Hub Group, Inc.: Hub Group Reports First Quarter 2025 Results

Highlights:

• Diluted earnings per share (EPS) of $0.44 for the first quarter in-line with prior year
• First quarter revenue of $915 million
• Operating income of $37 million or 4.1% of revenue, a 40-basis point improvement over Q1 2024
• Returned $21 million to shareholders in the first quarter through share repurchases and dividends
• Ended the quarter with cash of $141 million
• Net debt/EBITDA of 0.4x

OAK BROOK, Ill., May 08, 2025 (GLOBE NEWSWIRE) -- Hub Group, Inc. (Nasdaq: HUBG) announced first quarter 2025 net income of $27 million and diluted earnings per share of $0.44. Net income for the first quarter of 2024 was $27 million, or $0.44 per diluted share.

"I am proud of the team's performance in the first quarter as we remained focused on yield management, cost containment and operating efficiency initiatives, resulting in an operating income margin of 4.1%, a 40-basis point improvement over last year and a 20-basis point improvement over the fourth quarter. This included a 70-basis point improvement in our Logistics segment operating margins versus last year. Looking ahead we are focused on providing exceptional service and value to our customers while effectively managing our costs and investing in our business to deliver long term growth," said Phil Yeager, Hub Group's President, Chief Executive Officer, and Vice Chairman.

First Quarter 2025 Results

Consolidated revenue for the first quarter of 2025 of $915 million, an 8% decline from $999 million reported in the first quarter of 2024. Strong intermodal volume growth of 8% was offset by lower revenue per unit in intermodal and brokerage, decreased fuel revenue, and slowing shipping patterns in our Logistics segment.

First quarter purchased transportation and warehousing costs of $658 million decreased 11% compared to prior year due to lower rail and third-party warehouse costs. Salaries and benefits of $149 million were 3% higher than prior year driven by additional warehouse and driver team members and the addition of EASO. Depreciation and amortization of $33 million decreased 15% in the quarter. Insurance and claims of $11 million decreased 14% due to lower claim costs in the quarter. General and administrative expenses of $27 million were comparable to the prior year.

Operating income for the first quarter was $37 million or 4.1% of revenue, a 40-basis point improvement over the prior year. EBITDA (non-GAAP) for the quarter was $85 million. Net debt/EBITDA was 0.4x, below the leverage target range of 0.75 to 1.25x.

First Quarter 2025 Segment Results

First quarter Intermodal and Transportation Solutions ("ITS") Segment revenue was $530 million, as compared to $552 million in the prior year due to mix, price and fuel partially offset by higher intermodal volumes. ITS operating income increased to $14 million, or 2.7% of revenue, due to cost control efforts, lower dedicated start-up costs, and improved insurance and claims expenses.

First quarter Logistics Segment revenue was $411 million, as compared to $480 million last year due to lower volume and revenue per load in our brokerage business, exiting of unprofitable business in consolidation and fulfilment, and seasonal softness in managed transportation and final mile businesses. First quarter operating income was $23 million, or 5.7% of revenue, a 70-basis point improvement over prior year as positive contribution from consolidation and fulfillment, managed transportation, and final mile fully offset a lower brokerage margin.

Capital expenditures for the first quarter of 2025 totaled $19 million and, as of March 31, 2025, we had cash of $141 million.

2025 Outlook

We expect 2025 diluted earnings per share will range from $1.75 to $2.25. We estimate revenue of approximately $3.6 billion to $4.0 billion for the full year. We project an effective tax rate of approximately 24% and capital expenditures in the range of $40 million to $50 million for the full year.

Non-GAAP Financial Measures

In this press release, we present certain non-GAAP financial measures, including EBITDA and net debt/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 May 8, 2025, to discuss first quarter 2025 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-conf.media-server.com/register/BIb40a65630f35498fb1da8bc575bbf057 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. A 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: Garrett Holland, [e-mail]

HUB GROUP, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands, except per share amounts)
(unaudited)
		Three Months Ended March 31,
			2025						2024
					% of						% of
		Amount			Revenue			Amount			Revenue
Operating revenue		$	915,216		100.0	%		$	999,493		100.0	%
Operating expenses:
	Purchased transportation and warehousing		657,924		71.9	%			740,172		74.1	%
	Salaries and benefits		149,413		16.3	%			144,497		14.4	%
	Depreciation and amortization		32,578		3.6	%			38,331		3.8	%
	Insurance and claims		10,882		1.2	%			12,618		1.3	%
	General and administrative		27,146		2.9	%			27,234		2.7	%
	Loss (gain) on sale of assets, net		(65	)	0.0	%			(498	)	0.0	%
Total operating expenses			877,878		95.9	%			962,354		96.3	%
Operating income			37,338		4.1	%			37,139		3.7	%
Other income (expense):
	Interest expense, net		(1,992	)	-0.2	%			(2,506	)	-0.3	%
	Other, net		295		0.0	%			(170	)	-0.0	%
Total other (expense) income, net			(1,697	)	-0.2	%			(2,676	)	-0.3	%
Income before provision for income taxes			35,641		3.9	%			34,463		3.4	%
Provision for income taxes			8,447		0.9	%			7,410		0.7	%
Net income			27,194						27,053
Less: Net income attributable to non-controlling interests			347						-
Net income attributable to Hub Group, Inc.		$	26,847					$	27,053
Earnings per share
	Basic	$	0.45					$	0.44
	Diluted	$	0.44					$	0.44
Basic weighted average number of shares outstanding			60,190						61,325
Diluted weighted average number of shares outstanding			60,420						61,666

HUB GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
					March 31,				December 31,
						2025				2024
					(unaudited)
ASSETS
	CURRENT ASSETS:
		Cash and cash equivalents			$	112,674			$	98,248
		Restricted cash				28,436				28,700
		Accounts receivable trade, net				568,610				581,516
		Accounts receivable other				10,273				10,880
		Prepaid taxes				9,177				15,115
		Prepaid expenses and other current assets				23,642				33,870
				TOTAL CURRENT ASSETS		752,812				768,329
	Restricted investments					18,492				21,642
	Property and equipment, net					731,933				739,896
	Right-of-use assets - operating leases					221,888				233,651
	Right-of-use assets - financing leases					897				1,062
	Other intangibles, net					258,744				267,357
	Goodwill					812,235				814,309
	Other non-current assets					24,524				22,097
				TOTAL ASSETS	$	2,821,525			$	2,868,343
LIABILITIES AND STOCKHOLDERS' EQUITY
	CURRENT LIABILITIES:
		Accounts payable trade			$	263,267			$	279,982
		Accounts payable other				32,318				29,069
		Accrued payroll				27,609				32,833
		Accrued other				87,573				91,441
		Lease liability - operating leases				44,449				45,492
		Lease liability - financing leases				636				663
		Current portion of long-term debt				99,564				100,001
				TOTAL CURRENT LIABILITIES		555,416				579,481
	Deferred consideration					28,436				30,639
	Long-term debt					152,504				164,361
	Other non-current liabilities					50,083				51,004
	Lease liability - operating leases					188,108				197,664
	Lease liability - financing leases					193				330
	Deferred taxes					150,586				152,913
	STOCKHOLDERS' EQUITY:
		Preferred stock, $.01 par value; 2,000,000 shares authorized;
			no shares issued or outstanding in 2025 and 2024.			-				-
		Common stock
			Class A: $.01 par value; 97,337,700 shares authorized;
				72,303,228 shares issued in both 2025 and 2024;
				60,688,110 shares outstanding in 2025 and 60,746,745 shares outstanding in 2024.		723				723
			Class B: $.01 par value; 662,300 shares authorized;
				574,903 shares issued and outstanding in both 2025 and 2024.		6				6
		Additional paid-in capital				208,650				222,039
		Retained earnings				2,041,622				2,022,265
		Accumulated other comprehensive loss				(1,612	)			(1,453	)
		Treasury stock; at cost, 11,615,118 shares in 2025 and 11,556,483 shares in 2024				(600,886	)			(598,583	)
			Total Hub Group, Inc. equity			1,648,503				1,644,997
		Non-controlling interests				47,696				46,954
			TOTAL STOCKHOLDERS' EQUITY			1,696,199				1,691,951
				TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	2,821,525			$	2,868,343

HUB GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
					Three Months Ended March 31,
						2025				2024
Cash flows from operating activities:
	Net income				$	27,194			$	27,053
	Adjustments to reconcile net income
		to net cash provided by operating activities:
			Depreciation and amortization of intangibles and right-of-use assets			47,046				49,605
			Deferred taxes			(2,054	)			(3,025	)
			Non-cash share-based compensation expense			4,653				4,040
			Gain on sale of assets, net			(65	)			(498	)
	Changes in operating assets and liabilities, net of acquisitions:
			Restricted investments			2,153				370
			Accounts receivable, net			13,567				9,652
			Prepaid taxes			5,942				7,253
			Prepaid expenses and other current assets			10,232				12,468
			Other non-current assets			(3,326	)			(880	)
			Accounts payable			(13,532	)			(24,755	)
			Accrued expenses			(10,446	)			11,462
			Non-current liabilities			(11,329	)			(12,229	)
				Net cash provided by operating activities		70,035				80,516
Cash flows from investing activities:
	Proceeds from sale of equipment					3,625				3,442
	Purchases of property and equipment					(19,190	)			(17,524	)
				Net cash used in investing activities		(15,565	)			(14,082	)
Cash flows from financing activities:
	Repayments of long term debt					(26,379	)			(27,422	)
	Purchase of treasury stock					(13,814	)			(25,756	)
	Dividends paid					(7,500	)			(8,486	)
	Stock withheld for payments of withholding taxes					(6,531	)			(7,626	)
	Finance lease payments					(163	)			(606	)
	Proceeds from issuance of debt					14,072				11,550
				Net cash used in financing activities		(40,315	)			(58,346	)
	Effect of exchange rate changes on cash, cash equivalents and restricted cash					7				4
Net increase in cash, cash equivalents and restricted cash						14,162				8,092
Cash, cash equivalents and restricted cash at beginning of period						126,948				187,270
Cash, cash equivalents and restricted cash at end of period					$	141,110			$	195,362

HUB GROUP, INC.
FINANCIAL INFORMATION BY SEGMENT
(in thousands)
(unaudited)
	Three Months Ended March 31,
Operating Revenue		2025				2024
Intermodal and Transportation Services	$	530,022			$	552,033
Logistics		411,001				480,224
Inter-segment eliminations		(25,807	)			(32,764	)
Total operating revenue	$	915,216			$	999,493
	Three Months Ended March 31,
Operating Income		2025				2024
Intermodal and Transportation Services	$	14,049			$	13,031
Logistics		23,289				24,108
Total operating income	$	37,338			$	37,139
	Three Months Ended March 31,
Depreciation and Amortization		2025				2024
Intermodal and Transportation Services	$	22,025			$	27,049
Logistics		10,553				11,282
Total depreciation and amortization	$	32,578			$	38,331

RECONCILIATION OF NET INCOME TO EBITDA (1) AND NET DEBT / EBITDA LEVERAGE
(in thousands)
(unaudited)
	2024			2024			2024			2025
	Q2			Q3			Q4			Q1			LTM
Net Income	$	29,015		$	23,603		$	24,372		$	27,194		$	104,184
Interest Expense, net		1,881			1,333			1,858			1,992			7,064
Depreciation and Amortization (2)		49,495			46,374			47,088			47,046			190,003
Provision for Income Taxes		8,566			7,140			5,387			8,447			29,540
EBITDA	$	88,957		$	78,450		$	78,705		$	84,679		$	330,791
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	$	88,957		$	88,839		$	84,780		$	84,679		$	347,255
EBITDA													$	330,791
Net Debt (3)													$	140,223
Net Debt / EBITDA														0.4
(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.