• Hub Group, Inc. Reports First Quarter 2023 Results

    Источник: Nasdaq GlobeNewswire / 27 апр 2023 15:05:40   America/Chicago

    Highlights:        

    • Diluted earnings per share (EPS) of $1.88 for the quarter
    • First quarter revenue of $1.2 billion
    • Quarterly operating income of $78 million (6.8% of revenue) driven by our focus on operating efficiency and yield management
    • Ended the quarter with cash and cash equivalents of $343 million

    OAK BROOK, Ill., April 27, 2023 (GLOBE NEWSWIRE) -- Hub Group, Inc. (NASDAQ:HUBG) announced first quarter 2023 net income of $62 million, and diluted earnings per share of $1.88. Net income for first quarter 2022 was $88 million, or $2.58 per diluted share.

    “Although we are in a softer demand environment the $1.2 billion of revenue we generated in the quarter is the second highest first quarter revenue in the history of our company. Our yield management, cost containment and operating efficiency initiatives resulted in operating income margin of 6.8% of revenue. We continue to execute on our long-term strategy, investing in our core business and technology while diversifying our service offering. We remain focused on managing our costs and capital structure, while supporting our customers with great service and investing for growth to drive success in a variety of market conditions,” said Phil Yeager, Hub Group’s President and Chief Executive Officer.

    Changes to Financial Reporting

    As we have continued to expand our service offerings and diversify our business we have also made changes to the financial information that our CEO uses to make operating and capital decisions. Beginning with the first quarter of 2023, we concluded that we had two reportable segments: Intermodal and Transportation Solutions (“ITS”) and Logistics. Our ITS Segment includes our asset-light business lines: intermodal and dedicated trucking. Our Logistics Segment includes our non-asset business lines: managed transportation, truck brokerage, final mile, consolidation, warehousing and fulfillment. In addition, we have made changes to the presentation of certain expenses in our Consolidated Statements of Earnings. Included in this release is an exhibit providing an unaudited historical recast of our Consolidated Statements of Earnings as well as segment financial information for 2022.

    First Quarter 2023 Results

    Consolidated revenue for the first quarter of 2023 decreased to $1.2 billion as compared to $1.3 billion in first quarter 2022. Purchased transportation and warehousing costs declined as compared to prior year due to lower volumes, reductions in third-party carrier costs per load, and decreased use of third-party carriers for drayage, partially offset by higher equipment and rail costs. Salaries and benefits costs increased $9 million relative to prior year due to $28 million of incremental expense related to growth of our driver and warehouse employee headcount, partially offset by a $19 million reduction in office employee compensation due to lower headcount and lower incentive compensation expense. General and administrative expense increased as compared to prior year due to higher rent expense and higher outside services expense primarily for IT software related to the acquisition of TAGG Logistics, LLC (“TAGG”). 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. Operating income for the quarter was $78 million (6.8% of revenue) as compared to $115 million (8.9% of revenue) in the prior year. EBITDA (non-GAAP)1 for the quarter was $124 million. The first quarter 2023 effective tax rate of 19.4% benefitted primarily from a change in state apportionment methodology.

    First quarter ITS Segment revenue was $709 million, as compared to $777 million in the prior year. Intermodal revenue per load for the quarter increased 3% while volume decreased 12% as compared to prior year. Volume for the quarter was impacted by softer demand conditions as retailers’ inventory levels increased from the lows seen in 2021, which impacted demand for our services. Revenue for our Dedicated business line grew 5% in the quarter. ITS operating income decreased to $49 million (7.0% of revenue) as compared to $86 million (11.0% of revenue) in the prior year due to lower volume, higher equipment costs and lower surcharges. These headwinds were partially offset by lower drayage costs as we increased the portion of drayage handled on our own fleet to 74% in first quarter 2023 as compared to 58% in the prior year, as well as an improvement in profitability at our Dedicated service line.

    First quarter Logistics Segment revenue was $469 million, as compared to $541 million in the prior year. The decline in revenue was driven by lower revenue per load in our brokerage business line and lower managed transportation business line revenue, partially offset by revenue from TAGG. First quarter operating income was 6.1% of revenue as compared to 5.4% last year. Operating income was unchanged at $29 million, as lower revenue was offset by lower purchased transportation costs and our yield management initiatives.

    Capital expenditures for the first quarter of 2023 totaled $27 million. As of March 31, 2023, we had cash and cash equivalents of $343 million.  

    2023 Outlook

    We expect our 2023 diluted earnings per share will range from $6.00 to $7.00. We estimate revenue will range from $4.6 to $4.8 billion. We project our effective tax rate for the year will be 23.5-24.5%. 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 April 27, 2023 to discuss our first quarter 2022 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/BIeccf0be1980b42baab60bc9181ac7ce1

    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 may express or imply projections of revenues or expenditures, statements of plans and objectives or future operations or statements of future economic performance. Forward-looking statements are inherently uncertain and subject to risks, uncertainties and other factors that might cause the actual performance of Hub Group, Inc. to differ materially from those expressed or implied by this discussion and, therefore, should be viewed with caution. All forward-looking statements and information are provided pursuant to the safe harbor established under the Private Securities Litigation Reform Act of 1995 and should be evaluated in the context of these factors. Forward-looking statements generally may be identified by the use of forward-looking terminology such as “trends”, “assumptions”, “target”, “guidance”, “outlook”, “opportunity”, “future”, “plans”, “goals”, “objectives”, “expects”, “anticipate”, “expected”, “may”, “will”, “would”, “could”, “intend”, “believe”, “potential”, “projected”, “estimate” (or the negative or derivative of each of these terms), or similar words, and include our statements regarding our outlook, profit improvement initiatives and capital expenditures. These statements are based on Hub Group’s current beliefs and expectations of future events or future results, and involve risks and uncertainties that are difficult to predict and subject to change. Factors that could cause actual results to differ materially include, among other things, general or regional economic conditions, including inflation and changes in trade policy; the effect of the ongoing COVID-19 pandemic (including any spikes, outbreaks or variants of the virus) and any future government actions taken in response to the pandemic, on our business operations and general economic and financial market conditions; governmental or regulatory requirements affecting tax, wage and hour matters, health and safety, labor and employment, insurance or other areas; shipping and intermodal costs and prices, the integration of acquisitions and expenses relating thereto; driver shortages; the amount and timing of strategic investments or divestitures by Hub Group; the failure to implement and integrate critical information technology systems; cyber security incidents; and retail and other customers encountering adverse economic conditions. Further information on these factors and other risks that may affect the Hub Group’s business is included in filings it makes with the SEC from time to time, including but not limited to those discussed under the “Risk Factors” section in Hub Group’s Form 10-K for the fiscal year ended December 31, 2022, and other filings with the SEC and in other investor communications of Hub Group from time to time. 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 March 31,
            2023   2022 
            % of  % of
           AmountRevenue AmountRevenue
    Operating revenue   $1,152,265 100.0% $1,298,123 100.0%
                
    Operating expenses:        
     Purchased transportation and warehousing   866,931 75.2%  995,265 76.7%
     Salaries and benefits    137,431 11.9%  128,739 9.9%
     Depreciation and amortization   35,449 3.1%  31,289 2.4%
     Insurance and claims    12,683 1.1%  9,293 0.7%
     General and administrative    25,541 2.2%  23,222 1.8%
     Gain on sale of assets, net    (3,975)-0.3%  (4,745)-0.4%
    Total operating expenses    1,074,060 93.2%  1,183,063 91.1%
                
    Operating income    78,205 6.8%  115,060 8.9%
                
    Other income (expense):        
     Interest expense, net    (1,594)-0.1%  (1,698)-0.1%
     Other, net    39 0.0%  131 0.0%
    Total other expense, net    (1,555)-0.1%  (1,567)-0.1%
                
    Income before provision for income taxes   76,650 6.7%  113,493 8.8%
                
    Provision for income taxes    14,870 1.3%  25,990 2.0%
                
    Net income   $61,780   $87,503  
                
    Earnings per share        
     Basic   $1.90   $2.60  
     Diluted   $1.88   $2.58  
                
    Basic weighted average number of shares outstanding   32,549    33,644  
    Diluted weighted average number of shares outstanding   32,838    33,966  
                


    HUB GROUP, INC.
    CONSOLIDATED BALANCE SHEETS
    (in thousands, except share data)
     
            March 31, December 31,
             2023   2022 
            (unaudited)  
    ASSETS       
     CURRENT ASSETS:     
      Cash and cash equivalents $342,570  $286,642 
      Accounts receivable trade, net  696,789   716,190 
      Accounts receivable other  4,300   3,967 
      Prepaid taxes   9,382   16,987 
      Prepaid expenses and other current assets 19,297   32,914 
        TOTAL CURRENT ASSETS  1,072,338   1,056,700 
               
     Restricted investments   19,187   18,065 
     Property and equipment, net  776,656   783,683 
     Right-of-use assets - operating leases  174,194   102,114 
     Right-of-use assets - financing leases  4,357   1,194 
     Other intangibles, net   190,235   197,386 
     Goodwill    629,407   629,402 
     Other assets   21,608   21,537 
        TOTAL ASSETS $2,887,982  $2,810,081 
               
               
    LIABILITIES AND STOCKHOLDERS' EQUITY   
     CURRENT LIABILITIES:    
      Accounts payable trade $330,260  $344,751 
      Accounts payable other  12,343   15,563 
      Accrued payroll   28,673   66,669 
      Accrued other   130,909   132,324 
      Lease liability - operating leases  35,248   29,547 
      Lease liability - financing leases  2,375   1,175 
      Current portion of long term debt  97,899   101,741 
        TOTAL CURRENT LIABILITIES 637,707   691,770 
               
     Long term debt   236,160   240,724 
     Non-current liabilities   47,725   43,505 
     Lease liability - operating leases  145,612   78,557 
     Lease liability - financing leases  1,890   - 
     Deferred taxes   159,840   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; 32,760,635 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  206,111   208,165 
      Purchase price in excess of predecessor basis, net of tax   
      benefit of $10,306   (15,458)  (15,458)
      Retained earnings   1,843,362   1,781,582 
      Accumulated other comprehensive loss (180)  (214)
      Treasury stock; at cost, 8,551,550 shares in 2023   
       and 8,665,564 shares in 2022  (375,206)  (374,892)
       TOTAL STOCKHOLDERS' EQUITY 1,659,048   1,599,602 
        TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$2,887,982  $2,810,081 
               


    HUB GROUP, INC.
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (in thousands)
    (unaudited)
               
            Three Months Ended March 31,
             2023   2022 
               
               
    Cash flows from operating activities:    
     Net income  $61,780  $87,503 
     Adjustments to reconcile net income    
      to net cash provided by operating activities:   
       Depreciation and amortization  45,810   35,193 
       Deferred taxes   4,901   5,286 
       Compensation expense related to share-based compensation plans 5,238   4,719 
       Gain on sale of assets, net  (3,975)  (4,745)
     Changes in operating assets and liabilities, net of acquisitions:   
       Restricted investments  (1,122)  2,759 
       Accounts receivable, net  18,951   (65,288)
       Prepaid taxes   7,605   535 
       Prepaid expenses and other current assets 13,617   3,403 
       Other assets   (653)  (1,516)
       Accounts payable   (17,705)  7,771 
       Accrued expenses   (40,065)  7,130 
       Non-current liabilities  (5,007)  (2,540)
        Net cash provided by operating activities 89,375   80,210 
               
    Cash flows from investing activities:    
     Proceeds from sale of equipment  10,172   6,444 
     Purchases of property and equipment  (26,845)  (30,927)
     Acquisitions, net of cash acquired  108   - 
        Net cash used in investing activities (16,565)  (24,483)
               
    Cash flows from financing activities:    
     Repayments of long term debt  (29,237)  (26,024)
     Stock withheld for payments of withholding taxes (7,606)  (5,585)
     Finance lease payments   (888)  (526)
     Proceeds from issuance of debt  20,831   23,512 
        Net cash used in financing activities (16,900)  (8,623)
               
               
     Effect of exchange rate changes on cash and cash equivalents 18   8 
               
    Net increase in cash and cash equivalents 55,928   47,112 
    Cash and cash equivalents beginning of period 286,642   159,784 
    Cash and cash equivalents end of period $342,570  $206,896 
               


    HUB GROUP, INC.
    FINANCIAL INFORMATION BY SEGMENT
    (in thousands)
    (unaudited)
        
     Three Months
     Ended March 31,
    Operating Revenue 2023   2022 
    Intermodal and Transportation Services$709,249  $776,570 
    Logistics 469,141   540,984 
    Inter-segment eliminations (26,125)  (19,431)
    Total operating revenue$1,152,265  $1,298,123 
        
        
     Three Months
     Ended March 31,
    Operating Income 2023   2022 
    Intermodal and Transportation Services$49,379  $85,696 
    Logistics 28,826   29,364 
    Total operating income$78,205  $115,060 
        
        
     Three Months
     Ended March 31,
    Depreciation and Amortization 2023   2022 
    Intermodal and Transportation Services$27,142  $24,375 
    Logistics 8,307   6,914 
    Total depreciation and amortization$35,449  $31,289 
        


    RECONCILIATION OF NET INCOME TO EBITDA (1)
    (in thousands)
    (unaudited)
         
     Three Months
     Ended March 31,
         
      2023   2022 
         
    Net Income$61,780  $87,503 
         
    Interest Expense, net 1,594   1,698 
         
    Depreciation and Amortization 45,810   35,193 
         
    Provision for Income Taxes 14,870   25,990 
         
    EBITDA$124,054  $150,384 
         

    (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.

    HUB GROUP, INC.
    FINANCIAL INFORMATION BY SEGMENT
    (in thousands)
    (unaudited)
          
      2022 
    Operating RevenueQ1Q2Q3Q4YTD
    Intermodal and Transportation Solutions$776,570 $875,150 $856,001 $804,710 $3,312,431 
    Logistics 540,984  548,613  525,178  507,043  2,121,818 
    Inter-segment eliminations (19,431) (22,307) (25,772) (26,249) (93,759)
    Total operating revenue$1,298,123 $1,401,456 $1,355,407 $1,285,504 $5,340,490 
          
          
      2022 
    Operating IncomeQ1Q2Q3Q4YTD
    Intermodal and Transportation Solutions$85,696 $100,601 $86,773 $75,467 $348,537 
    Logistics 29,364  37,035  30,966  28,819  126,184 
    Total operating income$115,060 $137,636 $117,739 $104,286 $474,721 
          
          
      2022 
    Depreciation and AmortizationQ1Q2Q3Q4YTD
    Intermodal and Transportation Solutions$24,375 $25,383 $26,020 $26,501 $102,279 
    Logistics 6,914  6,861  7,522  8,213  29,510 
    Total depreciation and amortization$31,289 $32,244 $33,542 $34,714 $131,789 
          

     

    HUB GROUP, INC.
    CONSOLIDATED STATEMENTS OF EARNINGS
    (in thousands, except per share amounts)
    (unaudited)
           2022 
          Q1Q2Q3Q4YTD
    Operating revenue  $1,298,123 $1,401,456 $1,355,407 $1,285,504 $5,340,490 
               
    Operating expenses:       
     Purchased transportation and warehousing  995,265  1,062,983  1,023,051  955,204  4,036,503 
     Salaries and benefits   128,739  129,499  137,666  147,106  543,010 
     Depreciation and amortization  31,289  32,244  33,542  34,714  131,789 
     Insurance and claims   9,293  10,645  17,615  20,511  58,064 
     General and administrative   23,222  36,213  34,382  26,762  120,579 
     Gain on sale of assets, net   (4,745) (7,764) (8,588) (3,079) (24,176)
    Total operating expenses   1,183,063  1,263,820  1,237,668  1,181,218  4,865,769 
               
    Operating income   115,060  137,636  117,739  104,286  474,721 
               
    Other income (expense):       
     Interest expense, net   (1,698) (1,402) (2,150) (1,382) (6,632)
     Other, net   131  (195) (384) 317  (131)
    Total other expense, net   (1,567) (1,597) (2,534) (1,065) (6,763)
               
    Income before provision for income taxes  113,493  136,039  115,205  103,221  467,958 
               
    Provision for income taxes   25,990  33,193  27,880  23,947  111,010 
               
    Net income  $87,503 $102,846 $87,325 $79,274 $356,948 
               

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