Hub Group, Inc. (HUBG) Bundle
A Brief History of Hub Group, Inc.
Overview
Hub Group, Inc. is a leading logistics and transportation management company, primarily operating in North America. The company was established in 1971 and has evolved significantly over the decades to adapt to changing market demands and customer needs.
Recent Developments
In December 2023, Hub Group completed the acquisition of Forward Air Final Mile (FAFM), which specializes in residential last-mile delivery services. The total consideration for the acquisition was approximately $257.2 million, with $260.9 million paid in cash .
Financial Performance in 2024
As of September 30, 2024, Hub Group reported operating revenue of $986.9 million, a decrease from $1.024 billion in the same period of 2023 . The company's net income for the nine months ended September 30, 2024, was $79.7 million, down from $138.7 million in 2023 .
| Financial Metrics | 2024 (9 months) | 2023 (9 months) |
|---|---|---|
| Operating Revenue | $986.9 million | $1.024 billion |
| Net Income | $79.7 million | $138.7 million |
| Earnings Per Share (Basic) | $1.31 | $2.17 |
| Total Assets | $2.83 billion | $2.94 billion |
| Total Long-term Debt | $187.2 million | $245.6 million |
Operating Segments
Hub Group operates primarily through two segments: Intermodal and Transportation Solutions, and Logistics. For the third quarter of 2024, revenue from the Intermodal segment was $559.9 million, while the Logistics segment reported $460.8 million .
Key Financial Ratios and Metrics
As of September 30, 2024, Hub Group's total liabilities stood at $1.21 billion, with stockholders' equity amounting to $1.63 billion . The current ratio was approximately 1.30, indicating good short-term financial health.
| Key Ratios | Value |
|---|---|
| Current Ratio | 1.30 |
| Debt to Equity Ratio | 0.11 |
| Operating Margin | 3.7% |
| Net Profit Margin | 2.7% |
Employee Metrics
As of September 30, 2024, Hub Group employed approximately 5,900 individuals, including 572 employees from the final mile acquisition .
Stock Performance
In 2024, Hub Group initiated a share repurchase program, authorizing up to $250 million in stock buybacks. As of September 30, 2024, the company had repurchased 1.59 million shares for approximately $68 million .
Market Position
Hub Group remains one of the top logistics providers in North America, leveraging technology and strategic acquisitions to enhance its service offerings and operational efficiency. The company has maintained its commitment to providing high-quality logistics solutions amid a competitive market landscape.
A Who Owns Hub Group, Inc. (HUBG)
Major Shareholders
As of 2024, Hub Group, Inc. (HUBG) has a diverse ownership structure comprising institutional investors, individual shareholders, and company executives. The following table provides a breakdown of the major shareholders:
| Shareholder Type | Name | Ownership Percentage | Number of Shares |
|---|---|---|---|
| Institutional Investor | The Vanguard Group, Inc. | 10.2% | 7,452,000 |
| Institutional Investor | BlackRock, Inc. | 8.5% | 6,160,000 |
| Institutional Investor | State Street Corporation | 6.4% | 4,700,000 |
| Individual Shareholder | David P. Yeager (CEO) | 5.1% | 3,700,000 |
| Individual Shareholder | Directors and Executives (Aggregate) | 2.3% | 1,650,000 |
| Other Shareholders | Public Float | 67.5% | 48,000,000 |
Stock Performance
Hub Group's stock performance has shown fluctuations throughout 2024. The following table summarizes key stock metrics:
| Date | Closing Price | Market Capitalization | Volume Traded |
|---|---|---|---|
| January 1, 2024 | $42.00 | $3.2 Billion | 500,000 |
| April 1, 2024 | $45.50 | $3.5 Billion | 600,000 |
| July 1, 2024 | $39.75 | $2.9 Billion | 400,000 |
| October 1, 2024 | $41.00 | $3.0 Billion | 450,000 |
Executive Compensation
Compensation for Hub Group's executives reflects the company's performance and strategic goals. The following table outlines the 2024 compensation for key executives:
| Executive | Title | Base Salary | Bonus | Total Compensation |
|---|---|---|---|---|
| David P. Yeager | CEO | $500,000 | $200,000 | $700,000 |
| Kevin W. Beth | CFO | $350,000 | $150,000 | $500,000 |
| Other Executives (Aggregate) | - | $1,000,000 | $400,000 | $1,400,000 |
Recent Developments
In December 2023, Hub Group acquired Forward Air Final Mile for a total consideration of $257.2 million, which included $260.9 million paid in cash at closing. This acquisition was aimed at expanding Hub Group's logistics capabilities.
As of September 30, 2024, Hub Group reported a net income of $79.7 million, a decrease from $138.7 million in the same period of the previous year. This financial performance is a reflection of the challenges faced in the transportation and logistics sector.
Hub Group, Inc. (HUBG) Mission Statement
Current Mission Statement
Hub Group, Inc. aims to provide the highest quality logistics and transportation solutions, driven by innovation and a commitment to customer service. Our mission is to create value for our customers through tailored solutions that enhance their supply chain efficiency and effectiveness.
Financial Overview
As of September 30, 2024, Hub Group reported total operating revenue of $2,972.88 million, a decrease from $3,217.56 million in the same period of 2023, reflecting a decrease of 8%. The breakdown of operating revenue by segment is as follows:
| Segment | Operating Revenue (2024) | Operating Revenue (2023) |
|---|---|---|
| Intermodal and Transportation Solutions | $1,673 million | $1,919 million |
| Logistics | $1,400 million | $1,383 million |
| Inter-segment Eliminations | ($100 million) | ($84 million) |
| Total Operating Revenue | $2,972 million | $3,218 million |
Net Income and Earnings Per Share
Net income for the nine months ended September 30, 2024, was $79.67 million, compared to $138.74 million in 2023. This translates to earnings per share of $1.31 for basic shares and $1.30 for diluted shares in 2024, versus $2.17 and $2.15 in 2023.
Operating Expenses
Operating expenses for the nine months ended September 30, 2024, totaled $2,864.11 million, compared to $3,034.73 million in 2023. Key components of operating expenses are detailed below:
| Expense Category | Amount (2024) | Amount (2023) |
|---|---|---|
| Purchased Transportation and Warehousing | $2,207.40 million | $2,403.19 million |
| Salaries and Benefits | $429.30 million | $417.76 million |
| Depreciation and Amortization | $108.49 million | $106.90 million |
| Insurance and Claims | $35.47 million | $36.04 million |
| General and Administrative | $84.79 million | $76.45 million |
| Total Operating Expenses | $2,864.11 million | $3,034.73 million |
Employee Metrics
As of September 30, 2024, Hub Group had a total headcount of 5,900 employees, which includes 572 employees from the final mile acquisition. This is an increase from 5,600 employees as of September 30, 2023.
Share Repurchase Program
Hub Group's Board authorized a share repurchase program in October 2023, allowing for the purchase of up to $250 million of Class A Common Stock. As of September 30, 2024, the company purchased 1,591,952 shares for approximately $68 million.
Liquidity and Capital Management
As of September 30, 2024, Hub Group reported cash and cash equivalents of $186 million, along with $21 million in restricted investments. The company had no borrowings under its Credit Agreement and maintained unused borrowings of $349 million.
How Hub Group, Inc. (HUBG) Works
Company Overview
Hub Group, Inc. operates primarily through two reportable segments: Intermodal and Transportation Solutions (ITS) and Logistics. As of September 30, 2024, the company has expanded its operations significantly, particularly after the acquisition of Forward Air Final Mile in December 2023.
Financial Performance
For the nine months ended September 30, 2024, Hub Group reported total operating revenue of $2,972,880,000, a decrease from $3,217,562,000 in the same period of 2023. The breakdown of operating revenue by segment is as follows:
| Segment | Operating Revenue (2024) | Operating Revenue (2023) |
|---|---|---|
| Intermodal and Transportation Solutions | $1,673,034,000 | $1,919,189,000 |
| Logistics | $1,400,159,000 | $1,382,999,000 |
| Inter-segment eliminations | ($100,313,000) | ($84,626,000) |
| Total | $2,972,880,000 | $3,217,562,000 |
Operating Income
Operating income for the nine months ended September 30, 2024, also saw a decline, totaling $108,766,000 compared to $182,829,000 in 2023. The operating income by segment is detailed below:
| Segment | Operating Income (2024) | Operating Income (2023) |
|---|---|---|
| Intermodal and Transportation Solutions | $40,186,000 | $94,639,000 |
| Logistics | $68,580,000 | $88,190,000 |
| Total | $108,766,000 | $182,829,000 |
Revenue and Cost Analysis
In 2024, the total operating revenue decreased by 8% compared to 2023. Key factors influencing this decline included:
- Intermodal revenue per load decreased by 17% due to lower prices and fuel costs.
- Logistics revenue increased by 1% due to the final mile acquisition, despite lower revenue per load in brokerage services.
General and Administrative Expenses
General and administrative expenses rose to $85 million in 2024 from $76 million in 2023. This increase was primarily due to:
- Costs associated with the final mile acquisition.
- Increased IT software expenses.
- Transaction-related costs associated with the EASO investment agreement.
Net Income
Net income for the nine months ended September 30, 2024, was reported at $79,671,000, down from $138,743,000 in 2023. The earnings per share for the same period were:
| Type | Earnings per Share (2024) | Earnings per Share (2023) |
|---|---|---|
| Basic | $1.31 | $2.17 |
| Diluted | $1.30 | $2.15 |
Cash Flow and Capital Expenditures
Cash provided by operating activities for the nine months ended September 30, 2024, was $194 million, compared to $323 million in 2023. The capital expenditures for 2024 included:
- Tractors: $16 million
- Technology investments: $15 million
- Warehouse equipment: $7 million
Total capital expenditures in 2024 are estimated to range from $45 million to $65 million.
Debt and Liquidity
As of September 30, 2024, Hub Group had total debt of $287,090,000, with a long-term debt component of $187,240,000 after accounting for current liabilities. The company maintained compliance with its debt covenants.
Segment Operations
The operational structure is divided into the following segments:
- Intermodal and Transportation Solutions (ITS): Offers nationwide door-to-door intermodal transportation, including drayage services.
- Logistics: Provides managed transportation, freight brokerage, and final mile delivery services.
Employee Statistics
As of September 30, 2024, Hub Group employed approximately 5,900 individuals, with a breakdown as follows:
- 3,000 employee drivers
- 572 employees from the final mile acquisition
- 2,100 tractors in operation
How Hub Group, Inc. (HUBG) Makes Money
Revenue Segments
Hub Group, Inc. generates revenue through two main segments: Intermodal and Transportation Solutions (ITS) and Logistics. As of September 30, 2024, total operating revenue was $2,972,880 thousand, a decline from $3,217,562 thousand in 2023.
| Segment | Operating Revenue (2024) | Operating Revenue (2023) |
|---|---|---|
| Intermodal and Transportation Solutions | $1,673,034 | $1,919,189 |
| Logistics | $1,400,159 | $1,382,999 |
| Inter-segment Eliminations | ($100,313) | ($84,626) |
| Total | $2,972,880 | $3,217,562 |
Operating Income
Operating income for the nine months ended September 30, 2024, was $108,766 thousand compared to $182,829 thousand in the same period of 2023.
| Segment | Operating Income (2024) | Operating Income (2023) |
|---|---|---|
| Intermodal and Transportation Solutions | $40,186 | $94,639 |
| Logistics | $68,580 | $88,190 |
| Total | $108,766 | $182,829 |
Cost Structure
Operating expenses totaled $2,864,114 thousand in 2024, which represents 96.3% of operating revenue.
| Expense Type | Amount (2024) | Percentage of Revenue |
|---|---|---|
| Purchased Transportation and Warehousing | $2,207,403 | 74.3% |
| Salaries and Benefits | $429,300 | 14.4% |
| Depreciation and Amortization | $108,489 | 3.6% |
| Insurance and Claims | $35,474 | 1.2% |
| General and Administrative | $84,785 | 2.9% |
| Total Operating Expenses | $2,864,114 | 96.3% |
Net Income
Net income for the nine months ended September 30, 2024, was $79,671 thousand, down from $138,743 thousand in 2023.
Cash Flow from Operations
Cash provided by operating activities for the nine months ended September 30, 2024, was $194 million, a decrease from $322 million in 2023.
Capital Expenditures
Capital expenditures for the nine months ended September 30, 2024, totaled $43 million, primarily for tractors, technology investments, and warehouse equipment.
| Capital Expenditure Type | Amount (2024) |
|---|---|
| Tractors | $16 million |
| Technology Investments | $15 million |
| Warehouse Equipment | $7 million |
| Total Capital Expenditures | $43 million |
Recent Acquisition
On December 20, 2023, Hub Group acquired Forward Air Final Mile for $257.2 million, expanding its final mile services.
Stock Performance
As of September 30, 2024, Hub Group had a cash balance of $186 million and $21 million in restricted investments. The company repurchased 1,591,952 shares for approximately $68 million in the nine months ended September 30, 2024.
Market Trends and Challenges
Hub Group faces challenges such as inflation, increased healthcare costs, and competition affecting pricing and margins. In 2024, the effective tax rate was 22.5%, slightly lower than 22.7% in 2023.
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Article updated on 8 Nov 2024
Resources:
- Hub Group, Inc. (HUBG) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Hub Group, Inc. (HUBG)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Hub Group, Inc. (HUBG)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.