Highlights:
- Completed 2:1 stock split; Q4 Diluted earnings per share (EPS) presented post-split of
$0.46 and$2.62 for the full year - Adjusting for acquisition related expenses of
$5.1 million , Q4 adjusted EPS (non-GAAP) of$0.54 and$2.68 for full year - Full year revenue of
$4.2 billion ; Fourth quarter revenue of$1.0 billion - GAAP Quarterly operating income of
$29 million (3.0% of revenue) - Significantly increased our Final Mile business heading into 2024 through the acquisition of
Forward Air Final Mile (“FAFM”) - Executing on Capital Allocation Plan including
$26 million of shares purchased during the quarter - Introduced 2024 outlook with expected revenue of
$4.6 billion to$5.0 billion and diluted EPS of$2.00 to$2.50
“I am very proud of the way the organization supported our customers while delivering our second-best financial performance in the company’s history during a very challenging year. We continue to implement key strategic priorities that position us to grow for the long term, while keeping a significant focus on managing our cost structure. At the end of 2023, we continued to execute on our growth focused capital allocation plan acquiring
Fourth Quarter and Full Year 2023 Results
Consolidated revenue for the fourth quarter of 2023 was
Fourth quarter Intermodal and Transportation Solutions (“ITS”) Segment revenue was
Fourth quarter Logistics Segment revenue was
Capital expenditures for the fourth quarter of 2023 totaled
2024 Outlook
We expect our 2024 diluted earnings per share will range from
Non-GAAP Financial Measures
In this press release, we present certain non-GAAP financial measures. As required by the rules of the
CONFERENCE CALL
Hosting the conference call will be
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/BIeeaae6d02102421ea6f53479bff39a89 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 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
SOURCE:
CONTACT:
CONSOLIDATED STATEMENTS OF EARNINGS | ||||||||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||||
(unaudited) | ||||||||||||||||||
Three Months Ended | ||||||||||||||||||
2023 | 2022 | |||||||||||||||||
% of | % of | |||||||||||||||||
Amount | Revenue | Amount | Revenue | |||||||||||||||
Operating revenue | $ | 985,023 | 100.0% | $ | 1,285,503 | 100.0% | ||||||||||||
Operating expenses: | ||||||||||||||||||
Purchased transportation and warehousing | 742,405 | 75.4% | 955,204 | 74.3% | ||||||||||||||
Salaries and benefits | 135,569 | 13.7% | 147,106 | 11.4% | ||||||||||||||
Depreciation and amortization | 36,624 | 3.7% | 34,714 | 2.7% | ||||||||||||||
Insurance and claims | 12,999 | 1.3% | 20,511 | 1.6% | ||||||||||||||
General and administrative | 29,260 | 3.0% | 26,760 | 2.1% | ||||||||||||||
Gain on sale of assets, net | (1,236 | ) | -0.1% | (3,079 | ) | -0.2% | ||||||||||||
Total operating expenses | 955,621 | 97.0% | 1,181,216 | 91.9% | ||||||||||||||
Operating income | 29,402 | 3.0% | 104,287 | 8.1% | ||||||||||||||
Other income (expense): | ||||||||||||||||||
Interest expense | (3,812 | ) | -0.4% | (2,206 | ) | -0.2% | ||||||||||||
Interest income | 3,709 | 0.4% | 825 | 0.1% | ||||||||||||||
Other, net | 478 | 0.0% | 315 | 0.0% | ||||||||||||||
Total other income (expense), net | 375 | 0.0% | (1,066 | ) | -0.1% | |||||||||||||
Income before provision for income taxes | 29,777 | 3.0% | 103,221 | 8.0% | ||||||||||||||
Provision for income taxes | 992 | 0.1% | 23,947 | 1.9% | ||||||||||||||
Net income | $ | 28,785 | $ | 79,274 | ||||||||||||||
Earnings per share | ||||||||||||||||||
Basic | $ | 0.47 | $ | 1.22 | ||||||||||||||
Diluted | $ | 0.46 | $ | 1.21 | ||||||||||||||
Basic weighted average number of shares outstanding | 61,850 | 64,794 | ||||||||||||||||
Diluted weighted average number of shares outstanding | 62,562 | 65,630 | ||||||||||||||||
CONSOLIDATED STATEMENTS OF EARNINGS | ||||||||||||||||||
(in thousands, except per share amounts) | ||||||||||||||||||
(unaudited) | ||||||||||||||||||
Years Ended | ||||||||||||||||||
2023 | 2022 | |||||||||||||||||
% of | % of | |||||||||||||||||
Amount | Revenue | Amount | Revenue | |||||||||||||||
Operating revenue | $ | 4,202,585 | 100.0% | $ | 5,340,490 | 100.0% | ||||||||||||
Operating expenses: | ||||||||||||||||||
Purchased transportation and warehousing | 3,145,595 | 74.8% | 4,036,503 | 75.6% | ||||||||||||||
Salaries and benefits | 553,326 | 13.2% | 543,010 | 10.2% | ||||||||||||||
Depreciation and amortization | 143,523 | 3.4% | 131,789 | 2.5% | ||||||||||||||
Insurance and claims | 49,040 | 1.2% | 58,064 | 1.1% | ||||||||||||||
General and administrative | 105,705 | 2.5% | 120,579 | 2.2% | ||||||||||||||
Gain on sale of assets, net | (6,835 | ) | -0.2% | (24,176 | ) | -0.5% | ||||||||||||
Total operating expenses | 3,990,354 | 94.9% | 4,865,769 | 91.1% | ||||||||||||||
Operating income | 212,231 | 5.1% | 474,721 | 8.9% | ||||||||||||||
Other income (expense): | ||||||||||||||||||
Interest expense | (13,435 | ) | -0.3% | (7,506 | ) | -0.1% | ||||||||||||
Interest income | 10,011 | 0.2% | 874 | 0.0% | ||||||||||||||
Other, net | 397 | 0.0% | (131 | ) | -0.0% | |||||||||||||
Total other expense, net | (3,027 | ) | -0.1% | (6,763 | ) | -0.1% | ||||||||||||
Income before provision for income taxes | 209,204 | 5.0% | 467,958 | 8.8% | ||||||||||||||
Provision for income taxes | 41,676 | 1.0% | 111,010 | 2.1% | ||||||||||||||
Net income | $ | 167,528 | $ | 356,948 | ||||||||||||||
Earnings per share | ||||||||||||||||||
Basic | $ | 2.65 | $ | 5.37 | ||||||||||||||
Diluted | $ | 2.62 | $ | 5.32 | ||||||||||||||
Basic weighted average number of shares outstanding | 63,324 | 66,418 | ||||||||||||||||
Diluted weighted average number of shares outstanding | 63,954 | 67,118 | ||||||||||||||||
CONSOLIDATED BALANCE SHEETS | |||||||||||||||
(in thousands, except share data) | |||||||||||||||
2023 | 2022 | ||||||||||||||
(unaudited) | |||||||||||||||
ASSETS | |||||||||||||||
CURRENT ASSETS: | |||||||||||||||
Cash and cash equivalents | $ | 187,270 | $ | 286,642 | |||||||||||
Accounts receivable trade, net | 600,197 | 716,190 | |||||||||||||
Accounts receivable other | 3,358 | 3,967 | |||||||||||||
Prepaid taxes | 17,331 | 16,987 | |||||||||||||
Prepaid expenses and other current assets | 41,089 | 32,914 | |||||||||||||
TOTAL CURRENT ASSETS | 849,245 | 1,056,700 | |||||||||||||
Restricted investments | 20,763 | 18,065 | |||||||||||||
Property and equipment, net | 791,692 | 783,683 | |||||||||||||
Right-of-use assets - operating leases | 210,742 | 102,114 | |||||||||||||
Right-of-use assets - financing leases | 2,522 | 1,194 | |||||||||||||
Other intangibles, net | 304,607 | 197,386 | |||||||||||||
733,695 | 629,402 | ||||||||||||||
Other assets | 22,781 | 21,537 | |||||||||||||
TOTAL ASSETS | $ | 2,936,047 | $ | 2,810,081 | |||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||
CURRENT LIABILITIES: | |||||||||||||||
Accounts payable trade | $ | 349,378 | $ | 344,751 | |||||||||||
Accounts payable other | 14,471 | 15,563 | |||||||||||||
Accrued payroll | 21,731 | 66,669 | |||||||||||||
Accrued other | 121,253 | 132,324 | |||||||||||||
Lease liability - operating leases | 44,690 | 29,547 | |||||||||||||
Lease liability - financing leases | 1,579 | 1,175 | |||||||||||||
Current portion of long term debt | 105,108 | 101,741 | |||||||||||||
TOTAL CURRENT LIABILITIES | 658,210 | 691,770 | |||||||||||||
Long term debt | 245,574 | 240,724 | |||||||||||||
Non-current liabilities | 55,287 | 43,505 | |||||||||||||
Lease liability - operating leases | 177,699 | 78,557 | |||||||||||||
Lease liability - financing leases | 865 | - | |||||||||||||
Deferred taxes | 163,767 | 155,923 | |||||||||||||
STOCKHOLDERS' EQUITY: | |||||||||||||||
Preferred stock, | |||||||||||||||
no shares issued or outstanding in 2023 and 2022. | - | - | |||||||||||||
Common stock | |||||||||||||||
Class A: | |||||||||||||||
shares issued in both 2023 and 2022; 62,200,921 | |||||||||||||||
shares outstanding in 2023 and 65,868,145 shares outstanding in 2022. | 755 | 755 | |||||||||||||
Class B: | |||||||||||||||
574,903 shares issued and outstanding in both 2023 and 2022. | 6 | 6 | |||||||||||||
Additional paid-in capital | 225,288 | 207,823 | |||||||||||||
Purchase price in excess of predecessor basis, net of tax | |||||||||||||||
benefit of | (15,458 | ) | (15,458 | ) | |||||||||||
Retained earnings | 1,949,110 | 1,781,582 | |||||||||||||
Accumulated other comprehensive loss | (129 | ) | (214 | ) | |||||||||||
and 9,656,044 shares in 2022 | (524,927 | ) | (374,892 | ) | |||||||||||
TOTAL STOCKHOLDERS' EQUITY | 1,634,645 | 1,599,602 | |||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 2,936,047 | $ | 2,810,081 | |||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||
(in thousands) | ||||||||||||||
(unaudited) | ||||||||||||||
Years Ended | ||||||||||||||
2023 | 2022 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||
Net income | $ | 167,528 | $ | 356,948 | ||||||||||
Adjustments to reconcile net income | ||||||||||||||
to net cash provided by operating activities: | ||||||||||||||
Depreciation and amortization | 184,449 | 153,726 | ||||||||||||
Impairment of right-of-use asset | 2,012 | 5,874 | ||||||||||||
Deferred taxes | 9,587 | 4,448 | ||||||||||||
Compensation expense related to share-based compensation plans | 21,348 | 20,426 | ||||||||||||
Gain on sale of assets, net | (6,835 | ) | (24,176 | ) | ||||||||||
Changes in operating assets and liabilities, net of acquisitions: | ||||||||||||||
Restricted investments | (2,698 | ) | 6,191 | |||||||||||
Accounts receivable, net | 145,088 | 8,298 | ||||||||||||
Prepaid taxes | (344 | ) | (14,796 | ) | ||||||||||
Prepaid expenses and other current assets | (5,974 | ) | (3,111 | ) | ||||||||||
Other assets | (3,732 | ) | (4,231 | ) | ||||||||||
Accounts payable | 1,215 | (89,103 | ) | |||||||||||
Accrued expenses | (63,626 | ) | 57,613 | |||||||||||
Non-current liabilities | (25,860 | ) | (19,944 | ) | ||||||||||
Net cash provided by operating activities | 422,158 | 458,163 | ||||||||||||
Cash flows from investing activities: | ||||||||||||||
Proceeds from sale of equipment | 27,717 | 42,929 | ||||||||||||
Purchases of property and equipment | (140,068 | ) | (219,140 | ) | ||||||||||
Acquisitions, net of cash acquired | (260,810 | ) | (102,661 | ) | ||||||||||
Net cash used in investing activities | (373,161 | ) | (278,872 | ) | ||||||||||
Cash flows from financing activities: | ||||||||||||||
Purchase of treasury stock | (143,770 | ) | (75,000 | ) | ||||||||||
Repayments of long term debt | (105,771 | ) | (111,482 | ) | ||||||||||
Stock withheld for payments of withholding taxes | (10,148 | ) | (8,312 | ) | ||||||||||
Finance lease payments | (2,708 | ) | (2,093 | ) | ||||||||||
Purchase of treasury stock from related party | - | (34,767 | ) | |||||||||||
Proceeds from issuance of debt | 113,988 | 179,195 | ||||||||||||
Net cash used in financing activities | (148,409 | ) | (52,459 | ) | ||||||||||
Effect of exchange rate changes on cash and cash equivalents | 40 | 26 | ||||||||||||
Net increase in cash and cash equivalents | (99,372 | ) | 126,858 | |||||||||||
Cash and cash equivalents beginning of period | 286,642 | 159,784 | ||||||||||||
Cash and cash equivalents end of period | $ | 187,270 | $ | 286,642 | ||||||||||
FINANCIAL INFORMATION BY SEGMENT | |||||||||||||||
(in thousands) | |||||||||||||||
(unaudited) | |||||||||||||||
Three Months | Years | ||||||||||||||
Ended | Ended | ||||||||||||||
Operating Revenue | 2023 | 2022 | 2023 | 2022 | |||||||||||
Intermodal and Transportation Solutions | $ | 576,474 | $ | 804,709 | $ | 2,495,663 | $ | 3,312,431 | |||||||
Logistics | 437,857 | 507,043 | 1,820,856 | 2,121,818 | |||||||||||
Inter-segment eliminations | (29,308 | ) | (26,249 | ) | (113,934 | ) | (93,759 | ) | |||||||
Total operating revenue | $ | 985,023 | $ | 1,285,503 | $ | 4,202,585 | $ | 5,340,490 | |||||||
Three Months | Years | ||||||||||||||
Ended | Ended | ||||||||||||||
Operating Income | 2023 | 2022 | 2023 | 2022 | |||||||||||
Intermodal and Transportation Solutions | $ | 12,141 | $ | 75,468 | $ | 106,780 | $ | 348,537 | |||||||
Logistics | 17,261 | 28,819 | 105,451 | 126,184 | |||||||||||
Total operating income | $ | 29,402 | $ | 104,287 | $ | 212,231 | $ | 474,721 | |||||||
Three Months | Years | ||||||||||||||
Ended | Ended | ||||||||||||||
Depreciation and Amortization | 2023 | 2022 | 2023 | 2022 | |||||||||||
Intermodal and Transportation Solutions | $ | 27,483 | $ | 26,501 | $ | 109,234 | $ | 102,279 | |||||||
Logistics | 9,141 | 8,213 | 34,289 | 29,510 | |||||||||||
Total depreciation and amortization | $ | 36,624 | $ | 34,714 | $ | 143,523 | $ | 131,789 | |||||||
RECONCILIATION OF NET INCOME TO EBITDA | |||||||||||
(in thousands) | |||||||||||
(unaudited) | |||||||||||
Three Months | Years | ||||||||||
Ended | Ended | ||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||
Net Income | $ | 28,785 | $ | 79,274 | $ | 167,528 | $ | 356,948 | |||
Interest Expense, net | 103 | 1,381 | 3,424 | 6,632 | |||||||
Depreciation and Amortization | 47,674 | 43,313 | 184,449 | 153,726 | |||||||
Provision for Income Taxes | 992 | 23,947 | 41,676 | 111,010 | |||||||
EBITDA | $ | 77,554 | $ | 147,915 | $ | 397,077 | $ | 628,316 | |||
By providing this non-GAAP measure of EBITDA, management intends to provide investors with a meaningful, consistent comparison of the Company’s profitability for the periods presented.
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 earnings, excluding certain items for earnings before tax (pre-tax), net income (after-tax) and diluted earnings per share (per share): | |||||||||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||
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 expenses | 5.1 | 4.9 | $ | 0.08 | 5.1 | 4.1 | $ | 0.06 | |||||||||||||
Adjusted Earnings | $ | 34.9 | $ | 33.7 | $ | 0.54 | $ | 214.3 | $ | 171.6 | $ | 2.68 | |||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||||||||
Pre-Tax | After-Tax | Per Share | Pre-Tax | After-Tax | Per Share | ||||||||||||||||
GAAP Earnings | $ | 103.2 | $ | 79.3 | $ | 1.21 | $ | 468.0 | $ | 356.9 | $ | 5.32 | |||||||||
Acquisition related expenses | - | - | $ | - | 3.1 | 2.4 | $ | 0.04 | |||||||||||||
Adjusted Earnings | $ | 103.2 | $ | 79.3 | $ | 1.21 | $ | 471.1 | $ | 359.3 | $ | 5.36 | |||||||||
By providing this non-GAAP measure of Adjusted Earnings, management intends to provide investors with a useful measure of Hub Group’s performance that excludes certain acquisition-related items and allowing better evaluation of underlying business performance and period-to-period comparability.
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 acquisitions of
Source:
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