Hello, and welcome to the Hub Group Inc. Second Quarter 2013 Earnings Conference Call. [Operator Instructions] Any forward-looking statements made during the course of the call represent our best good faith-judgment as to what may happen in the future. Statements that are forward-looking can be identified by the use of words such as believe, expect, anticipate and project. Actual results could differ materially from the -- projected in the following forward-looking statements. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Dave Yeager, CEO for Hub Group. You may now begin.

Thank you, and welcome to Hub Group's second quarter earnings call. We're now halfway through 2013, and we're pleased to report that all of our business lines are displaying healthy growth. Intermodal continues to expand while maintaining solid margins. Truck brokerage has continued to display strong volume and margins since our successful realignment last year. Unyson Logistics experienced rapid growth, having added several new customers during the quarter. And Mode celebrated its second anniversary as a Hub Group company by posting strong top line and bottom line results while also expanding its agent network. With that, I'd like to turn it over to Mark to discuss the details of our quarter by business line.

Thank you, Dave, and good afternoon, everyone. We're pleased to report continued growth this quarter, with solid improvement on a tough comparable. The main theme this quarter was solid execution in all 4 of our business lines. Logistics had outstanding performance, with 34% revenue growth and margin improvement. Truck brokerage delivered 5% revenue growth and solid margins in a challenging truck market. Pricing and operating discipline enabled us to grow intermodal volume modestly, expand margin and continue to execute on our strategy. Mode demonstrated terrific results, improving operating income 71%. Now turning to more details on each business line. Intermodal volume grew 2%, with improved margin despite the tough competitive environment. We saw most of the growth in local West, with a 10% volume increase. Transcon was flat for the second quarter, and the local East declined 1%. Pricing remained very competitive during bid season, particularly in the local East and transcontinental backhaul markets. While our continued focus on pricing discipline undoubtedly cost us some volume, we held our own and remain confident that growth at Hub will reaccelerate in the second half of the year. Our confidence in demand led us to increase this year's fleet plan to include an additional 1,000 new containers on top of the previously planned purchase of 3,000 units. With the retirement of 2,000 older aluminum containers currently in progress, we expect our fleet to reach 26,000 containers during the upcoming peak season. Our fleet utilization continues to excel with a 10 basis points improvement over last year despite a larger fleet. It was 13.1 days for the quarter compared to 13.2 days for Q2 of 2012. Rail service remained solid with a 1% improvement and on-time performance. Our Comtrak drayage operations continue to grow. Since year end, we added 212 drivers, ending the…

Thanks, Mark, and hello, everyone. We had a record second quarter, and I'd like to highlight 3 points: first, we saw revenue and gross margin growth in all 3 Hub service lines and in Mode; second, Logistics had an awesome quarter with record new customer growth; and third, we had a 9% increase in earnings per share. Here are the key numbers for the second quarter: Hub Group's revenue increased 8% to $837 million; Hub Group's diluted earnings per share was $0.50 this year compared to $0.46 last year. Now I'll talk about details for the quarter, starting with the financial performance of the Hub segment. The Hub segment generated revenue of $645 million, which is an 8% increase over last year. Let's take a closer look at Hub's business line. Intermodal revenue increased 4%. This change includes a 2% increase in loads. Price and mix were up but were partially offset by the impact of lower fuel. Again this quarter, retail was the leader, with loads from these customers increasing 14%. Loads from paper customers were down 29%, and loads from consumer products customers were down 1%. Both customer segments were down due primarily to holding our ground on pricing in a tough market. The benefits of the restructuring and truck brokerage continue to pay off, with revenue increasing 5% due to 8% volume growth. Prices were up, while fuel and mix were down. The average length of haul per truck brokerage shipment decreased 7% to 590 miles. 11 of our top 50 growing customers in truck brokerage are new. Logistics growth accelerated to 34%, due mostly to growth with new customers. Several new large Logistics customers were onboarded during the second quarter. Hub's gross margin increased by $6.6 million due to growth in all 3 of our service…

Great. Thank you, Terri. In conclusion, we experienced a solid second quarter, having delivered a 9% increase in earnings per share with growth in all of our business lines. We remain focused on managing each of these business segments to consistently deliver profitable growth and shareholder returns and look forward to continued success in the second half of 2013. With that, Terri, Mark and I are happy to take your questions.

[Operator Instructions] The first question comes from the line of John Barnes with RBC.

Your comment about just the competitive environment and having to walk away from a little bit of business, can you just talk about kind of what you saw from the competitors in terms of the behavior on pricing and things like that, maybe give us a little bit of context around maybe the magnitude of what you were experiencing?

Sure, John. This is Mark. Yes, I think it certainly was a competitive environment throughout the bid season. I would say that this season opened very competitively. We saw a number of, particularly, consumer products companies that the business was hotly contested, and this was particularly true in local East markets and backhaul transcontinental markets. Obviously, our biggest competitor is always a factor in those -- in that environment. At the same time, we did see some traditional IMCs who were also competing with a rail-based product pretty aggressively for some of that business. As the bid season wore on, I think we saw what we expected to see. We didn't see things get significantly more aggressive. Stayed competitive, but we were able to secure increases in most instances.

Okay. All right. Very good. And then, as a follow-up, it seems like maybe some of the truck conversion activity during the quarter maybe slowed down a little bit. We get the sense in talking to the truckload carriers that there's no -- that shippers don't perceive that capacity shortage. And then, obviously, you had a little bit of a decline in diesel fuel prices. Do you feel like you experienced the same thing during the quarter? And is that just maybe a breather before that longer-term trend kind of kicks back in?

We still are pretty optimistic about the conversion opportunities that are out there. We think that they're significant. We think that very few shippers are at their optimal usage levels of the intermodal product. Actually, throughout the quarter, on a same-day basis, we saw demand increase. So we certainly didn't see it decrease or lessen. Obviously, cheaper fuel does have the effect of narrowing the gap between intermodal and truck. But at the same time, most of our customers are still looking for a long-term way to reduce their costs. And as a result, most of them are trying to continue to explore where they can use intermodal more frequently.

The next question comes from the line of Ben Hartford with Robert W. Baird. Benjamin J. Hartford - Robert W. Baird & Co. Incorporated, Research Division: Could we talk a little bit about, Terri, your comment at the end in -- with respect to Hub margins. You said that you hope to maintain 11% Hub gross margins in 2013, hold it flat relative to 2012. I think last quarter, the comment was you hoped to improve upon it. That change in language, I'm curious to know how deliberate it is, one; and, two, how much of it -- is it a function of a slightly more aggressive intermodal pricing environment versus maybe some mix shift within the business with respect to logistics growing quickly here? Can you talk through that logic?

Sure. First of all, right, we haven't -- that's exactly right, what you said, that we hope to maintain the 11% gross margins that we have. We have not finalized all the rail cost increases yet. It was a difficult pricing environment, but we got price, and we got enough price that we think that we can cover the cost increases. So that's part of it, the tough pricing environment. And then the other part of the reason that we'd maintain that margin percentage is due to Logistics because Logistics grow so much. While that's great for gross margin dollar growth, it does bring down our yield a touch. And we grew tremendously in Logistics, and we think we'll continue to grow Logistics in the next 2 quarters quite a bit. So that's impacting the yield as well.

Okay. So it is a change in language, one; and, two, it is a function of both those dynamics. Is that right?

Correct.

Okay. And then, if I look at the volume -- intermodal volume growth in the first half of the year, at 2%, it would seem to lag the IANA figures. And I'm just wondering if you're confident that volume growth will improve in the second half of the year. If you look at the business in the broader context, do you think that 2013 is just a period of you guys really focusing on yields maybe at the expense of volume growth or share on the margin and that you can go into '14 and beyond and be -- either, one, that grows at market levels if we're talking about intermodal specifically; or even a share gainer on the intermodal side? Could you talk a bit strategically about how you see the intermodal product here and the positioning of the product in '13 and beyond?

Okay. Ben, this is Dave. As far as '13 in the first half, we did have an awful lot of low-margin business in which we were the incumbent. And so, as with that, you always have a fair amount of risk and more downside than upside as far as increasing volume. We did hold our ground. We did lose some share with some of the lower-margin consumer products companies. And as a result of that, we saw our volume tail off. Now that was for the first quarter and that bid season. We, since then, have been, I would say, not necessarily on a roll, but we've been much more successful in gaining share. And if you look at it sequentially, our volume change per business day has increased throughout the second quarter. And we're starting out July of this year with a very similar to how June and the increases in volume were. Over the longer term, I think we always believe that intermodal is going to -- the growth of it is going to outpace that of GDP. And we do believe that we should outpace intermodal's growth in the aggregate. There's going to be spots and quarters and months when we do not, but we do believe over the longer term, our business model, having the fleet, having the drayage operations and also having access to the rail equipment, puts us in a very good, solid strategic position to continue to grow faster than the intermodal market.

Your next question comes from the line of Justin Long with Stephens.

Could you talk about how demand in intermodal played out over the course of the quarter, maybe just touching on the month-to-month trends that you saw? And also, going forward, what you're hearing from your customers today as it relates to an outlook for peak season?

Yes. I think, as Dave just alluded to, we saw -- you sort of have to look at it on a same-business-day basis, right, because there are some -- number of days per month and those kinds of things really do affect volumes. So as you look on a per-business-day basis, we actually saw our growth accelerate over the course of the quarter. So June was our strongest and -- so April, May, and then June. So we saw growth building over the course of time. Based on what we know about demand for the remainder of the year, we think domestic intermodal is going to continue to post solid results. Rail service has been good. We believe there will be a peak season. I'm not sure exactly how robust and how early that will start, but we're certainly preparing for that. So I think when you look at the growth of domestic intermodal over the course of the last, say, 3 years or so, it's been a solid story, and we think it's likely to continue that trend. It's probably not going to be 2004 or 2007, but we do think that domestic intermodal will have a solid growth year, which will include a good second half.

Okay. Great. That's helpful. And then, maybe on brokerage. Last call, you mentioned the month of May being a pivotal indicator on how demand progresses the rest of the year. Would you say, in terms of demand, things played out as you expected in the quarter?

Well, I mean, I would say that I don't think we saw the kind of tightness of supply that we were looking for in the month of May. The previous 2 years, we had seen a spike up and a bit of -- a bit more tightening in May. That then dissipated throughout the rest of the year. But I would say, based on the indexes that we've seen, that has not been the case, which indicates that, right now, we aren't seeing an environment where demand exceeds supply. We have seen some pockets of tightness, particularly around produce season, but we haven't seen consistent tightness throughout any period of the quarter, including May.

Okay. Great. And one last one, if you don't mind. You mentioned -- you evaluated an acquisition. I was wondering if you could comment on the activity you're seeing in the M&A market today as it relates both to the number of willing sellers, but also the level of competition and aggressiveness you're seeing from other bidders.

There certainly is -- does seem to be more assets that are on the market for sale. We obviously -- we've always committed to our shareholders that we'll do 2 things: one, that it will be -- any acquisitions we make will not be a fixer-upper; and probably primarily, also, that it will be accretive to our earnings. So we're seeing some good companies that are being brought to the market. We're going to evaluate them to see if in fact they're a strategic fit for Hub. This particular one, it was an auction that we did partake in, and we just couldn't get to the EBITDA multiple of where the private equity firm finally ended up. So we are seeing a lot of private equity money in there as well, at this point, in addition to your normal strategic buyers.

The next question comes from the line of Kevin Sterling with BB&T Capital Markets. Kevin W. Sterling - BB&T Capital Markets, Research Division: Dave, are you seeing any shippers coming to you, maybe looking for capacity now in light of hours of service? Or is it still too early, given that hours of service isn't [ph] implemented in a slow freight month and before peak season?

Sure, Kevin. It probably is too early to really see the impacts of hours of service. It's -- again, it's only been several weeks, and we haven't really seen any impact. We didn't foresee that, with Comtrak, it was going to have any impact on us, just because of the number of hours our drivers are on the road and because we are local drayage, for the most part. I do think that over the longer term, and this is probably over a series of years, as onboard tracking devices are on all tractors and if they're mandated, that hours of service, when strictly adhered to, will have an impact. But right now, it's really only the larger carriers that are being checked on the new regulations, and I think we're all in compliance to begin with. So -- but as it's expanded with onboard computers, et cetera, I think that then we'll see that change, and there will be somewhat of an impact, but that could be over years. Kevin W. Sterling - BB&T Capital Markets, Research Division: Okay. Great. And switching gears here. The growth that we saw in the second quarter from Unyson Logistics, which was very good, and I think you mentioned the pipeline is still full with some new customers. How should we think about growth for the back half of this year from Unyson Logistics? Should we extrapolate what we saw in the second quarter or maybe turn it down a little bit? Just like to get your thoughts from...

That's a good question, Kevin. Yes, we had some phenomenal new customers with a lot of growth, and we think that the growth that we had in the second quarter will probably continue. Maybe dial it back a touch, but it should continue in the second half of the year.

Your next question comes from the line of Michael Weinz with JPMorgan. Michael R. Weinz - JP Morgan Chase & Co, Research Division: I was wondering if you can talk a little bit about intermodal capacity, what you're seeing in the marketplace. Because, obviously, the markets are conducive enough for you to have increased your order of containers. But at what point, given that pricing is getting more difficult, do you say, "Enough, enough. We need to kind of hold off for a little bit as an industry"? Or is all of this, in anticipation of the growth on the Crescent Corridor, that you're willing to put up with a less favorable pricing environment for a short period of time ahead of that volume growth?

Yes. I think that right now, we're seeing a fairly fluid equipment environment. I wouldn't say that it's tight. We've seen some periodic episodes of tightness in some areas like the Southeast. We are not seeing tightness off of the West Coast as of yet. However, the industry itself is not adding anywhere near the capacity this year that it did last year, or certainly not the year before. So we feel like, given the service levels that we're receiving and the utilization that we've been able to maintain with -- at 13.1 days with the fleet that we have, in order to properly serve our customers' needs as demand does pick up, it's in our best interest to add those additional boxes. So I don't think it's a tight capacity environment. We are anticipating some tightness off the West Coast during peak, as is normal, but at the same time, we also don't believe we're going to have a situation in which we'll have excess capacity. We've had our fleet fully deployed all year, and I would certainly anticipate that to be the case for the remainder of the year. Michael R. Weinz - JP Morgan Chase & Co, Research Division: Right. Maybe you can help me with how some of the math works here. Because it seems like you have, on a year-over-year basis, your container capacity is going to be up more than 10% with the addition of 3,000 boxes. So...

We're adding 4,000 new boxes. But 2,000, note, after we retire the 2,000 that we've got.

So it's under 10%. Michael R. Weinz - JP Morgan Chase & Co, Research Division: Okay. It is under 10%. Okay. But in first half, you're seeing volumes in the intermodal side for the core Hub business around 2%. Mode is smaller, but it's growing faster. So how should we think about how the containers are being allocated? And just -- this is kind of getting to the idea that you should see a material step-up in the pace of volume growth in the second half based on these additions, assuming, of course, there's no change to the utilization rate?

Yes, I mean, I think what we've said is that we felt that volume growth would reaccelerate in the second half of the year. Everything we've seen from the bid results thus far, about 70% of our business has repriced, and we remain confident that we will see growth levels in the mid- to high single-digits in the second half of the year. And I think that was the guidance we gave at the end of last quarter. And based on everything we know, we're still confident in that.

Your next question comes from the line of Todd Fowler with KeyBanc Capital Markets.

I guess I just wanted to talk a little bit about the decline in the local East volumes and kind of what your view is as to what changes those dynamics in the market, either from Hub Group's standpoint competitively or with some of the behavior from some of your other competitors?

Well, Todd, we still view -- this is Dave. We still view local East as an enormous opportunity for truck conversion. So number one, we still look that, that will be one of our primary growth areas. This past quarter, again, we had some low-margin business as well as a few instances where some of our competitors were quite aggressive to levels that we just didn't feel were compensatory. And so we walked from the business, if you will. So it did cost us some volume. But we're still -- again, we believe that the local East, over the longer term, has tremendous opportunities. There's a lot of truck conversion that's there. The Crescent Corridor, it is growing with our volumes. Not as rapidly as we might like, but it is growing well. And we believe that, again, there's just a tremendous amount of conversion capability. So we lost some low-margin business, but it's not anything that we think will have a long-term negative impact on us.

And I guess, David, some of that, the different strategies between the 2 main rail carriers in the East, and does something in those dynamics change going forward? Or is some of it just a growth period until they can fill up the network for some of the capacity expansion that they've been doing in the past couple of years?

Well, both of them, of course, have been adding capacity and building out terminals. So that definitely does have the -- it does create more capacity. At the same point in time, we're, of course, aligned with Norfolk Southern. We believe that their long-term strategic direction fits best with Hub and that CSX, they have certainly expanded their terminals in some of the new locations. But they are more transactionally focused. And again, we're just better aligned with Norfolk Southern and believe that, with their focus on service, that we have a long-term relationship that will be beneficial.

Okay. And then for my follow-up, what is the difference between the growth rate that Mode's showing in the intermodal business versus the legacy Hub Group business? I mean, the 11% top line growth. I don't know if you gave any volume numbers for Mode, but what's allowing them to grow faster than what the legacy Hub business is?

Yes, I think we did throw a volume number out there. In any event, Mode's volume growth was 13% on the quarter, which was outstanding. I think what we've got is a few of the larger Mode agents who have really embraced intermodal and are exploring all of their options and using all of their rail and fourth-party options effectively. So they've seen some good success with their existing customers, as well as some good success with some new customers that they're bringing on board. And some of those have been sizable and big enough to move the needle. They were fortunate enough to not have to walk away from noncompensatory business, so they didn't have that headwind either. But we think that they're doing a very good job of embracing intermodal, and we're seeing good growth out of a number of those larger Mode agents. And so that's encouraging.

And Mark, I guess this is probably a sensitive thing to do. But, I mean, do you work, then, with the Mode agents to either expand that relationship on the Hub Group side, or how do you kind of look at the growth that they're seeing to the benefit of the overall company?

Well, I mean, we think that it's helping us reach a new set of customers and new markets as they're bringing intermodal to their customer base. So that's a good thing. Obviously, we want to do more dray services for them, and we want to provide more fleet capacity to them when they need it as well. We made a conscious decision with Mode to maintain our pricing disciplines as well. And so Mode actually shrank in terms of volume with Hub fleet boxes and chose more cost-effective alternatives in order to be competitive. So that's a strategy that we'll likely continue to follow. But we want to support them however we can. At the same time, we've made a commitment to the Mode agents that they're going to be allowed to make their routing choices, and we're going to continue to stick by that commitment.

Your next question comes from the line of Kelly Dougherty with Macquarie.

This morning, Union Pacific mentioned on a call that intermodal volumes were down, I think, kind of driven by an 8% decline on the international side offset by a 3% growth in domestic. Do you think that the weakness on the international side and maybe their eagerness to drive more highway conversions just makes for a more reasonable discussion with you about what's going on, on the domestic side of things?

This is Dave. I think that the UP has made it very clear that they -- as we walked away from some low-margin business most recently, they are willing to also walk away from business. And if I'm not mistaken, they had stated that it's their goal to have a 65 operating ratio by 2015. So it's certainly -- we have a very significant relationship with the Union Pacific. We don't find the price increases that they're looking for to be unreasonable. We think it's something that the intermodal marketplace itself can in fact support.

So it seems like there's been kind of a change in how the rail cost increases have been going from where they were, or maybe in the recent past, to where you are now?

Well, I don't know if I would say that necessarily. I think that we're having better communications and better understandings on expectations, both with our rail partners as well as with our clients. And so with the added communication, I think it makes the price increase discussion a lot simpler and a lot more direct.

Okay. Great. And then, Terri, maybe just a quick one for you on the logistics side. Talk about being able to dial back the growth a little bit but still seeing a pretty strong growth, can you give us a sense of maybe what the growth will be for the full year and how we should think about it going forward on the logistics side? And then, what this onboarding does to margins? Do they get a bit depressed as you ramp up some of this new business? And then, do they improve, and maybe how to think about that?

Sure. Probably, growth for the year could range in logistics anywhere between 25% and 30%, call it, is what we would get for the whole year. And then, in terms of how that impacts the margin logistics, gross margin as a percentage of sales is the lowest of our 3 different service lines. So that brings the yield down, but certainly, it's terrific gross margin dollar growth, because that was our second-biggest grower in terms of gross margin dollar growth this quarter. And so we think, overall, we'll be able to maintain those -- the 11% gross margin that we had in 2012. But a headwind, in terms of the yield, is the logistics.

Sure. I think I'm maybe -- apologies for the confusion. But I guess, within the Logistics segment itself, though, does the onboarding kind of depress the margins just within the segment a bit? And then, as the business ramps up, you should actually see margins improve?

Yes. We have a little inefficiency, sure. There's a bit of a ramp-up cost, and some of them are pretty big engagements. And it just takes a while to be efficient with them, I guess.

Right.

So you're exactly right, Kelly. We would have a little bit of ramp-up cost in this quarter. So that will be lower, those ramp-up costs, as we progress throughout the quarter.

The next question comes from the line of Scott Group with Wolfe Research.

So I just want to clarify one thing. So I know you talked about the margin percent may be a little bit lower than what you thought earlier in the year. You didn't -- you never gave us margin dollars guidance, but is that going up relative to what you thought earlier in the year, just because logistics is doing better?

Yes.

That's right? Okay.

Exactly right.

So, I don't really -- I want to understand kind of the confidence that intermodal volume's getting better. If you walked away from some business and it was low margins, low-profit business earlier in the year, shouldn't that continue to have an impact for the full year? And if you're right and intermodal volumes do accelerate, can we also sustain the 3% to 4% pricing mix benefit x fuel and get better volume? Can we get it all?

I'll answer a part of that. Maybe Terri can answer the last part. Overall, we did see, sequentially through the quarter, our volumes improve. And that, coupled with what we know is in the pipeline, maybe possibly not implemented as of yet, some of the new bids and awards we've received, will more than offset the losses that we had with some of the low-margin business. So we certainly do feel very comfortable that we'll be in the mid-single-digits for the year, and certainly, that's the way that we're trending, as we did in June as well as thus far in July.

Yes, and then I'll take the second part of your question, Scott. I guess, in terms of this quarter, you talked about price, fuel and mix. Price was up the most. Mix was also up, and they were -- that was partially offset by slightly lower fuel. So it's hard for us -- so we did get price increases, as Dave said earlier. We worked closely with our partners to make sure that we got an increase and walked away from those lower-margin business. So our prices are up. And our mix is up, really, driven more by a lot of our growth within the local West market, which is the longer length of haul, so that's why mix is up a bit. And then, fuel, it's hard for us to tell what will happen with that. I mean, fuel fluctuates depending on whether the price of diesel goes up or down for us.

I guess what I was asking, and maybe a different way of asking it, so as the volumes are getting sequentially better, are you maintaining the yields? Or are those getting sequentially -- the pricing, or is that getting sequentially a little bit worse?

We're maintaining the pricing, and it should get a little better.

Okay. Great. And then one last thing, if I can. So the operating expenses, if I back out the $2 million of acquisitions, cost was $63 million. Why are they...

It was $1 million of acquisition cost, actually.

Okay. So why are they going up to $67 million to $69 million in the back half?

The biggest contributor to that would be we're projecting that Mode's gross margin goes up. And when that happens, agent commissions goes up, because that's a function of gross margin. So we're thinking that could go up $1 million. And then, we're also projected to add about 45 more people in the second half of the year. And then, we'll have the impact of the 65 people that we added in the first half of the year that are only in there part of the time. So that could be about $2 million for that. And then, commissions will be up about $300,000, since we expect to grow more in the second half.

Your next question comes from the line of Bill Greene with Morgan Stanley.

Just a couple of quick follow-ups here on some of the details. Terri, you went through some of those details on the operating cost there. But you've actually been doing quite a bit better in the first half, and you had some onetime -- not onetime, but maybe unusual items here in the second quarter as well. So you went through sort of those items, but the first half is not actually a pretty good run rate to sort of start as a base?

Right. It wouldn't be. If the agent commissions for -- if the gross margin for Mode goes up, that's just a cost that we have. We've got the agent commissions...

All right. I get it. I just -- I kind of -- when I hear the sort of the discussion on the pricing, you want to sort of stay disciplined and whatnot, but your competitors are being a bit aggressive. I would kind of think, well, maybe there's something that they can do, then, on the costs such that you could actually say, "Well, we can match whatever price you want because we can stay better than you on cost." That's kind of where I was sort of thinking that maybe there's something here in the cost structure you'd say, "We should try to attack that to get that down." But maybe that's not thinking about it right.

That's a good question, I guess. And most of the employees that we'd be adding would really be for logistics and a little bit of Comtrak. Comtrak grows for us, and that's good for us because we're doing more of our own drays and we save money. So those are really the headcount adds. It's not in intermodal per se.

Yes. Okay. And then, on the full year guidance range, you took out the top end a little bit. Is that just all this tax rate increase? Because I think you had $2 to $2.15, if I'm not mistaken.

No. The new analyst range is, right now, $1.95 to $2.10.

No, that's true, but I thought the prior commentary on guidance had been more like $2 to $2.15.

Yes, that was the analyst range at the time.

Okay. So you're just saying where the range is. You weren't trying to sort of take down guidance?

No. We feel very comfortable within the analyst range.

Your next question comes from the line of David Tamberrino with Stifel. David J. Tamberrino - Stifel, Nicolaus & Co., Inc., Research Division: I was wondering how much of your business in the West with the rails -- actually, across the nation with the rails, is left to be repriced. I believe you mentioned that there was some but didn't really quantify what percentage had been repriced so far this year?

I think Mark said 30% is going to be repriced in total, and 70% has already been repriced. David J. Tamberrino - Stifel, Nicolaus & Co., Inc., Research Division: Okay. I might not have picked that up earlier. And then your confidence in the back half ramp of intermodal. I believe you said mid- to high single digits for the last couple, so that evens out to about mid-digits for the year. What lanes do you anticipate seeing the most growth in?

Well, I think that we're likely to see the ongoing pattern of what we've seen. I mean, we think that local West will probably continue to lead our growth. Hopeful to see that the transcon will get back in positive numbers, and same with local East. But I would say that in all likelihood, particularly given the fact that it's a -- we've had a lot of success in the retail sector, it's likely to see the preponderance of our growth being in the local West market. David J. Tamberrino - Stifel, Nicolaus & Co., Inc., Research Division: Okay. And then, maybe just last one on Hub brokerage. You said there was a margin expansion for the quarter. Is that a result of price coming up or better procurement in terms of trucks?

It was really a combination of both. You're right, our prices were up. Fuel and mix were down for us. And then, our team has done a great job of purchasing. David J. Tamberrino - Stifel, Nicolaus & Co., Inc., Research Division: If you had to attribute that one way or the other, if -- or are you just splitting it down the middle?

Hard to do, really. Hard for us to measure, to be quite honest. So I'd probably split down the middle.

Yes.

Your next question comes from the line of Matt Brooklier with Longbow Research.

I think someone mentioned earlier in the call that you've added some salespeople and sales agents. I was just curious to get your thoughts on 5% growth in the quarter. How much was that potentially attributed to the headcount additions? And then maybe, potentially, you could talk to what was organic growth for Mode during the quarter?

Matt, this is Mark. Yes, almost all of that growth came out of existing agents. By and large, it was our larger agents who posted the significant growth. We did add 2 new IBOs and 6 sales agents over the quarter, so that's a good thing. But it typically takes them some time to ramp up and really start to generate enough revenue to move the needle. So most of our growth came organically.

Okay. That's good to hear. And then, are the expectations -- and I think Terri talked about it, you're adding some headcount in the second half of this year. Are we planning to add incremental IBOs or incremental sales headcount to Mode? Or are you more focused on kind of continuing this momentum of organic growth?

We're always wanting to add more IBOs and sales agents, and we'd love to sign more up. So we've got -- our recruiting team is working on that, doing a good job. And we're focused on it, but we have more control over how many people we add at the Hub segment, really. And so those headcount adds that I mentioned were at the Hub segment.

Right. And most of those are within Logistics with the new onboardings. Also highway, as they continue to expand, as well as some Comtrak, as it also is up over 10% in driver count thus far this year.

Right. So the headcount is there to either handle new business or to help make our street operations more efficient.

Okay. And second part of my second question as a follow-up here. I guess, the ability to attract IBOs to Mode and having this, I guess, more recent success, is it a function of kind of stabilizing the business, getting the IT in place? Is it just a function of being more attractive from, I guess, platform perspective? Or is it more a function of your efforts on the recruiting side and really going out in the market and being more aggressive in terms of looking at potential agents?

Well, we certainly hope that it's an attractive platform. I think it's a unique platform, especially for IBOs that are interested in the intermodal product. We're trying to also do a good job of supporting their LTL efforts and their truckload efforts as well, and we think we are in a unique position to do that. I think now that we're 2 years in, we've demonstrated that we're going to allow them to run their businesses but support them however we can. And so hopefully, they're comfortable that, that's the case and will be going forward. We've got through some systems issues last year, and so they have more clarity in terms of the operating systems that they're working with, and I think that, that's helping the recruiters give potential agents a view of how they're going to operate their business going forward as well. So I think all of those things are giving the agents more confidence that Mode is a good place to be associated with.

Your next question comes from the line of Ryan Bouchard with Avondale Partners.

The truck brokerage segment, the second half of last year provides a little bit more difficult comps. Do you think you can maintain kind of this mid-single-digit revenue growth, or should it tick down a little bit, or how do you think about that?

We think we can definitely maintain the mid-single. It might even go up from there.

Okay. And then, the Mode operating margin improved quite a bit. You said it should be greater than 2% for the rest of the year. Also, in the second of last year, you hit tougher comps. Should it continue to be higher, year-over-year? Or -- just maybe not to the extent that we saw in the first and second quarter?

It'll be close to -- maybe close to what it was last year because you're right, in last half of the year, it was above the 2%. We think we can maintain that.

Okay. And then just one last one, if I could. Did you talk about -- you talked about Mode intermodal. Could you give us a number on the percentage of Mode intermodal movements that were done using Hub boxes?

That went down. But it was 13% of their loads were moved in our fleet boxes.

Your next question comes from the line of Anthony Gallo with Wells Fargo.

So first question, I just wanted to clarify, you mentioned that you walked away from some lower-margin business, and I'm trying to figure out if that would have shown up in the second quarter numbers, or is that more a second half issue? Because if I look at legacy Hub, or even on a consolidated basis, margins didn't really improve that much. In fact, I think most of the outperformance sort of came from Mode. So I was just trying to reconcile the low-margin business that was walked away from and kind of where it shows up or when it will show up in the numbers.

Well, Anthony, let me correct that a bit. You're saying "walk away." We priced it up and somebody else took it. So -- at the lower margin. So we didn't walk away, but we tried to increase the price and the customer was unwilling to accept it, and somebody else was willing to operate at those margins. Most of that took place in early bids. We're talking the January, February. And so those aren't actually implemented until -- it could be as late as mid-second half. It could be June. Because obviously, once you go through the bid, they may make awards, but then it takes a while for everybody to be prepared to handle that new network. So no, we feel very good about where we are. A lot of the business that we have been awarded has been kicking in over the last several months, and some of it has yet to be implemented, the business that we did, in fact, win in bids that may have been held in April and May. So we feel very confident in the numbers, and we're...

That's helpful clarification. On the Mode improvement in margins, what were the 2 or 3 main drivers of that, do you think?

About $1.5 million. About 60% of it was due to Temstar improvement, which is our refrigerated trailer product that we have. And the rest of it was due to IBO growth.

[Operator Instructions] At this time, there are no further questions. I will now turn the call back over to Mr. Dave Yeager for any follow-up remarks.

Well, great. Well, once again, we thank you for having an interest in Hub and participating in or listening to our second quarter earnings call. As always, Terri, Mark and I would be available if you do come up with some additional questions or need some clarifications. But thank you for joining us today.

Ladies and gentlemen, that concludes today's conference. Thank you for your participation. You may now disconnect, and have a great day.