Hub Group Inc. (HUBG, Financial) filed Quarterly Report for the period ended 2010-03-31.
Hub Group Inc. has a market cap of $1.24 billion; its shares were traded at around $33.09 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 11.2% over the past 10 years.HUBG is in the portfolios of Diamond Hill Capital of Diamond Hill Capital Management Inc, Chuck Royce of Royce& Associates, Steven Cohen of SAC Capital Advisors, Jim Simons of Renaissance Technologies LLC.
Gross margin increased 8.1% to $48.8 million in 2010 from $45.2 million in 2009. This $3.6 million margin increase came primarily from intermodal and logistics. As a percentage of revenue, gross margin decreased to 11.7% in 2010 from 12.8% in 2009. The decrease in gross margin as a percentage of revenue was driven primarily by intermodal pricing being down 3% and an increase in truck brokerage costs resulting from tighter capacity.
As a percentage of revenue, salaries and benefits decreased to 5.6% in 2010 from 6.6% in 2009 due to increased revenue and improved employee efficiencies. Salaries and benefits increased to $23.5 million in 2010 from $23.2 million in 2009 due primarily to an increase in bonus expense, partially offset by lower severance. Bonuses were $1.3 million higher in the first quarter of 2010 due primarily to the EPS portion of the bonus being accrued in 2010 while no EPS bonus was accrued in 2009. This increase was partially offset by a decrease in salaries related to severance costs of $0.9 million recorded during the quarter ended March 31, 2009. Headcount as of March 31, 2010 was Â1,037 which excludes drivers as driver costs are included in transportation costs.
General and administrative expenses remained constant at $10.1 million in both 2010 and 2009. As a percentage of revenue, these expenses decreased to 2.5% in 2010 from 2.9% in 2009. Increases in professional fees of $0.8 million and outside sales commissions of $0.2 million were offset by decreases in bad debt expense of $0.8 million and travel and entertainment expenses of $0.2 million.
Depreciation and amortization decreased to $1.0 million in 2010 from $1.2 million in 2009. This expense as a percentage of revenue decreased to 0.2% in 2010 from 0.3% in 2009. The decrease in depreciation and amortization was due primarily to a change in the salvage value of certain assets in 2009.
On March 3, 2010, we entered into an amendment to our Credit Agreement which reduced our maximum unsecured borrowing capacity under the Credit Agreement from $50.0 million to $10.0 million and extended the term of the Credit Agreement until March 2013. The interest rate of the Credit Agreement is equal to LIBOR plus 1.75%. The financial covenants require a minimum net worth of $275.0 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%. The revolving line of credit expires on March 3, 2013. We believe that the $10.0 million in unsecured borrowing capacity more accurately reflects our borrowing needs in the coming years in light of our historical lack of borrowings against the line of credit, significant cash balance and ability to generate cash.
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Hub Group Inc. has a market cap of $1.24 billion; its shares were traded at around $33.09 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 11.2% over the past 10 years.HUBG is in the portfolios of Diamond Hill Capital of Diamond Hill Capital Management Inc, Chuck Royce of Royce& Associates, Steven Cohen of SAC Capital Advisors, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Revenue increased 18.7% to $417.3 million in 2010 from $351.7 million in 2009. Intermodal revenue increased 16.8% to $286.7 million due to a 16% increase in volume, a 6% increase for fuel, a 3% price decrease and a 2% decrease for mix. Truck brokerage revenue increased 22.8% to $83.6 million due to a 23% increase in volume and a 7% increase for fuel, offset by a 7% decrease for price and mix. Our length of haul for truck brokerage was down 4% or 30 miles. Logistics revenue increased 23.3% to $47.0 million related to several new customers added in 2009 and an increase in business with existing accounts.Gross margin increased 8.1% to $48.8 million in 2010 from $45.2 million in 2009. This $3.6 million margin increase came primarily from intermodal and logistics. As a percentage of revenue, gross margin decreased to 11.7% in 2010 from 12.8% in 2009. The decrease in gross margin as a percentage of revenue was driven primarily by intermodal pricing being down 3% and an increase in truck brokerage costs resulting from tighter capacity.
As a percentage of revenue, salaries and benefits decreased to 5.6% in 2010 from 6.6% in 2009 due to increased revenue and improved employee efficiencies. Salaries and benefits increased to $23.5 million in 2010 from $23.2 million in 2009 due primarily to an increase in bonus expense, partially offset by lower severance. Bonuses were $1.3 million higher in the first quarter of 2010 due primarily to the EPS portion of the bonus being accrued in 2010 while no EPS bonus was accrued in 2009. This increase was partially offset by a decrease in salaries related to severance costs of $0.9 million recorded during the quarter ended March 31, 2009. Headcount as of March 31, 2010 was Â1,037 which excludes drivers as driver costs are included in transportation costs.
General and administrative expenses remained constant at $10.1 million in both 2010 and 2009. As a percentage of revenue, these expenses decreased to 2.5% in 2010 from 2.9% in 2009. Increases in professional fees of $0.8 million and outside sales commissions of $0.2 million were offset by decreases in bad debt expense of $0.8 million and travel and entertainment expenses of $0.2 million.
Depreciation and amortization decreased to $1.0 million in 2010 from $1.2 million in 2009. This expense as a percentage of revenue decreased to 0.2% in 2010 from 0.3% in 2009. The decrease in depreciation and amortization was due primarily to a change in the salvage value of certain assets in 2009.
On March 3, 2010, we entered into an amendment to our Credit Agreement which reduced our maximum unsecured borrowing capacity under the Credit Agreement from $50.0 million to $10.0 million and extended the term of the Credit Agreement until March 2013. The interest rate of the Credit Agreement is equal to LIBOR plus 1.75%. The financial covenants require a minimum net worth of $275.0 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%. The revolving line of credit expires on March 3, 2013. We believe that the $10.0 million in unsecured borrowing capacity more accurately reflects our borrowing needs in the coming years in light of our historical lack of borrowings against the line of credit, significant cash balance and ability to generate cash.
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