efficiency of our cross dock services, Final Mile and Consolidation and Fulfillment lines of business.
	(ii) Transaction related expenses are comprised of due diligence costs, legal fees, insurance fees and other professional service fees incurred as part of the forming of a joint venture with EASO in 2024.
	(iii) Other includes non-ordinary expenses related to employee matters.

HUB GROUP, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(in millions, except per share amounts)
(unaudited)
	The following is a reconciliation of GAAP earnings to Non-GAAP Adjusted Earnings, excluding certain items, for income before provision for income taxes (Pre-Tax), net income (After-Tax) and diluted earnings per share (Per Share):
						Three Months Ended									Year Ended
						December 31, 2023									December 31, 2023
						Pre-Tax			After-Tax			Per Share			Pre-Tax			After-Tax			Per Share
	GAAP Earnings					$	29.8		$	28.8		$	0.46		$	209.2		$	167.5		$	2.62
	Acquisition Related (i)						5.1			4.9			0.08			5.1			4.1			0.06
	Non-GAAP Adjusted Earnings					$	34.9		$	33.7		$	0.54		$	214.3		$	171.6		$	2.68
	By providing this measure of Non-GAAP Adjusted Earnings, management intends to provide investors with a useful measure of Hub Group's performance that excludes certain non-ordinary expense items and allowing better evaluation of underlying business performance and period-to-period comparability.
	(i) Acquisition related expenses are comprised of banker fees, legal fees, insurance fees and other professional service fees incurred as part of the process of closing the acquisition of Forward Air Final Mile in 2023.

HUB GROUP, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(in millions, except per share amounts)
(unaudited)
	The following is a reconciliation of GAAP Operating Income to Non-GAAP Adjusted Operating Income, excluding certain items.
						Three Months Ended									Year Ended
						December 31, 2024									December 31, 2024
						ITS			Logistics			Consolidated			ITS			Logistics			Consolidated
	GAAP Operating Income					$	16.8		$	14.7		$	31.5		$	57.0		$	83.3		$	140.3
	Network Alignment (i)						0.2			4.6			4.8			0.5			12.7			13.2
	Transaction Related (ii)						0.7			0.5			1.2			1.2			0.9			2.1
	Other (iii)						-			0.1			0.1			0.6			0.5			1.1
	Non-GAAP Adjusted Operating Income					$	17.7		$	19.9		$	37.6		$	59.3		$	97.4		$	156.7
	By providing this measure of Non-GAAP Adjusted Operating Income, management intends to provide investors with a useful measure of Hub Group's performance that excludes certain non-ordinary expense items and allowing better evaluation of underlying business performance and period-to-period comparability.
	(i) Network alignment expenses include transfer costs, legal fees and other expenses related to consolidating from existing warehouses to improve operational efficiency of our cross dock services, Final Mile and Consolidation and Fulfillment lines of business.
	(ii) Transaction related expenses are comprised of due diligence costs, legal fees, insurance fees and other professional service fees incurred as part of the forming of a joint venture with EASO in 2024.
	(iii) Other includes non-ordinary expenses related to employee matters.

HUB GROUP, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(in millions, except per share amounts)
(unaudited)
	The following is a reconciliation of GAAP Operating Income to Non-GAAP Adjusted Operating Income, excluding certain items.
						Three Months Ended									Year Ended
						December 31, 2023									December 31, 2023
						ITS			Logistics			Consolidated			ITS			Logistics			Consolidated
	GAAP Operating Income					$	12.1		$	17.3		$	29.4		$	106.8		$	105.4		$	212.2
	Acquisition Related (i)						3.0			2.1			5.1			3.0			2.1			5.1
	Non-GAAP Adjusted Operating Income					$	15.1		$	19.4		$	34.5		$	109.8		$	107.5		$	217.3
	By providing this measure of Non-GAAP Adjusted Operating Income, management intends to provide investors with a useful measure of Hub Group's performance that excludes certain non-ordinary expense items and allowing better evaluation of underlying business performance and period-to-period comparability.
	(i) Acquisition related expenses are comprised of banker fees, legal fees, insurance fees and other professional service fees incurred as part of the process of closing the acquisition of Forward Air Final Mile in 2023.

RECONCILIATION OF NET INCOME TO EBITDA (1) AND NET DEBT / EBITDA LEVERAGE
(in thousands)
(unaudited)
		2024			2024			2024			2024
	Q1			Q2			Q3			Q4				2024
Net Income	$	27,053		$	29,015		$	23,603		$	24,372		$	104,043
Interest Expense, net		2,506			1,881			1,333			1,858			7,578
Depreciation and Amortization (2)		49,605			49,495			46,374			47,088			192,562
Provision for Income Taxes		7,410			8,566			7,140			5,387			28,503
EBITDA	$	86,574		$	88,957		$	78,450		$	78,705		$	332,686
Network Alignment (i)	$	-		$	-		$	8,381		$	4,814		$	13,195
Transaction Related (ii)		-			-			947			1,194			2,141
Other (iii)		-			-			1,061			67			1,128
Adjusted EBITDA	$	86,574		$	88,957		$	88,839		$	84,780		$	349,150
EBITDA													$	332,686
Net Debt (3)													$	167,106
Net Debt / EBITDA														0.5
Adjusted EBITDA													$	349,150
Net Debt / Adjusted EBITDA														0.5
(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 and leverage for the periods presented.
(2) Includes depreciation of property and equipment, amortization of intangible assets and amortization of right-of-use assets.
(3) Total debt (including finance leases) less cash and cash equivalents.
(i) Network alignment expenses include transfer costs, legal fees and other expenses related to consolidating from existing warehouses to improve operational efficiency of our cross dock services, Final Mile and Consolidation and Fulfillment lines of business.
(ii) Transaction related expenses are comprised of due diligence costs, legal fees, insurance fees and other professional service fees incurred as part of the forming of a joint venture with EASO in 2024.
(iii) Other includes non-ordinary expenses related to employee matters.