Hub (US:HUBG)2026-02-05 23:00Financial Data and Key Metrics Changes - Preliminary consolidated operating revenue for 2025 is expected to be $3.7 billion, a 7% decrease compared to the prior year [17] - Preliminary operating cash flow for 2025 is approximately $194 million [6][19] - Debt at December 31, 2025, totaled approximately $229 million, resulting in net debt of approximately $116 million, a decrease of approximately $50 million compared to December 31, 2024 [20] Business Line Data and Key Metrics Changes - ITS segment operating revenue for 2025 is expected to be approximately $2.2 billion, reflecting a low single-digit year-over-year decrease during the fourth quarter [18] - Logistics segment operating revenue for 2025 is expected to be approximately $1.6 billion, with a high single-digit year-over-year decrease during the fourth quarter [18] - Brokerage volumes declined 10% year-over-year in the fourth quarter, with revenue per load down 4% [12] Market Data and Key Metrics Changes - Intermodal volume growth was 1% year-over-year in the fourth quarter, with refrigerated volumes increasing by 150% and Mexico volumes increasing by 33% [7] - Market conditions remain fluid, with tightening capacity conditions later in the quarter due to lower driver supply and weather disruptions [19] - Demand from shippers is cautiously optimistic, with potential benefits from stimulus measures countering lingering inflationary pressure [10] Company Strategy and Development Direction - The company remains focused on controlling costs, enhancing service levels, and investing in technology and acquisitions [6][14] - Capital allocation plan emphasizes investing in business growth, returning capital to shareholders, and evaluating M&A opportunities [15][22] - The company aims to maintain a strong balance sheet and financial flexibility to support long-term growth [14][20] Management's Comments on Operating Environment and Future Outlook - Management noted that freight market conditions remain challenging but are seeing positive trends as 2026 begins, with improving ISM New Orders and spot market activity [24] - The company believes it is well-positioned to support customers in an evolving environment and is optimistic about growth opportunities [13][14] - There is uncertainty in the near term, but the company sees drivers creating an exciting backdrop for growth in 2026 and beyond [15][24] Other Important Information - A calculation error was identified that resulted in the understatement of purchased transportation costs and accounts payable, with a total reduction of $77 million recorded during the first nine months of 2025 [4][16] - The company plans to restate quarterly financial information for Q1, Q2, and Q3 2025 in its 2025 Form 10-K [17] Q&A Session Summary Question: What is the outlook for intermodal volume growth in 2026? - Management expressed optimism regarding intermodal volume growth in 2026, driven by strong service performance and consolidation with rail partners [9] Question: How is the company addressing the challenges in the brokerage segment? - Management indicated that while brokerage volumes are under pressure, productivity has improved significantly due to investments in technology and restructuring [12] Question: What are the expectations for capital expenditures in 2026? - The company expects capital expenditures to be between $35 million and $45 million, focusing on technology projects and opportunistic replacements for tractors [21]