UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 0-27754 HUB GROUP, INC. Delaware 36-4007085 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification N ...

Financial Data and Key Metrics Changes - The company reported a 26% increase in total revenue year-over-year, with operating income doubling compared to the previous year [20][21] - Gross margin as a percentage of revenue was 16.5%, with an operating income margin of 8.7% [20] - Earnings per share for the quarter was $2.61, more than double the prior year [21] Business Line Data and Key Metrics Changes - Intermodal Transportation Services (ITS) revenue increased by 22%, driven by a 31% increase in revenue per load despite a 6% decrease in volume [11] - Logistics revenue rose by 12%, with gross margin as a percentage of sales increasing by 370 basis points [15] - Brokerage revenue surged by 63%, attributed to a 54% increase in volume and a 6% increase in revenue per load [17] Market Data and Key Metrics Changes - Local East volume declined by 18%, while Local West volume increased by 1% and Transcon volume decreased by 1% [12] - Year-to-date volume in October was down about 8% year-over-year, showing a sequential improvement from September [31] Company Strategy and Development Direction - The company is focusing on diversification into non-asset-based services, which are expected to generate significant free cash flow and enhance customer value [8] - The strategy includes in-sourcing a higher percentage of drainage to improve competitive positioning in intermodal [8] - The company aims to maintain a balance between volume growth and margin preservation, particularly in the intermodal segment [94] Management's Comments on Operating Environment and Future Outlook - Management acknowledged potential for a continued softening economy but expressed confidence in the company's resilience due to strategic adjustments [7] - The company expects intermodal volumes to decline in low single digits for 2022, with a forecasted gross margin of 16.5% to 16.7% for the year [23][24] - Management highlighted the importance of maximizing margin per load day as a key focus moving forward [48] Other Important Information - The company authorized a $200 million share repurchase program as part of its commitment to returning capital to shareholders [22] - The company has a pristine balance sheet with low levels of net indebtedness, providing flexibility for investments [24] Q&A Session Summary Question: What are the variables affecting fourth-quarter guidance? - Management indicated that volume growth or decline, surcharges, and gains on sale are key swing factors for guidance [29] Question: Can you provide insights on volume trends for Q3 and Q4? - Volume was down 6% in Q3, with an estimated 200 basis points attributed to the averted rail strike; October showed an 8% year-over-year decline but sequential improvement from September [31] Question: How much of the business is now asset-light? - Approximately 40% to 45% of revenue is now asset-light, providing more flexibility in rail contracts [34] Question: What is the competitive dynamic in intermodal for 2023? - Management believes the market is stable, with a focus on margin maintenance while pursuing volume growth [93] Question: How is the TAGG acquisition progressing? - The acquisition has exceeded expectations in terms of customer receptivity and cross-selling opportunities, enhancing the company's e-commerce fulfillment capabilities [80][82] Question: What is the expected free cash flow profile in a downturn? - The company anticipates strong free cash flow generation, with the ability to scale down capital expenditures if necessary [105]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 0-27754 HUB GROUP, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) Del ...

Hub Group, Inc. (NASDAQ:HUBG) Q2 2022 Earnings Conference Call August 3, 2022 5:00 PM ET Company Participants Dave Yeager - Chief Executive Officer Phil Yeager - President and Chief Operating Officer Geoff DeMartino - Chief Financial Officer Conference Call Participants Todd Fowler - KeyBanc Scott Group - Wolfe Research Tom Wadewitz - UBS Brian Ossenbeck - JPMorgan Jon Chappell - Evercore Bascome Majors - Susquehanna Financial Group Justin Long - Stephens Matt Milask - Stifel David Zazula - Barclays Operato ...

Revenue Growth - Total revenue increased by 41% to $1,298 million in Q1 2022 from $920 million in Q1 2021, driven by significant growth across all business lines [68]. - Intermodal and Transportation Solutions revenue rose 35% to $774 million, with a 35% increase in intermodal revenue per load and a 4% increase in intermodal volume [69]. - Truck Brokerage revenue surged 132% to $296 million, primarily due to the acquisition of Choptank and a 33% increase in revenue per load [69]. - Logistics revenue grew 6% to $229 million, supported by final mile and consolidation services, despite some customer losses [69]. - Top 50 customers accounted for approximately 63% of revenue for the three months ended March 31, 2022, with one customer exceeding 10% of quarterly revenue [65]. Cost and Expenses - Transportation costs increased by 34% to $1,083 million, with purchased transportation costs rising 40% due to higher business activity and increased fuel costs [70]. - Salaries and benefits rose to $69 million in 2022 from $57 million in 2021, but as a percentage of revenue, it decreased to 5.3% from 6.2% [72]. - General and administrative expenses rose to $20 million in 2022 from $19 million in 2021, but as a percentage of revenue, they decreased to 1.6% from 2.1% [75]. - Depreciation and amortization expense increased to $11 million in 2022 from $9 million in 2021, with a revenue percentage decrease to 0.8% from 0.9% [76]. Profitability - Gross margin increased by 98% to $215 million, with gross margin percentage rising to 16.6% from 11.8% [71]. - Net income surged to $88 million in 2022 from $17 million in 2021, driven by increased gross margin [79]. Cash Flow and Capital Expenditures - Cash provided by operating activities was $80 million for the three months ended March 31, 2022, down from $127 million in 2021, primarily due to a $74 million increase in accounts receivable [83]. - Capital expenditures for the three months ended March 31, 2022, totaled $31 million, with significant investments in tractors ($12 million) and containers ($11 million) [84]. - Estimated capital expenditures for 2022 are projected to range from $240 million to $265 million, with transportation equipment purchases expected between $210 million and $225 million [86]. - Net cash used in financing activities for the three months ended March 31, 2022, was $9 million, including long-term debt repayments of $26 million [87]. - As of March 31, 2022, the company had $207 million in cash and $21 million in restricted investments, with no borrowings under the Credit Agreement [81]. Operational Insights - The company plans to order approximately 6,500 new containers in 2022 to increase capacity and meet customer demand [64]. - The company anticipates ongoing uncertainties, including potential consumer spending slowdowns and rising inflation impacting revenue and profitability [66]. - Headcount increased to 2,277 as of March 31, 2022, from 1,958 in 2021, primarily due to the addition of Choptank employees [74]. - The company is continuously evaluating economic conditions and their impact on operational cash flows, particularly in the freight market [92].

Hub Group, Inc. (NASDAQ:HUBG) Q1 2022 Earnings Conference Call April 28, 2022 5:00 PM ET Company Participants Dave Yeager - Chairman & Chief Executive Officer Phil Yeager - President & Chief Operating Officer Geoff DeMartino - Executive Vice President & Chief Financial Officer Conference Call Participants Todd Fowler - KeyBanc Scott Group - Wolfe Research Tom Wadewitz - UBS Jason Seidl - Cowen Jon Chappell - Evercore Bascome Majors - Susquehanna Justin Long - Stephens Brian Ossenbeck - JPMorgan David Zazula ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 0-27754 HUB GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 36-4007085 (State or other jurisdiction of incorporation or organization) 2000 Clearwa ...

Hub Group Overview Investor Presentation F e b r u a r y 2 0 2 2 D I S C L O S U R E hubgroup.com CERTAIN FORWARD-LOOKING STATEMENTS: Statements in this presentation that are not historical may express or imply projections of revenues or expenditures, statements of plans and objectives or future operations or statements of future economic performance. Forward-looking statements are inherently uncertain and subject to risks, uncertainties and other factors that might cause the actual performance of Hub Group ...

Hub Group, Inc. (NASDAQ:HUBG) Q4 2021 Earnings Conference Call February 8, 2022 5:00 PM ET Company Participants Dave Yeager – Chief Executive Officer Phil Yeager – President and Chief Operating Officer Geoff DeMartino – Chief Financial Officer Conference Call Participants Justin Long – Stephens Scott Group – Wolfe Research Todd Fowler – KeyBanc Elliot Alper – Cowen and Company Bascome Majors – Susquehanna Financials Tom Wadewitz – UBS Allison Poliniak – Wells Fargo Jon Chappell – Evercore ISI Brian Ossenbe ...

[PART I. Financial Information](index=2&type=section&id=PART%20I.%20Financial%20Information) This section presents Hub Group, Inc.'s unaudited consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents Hub Group's unaudited consolidated financial statements, including balance sheets, income, equity, and cash flow statements, with detailed notes [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Presents the company's financial position, including assets, liabilities, and equity, as of specific dates Consolidated Balance Sheet Highlights (in thousands) | Metric | September 30, 2021 | December 31, 2020 | | :-------------------------- | :------------------- | :------------------ | | Cash and cash equivalents | $230,656 | $124,506 | | Total Current Assets | $881,007 | $672,835 | | Total Assets | $2,291,480 | $2,105,396 | | Total Current Liabilities | $644,256 | $529,105 | | Total Liabilities | $1,036,355 | $947,473 | | Total Stockholders' Equity | $1,255,125 | $1,157,923 | [Unaudited Consolidated Statements of Income and Comprehensive Income](index=4&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) Details the company's revenues, expenses, and net income over specific periods Consolidated Statements of Income Highlights (in thousands, except per share amounts) | Metric | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :-------------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Revenue | $1,075,107 | $924,812 | $2,975,980 | $2,542,914 | | Gross margin | $157,600 | $108,035 | $386,908 | $319,878 | | Operating income | $59,873 | $33,917 | $120,872 | $74,654 | | Net income | $43,338 | $24,781 | $87,160 | $51,171 | | Diluted earnings per share | $1.28 | $0.74 | $2.58 | $1.53 | [Unaudited Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Outlines changes in stockholders' equity, including net income and share-based compensation, over a period Changes in Stockholders' Equity (Nine Months Ended Sep 30, 2021, in thousands) | Item | Amount | | :------------------------------------------ | :------- | | Balance December 31, 2020 | $1,157,923 | | Stock withheld for payments of withholding taxes | $(4,038) | | Issuance of restricted stock awards, net of forfeitures | - | | Share-based compensation expense | $14,090 | | Net income | $87,160 | | Foreign currency translation adjustment | $(10) | | Balance September 30, 2021 | $1,255,125 | [Unaudited Consolidated Statements of Cash Flows](index=6&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash inflows and outflows from operating, investing, and financing activities Consolidated Statements of Cash Flows Highlights (Nine Months Ended Sep 30, in thousands) | Metric | 2021 | 2020 | | :------------------------------------ | :--------- | :--------- | | Net cash provided by operating activities | $178,058 | $122,688 | | Net cash used in investing activities | $(53,608) | $(54,054) | | Net cash used in financing activities | $(18,289) | $(51,976) | | Net increase in cash and cash equivalents | $106,150 | $16,607 | | Cash and cash equivalents end of the period | $230,656 | $185,336 | [Notes to Unaudited Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Provides detailed explanations of accounting policies, significant transactions, and financial statement line items [NOTE 1. Interim Financial Statements](index=7&type=section&id=NOTE%201.%20Interim%20Financial%20Statements) Explains the basis of preparation for interim financial statements and their limitations - The unaudited consolidated financial statements are prepared in accordance with SEC rules, include normal recurring adjustments, and should be read in conjunction with the annual 10-K. Interim results are not necessarily indicative of full-year results due to seasonality[18](index=18&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk) [NOTE 2. Acquisition](index=7&type=section&id=NOTE%202.%20Acquisition) Details the acquisition of NonstopDelivery, LLC, including purchase price and intangible assets recognized - On December 9, 2020, Hub Group acquired 100% of NonstopDelivery, LLC (NSD) for **$105.9 million**, expanding its logistics service offering to include residential last-mile logistics. NSD operates through a non-asset business model with over **170 carriers**[21](index=21&type=chunk)[22](index=22&type=chunk) Goodwill and Other Intangibles (in thousands) | Metric | January 1, 2021 | September 30, 2021 | | :-------------------- | :-------------- | :----------------- | | Goodwill Balance | $508,555 | $522,360 | NSD Intangible Assets at Acquisition Date (in thousands) | Intangible Asset | Amount | Estimated Useful Life | | :----------------- | :------- | :-------------------- | | Customer relationships | $46,200 | 15 years | | Agent relationships | $600 | 4 years | | Trade name | $900 | 18 months | - Amortization expense related to NSD for the three and nine months ended September 30, 2021, was **$1.0 million** and **$2.8 million**, respectively[23](index=23&type=chunk)[24](index=24&type=chunk) [NOTE 3. Earnings Per Share](index=10&type=section&id=NOTE%203.%20Earnings%20Per%20Share) Reconciles net income to basic and diluted earnings per share calculations Earnings Per Share Reconciliation (in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net income | $43,338 | $24,781 | $87,160 | $51,171 | | Weighted average shares outstanding - basic | 33,433 | 33,177 | 33,427 | 33,169 | | Dilutive effect of stock options and restricted stock | 440 | 420 | 415 | 344 | | Weighted average shares outstanding - diluted | 33,873 | 33,597 | 33,842 | 33,513 | | Earnings per share - basic | $1.30 | $0.75 | $2.61 | $1.54 | | Earnings per share - diluted | $1.28 | $0.74 | $2.58 | $1.53 | [NOTE 4. Revenue from Contracts with Customers](index=10&type=section&id=NOTE%204.%20Revenue%20from%20Contracts%20with%20Customers) Disaggregates revenue by business line and describes the company's service offerings - Hub offers comprehensive multimodal solutions including intermodal, truck brokerage, logistics (including last mile delivery via NSD), and dedicated services across the United States, Canada, and Mexico[26](index=26&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk)[29](index=29&type=chunk)[30](index=30&type=chunk)[31](index=31&type=chunk) Disaggregated Revenue by Business Line (in thousands) | Business Line | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Intermodal | $633,427 | $543,464 | $1,689,617 | $1,468,624 | | Logistics | $224,136 | $192,187 | $663,620 | $569,682 | | Truck brokerage | $153,270 | $119,994 | $420,523 | $304,686 | | Dedicated | $64,274 | $69,167 | $202,220 | $199,922 | | **Total revenue** | **$1,075,107** | **$924,812** | **$2,975,980** | **$2,542,914** | [NOTE 5. Fair Value Measurement](index=11&type=section&id=NOTE%205.%20Fair%20Value%20Measurement) Describes the fair value measurement of financial instruments and their classification within the fair value hierarchy - The carrying value of cash, accounts receivable, and accounts payable approximated fair value. Fixed-rate borrowings' fair value was estimated using an income approach. Restricted investments (mutual funds) are reported at fair value. Assets and liabilities are categorized into **Level 1** (cash, mutual funds, receivables, payables) and **Level 2** (long-term debt) of the fair value hierarchy[33](index=33&type=chunk)[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk) [NOTE 6. Long-Term Debt and Financing Arrangements](index=11&type=section&id=NOTE%206.%20Long-Term%20Debt%20and%20Financing%20Arrangements) Outlines the company's credit facilities, secured equipment notes, and debt covenant compliance - Hub has a **$350 million** unsecured credit agreement maturing July 1, 2022, with **$41.3 million** in standby letters of credit outstanding as of September 30, 2021. Unused and available borrowings were **$308.7 million**. The company was in compliance with debt covenants[37](index=37&type=chunk)[38](index=38&type=chunk)[101](index=101&type=chunk) Secured Equipment Notes (in thousands) | Maturity | Interest Rate Range | September 30, 2021 | December 31, 2020 | | :------- | :------------------ | :----------------- | :---------------- | | 2026 | 1.48% - 1.83% | $67,656 | - | | 2025 | 1.51% - 1.80% | $63,211 | $74,494 | | 2024 | 2.50% - 3.59% | $37,730 | $49,920 | | 2023 | 2.20% - 4.20% | $72,275 | $112,668 | | 2022 | 2.20% - 2.90% | $4,679 | $8,943 | | 2021 | 2.02% - 2.96% | $2,259 | $15,432 | | **Total** | | **$258,250** | **$270,359** | | Less current portion | | $(92,598) | $(93,562) | | **Total long-term debt** | | **$165,652** | **$176,797** | [NOTE 7. Legal Matters](index=13&type=section&id=NOTE%207.%20Legal%20Matters) Discusses ongoing legal proceedings, including class-action lawsuits and their potential impact - Hub Group agreed in principle to settle the Robles and Adame class-action lawsuits, alleging driver misclassification, for **$4.8 million** in September 2019. The company converted its California driver model to employees in late 2014. Management believes other pending litigation is not likely to have a material adverse effect[40](index=40&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk)[44](index=44&type=chunk) [NOTE 8. New Accounting Pronouncements](index=13&type=section&id=NOTE%208.%20New%20Accounting%20Pronouncements) Identifies recently adopted accounting pronouncements and their impact on financial statements - Hub Group adopted ASU 2019-12, Income Taxes (Topic 740), on January 1, 2021, which clarifies and simplifies income tax accounting, but it did not have a material impact on the consolidated financial statements[45](index=45&type=chunk) [NOTE 9. Subsequent Events](index=13&type=section&id=NOTE%209.%20Subsequent%20Events) Reports significant events occurring after the balance sheet date, such as the Choptank Transport acquisition - On October 19, 2021, Hub Group acquired Choptank Transport, LLC for approximately **$130 million** in cash and **$20 million** in restricted stock. This acquisition enhances refrigerated transportation solutions and leverages Choptank's technology platform for truck brokerage[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=14&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion and analysis of financial condition and results of operations, including performance, liquidity, and forward-looking statements [Forward-Looking Information](index=14&type=section&id=Forward-Looking%20Information) Highlights inherent uncertainties and risks that may cause actual results to differ from forward-looking statements - The report contains forward-looking statements subject to inherent uncertainties, risks, and changes in circumstances, including adverse economic conditions (e.g., COVID-19 pandemic), market growth, railroad relationships, driver recruitment, competitive pressures, and regulatory changes, which could cause actual results to differ materially[49](index=49&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk)[57](index=57&type=chunk) [EXECUTIVE SUMMARY](index=15&type=section&id=EXECUTIVE%20SUMMARY) Provides an overview of Hub Group's business, service offerings, and strategic focus on margin enhancement - Hub Group is a leading supply chain solutions provider offering comprehensive transportation and logistics management services, including intermodal, truck brokerage, dedicated trucking, and various logistics services. Its mission is to elevate customer business, and its vision is to build the industry's premier supply chain solutions[52](index=52&type=chunk) - Hub Group Trucking (HGT) provided approximately **51%** of drayage needs for intermodal services for the nine months ended September 30, 2021, operating ~**1,400 tractors** and employing ~**1,400 drivers**. The dedicated operation runs ~**1,000 tractors** and **4,600 trailers** at **65 locations** with ~**1,100 drivers**[54](index=54&type=chunk)[58](index=58&type=chunk) - The company focuses on margin enhancement initiatives such as pricing optimization, load matching, reducing empty miles, improving driver retention, controlling maintenance costs, and enhancing procurement. Its top **50 customers** represent approximately **69% of revenue** for the nine months ended September 30, 2021[60](index=60&type=chunk)[61](index=61&type=chunk) [RESULTS OF OPERATIONS (Three Months Ended September 30, 2021 Compared to 2020)](index=16&type=section&id=RESULTS%20OF%20OPERATIONS%20Three%20Months%20Ended%20September%2030%2C%202021%20Compared%20to%20the%20Three%20Months%20Ended%20September%2030%2C%202020) Analyzes financial performance, including revenue and gross margin trends, for the three months ended September 30 Revenue by Business Line (Three Months Ended Sep 30, in thousands) | Business Line | 2021 | 2020 | Change (%) | | :------------ | :--------- | :--------- | :--------- | | Intermodal | $633,427 | $543,464 | +16.6% | | Logistics | $224,136 | $192,187 | +16.6% | | Truck brokerage | $153,270 | $119,994 | +27.7% | | Dedicated | $64,274 | $69,167 | -7.1% | | **Total revenue** | **$1,075,107** | **$924,812** | **+16.3%** | - Gross margin increased **45.9%** to **$157.6 million**, with gross margin as a percentage of revenue rising to **14.7%** (2021) from **11.7%** (2020). This was driven by higher prices and lower equipment repositioning costs in intermodal, revenue growth and yield management in logistics, and higher revenue per load in truck brokerage[66](index=66&type=chunk)[67](index=67&type=chunk) - Transportation costs increased **12.3%** to **$917.5 million**, primarily due to higher third-party carrier, rail, and fuel costs, partially offset by lower volumes in intermodal and truck brokerage[65](index=65&type=chunk) [CONSOLIDATED OPERATING EXPENSES (Three Months Ended September 30, 2021 Compared to 2020)](index=17&type=section&id=CONSOLIDATED%20OPERATING%20EXPENSES%20Three%20Months%20Ended%20September%2030%2C%202021%20Compared%20to%20the%20Three%20Months%20Ended%20September%2030%2C%202020) Examines changes in operating expenses, including salaries, benefits, and general and administrative costs, for the three-month period - Salaries and benefits increased to **$65.4 million** (2021) from **$45.6 million** (2020), primarily due to the NSD acquisition, **$11.9 million** in employee bonuses, **$2.3 million** in commissions, and **$2.4 million** in employee benefits and payroll taxes. Headcount increased to **1,971** from **1,849**[68](index=68&type=chunk) - General and administrative expenses increased to **$23.4 million** (2021) from **$20.8 million** (2020), driven by a **$3.2 million** increase in legal claims, **$2.1 million** in professional services (Choptank acquisition-related), and additional NSD expenses, partially offset by **$4.9 million** in gains on asset sales[69](index=69&type=chunk) - Net income increased to **$43.3 million** (2021) from **$24.8 million** (2020), primarily due to increased revenue and gross margin, partially offset by higher operating expenses and income tax expense. The effective tax rate was **25.3%** in 2021, up from **21.5%** in 2020[73](index=73&type=chunk)[75](index=75&type=chunk) [RESULTS OF OPERATIONS (Nine Months Ended September 30, 2021 Compared to 2020)](index=18&type=section&id=Nine%20Months%20Ended%20September%2030%2C%202021%20Compared%20to%20the%20Nine%20Months%20Ended%20September%2030%2C%202020) Analyzes financial performance, including revenue and gross margin trends, for the nine months ended September 30 Revenue by Business Line (Nine Months Ended Sep 30, in thousands) | Business Line | 2021 | 2020 | Change (%) | | :------------ | :----------- | :----------- | :--------- | | Intermodal | $1,689,617 | $1,468,624 | +15.0% | | Logistics | $663,620 | $569,682 | +16.5% | | Truck brokerage | $420,523 | $304,686 | +38.0% | | Dedicated | $202,220 | $199,922 | +1.1% | | **Total revenue** | **$2,975,980** | **$2,542,914** | **+17.0%** | - Gross margin increased **21.0%** to **$386.9 million**, with gross margin as a percentage of revenue rising to **13.0%** (2021) from **12.6%** (2020). This growth was primarily driven by increased pricing and volumes in intermodal, profitability initiatives and the NSD acquisition in logistics, and revenue per load growth in truck brokerage[79](index=79&type=chunk)[80](index=80&type=chunk)[81](index=81&type=chunk) - Transportation costs increased **16.5%** to **$2.6 billion**, mainly due to higher purchased transportation costs, increased fuel costs, and higher per-driver compensation[78](index=78&type=chunk) [CONSOLIDATED OPERATING EXPENSES (Nine Months Ended September 30, 2021 Compared to 2020)](index=20&type=section&id=CONSOLIDATED%20OPERATING%20EXPENSES%20Nine%20Months%20Ended%20September%2030%2C%202021%20Compared%20to%20the%20Nine%20Months%20Ended%20September%2030%2C%202020) Examines changes in operating expenses, including salaries, benefits, and general and administrative costs, for the nine-month period - Salaries and benefits increased **$30.6 million** to **$176.7 million** (2021) from **$146.1 million** (2020), primarily due to the NSD acquisition, **$21.0 million** in employee bonuses, **$3.0 million** in commissions, and **$3.4 million** in employee benefits and payroll taxes[82](index=82&type=chunk) - General and administrative expenses decreased **$13.1 million** to **$63.1 million** (2021) from **$76.2 million** (2020), mainly due to a **$9.1 million** change in gain on asset sales, a **$5.4 million** decrease in COVID-19 donation expense, and a **$4.1 million** decrease in professional services, partially offset by **$3.4 million** in legal claims and NSD costs[83](index=83&type=chunk) - Net income increased to **$87.2 million** (2021) from **$51.2 million** (2020), primarily due to increased revenue and gross margin, partially offset by higher operating costs and income tax expense. The effective tax rate was **24.1%** in 2021, up from **23.7%** in 2020[86](index=86&type=chunk)[87](index=87&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=21&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Discusses the company's cash position, operating cash flows, capital expenditures, and debt management - Hub Group believes its cash on hand, cash flows from operations, and available borrowings are sufficient to meet cash needs for at least the next twelve months. Net cash provided by operating activities increased **$55.4 million** to **$178.1 million** for the nine months ended September 30, 2021[89](index=89&type=chunk)[90](index=90&type=chunk)[91](index=91&type=chunk) - Net cash used in investing activities was **$53.6 million**, including **$84.1 million** in capital expenditures (containers, tractors, technology, new building). Estimated capital expenditures for the remainder of 2021 range from **$66 million** to **$76 million**[94](index=94&type=chunk)[95](index=95&type=chunk) - Net cash used in financing activities decreased **$33.7 million** to **$18.3 million**, primarily due to more proceeds from new debt issuance on transportation equipment. The company deferred **$11.3 million** of 2020 payroll taxes under the CARES Act, with half due in December 2021 and the other half in December 2022[97](index=97&type=chunk)[98](index=98&type=chunk)[100](index=100&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=22&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) States that there have been no material changes in market risk since the prior annual report - No material changes in market risk as of September 30, 2021, from that presented in the 2020 10-K[103](index=103&type=chunk) [Item 4. Controls and Procedures](index=22&type=section&id=Item%204.%20Controls%20and%20Procedures) Confirms the effectiveness of disclosure controls and procedures and ongoing integration efforts for acquisitions - Disclosure controls and procedures were effective as of September 30, 2021, as concluded by management, including the CEO and CFO[104](index=104&type=chunk) - No material changes in internal control over financial reporting occurred during the fiscal quarter ended September 30, 2021. The integration of processes, employees, technologies, and operations from the NonstopDelivery, LLC acquisition is ongoing[105](index=105&type=chunk)[106](index=106&type=chunk) [PART II. Other Information](index=22&type=section&id=PART%20II.%20Other%20Information) This section provides additional information beyond the financial statements, including legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=22&type=section&id=Item%201.%20Legal%20Proceedings) Reports no material developments in legal proceedings beyond prior disclosures - No material developments in legal proceedings during the nine months ended September 30, 2021, as disclosed in the 2020 10-K[107](index=107&type=chunk) [Item 1A. Risk Factors](index=22&type=section&id=Item%201A.%20Risk%20Factors) Refers to previously identified risk factors and cautionary statements regarding forward-looking information - Investing in company stock involves risks identified in Part I, Item 1A of the 2020 10-K and cautionary statements in this 10-Q, including "Forward-Looking Information"[108](index=108&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=22&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details share repurchases for employee tax withholding and the status of the stock repurchase program - No purchases were made under the **$100 million** Class A Common Stock repurchase program in 2021 or 2020[109](index=109&type=chunk) Shares Purchased for Employee Tax Withholding (Q3 2021) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :------------------- | :----------------------------- | :--------------------------- | | 7/1/2021 - 7/31/2021 | 703 | $65.48 | | 8/1/2021 - 8/31/2021 | 53 | $67.38 | | 9/1/2021 - 9/30/2021 | 212 | $69.85 | | **Total** | **968** | **$66.54** | [Item 6. Exhibits](index=22&type=section&id=Item%206.%20Exhibits) Lists all exhibits filed as part of the Form 10-Q, including certifications and interactive data files - Exhibits include certifications (CEO, CFO), interactive data files (Inline XBRL for financial statements and notes), and the cover page[115](index=115&type=chunk)