Business Segments

6 Months Ended

Jun. 30, 2017

Segment Reporting [Abstract]

Business Segments

NOTE 2. Business Segments

We report two distinct business segments.  The first segment is Mode, which includes the Mode Transportation, LLC (“Mode LLC”) business we acquired on April 1, 2011.  The second segment is Hub, which is all business other than Mode.

Hub offers comprehensive intermodal, truck brokerage and logistics services.  Our employees operate the freight through a network of operating centers located in the United States, Canada and Mexico.  Each operating center is strategically located in a market with a significant concentration of shipping customers and one or more railheads.  Hub has full time employees located throughout the United States, Canada and Mexico.

Mode LLC has Independent Business Owners (“IBOs”) who sell and operate the business throughout North America, as well as sales only agents.  Mode LLC also has a company managed operation and corporate offices in Dallas, TX, a temperature protected services division, Temstar, located in Oak Brook, IL and corporate offices in Memphis, TN.

Mode LLC markets and operates its freight transportation services, consisting of intermodal, truck brokerage and logistics, primarily through agents who enter into contractual arrangements with Mode LLC.

The following is a summary of operating results and certain other financial data for our business segments (in thousands):

	Three Months									Three Months
	Ended June 30, 2017									Ended June 30, 2016
					Inter-			Hub						Inter-			Hub
					Segment			Group						Segment			Group
	Hub		Mode		Elims			Total		Hub		Mode		Elims			Total
Revenue	$	705,208	$	243,051	$	(23,746	)	$	924,513	$	648,523	$	231,924	$	(24,890	)	$	855,557
Transportation costs		632,651		214,291		(23,746	)		823,196		565,448		200,509		(24,890	)		741,067
Gross margin		72,557		28,760		-			101,317		83,075		31,415		-			114,490
Costs and expenses:
Salaries and benefits		41,569		3,469		-			45,038		39,787		3,815		-			43,602
Agent fees and commissions		14		17,024		-			17,038		13		18,347		-			18,360
General and administrative		18,331		1,783		-			20,114		14,226		1,857		-			16,083
Depreciation and amortization		2,249		300		-			2,549		1,830		318		-			2,148
Total costs and expenses		62,163		22,576		-			84,739		55,856		24,337		-			80,193
Operating income	$	10,394	$	6,184	$	-		$	16,578	$	27,219	$	7,078	$	-		$	34,297
Capital Expenditures	$	22,937	$	31	$	-		$	22,968	$	20,314	$	10	$	-		$	20,324

The following tables summarize our revenue by segment and business line (in thousands) for the quarter ended June 30:

	Three Months									Three Months
	Ended June 30, 2017									Ended June 30, 2016
					Inter-			Hub						Inter-			Hub
					Segment			Group						Segment			Group
	Hub		Mode		Elims			Total		Hub		Mode		Elims			Total
Intermodal	$	451,593	$	112,119	$	(12,866	)	$	550,846	$	438,133	$	116,963	$	(22,168	)	$	532,928
Truck brokerage		104,980		82,891		(310	)		187,561		83,140		81,374		(475	)		164,039
Logistics		148,635		48,041		(10,570	)		186,106		127,250		33,587		(2,247	)		158,590
Total revenue	$	705,208	$	243,051	$	(23,746	)	$	924,513	$	648,523	$	231,924	$	(24,890	)	$	855,557

The following is a summary of operating results and certain other financial data for our business segments (in thousands):

	Six Months									Six Months
	Ended June 30, 2017									Ended June 30, 2016
					Inter-			Hub						Inter-			Hub
					Segment			Group						Segment			Group
	Hub		Mode		Elims			Total		Hub		Mode		Elims			Total
Revenue	$	1,382,340	$	484,925	$	(49,304	)	$	1,817,961	$	1,263,751	$	440,755	$	(43,090	)	$	1,661,416
Transportation costs		1,237,978		426,385		(49,304	)		1,615,059		1,101,522		380,107		(43,090	)		1,438,539
Gross margin		144,362		58,540		-			202,902		162,229		60,648		-			222,877
Costs and expenses:
Salaries and benefits		81,164		7,053		-			88,217		79,883		7,582		-			87,465
Agent fees and commissions		31		35,000		-			35,031		27		35,235		-			35,262
General and administrative		36,810		4,128		-			40,938		28,948		3,779		-			32,727
Depreciation and amortization		4,357		604		-			4,961		3,644		639		-			4,283
Total costs and expenses		122,362		46,785		-			169,147		112,502		47,235		-			159,737
Operating income	$	22,000	$	11,755	$	-		$	33,755	$	49,727	$	13,413	$	-		$	63,140
Capital Expenditures	$	29,562	$	31	$	-		$	29,593	$	24,945	$	272	$	-		$	25,217

	As of June 30, 2017									As of December 31, 2016
					Inter-			Hub						Inter-			Hub
					Segment			Group						Segment			Group
	Hub		Mode		Elims			Total		Hub		Mode		Elims			Total
Total assets	$	1,201,733	$	169,700	$	(7,663	)	$	1,363,770	$	1,178,110	$	191,374	$	(9,225	)	$	1,360,259
Goodwill		232,877		29,389		-			262,266		232,987		29,389		-			262,376

The following tables summarize our revenue by segment and business line (in thousands) for the six months ended June 30:

	Six Months									Six Months
	Ended June 30, 2017									Ended June 30, 2016
					Inter-			Hub						Inter-			Hub
					Segment			Group						Segment			Group
	Hub		Mode		Elims			Total		Hub		Mode		Elims			Total
Intermodal	$	876,189	$	234,322	$	(28,103	)	$	1,082,408	$	851,940	$	229,329	$	(40,117	)	$	1,041,152
Truck brokerage		211,644		161,069		(695	)		372,018		164,550		148,722		(502	)		312,770
Logistics		294,507		89,534		(20,506	)		363,535		247,261		62,704		(2,471	)		307,494
Total revenue	$	1,382,340	$	484,925	$	(49,304	)	$	1,817,961	$	1,263,751	$	440,755	$	(43,090	)	$	1,661,416