Hub Group Inc. (HUBG, Financial) filed Quarterly Report for the period ended 2011-03-31.
Hub Group Inc. has a market cap of $1.47 billion; its shares were traded at around $39.84 with a P/E ratio of 34.1 and P/S ratio of 0.8. Hub Group Inc. had an annual average earning growth of 10.4% over the past 10 years.
Gross margin increased 17.4% to $57.3 million in 2011 from $48.8 million in 2010. This $8.5 million margin increase came primarily from intermodal. Intermodal margin grew since we did more of our own drayage, improved equipment utilization, handled 13% more loads and increased prices. As a percentage of revenue, gross margin increased to 11.8% in 2011 from 11.7% in 2010. The increase in gross margin as a percentage of revenue was driven primarily by intermodal pricing being up 3%. Logistics gross margin went down 241 basis points due to growth coming from customers for whom we record transportation revenue and costs as opposed to customers from whom we collect a management fee.
As a percentage of revenue, salaries and benefits decreased to 5.5% in 2011 from 5.6% in 2010 due to increased revenue and improved employee efficiencies. Salaries and benefits increased to $26.8 million in
General and administrative expenses increased to $12.8 million in 2011 from $10.1 million in 2010. As a percentage of revenue, these expenses increased to 2.6% in 2011 from 2.5% in 2010. Total expenses increased due primarily to deal related costs of $1.7 million associated with the Mode Transportation purchase that closed on April 1, 2011, an increase in information technology consultants of $0.5 million and an increase in independent agent commission expenses of $0.3 million.
The provision for income taxes increased to $6.5 million in 2011 from $5.6 million in 2010. We provided for income taxes using an effective rate of 38.2% in 2011 and an effective rate of 39.2% in 2010. The 2011 effective rate was lower due primarily to favorable state apportionment and a reduction in non-deductible compensation.
On March 31, 2011, we amended our Credit Agreement which increased our maximum unsecured borrowing capacity from $10.0 million to $50.0 million and extended the term until March 2014. The interest rate under the Credit Agreement is equal to LIBOR plus 1.75%. The financial covenants require a minimum net worth of $300.0 million and a cash flow leverage ratio of not more than 2.0 to 1.0. The commitment fee charged on the unused line of credit is 0.375%.
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Hub Group Inc. has a market cap of $1.47 billion; its shares were traded at around $39.84 with a P/E ratio of 34.1 and P/S ratio of 0.8. Hub Group Inc. had an annual average earning growth of 10.4% over the past 10 years.
Highlight of Business Operations:
Revenue increased 16.3% to $485.4 million in 2011 from $417.3 million in 2010. Intermodal revenue increased 17.4% to $336.7 million due to a 13% increase in loads, a 7% increase for fuel and a 3% price increase, offset partially by a 6% decrease for mix. Truck brokerage revenue increased 1.3% to $84.7 million due to a 6% increase for fuel and a 4% increase for price and mix, offset partially by a 9% decrease in loads. Our length of haul for truck brokerage was down 5% or 37 miles. Logistics revenue increased 36.3% to $64.0 million related primarily to existing customer growth and new customers who were onboarded in 2010.Gross margin increased 17.4% to $57.3 million in 2011 from $48.8 million in 2010. This $8.5 million margin increase came primarily from intermodal. Intermodal margin grew since we did more of our own drayage, improved equipment utilization, handled 13% more loads and increased prices. As a percentage of revenue, gross margin increased to 11.8% in 2011 from 11.7% in 2010. The increase in gross margin as a percentage of revenue was driven primarily by intermodal pricing being up 3%. Logistics gross margin went down 241 basis points due to growth coming from customers for whom we record transportation revenue and costs as opposed to customers from whom we collect a management fee.
As a percentage of revenue, salaries and benefits decreased to 5.5% in 2011 from 5.6% in 2010 due to increased revenue and improved employee efficiencies. Salaries and benefits increased to $26.8 million in
General and administrative expenses increased to $12.8 million in 2011 from $10.1 million in 2010. As a percentage of revenue, these expenses increased to 2.6% in 2011 from 2.5% in 2010. Total expenses increased due primarily to deal related costs of $1.7 million associated with the Mode Transportation purchase that closed on April 1, 2011, an increase in information technology consultants of $0.5 million and an increase in independent agent commission expenses of $0.3 million.
The provision for income taxes increased to $6.5 million in 2011 from $5.6 million in 2010. We provided for income taxes using an effective rate of 38.2% in 2011 and an effective rate of 39.2% in 2010. The 2011 effective rate was lower due primarily to favorable state apportionment and a reduction in non-deductible compensation.
On March 31, 2011, we amended our Credit Agreement which increased our maximum unsecured borrowing capacity from $10.0 million to $50.0 million and extended the term until March 2014. The interest rate under the Credit Agreement is equal to LIBOR plus 1.75%. The financial covenants require a minimum net worth of $300.0 million and a cash flow leverage ratio of not more than 2.0 to 1.0. The commitment fee charged on the unused line of credit is 0.375%.
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