Item 1. Financial Statements
Item 1. Financial Statements
HUB GROUP, INC.
CONDENSED CONSOLIDATED BAL ANCE SHEETS
(in thousands, except share amounts)
June 30,
December 31,
2025
2024
ASSETS
(unaudited)
CURRENT ASSETS:
Cash and cash equivalents
$
137,048
$
98,248
Restricted cash
26,553
28,700
Accounts receivable trade, net
541,554
581,516
Accounts receivable other
11,887
10,880
Prepaid taxes
11,060
15,115
Prepaid expenses and other current assets
17,337
33,870
TOTAL CURRENT ASSETS
745,439
768,329
Restricted investments
20,005
21,642
Property and equipment, net
725,200
739,896
Right-of-use assets - operating leases
219,925
233,651
Right-of-use assets - financing leases
731
1,062
Other intangibles, net
259,300
267,357
Goodwill
804,019
814,309
Other non-current assets
25,432
22,097
TOTAL ASSETS
$
2,800,051
$
2,868,343
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable trade
$
235,295
$
279,982
Accounts payable other
31,260
29,069
Accrued payroll
26,820
32,833
Accrued other
90,337
91,441
Lease liability - operating leases
44,006
45,492
Lease liability - financing leases
569
663
Current portion of long-term debt
97,641
100,001
TOTAL CURRENT LIABILITIES
525,928
579,481
Deferred consideration
28,356
30,639
Long-term debt
134,279
164,361
Other non-current liabilities
51,551
51,004
Lease liability - operating leases
186,033
197,664
Lease liability - financing leases
96
330
Deferred taxes
147,600
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; 60,641,237 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 2025 and 2024.
6
6
Additional paid-in capital
216,107
222,039
Retained earnings
2,059,244
2,022,265
Accumulated other comprehensive gain (loss)
2,672
( 1,453
)
Treasury stock; at cost, 11,661,991 shares in 2025 and 11,556,483 shares in 2024
( 603,793
)
( 598,583
)
Total Hub Group, Inc. equity
1,674,959
1,644,997
Non-controlling interests
51,249
46,954
TOTAL STOCKHOLDERS' EQUITY
1,726,208
1,691,951
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
2,800,051
$
2,868,343
See notes to unaudited condensed consolidated financial statements.
3
HUB GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
O F INCOME
(in thousands, except per share amounts)
Three Months Ended
Six Months Ended
June 30,
June 30,
2025
2024
2025
2024
Operating revenue
$
905,648
$
986,495
$
1,820,864
$
1,985,988
Operating expenses:
Purchased transportation and warehousing
655,904
727,236
1,313,827
1,467,408
Salaries and benefits
143,310
141,856
292,723
286,352
Depreciation and amortization
32,387
37,772
64,966
76,103
Insurance and claims
10,644
12,639
21,526
25,257
General and administrative
28,925
27,877
56,070
55,111
Loss (gain) on sale of assets, net
130
( 413
)
65
( 910
)
Total operating expenses
871,300
946,967
1,749,177
1,909,321
Operating income
34,348
39,528
71,687
76,667
Other income (expense):
Interest expense
( 3,148
)
( 3,689
)
( 6,395
)
( 7,588
)
Interest income
1,019
1,808
2,274
3,201
Other, net
728
( 66
)
1,023
( 236
)
Total other expense, net
( 1,401
)
( 1,947
)
( 3,098
)
( 4,623
)
Income before provision for income taxes
32,947
37,581
68,589
72,044
Provision for income taxes
7,916
8,566
16,363
15,976
Net income
25,031
29,015
52,226
56,068
Less: net (loss) income attributable to non-controlling interests
( 216
)
-
131
-
Net income attributable to Hub Group, Inc.
$
25,247
$
29,015
$
52,095
$
56,068
Basic earnings per common share
$
0.42
$
0.48
$
0.87
$
0.92
Diluted earnings per common share
$
0.42
$
0.47
$
0.86
$
0.91
Basic weighted average number of shares outstanding
60,002
60,710
60,096
61,018
Diluted weighted average number of shares outstanding
60,210
61,108
60,314
61,387
See notes to unaudited condensed consolidated financial statements.
4
HUB GR OUP, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS
OF COMPREHENSIVE INCOME
(in thousands, except per share amounts)
Three Months Ended
Six Months Ended
June 30,
June 30,
2025
2024
2025
2024
Net income
$
25,031
$
29,015
$
52,226
$
56,068
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments
8,053
( 63
)
8,289
( 71
)
Total comprehensive income
$
33,084
$
28,952
$
60,515
$
55,997
Less: comprehensive income attributable to non-controlling interests
3,553
-
4,295
-
Comprehensive income attributable to Hub Group, Inc.
$
29,531
$
28,952
$
56,220
$
55,997
See notes to unaudited condensed consolidated financial statements.
5
HUB GROUP, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(in thousands, except per share amounts)
Class A & B
Accumulated
Common Stock
Additional
Other
Non-
Shares
Paid-in
Retained
Comprehensive
Treasury Stock
Controlling
Issued
Amount
Capital
Earnings
Income (loss)
Shares
Amount
Interests
Total
Balance March 31, 2024
72,878,131
$
729
$
208,964
$
1,968,361
$
( 137
)
( 10,455,784
)
$
( 555,701
)
$
1,622,216
Net income attributable to Hub Group, Inc.
-
-
-
29,015
-
-
-
-
29,015
Stock tendered for payments of withholding taxes related to awards vested
-
-
-
-
-
( 4,237
)
( 178
)
-
( 178
)
Purchase of treasury stock
-
-
-
-
-
( 179,875
)
( 7,182
)
-
( 7,182
)
Federal excise tax on purchased treasury stock
-
-
-
-
-
-
( 295
)
-
( 295
)
Issuance of restricted stock awards, net of forfeitures
-
-
( 3,011
)
-
-
( 10,329
)
3,011
-
-
Share-based compensation expense
-
-
5,393
-
-
-
-
-
5,393
Dividends paid
-
-
-
( 7,604
)
-
-
-
-
( 7,604
)
Change in unvested dividends
-
-
-
( 172
)
-
-
-
-
( 172
)
Foreign currency translation adjustment
-
-
-
-
( 63
)
-
-
-
( 63
)
Balance June 30, 2024
72,878,131
$
729
$
211,346
$
1,989,600
$
( 200
)
( 10,650,225
)
$
( 560,345
)
$
-
$
1,641,130
Balance March 31, 2025
72,878,131
$
729
$
208,650
$
2,041,622
$
( 1,612
)
( 11,615,118
)
$
( 600,886
)
$
47,696
$
1,696,199
Net income attributable to Hub Group, Inc.
-
-
-
25,247
-
-
-
-
25,247
Net loss attributable to non-controlling interests
-
-
-
-
-
-
-
( 216
)
( 216
)
Stock tendered for payments of withholding taxes related to awards vested
-
-
-
-
-
( 3,661
)
( 143
)
-
( 143
)
Issuance of restricted stock awards, net of forfeitures
-
-
2,764
-
-
( 43,212
)
( 2,764
)
-
-
Share-based compensation expense
-
-
4,693
-
-
-
-
-
4,693
Dividends paid
-
-
-
( 7,500
)
-
-
-
-
( 7,500
)
Change in unvested dividends
-
-
-
( 125
)
-
-
-
-
( 125
)
Foreign currency translation adjustment
-
-
-
-
4,284
-
-
3,769
8,053
Balance June 30, 2025
72,878,131
$
729
$
216,107
$
2,059,244
$
2,672
( 11,661,991
)
$
( 603,793
)
$
51,249
$
1,726,208
Balance December 31, 2023
76,099,092
$
761
$
209,830
$
1,949,110
$
( 129
)
( 13,323,268
)
$
( 524,927
)
$
1,634,645
Adjustment related to stock split
( 3,220,961
)
( 32
)
32
-
-
3,220,961
-
-
-
Net income attributable to Hub Group, Inc.
-
-
-
56,068
-
-
-
-
56,068
Stock tendered for payments of withholding taxes related to awards vested
-
-
-
-
-
( 190,304
)
( 8,664
)
-
( 8,664
)
Purchase of treasury stock
-
-
-
-
-
( 767,803
)
( 32,938
)
-
( 32,938
)
Federal excise tax on purchased treasury stock
-
-
-
-
-
-
( 1,765
)
-
( 1,765
)
Issuance of restricted stock awards, net of forfeitures
-
-
( 7,949
)
-
-
410,189
7,949
-
-
Share-based compensation expense
-
-
9,433
-
-
-
-
-
9,433
Dividends paid
-
-
-
( 15,230
)
-
-
-
-
( 15,230
)
Change in unvested dividends
-
-
-
( 348
)
-
-
-
-
( 348
)
Foreign currency translation adjustment
-
-
-
-
( 71
)
-
-
-
( 71
)
Balance June 30, 2024
72,878,131
$
729
$
211,346
$
1,989,600
$
( 200
)
( 10,650,225
)
$
( 560,345
)
$
-
$
1,641,130
Balance December 31, 2024
72,878,131
$
729
$
222,039
$
2,022,265
$
( 1,453
)
( 11,556,483
)
$
( 598,583
)
$
46,954
$
1,691,951
Net income attributable to Hub Group, Inc.
52,095
-
-
-
-
52,095
Net income attributable to non-controlling interests
-
-
-
-
131
131
Stock tendered for payments of withholding taxes related to awards vested
-
-
-
-
-
( 151,685
)
( 6,673
)
( 6,673
)
Purchase of treasury stock
-
-
-
-
-
( 330,441
)
( 13,814
)
( 13,814
)
Issuance of restricted stock awards, net of forfeitures
-
-
( 15,277
)
-
-
376,618
15,277
-
Share-based compensation expense
-
-
9,345
-
-
-
-
-
9,345
Dividends paid
-
-
-
( 15,000
)
-
-
-
-
( 15,000
)
Change in unvested dividends
-
-
-
( 116
)
-
-
-
-
( 116
)
Foreign currency translation adjustment
-
-
-
-
4,125
-
-
4,164
8,289
Balance June 30, 2025
72,878,131
$
729
$
216,107
$
2,059,244
$
2,672
( 11,661,991
)
$
( 603,793
)
$
51,249
$
1,726,208
See notes to unaudited condensed consolidated financial statements.
6
HUB GROUP, INC.
U NAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Six Months Ended June 30,
2025
2024
Cash flows from operating activities:
Net income
$
52,226
$
56,068
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of intangibles and right-of-use assets
94,448
99,100
Deferred taxes
( 4,191
)
( 9,249
)
Non-cash share-based compensation expense
9,345
9,433
Loss (gain) on sale of assets, net
65
( 910
)
Changes in operating assets and liabilities, net of acquisition:
Restricted investments
640
( 281
)
Accounts receivable, net
41,251
15,784
Prepaid taxes
4,191
4,537
Prepaid expenses and other current assets
16,910
19,697
Other non-current assets
( 4,445
)
( 1,503
)
Accounts payable
( 43,705
)
( 14,270
)
Accrued expenses
( 13,552
)
( 6,542
)
Non-current liabilities
( 21,647
)
( 21,399
)
Net cash provided by operating activities
131,536
150,465
Cash flows from investing activities:
Proceeds from sale of equipment
4,056
5,750
Purchases of property and equipment
( 30,480
)
( 31,255
)
Acquisitions, net of cash acquired
-
3,701
Net cash used in investing activities
( 26,424
)
( 21,804
)
Cash flows from financing activities:
Repayments of long-term debt
( 51,729
)
( 53,233
)
Purchase of treasury stock
( 13,814
)
( 32,938
)
Dividends paid
( 15,000
)
( 15,230
)
Stock withheld for payments of withholding taxes
( 6,673
)
( 8,664
)
Finance lease payments
( 328
)
( 1,217
)
Proceeds from issuance of debt
19,103
15,618
Net cash used in financing activities
( 68,441
)
( 95,664
)
Effect of exchange rate changes on cash and cash equivalents and restricted cash
( 18
)
( 20
)
Net increase in cash and cash equivalents and restricted cash
36,653
32,977
Cash and cash equivalents and restricted cash at beginning of the period
126,948
187,270
Cash and cash equivalents and restricted cash at end of the period
$
163,601
$
220,247
Supplemental disclosures of cash paid for:
Interest paid
$
6,284
$
7,413
Income taxes paid, net
$
16,840
$
20,684
See notes to unaudited condensed consolidated financial statements.
7
HUB GROUP, INC.
N OTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. Interim Financial Statements
Our accompanying unaudited condensed consolidated financial statements of Hub Group, Inc. (the “Company,” “Hub,” “we,” “us” or “our”) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements have been omitted pursuant to those rules and regulations. However, we believe that the disclosures contained herein are adequate to make the information presented not misleading.
The financial statements reflect, in our opinion, all material adjustments (which include only normal recurring adjustments) necessary to fairly present our financial position as of June 30, 2025 and results of operations for the three and six months ended June 30, 2025 and 2024.
These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “2024 10-K”). Results of operations in interim periods are not necessarily indicative of results to be expected for a full year due partially to seasonality.
On March 5, 2025, the Board declared a quarterly cash dividend of $ 0.125 per share on the Company’s Class A and Class B common stock. The dividend was paid on March 28, 2025 to stockholders of record as of March 18, 2025. The declaration and payment of the quarterly cash dividend was subject to the approval of the Board at its sole discretion and in compliance with applicable laws and regulations.
On May 13, 2025, the Board declared a quarterly cash dividend of $ 0.125 per share on the Company’s Class A and Class B common stock. The dividend was paid on June 30, 2025 to stockholders of record as of June 23, 2025. The declaration and payment of the quarterly cash dividend was subject to the approval of the Board at its sole discretion and in compliance with applicable laws and regulations.
In October 2023, the Board authorized the purchase of up to $ 250 million of our Class A Common Stock pursuant to a share repurchase program. During the quarter ended June 30, 2025 , we did no t purchase any shares. During the six months ended June 30, 2025 , we purchased 330,441 shares for approximately $ 13.8 million.
NOTE 2. Earnings Per Share
The Company has two classes of common stock, Class A and Class B, both of which have identical rights to dividends and share equally in the earnings of the Company. Accordingly, the Company presents a single calculation of basic and diluted earnings per share for both classes in accordance with the guidance in ASC 260 “Earnings Per Share”.
The following is a reconciliation of our earnings per share (in thousands, except for per share data):
Three Months Ended June 30,
Six Months Ended June 30,
2025
2024
2025
2024
Net income for basic and diluted earnings per share
$
25,031
$
29,015
$
52,226
$
56,068
Less: net (loss) income attributable to non-controlling interests
( 216
)
-
131
-
Net income attributable to Hub Group, Inc.
$
25,247
$
29,015
$
52,095
$
56,068
Weighted average shares outstanding - basic
60,002
60,710
60,096
61,018
Dilutive effect of restricted stock
208
398
218
369
Weighted average shares outstanding - diluted
60,210
61,108
60,314
61,387
Earnings per share - basic
$
0.42
$
0.48
$
0.87
$
0.92
Earnings per share - diluted
$
0.42
$
0.47
$
0.86
$
0.91
8
NOTE 3. Acquisitions
EASO Transaction
On October 23, 2024 , we entered into an investment agreement with Corporación Interamericana de Logística, S.A. de C.V. and certain associated entities (commonly known as “EASO”), a family-led, intermodal and trucking logistics provider headquartered in Mexico City to acquire a controlling interest in EASO. EASO specializes in intermodal, dedicated trucking, truckload and freight brokerage services. Through a network of terminals across Mexico, EASO serves the entire Mexican domestic market and main logistics hubs in the U.S. using its intermodal cross-border network.
The estimated fair value of total consideration transferred was approximately $ 55 million for a 51 % equity stake in EASO. The financial results of EASO, since the date of acquisition, are included in our ITS segment.
The EASO investment transaction expanded our intermodal and transportation solutions business. With a substantial increase in cross-border trade activity from nearshoring, this transaction improves our ability to provide a cross-border service offering and provides increased intermodal conversion opportunities.
The initial accounting for the EASO transaction is incomplete as we, with the support of our valuation specialist, are in the process of finalizing the fair market value calculations of the acquired net assets as well as non-controlling interests. In addition, we are in the preparation and review process of the valuation of certain acquired assets, liabilities, and non-controlling interest used in determining the purchase accounting. Finally, certain post-closing activities outlined in the investment agreement remain incomplete. As a result, the amounts recorded in the condensed consolidated financial statements related to the EASO transaction are preliminary and the measurement period remains open.
The following table summarizes the preliminary purchase price allocation to the assets acquired and liabilities assumed as of the date of the investment agreement (in thousands):
October 23, 2024
Cash and cash equivalents
$
2,018
Accounts receivable trade, net
15,138
Other receivables
8,258
Prepaid taxes
1,174
Prepaid expenses and other current assets
1,790
Property and equipment, net
20,275
Right-of-use assets - operating leases
1,647
Other intangibles
42,511
Goodwill
30,507
Other non-current assets
243
Deferred taxes
780
Total assets acquired
$
124,341
Accounts payable trade
$
9,976
Accounts payable other
3,844
Accrued payroll
1,273
Accrued other
841
Lease liability - operating leases (current)
336
Current portion of long-term debt
1,031
Long-term debt
2,017
Lease liability - operating leases (non-current)
1,311
Total liabilities assumed
$
20,629
Total purchase price allocation
$
103,712
Less: non-controlling interests
48,996
Consideration transferred for 51 % ownership
54,716
Less: contingent consideration due to sellers
3,721
Cash contributed for 51 % ownership
50,995
Less: cash and cash equivalents acquired
2,018
Less: deferred cash consideration
28,436
Cash paid, net
$
20,541
9
The following table summarizes the preliminary estimated acquisition date fair value of consideration transferred and purchase price allocation.
October 23, 2024
Cash
$
22,559
Deferred cash consideration
28,436
Contingent consideration
3,721
Total consideration transferred
54,716
Non-controlling interests
48,996
Total purchase price allocation
$
103,712
The EASO transaction was accounted for as a purchase business combination in accordance with ASC 805 “Business Combinations.” In connection with the transaction, we performed a consolidation analysis concluding that we control all EASO entities through either a majority voting interest or as the primary beneficiary of a variable interest entity. As a result, 100 % of assets acquired, liabilities assumed and non-controlling interests were recorded in the accompanying Condensed Consolidated Balance Sheet at their preliminary estimated fair values as of October 23, 2024, with the remaining unallocated purchase price recorded as goodwill. The goodwill recognized in the EASO transaction was primarily attributable to potential expansion and future development of the business. This goodwill is not expected to be deductible for tax purposes.
Total consideration transferred includes $ 28.4 million of deferred cash consideration, all or a portion of which may be paid at least two years after the closing date of the transaction. As a result of the restrictions on this deferred consideration in the investment agreement, we have classified the associated cash as Restricted Cash in the accompanying Condensed Consolidated Balance Sheet. As of June 30, 2025, the balances of Deferred Consideration and Restricted Cash were $ 28.4 million and $ 26.6 million, respectively , on the Condensed Consolidated Balance Sheet.
Total consideration transferred includes $ 3.7 million of contingent consideration related to certain operating tax balances existing prior to the transaction for which we have agreed to reimburse the full amount of cash collected within two years of the closing date of the transaction. The estimated fair value of such contingent consideration is based on estimated collectability of such operating tax balances within the agreed timeframe.
Our investment in one of the EASO entities, Corporación Interamericana de Logística, S.A. de C.V. (“CIL”), qualifies as a Variable Interest Entity (“VIE”). Based on the rights provided in the investment and shareholder agreements, as well as the design of the VIE, our majority exposure to the variability associated with economic performance of the VIE, and the relationship and significance of activities of the VIE to us, we determined that we are most closely associated with the VIE and are therefore considered the primary beneficiary.
During a period from 2030 to 2032, Hub will have the right, but not the obligation, to purchase an amount of issued and outstanding shares of EASO such that, upon exercising this call right, we would own 80 % of all of the issued and outstanding shares of EASO at a purchase price based on earnings multiples as defined in the shareholders agreement. We evaluated this call right and concluded that it does not meet the definition of a derivative, resulting in the non-controlling interest and embedded call right being classified as permanent equity.
The components of “Other intangibles” listed in the above table as of the transaction date are preliminarily estimated as follows (in thousands):
Closing Date
Accumulated
Balance at
Estimated Useful
Amount
Amortization
June 30, 2025
Life
Customer relationships
$
33,018
$
1,512
$
31,506
15 years
Trade name
9,493
326
9,167
20 years
Subtotal
$
42,511
$
1,838
40,673
Effect of translation
2,169
Ending Balance
$
42,842
The above intangible assets are amortized using the straight-line method. Amortization expense related to the intangible assets acquired with this transaction was $ 0.4 million and $ 1.2 million for the three months and six months ended June 30, 2025, respectively. The intangible assets have a weighted average useful life of approximately 15.46 years as of June 30, 2025.
10
Amortization expense related to EASO investment agreement for the next five years is estimated as follows (in thousands):
Total
2025 (Remainder of year)
$
1,341
2026
2,681
2027
2,681
2028
2,681
2029
2,681
The following table presents the total carrying amount of goodwill by segment (in thousands):
ITS
Logistics
Total
Balance at December 31, 2024
$
413,745
$
400,564
$
814,309
Adjustments
( 12,891
)
-
( 12,891
)
Currency translation adjustment
2,601
-
2,601
Balance at June 30, 2025
$
403,455
$
400,564
$
804,019
The changes noted as "Adjustments" in the above table refer to preliminary purchase accounting adjustments related to the EASO acquisition recorded during the three month period ending June 30, 2025, primarily related to the increase in the valuation of intangibles for $ 5.9 million and the increase in valuation of property, plant, and equipment for $ 4.5 million.
NOTE 4. Segment Reporting
Our CEO has been identified as our Chief Operating Decision Maker (“CODM”). We have two reportable segments: Intermodal and Transportation Solutions (“ITS”) and Logistics which are based primarily on the services each segment provides. Our ITS segment includes our asset-light business lines: intermodal and dedicated trucking. Our Logistics segment includes our non-asset business lines: managed transportation, truck brokerage, final mile and consolidation and fulfillment services. Our CODM uses operating income by segment to make decisions over the allocation of capital and resources and assess the performance of our segments.
Intermodal and Transportation Solutions. Our ITS segment offers high service, nationwide door-to-door intermodal transportation, providing value, visibility and reliability in both transcontinental and local lanes by combining rail transportation with local trucking. This segment includes our trucking operations which provides our customers with local pickup and delivery (referred to as “drayage”) as well as high service local and regional trucking transportation using equipment dedicated to their needs. We arrange for the movement of our customers’ freight in one of our approximately 50,000 containers. As of June 30, 2025, we operated trucking terminals a t 32 l ocations throughout the United States and Mexico, with locations in many large metropolitan areas. We also contract for services with independent owner-operators who supply their own equipment and operate under our regulatory authority. These assets and contractual services are used to support drayage for our intermodal service offering and to serve our customers who require high service local and regional trucking transportation using equipment dedicated to their needs. We contract with railroads to provide transportation for the long-haul portion of the shipment between rail terminals. Drayage between origin or destination and rail terminals are provided by our own trucking operations and third parties with whom we contract. Our dedicated service operation offers fleets of equipment and drivers to each customer on a contract basis, as well as the management and infrastructure to operate according to the customer’s high service expectations. As of June 30, 2025, our trucking transportation operation consisted of approximately 2,400 tractors, 3,300 employee drivers and 4,500 trailers. We also contract for services with approximately 500 independent owner-operators.
Logistics . Our Logistics segment offers a wide range of services including transportation management, freight brokerage services, shipment optimization, load consolidation, mode selection, carrier management, load planning and execution, warehousing, fulfillment, cross-docking, consolidation services and final mile delivery. These services include a full range of trucking transportation services, including dry van, expedited, less-than-truckload, refrigerated and flatbed, all of which is provided by third party carriers with whom we contract. We also leverage proprietary technology along with collaborative relationships with third party service providers to deliver cost savings and performance-enhancing supply chain services to our clients. Our transportation management offering also serves as a source of volume for our ITS segment. Many of the customers for these solutions are consumer goods companies who sell into the retail channel. Our final mile delivery offering provides residential final mile delivery and installation of appliances and big and bulky goods. Final mile operates through a network of independent service providers in company, customer and third-party facilities throughout the continental United States. Our business operates or has access to approximatel y 7 million square feet of warehousing and cross-dock space across North America, to which our customers ship their goods to be stored and distributed to destinations including residences, retail stores and other commercial locations. These services offer our customers shipment visibility, transportation cost savings, high service and compliance with retailers’ increasingly stringent supply chain requirements. Logistics also includes our brokerage business which provides third-party truckload, less-than-truckload (“LTL”), flatbed and temperature-controlled needs.
11
The following tables summarize our financial and operating data by segment for the three months ended June 30, 2025 and June 30, 2024 (in thousands):
Three Months Ended
June 30, 2025
ITS
Logistics
Eliminations
Total
Operating revenue
$
528,184
$
404,310
$
( 26,846
)
$
905,648
Operating expenses
Purchased transportation and warehousing
364,048
318,409
( 26,553
)
Salaries and benefits
87,716
32,556
-
Depreciation and amortization
19,140
8,250
-
Insurance and claims
9,423
868
( 293
)
General and administrative
8,298
6,233
-
Corporate allocations
25,018
18,053
-
(Gain) / loss on sale of assets, net
134
-
-
Total operating expenses
513,777
384,369
( 26,846
)
871,300
Operating income
$
14,407
$
19,941
$
-
$
34,348
Three Months Ended
June 30, 2024
ITS
Logistics
Eliminations
Total
Operating revenue
$
561,033
$
459,088
$
( 33,626
)
$
986,495
Operating expenses
Purchased transportation and warehousing
397,129
363,424
( 33,292
)
Salaries and benefits
84,157
35,029
-
Depreciation and amortization
24,045
8,021
-
Insurance and claims
10,012
1,542
( 334
)
General and administrative
7,249
5,872
-
Corporate allocations
25,184
19,345
-
(Gain) / loss on sale of assets, net
( 382
)
( 34
)
-
Total operating expenses
547,394
433,199
( 33,626
)
946,967
Operating income
$
13,639
$
25,889
$
-
$
39,528
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The following tables summarize our financial and operating data by segment for the six months ended June 30, 2025 and June 30, 2024 (in thousands):
Six Months Ended
June 30, 2025
ITS
Logistics
Eliminations
Total
Operating revenue
$
1,058,206
$
815,311
$
( 52,653
)
$
1,820,864
Operating expenses
Purchased transportation and warehousing
727,962
637,929
( 52,066
)
Salaries and benefits
177,247
67,412
-
Depreciation and amortization
38,089
16,536
-
Insurance and claims
18,323
2,460
( 587
)
General and administrative
16,869
10,720
-
Corporate allocations
51,191
37,027
-
(Gain) / loss on sale of assets, net
68
( 3
)
-
Total operating expenses
1,029,749
772,081
( 52,653
)
1,749,177
Operating income
$
28,457
$
43,230
$
-
$
71,687
Six Months Ended
June 30, 2024
ITS
Logistics
Eliminations
Total
Operating revenue
$
1,113,066
$
939,312
$
( 66,390
)
$
1,985,988
Operating expenses
Purchased transportation and warehousing
785,334
747,850
( 65,722
)
Salaries and benefits
169,558
69,737
-
Depreciation and amortization
48,103
16,841
-
Insurance and claims
19,855
3,327
( 668
)
General and administrative
14,092
11,708
-
Corporate allocations
50,337
39,886
-
(Gain) / loss on sale of assets, net
( 883
)
( 34
)
-
Total operating expenses
1,086,396
889,315
( 66,390
)
1,909,321
Operating income
$
26,670
$
49,997
$
-
$
76,667
The “Eliminations” column primarily relates to revenues for transportation management services provided to the Logistics segment and recognized as revenues in the ITS segment, and operating expenses incurred by the Logistics segment for these intercompany services.
The following table summarizes our revenue from external customers by geographic region (in thousands):
Three Months Ended
Six Months Ended
June 30,
June 30,
2025
2024
2025
2024
United States
$
878,479
$
986,362
$
1,769,045
$
1,985,740
Mexico
27,169
133
51,819
248
Revenue from external customers
$
905,648
$
986,495
$
1,820,864
$
1,985,988
Separate balance sheets are not presented by segment to our Chief Operating Decision Maker (“CODM”). Our CODM does not utilize segment asset information to evaluate performance and make resource allocation decisions, and thus such disclosures are not provided.
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NOTE 5. Fair Value Measurement
The carrying value of cash and cash equivalents, accounts receivable and accounts payable approximated fair value as of June 30, 2025 and December 31, 2024. As of June 30, 2025, the fair value of the Company’s fixed-rate borrowings was $ 2.6 million more than the historical carrying value of $ 231.9 million. As of December 31, 2024, the $ 264.4 million carrying value of the Company's fixed-rate borrowings approximated the fair value. The fair value of the fixed-rate borrowings was estimated using an income approach based on current interest rates available to the Company for borrowings on similar terms and maturities.
We consider as cash equivalents all highly liquid instruments with an original maturity of three months or less. As of June 30, 2025 and December 31, 2024, our cash and temporary investments were with high quality financial institutions in demand deposit accounts, savings accounts, checking accounts and money market accounts.
Restricted Cash of $ 26.6 million and $ 28.7 million as of June 30, 2025 and December 31, 2024, respectively, includes cash held in both deposit accounts and escrow accounts that are not subject to remeasurement on a recurring basis.
Restricted investments included $ 20.0 million and $ 21.6 million as of June 30, 2025 and December 31, 2024, respectively, of mutual funds and other security investments which are reported at fair value. These investments relate to our non-qualified deferred compensation plan and insurance deposits.
Our assets and liabilities measured at fair value are based on valuation techniques which consider prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities. These valuation methods are based on either quoted market prices (Level 1) or inputs, other than quoted prices in active markets, that are observable either directly or indirectly (Level 2), or unobservable inputs (Level 3). Cash and cash equivalents, accounts receivable, accounts payable and mutual funds and related liabilities are defined as “Level 1,” while long-term debt is defined as “Level 2” of the fair value hierarchy in the Fair Value Measurements and Disclosures Topic of the Codification.
NOTE 6. Long-Term Debt and Financing Arrangements
On June 20, 2025, we entered into a five-year , $ 450 million credit agreement (the "Credit Agreement"). This Credit Agreement replaces the credit agreement dated as of February 24, 2022 (the “2022 Credit Agreement”). As part of this transition, all outstanding standby letters of credit issued under the 2022 Credit Agreement were transferred to the new Credit Agreement. We did not incur any early termination penalties in connection with the termination of the 2022 Credit Agreement.
Borrowings under the Credit Agreement generally bear interest at a variable rate equal to (i) the secured overnight financing rate (published by the Federal Reserve Bank of New York, “SOFR”), plus a specified margin based on the term of such borrowing, plus a specified margin based upon our total net leverage ratio (as defined in the Credit Agreement) (the "Total Net Leverage Ratio"), or (ii) the base rate (which is the highest of (a) the administrative agent's prime rate, (b) the federal funds rate plus 0.50 % or (c) the sum of 1 % and one-month SOFR ) plus a specified margin based upon the Total Net Leverage Ratio. The specified margin for SOFR loans varies from 100.0 to 175.0 basis points per annum. The specified margin for base rate loans varies from 0.0 to 75.0 basis points per annum. We must also pay (1) a commitment fee ranging from 10.0 to 25.0 basis points per annum (based upon the Total Net Leverage Ratio) on the aggregate unused commitments and (2) a letter of credit fee ranging from 100.0 to 175.0 basis points per annum (based upon the Total Net Leverage Ratio) on the undrawn amount of letters of credit. While any payment default exists, we must pay interest at a default rate equal to the applicable interest rate described above plus 2.0 % per annum.
We have standby letters of credit that expire in 2025 . As of June 30, 2025 and December 31, 2024, our letters of credit were $ 0.7 million and $ 0.8 million, respectively.
As of June 30, 2025 and December 31, 2024 , we had no borrowings under the Credit Agreement and the 2022 Credit Agreement, and our unused and available borrowings were $ 449.3 million and $ 349.2 million, respectively. We were in compliance with our debt covenants as of June 30, 2025 and December 31, 2024.
14
We have entered into various Equipment Notes (“Notes”) for t he purchase of tractors, trailers, containers and refrigeration units. The Notes are secured by the underlying equipment financed in the agreements.
Our outstanding Notes are as follows (in thousands):
June 30,
December 31,
2025
2024
Interim funding for equipment received and expected to be converted to an equipment note in a subsequent period; interest paid at a variable rate
$
857
$
-
Secured Equipment Note maturing in 2030 commencing in 2025 ; interest is paid monthly at a fixed annual rate between 5.34 % and 5.40 %
17,710
-
Secured Equipment Notes maturing on various dates in 2029 commencing on various dates in 2024 ; interest is paid monthly at a fixed annual rate between 5.11 % and 6.24 % (1)
18,549
21,400
Secured Equipment Notes maturing on various dates in 2028 commencing on various dates in 2023 ; interest is paid monthly at a fixed annual rate between 5.21 % and 6.32 %
74,581
85,050
Secured Equipment Notes maturing on various dates in 2027 commencing on various dates in 2022 and 2023 ; interest is paid monthly at a fixed annual rate between 2.07 % and 6.45 %
88,315
108,411
Secured Equipment Notes maturing on various dates in 2026 commencing on various dates in 2021 ; interest is paid monthly at a fixed annual rate between 1.48 % and 2.41 %
26,337
36,942
Secured Equipment Notes maturing on various dates in 2025 commencing on various dates in 2020 ; interest is paid monthly at a fixed annual rate between 1.51 % and 1.80 %
5,571
12,559
Total debt
231,920
264,362
Less current portion of long-term debt
( 97,641
)
( 100,001
)
Total long-term debt
$
134,279
$
164,361
(1) Includes an immaterial amount of notes held at EASO with interest rates up to 13.95 %.
NOTE 7. Legal Matters
The Company is involved in certain claims, commercial disputes and pending litigation arising from the normal conduct of business, including putative class-action lawsuits involving employment related claims. Based on management's present knowledge, management does not believe that any potential unrecorded loss contingencies arising from these pending matters are likely to have a material adverse effect on our overall financial position, operating results, or cash flows after taking into account any existing accruals for settlements or losses determined to be probable and estimable. However, actual outcomes could be material to the Company's financial position, operating results, or cash flows for any particular period.
NOTE 8. Subs equent Event
On July 22, 2025, we entered into an Asset Purchase Agreement with Marten Transport, Ltd. Intermodal. The transaction is expected to close by the end of the third quarter. Under the agreement, we will acquire certain intermodal equipment and contracts for a total purchase price of $ 51.8 million in cash.
15
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.