Hub Group Inc. (HUBG, Financial) filed Quarterly Report for the period ended 2009-03-31.
Hub Group Inc. is a full service transportation provider offering intermodal truck brokerage and comprehensive logistics services. Hub Group Inc. has a market cap of $832.5 million; its shares were traded at around $22.4 with a P/E ratio of 14.2 and P/S ratio of 0.4. Hub Group Inc. had an annual average earning growth of 20% over the past 5 years.
Gross margin decreased 21.4% to $45.2 million in 2009 from $57.5 million in 2008. This $12.3 million margin decline comes from, in order of magnitude, first intermodal and then truck brokerage. Margin decline was attributed to pricing being down in the quarter, lower volume and changes in customer mix. As a percent of revenue, gross margin has decreased to 12.8% in 2009 from 13.5% in 2008. The decrease in gross margin as a percent of revenue was driven primarily by intermodal pricing pressure, and lower margins from our drayage company, Comtrak.
As a percentage of revenue, salaries and benefits increased to 6.6% in 2009 from 6.0% in 2008. Salaries and benefits decreased to $23.2 million in 2009 from $25.4 million in 2008 due primarily to a decrease in bonus expense and headcount. Bonus is $2.0 million lower in the first quarter of 2009 due to not earning any EPS-based bonus in 2009. This decrease was partially offset by an increase in salaries which included severance costs for the three months ended March 31, 2009 of $0.9 million. Headcount as of March 31, 2009 was 1,004 which excludes drivers as driver costs are included in transportation costs.
General and administrative expenses decreased to $10.1 million in 2009 from $10.2 million in 2008. As a percentage of revenue, these expenses increased to 2.9% from 2.4%. Total expenses decreased due to a reduction in outside services of $0.5 million, and a reduction of $0.2 million each for sales commissions, advertising expenses and travel and entertainment expenses. These decreases were partially offset by a $1.0 million increase in bad debt expense, quarter over quarter.
Depreciation and amortization increased to $1.2 million in 2009 from $1.0 million in 2008. This expense as a percentage of revenue increased to 0.3% in 2009 from 0.2% in 2008. The increase in depreciation and amortization is due primarily to a decrease in the salvage value of certain assets.
The provision for income taxes decreased to $4.5 million in 2009 compared to $8.3 million in 2008. We provided for income taxes using an effective rate of 42.3% in 2009 and an effective rate of 38.6% in 2008. The 2009 effective rate was higher due to income tax law changes enacted in February, 2009 by Wisconsin and California. The combined effect of the changes is approximately a $0.4 million increase in expense.
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Hub Group Inc. is a full service transportation provider offering intermodal truck brokerage and comprehensive logistics services. Hub Group Inc. has a market cap of $832.5 million; its shares were traded at around $22.4 with a P/E ratio of 14.2 and P/S ratio of 0.4. Hub Group Inc. had an annual average earning growth of 20% over the past 5 years.
Highlight of Business Operations:
Revenue decreased 17.2% to $351.7 million in 2009 from $425.0 million in 2008. Intermodal revenue decreased 18.9% to $245.6 million due to a 4.9% decrease in volume, an 11.0% decline for fuel, a 2.0% price decrease and 1.0% due to unfavorable mix. Truck brokerage revenue decreased 24.3% to $68.0 million due to a decrease in volume, a 9% decrease related to fuel, lower prices and an unfavorable mix change due to a shorter length of haul. Our length of haul for truck brokerage was down 8% or 70 miles. Logistics revenue increased 17.9% to $38.1 million related to several new customers added in 2008 and an increase in business with existing accounts.Gross margin decreased 21.4% to $45.2 million in 2009 from $57.5 million in 2008. This $12.3 million margin decline comes from, in order of magnitude, first intermodal and then truck brokerage. Margin decline was attributed to pricing being down in the quarter, lower volume and changes in customer mix. As a percent of revenue, gross margin has decreased to 12.8% in 2009 from 13.5% in 2008. The decrease in gross margin as a percent of revenue was driven primarily by intermodal pricing pressure, and lower margins from our drayage company, Comtrak.
As a percentage of revenue, salaries and benefits increased to 6.6% in 2009 from 6.0% in 2008. Salaries and benefits decreased to $23.2 million in 2009 from $25.4 million in 2008 due primarily to a decrease in bonus expense and headcount. Bonus is $2.0 million lower in the first quarter of 2009 due to not earning any EPS-based bonus in 2009. This decrease was partially offset by an increase in salaries which included severance costs for the three months ended March 31, 2009 of $0.9 million. Headcount as of March 31, 2009 was 1,004 which excludes drivers as driver costs are included in transportation costs.
General and administrative expenses decreased to $10.1 million in 2009 from $10.2 million in 2008. As a percentage of revenue, these expenses increased to 2.9% from 2.4%. Total expenses decreased due to a reduction in outside services of $0.5 million, and a reduction of $0.2 million each for sales commissions, advertising expenses and travel and entertainment expenses. These decreases were partially offset by a $1.0 million increase in bad debt expense, quarter over quarter.
Depreciation and amortization increased to $1.2 million in 2009 from $1.0 million in 2008. This expense as a percentage of revenue increased to 0.3% in 2009 from 0.2% in 2008. The increase in depreciation and amortization is due primarily to a decrease in the salvage value of certain assets.
The provision for income taxes decreased to $4.5 million in 2009 compared to $8.3 million in 2008. We provided for income taxes using an effective rate of 42.3% in 2009 and an effective rate of 38.6% in 2008. The 2009 effective rate was higher due to income tax law changes enacted in February, 2009 by Wisconsin and California. The combined effect of the changes is approximately a $0.4 million increase in expense.
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