Last10K.com

Hub Group, Inc. (HUBG) SEC Filing 10-Q Quarterly Report for the period ending Thursday, September 30, 2021

Hub Group, Inc.

CIK: 940942 Ticker: HUBG

EXHIBIT 99.1

Hub Group, Inc. Reports Third Quarter 2021 Results

Highlights:        

  • Record quarterly revenue of $1.1 billion, up 16% as compared to last year, driven by strong demand conditions and the benefits of our continued investment in the business
  • Record gross margin of $158 million (14.7% of revenue) driven by favorable pricing and yield improvement, combined with our continued focus on operating efficiency, resulted in third quarter operating income margin of 5.6% of revenue
  • Record net income of $43 million or $1.28 of diluted earnings per share (EPS), which represents year-on-year growth of 73%
  • Generated EBITDA (non-GAAP)1 of $92 million in the quarter
  • Expanded our brokerage and refrigerated transportation offerings through the acquisition of Choptank Transport in October
  • Increased expected full year 2021 diluted earnings per share to $3.90 - $4.00

OAK BROOK, Ill., Oct. 28, 2021 (GLOBE NEWSWIRE) -- Hub Group, Inc. (NASDAQ:HUBG) announced third quarter 2021 net income of $43 million, or diluted earnings per share of $1.28.   Net income for third quarter 2020 was $25 million, or $0.74 per diluted share.  

“Continued strong freight demand and favorable market conditions, combined with our drive to provide a world-class customer experience, resulted in 16% revenue growth in the quarter compared to Q3 2020. Our ongoing focus on yield improvement and operating efficiency led to record profitability. We reported record quarterly diluted EPS of $1.28, which represents growth of 73% as compared to the prior year. Finally, we are very excited about the additional scale and expanded service offerings from our recent acquisition of Choptank Transport,” said Dave Yeager, Hub Group’s Chairman and Chief Executive Officer.  

Third Quarter 2021 Results

Revenue for the third quarter of 2021 increased by 16% to $1.1 billion compared with $925 million for the third quarter of 2020. Operating income for the quarter was $60 million (5.6% of revenue) versus $34 million (3.7% of revenue) for the third quarter of 2020.   EBITDA (non-GAAP)1 for the third quarter was $92 million.

Third quarter intermodal revenue increased 17% to $633 million due to a 26% increase in revenue per load, partially offset by an 8% decline in volume due to ongoing challenges with congestion across the supply chain. Intermodal gross margin increased compared to the prior year as higher prices and cost recovery more than offset increased purchased transportation costs and lower volume.  

Third quarter logistics revenue increased 17% to $224 million due to growth of our retail supplier solutions services and from the addition of our final mile business in December 2020. Gross margin increased due to revenue growth, yield management initiatives and the acquisition of final mile, partially offset by higher warehousing and transportation costs.

Truck brokerage revenue grew 28% in the quarter to $153 million due to a 31% increase in revenue per load partially offset by a 3% decline in volume. Contractual freight represented 51% of total brokerage volume in the third quarter of 2021 as compared to 61% in 2020. Gross margin increased relative to third quarter 2020 due to revenue per load growth in both contractual and transactional freight, partially offset by the impact of higher purchased transportation costs.

Dedicated revenue decreased 7% compared to the prior year to $64 million due to declines from existing customers and the impact of business we exited, partially offset by growth with new customers. Dedicated gross margin decreased primarily due to lower revenue, higher insurance and claims, and maintenance and repair expenses.

Costs and expenses increased to $98 million in the third quarter of 2021 due primarily to higher variable compensation expense, operating costs of our final mile acquisition, expenses related to legal settlements, and costs related to the acquisition of Choptank Transport (“Choptank”), partially offset by higher gains on the sale of equipment.

Capital expenditures for the third quarter of 2021 totaled $58 million. At September 30, 2021, we had cash and cash equivalents of $231 million.   In October we acquired Choptank for approximately $130 million in cash and in connection with the acquisition we issued $20 million of restricted stock to Choptank’s owners and senior management team.

2021 Outlook

We expect that our 2021 diluted earnings per share will range from $3.90 to $4.00. We estimate revenue will grow in the high-teens percentage range for 2021, and that gross margin as a percentage of revenue will range from 13.3% to 13.7%. We estimate our costs and expenses will range from $365 to $375 million for the year. We project our effective tax rate for the fourth quarter will be approximately 24%.

We expect capital expenditures for fiscal year 2021 to range from $150 to $160 million.   For 2021 we expect to add 3,000 containers, which will result in net growth of approximately 2,750 after retirements of containers that have reached end of life. In 2021 we ordered over 650 tractors to replace older units and support growth in our drayage and dedicated fleets, however we expect approximately 150 of these will be delivered in early 2022.

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 October 28, 2021 to discuss our third quarter 2021 results.

Hosting the conference call will be Dave Yeager, Chairman and CEO. Also participating on the call will be Phil Yeager, President and 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 register at: https://www.yourconferencecenter.com/confcenter/PinCode/Pin_Code.aspx?100374&o=UrwfgPrJQQNDwx

Registrants will be issued a passcode and PIN to use when dialing into the live call which will provide quickest access to the conference. You may register at any time, including up to and after the call start time. On the day of the call, dial (888) 206-4064 approximately ten minutes prior to the scheduled call time; enter the participant passcode and 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 forward-looking statements are based on management's experience and perception of trends, current conditions, and anticipated future developments, as well as other factors believed to be appropriate. We believe these statements and the assumptions and estimates contained in this release are reasonable based on information that is currently available to us. Factors that could cause actual results to differ materially include general or regional economic conditions and health concerns; the effect of the ongoing COVID-19 pandemic, including any spikes, outbreaks or variants of the virus, as well as any future government actions taken in response to the pandemic, including on our business operations, as well as its impact on general economic and financial market conditions and on our customers, counterparties, employees and third-party service providers; our ability to sustain or the effects of plans intended to improve operational execution and performance; changes in or implementation of governmental or regulatory rules and interpretations affecting tax, wage and hour matters, health and safety, labor and employment, insurance or other undeterminable areas; intermodal costs and prices, the integration of NSD and Choptank and any other acquisitions and expenses relating thereto; the future performance of Hub’s Intermodal, Truck Brokerage, Dedicated and Logistics business lines; driver shortages; the amount and timing of strategic investments or divestitures by Hub; the failure to implement and integrate critical information technology systems; cyber security incidents; retail and other customers encountering adverse economic conditions and other factors described from time to time in Hub Group's SEC reports, press releases and other communications. Hub Group assumes no obligation to update any such forward-looking statements.  

SOURCE:   Hub Group, Inc.                CONTACT: Maralee Volchko of Hub Group, Inc., +1-630-271-3745


HUB GROUP, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands, except per share amounts)
(unaudited)
        
   Three Months Ended September 30,
   2021
 2020
    % of  % of
   AmountRevenue AmountRevenue
Revenue$1,075,107 100.0% $924,812 100.0%
        
Transportation costs 917,507 85.3%  816,777 88.3%
 Gross margin 157,600 14.7%  108,035 11.7%
        
Costs and expenses:     
 Salaries and benefits 65,370 6.1%  45,576 4.9%
 General and administrative 23,445 2.2%  20,845 2.3%
 Depreciation and amortization 8,912 0.8%  7,697 0.8%
  Total costs and expenses 97,727 9.1%  74,118 8.0%
        
Operating income 59,873 5.6%  33,917 3.7%
        
Other income (expense):     
 Interest expense (1,793)-0.2%  (2,237)-0.3%
 Other, net (96)0.0%  (122)0.0%
  Total other expense (1,889)-0.2%  (2,359)-0.3%
        
Income before provision for income taxes 57,984 5.4%  31,558 3.4%
        
Provision for income taxes 14,646 1.4%  6,777 0.7%
        
Net income$43,338   $24,781  
        
Earnings per share     
 Basic$1.30   $0.75  
 Diluted$1.28   $0.74  
        
Basic weighted average number of shares outstanding 33,433    33,177  
Diluted weighted average number of shares outstanding 33,873    33,597  
        



HUB GROUP, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands, except per share amounts)
(unaudited)
        
   Nine Months Ended September 30,
   2021 2020
    % of  % of
   AmountRevenue AmountRevenue
Revenue$2,975,980 100.0% $2,542,914 100.0%
        
Transportation costs 2,589,072 87.0%  2,223,036 87.4%
 Gross margin 386,908 13.0%  319,878 12.6%
        
Costs and expenses:     
 Salaries and benefits 176,696 5.9%  146,128 5.7%
 General and administrative 63,058 2.1%  76,151 3.0%
 Depreciation and amortization 26,282 0.9%  22,945 0.9%
  Total costs and expenses 266,036 8.9%  245,224 9.6%
        
Operating income 120,872 4.1%  74,654 3.0%
        
Other income (expense):     
 Interest expense (5,555)-0.2%  (7,698)-0.3%
 Other, net (382)0.0%  106 0.0%
  Total other expense (5,937)-0.2%  (7,592)-0.3%
        
Income before provision for income taxes 114,935 3.9%  67,062 2.7%
        
Provision for income taxes 27,775 0.9%  15,891 0.6%
        
Net income$87,160   $51,171  
        
Earnings per share     
 Basic$2.61   $1.54  
 Diluted$2.58   $1.53  
        
Basic weighted average number of shares outstanding 33,427    33,169  
Diluted weighted average number of shares outstanding 33,842    33,513  
        


HUB GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(unaudited)
        
     September 30, December 31,
      2021   2020 
        
ASSETS   
 CURRENT ASSETS:   
  Cash and cash equivalents$230,656  $124,506 
  Accounts receivable trade, net 613,443   518,975 
  Accounts receivable other 4,049   1,265 
  Prepaid taxes 87   1,336 
  Prepaid expenses and other current assets 32,772   26,753 
    TOTAL CURRENT ASSETS 881,007   672,835 
        
 Restricted investments 23,100   23,353 
 Property and equipment, net 661,346   671,101 
 Right-of-use assets - operating leases 41,335   43,573 
 Right-of-use assets - financing leases 1,789   3,557 
 Other intangibles, net 142,592   163,953 
 Goodwill, net 522,360   508,555 
 Other assets 17,951   18,469 
    TOTAL ASSETS$2,291,480  $2,105,396 
        
        
LIABILITIES AND STOCKHOLDERS' EQUITY   
 CURRENT LIABILITIES:   
  Accounts payable trade$355,714  $285,320 
  Accounts payable other 24,192   12,680 
  Accrued payroll 56,390   23,044 
  Accrued other 103,183   102,613 
  Lease liability - operating leases 10,390   10,093 
  Lease liability - financing leases 1,789   1,793 
  Current portion of long term debt 92,598   93,562 
    TOTAL CURRENT LIABILITIES 644,256   529,105 
        
 Long term debt 165,652   176,797 
 Non-current liabilities 43,512   42,910 
 Lease liability - operating leases 33,104   36,328 
 Lease liability - financing leases 2   8 
 Deferred taxes 149,829   162,325 
        
 STOCKHOLDERS' EQUITY:   
  Preferred stock, $.01 par value; 2,000,000 shares authorized;   
   no shares issued or outstanding in 2021 and 2020 -   - 
  Common stock   
   Class A: $.01 par value; 97,337,700 shares authorized and   
    41,224,792 shares issued in 2021 and 2020; 33,685,717 shares   
    outstanding in 2021 and 33,549,708 shares outstanding in 2020 412   412 
   Class B: $.01 par value; 662,300 shares authorized;   
    662,296 shares issued and outstanding in 2021 and 2020 7   7 
  Additional paid-in capital 191,765   186,058 
  Purchase price in excess of predecessor basis, net of tax   
  benefit of $10,306 (15,458)  (15,458)
  Retained earnings 1,340,320   1,253,160 
  Accumulated other comprehensive loss (201)  (191)
  Treasury stock; at cost, 7,539,075 shares in 2021   
   and 7,675,084 shares in 2020 (261,720)  (266,065)
   TOTAL STOCKHOLDERS' EQUITY 1,255,125   1,157,923 
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$2,291,480  $2,105,396 
        



HUB GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
      
     Nine Months Ended September 30,
      2021   2020 
        
        
Cash flows from operating activities:   
 Net income$87,160  $51,171 
 Adjustments to reconcile net income   
  to net cash provided by operating activities:   
   Depreciation and amortization 95,959   91,798 
   Deferred taxes (12,553)  7,436 
   Compensation expense related to share-based compensation plans 14,090   12,676 
   (Gain) loss on sale of assets (8,978)  94 
   Donated equipment -   5,626 
 Changes in operating assets and liabilities:   
   Restricted investments 253   1,085 
   Accounts receivable, net (100,102)  (105,918)
   Prepaid taxes 1,248   (1,154)
   Prepaid expenses and other current assets (6,059)  10,379 
   Other assets (1,670)  (429)
   Accounts payable 81,908   61,549 
   Accrued expenses 33,424   (17,834)
   Non-current liabilities (6,622)  6,209 
    Net cash provided by operating activities 178,058   122,688 
        
Cash flows from investing activities:   
 Proceeds from sale of equipment 30,558   1,298 
 Purchases of property and equipment (84,076)  (55,352)
 Cash used in acquisitions (90)  - 
    Net cash used in investing activities (53,608)  (54,054)
        
Cash flows from financing activities:   
 Repayments of long term debt (82,804)  (174,419)
 Stock withheld for payments of withholding taxes (4,038)  (4,041)
 Finance lease payments (2,142)  (2,278)
 Proceeds from issuance of debt 70,695   128,762 
    Net cash used in financing activities (18,289)  (51,976)
        
        
 Effect of exchange rate changes on cash and cash equivalents (11)  (51)
        
Net increase in cash and cash equivalents 106,150   16,607 
Cash and cash equivalents beginning of period 124,506   168,729 
Cash and cash equivalents end of period$230,656  $185,336 
        



HUB GROUP, INC.
FINANCIAL INFORMATION BY BUSINESS LINE
(in thousands)
(unaudited)
        
 Three Months Nine Months
 Ended September 30, Ended September 30,
        
  2021  2020  2021  2020
        
Intermodal$633,427 $543,464 $1,689,617 $1,468,624
        
Logistics 224,136  192,187  663,620  569,682
        
Truck brokerage 153,270  119,994  420,523  304,686
        
Dedicated 64,274  69,167  202,220  199,922
  -  -  -  
Total Revenue$1,075,107 $924,812 $2,975,980 $2,542,914
        



RECONCILIATION OF NET INCOME TO EBITDA
(in thousands)
(unaudited)
        
 Three Months
 Ended September 30,
     Change Change
  2021  2020 $  %
        
Net income$43,338 $24,781 $18,557  74.9%
        
Interest expense 1,793  2,237  (444) -19.8%
        
Depreciation and amortization 31,926  30,039  1,887  6.3%
        
Provision for income taxes 14,646  6,777  7,869  116.1%
        
EBITDA$91,703 $63,834 $27,869  43.7%
        



RECONCILIATION OF NET INCOME TO EBITDA
(in thousands)
(unaudited)
        
 Nine Months
 Ended September 30,
     Change Change
  2021  2020 $  %
        
Net income$87,160 $51,171 $35,989  70.3%
        
Interest expense 5,555  7,698  (2,143) -27.8%
        
Depreciation and amortization 95,959  91,798  4,161  4.5%
        
Provision for income taxes 27,775  15,891  11,884  74.8%
        
EBITDA$216,449 $166,558 $49,891  30.0%
        

____________________________
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.


The following information was filed by Hub Group, Inc. (HUBG) on Thursday, October 28, 2021 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

View differences made from one quarter to another to evaluate Hub Group, Inc.'s financial trajectory

Compare SEC Filings Year-over-Year (YoY) and Quarter-over-Quarter (QoQ)
Sample 10-K Year-over-Year (YoY) Comparison

Compare this 10-Q Quarterly Report to its predecessor by reading our highlights to see what text and tables were  removed  ,   added    and   changed   by Hub Group, Inc..

Continue

Assess how Hub Group, Inc.'s management team is paid from their Annual Proxy

Definitive Proxy Statement (Form DEF 14A)
Screenshot example of actual Proxy Statement

Hub Group, Inc.'s Definitive Proxy Statement (Form DEF 14A) filed after their 2021 10-K Annual Report includes:

  • Voting Procedures
  • Board Members
  • Executive Team
  • Salaries, Bonuses, Perks
  • Peers / Competitors

Continue

SEC Filing Tools

Rating

Learn More
Bullish Bearish Neutral
Filter Sentiment:
All
Positive
Negative
Filter Category:
All
Financial
Revenue
Other
Filter Subcategory:
All
Earnings
Income
Expense
Product
Cash Flow
Debt
Other
Inside Hub Group, Inc.'s 10-Q Quarterly Report:

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Document And Entity Information
Consolidated Balance Sheets
Consolidated Balance Sheets (Parenthetical)
Consolidated Statements Of Cash Flows
Consolidated Statements Of Income And Comprehensive Income
Consolidated Statements Stockholders Equity
Acquisition
Acquisition (Tables)
Acquisition - Additional Information (Detail)
Acquisition - Amortization Expense (Detail)
Acquisition - Components Of Other Intangible Acquired (Detail)
Acquisition - Schedule Of Carrying Amount Of Goodwill (Detail)
Acquisition - Summarizes The Total Purchase Price Allocated To Net Assets Acquired And Liabilities Assumed (Detail)
Acquisition - Unaudited Pro Forma Consolidated Results Of Operations (Detail)
Earnings Per Share
Earnings Per Share (Tables)
Fair Value Measurement
Fair Value Measurement - Additional Information (Detail)
Interim Financial Statements
Legal Matters
Legal Matters - Additional Information (Detail)
Long-Term Debt And Financing Arrangements
Long-Term Debt And Financing Arrangements (Tables)
Long-Term Debt And Financing Arrangements - Additional Information (Detail)
New Accounting Pronouncements
Reconciliation Of Earnings Per Share (Detail)
Revenue From Contract With Customers
Revenue From Contract With Customers (Tables)
Revenue From Contracts With Customers - Additional Information (Detail)
Revenue From Contracts With Customers - Summary Of Disaggregated Revenue By Business Line (Detail)
Schedule Of Outstanding Debt (Detail)
Schedule Of Outstanding Debt (Parenthetical) (Detail)
Subsequent Events
Subsequent Events - Additional Information (Details)

Material Contracts, Statements, Certifications & more

Hub Group, Inc. provided additional information to their SEC Filing as exhibits

Ticker: HUBG
CIK: 940942
Form Type: 10-Q Quarterly Report
Accession Number: 0000950170-21-003244
Submitted to the SEC: Fri Nov 05 2021 4:36:50 PM EST
Accepted by the SEC: Fri Nov 05 2021
Period: Thursday, September 30, 2021
Industry: Arrangement Of Transportation Of Freight And Cargo

External Resources:
Stock Quote
Social Media

Bookmark the Permalink:
https://last10k.com/sec-filings/hubg/0000950170-21-003244.htm