Press Release

Hub Group, Inc. Reports Record Earnings for the Fourth Quarter and Full Year 2005 and Provides 2006 Guidance

DOWNERS GROVE, Ill., Feb. 7 /PRNewswire-FirstCall/ -- Hub Group, Inc. (Nasdaq: HUBG) today reported record net income for the quarter ended December 31, 2005 of $10.1 million. This represents a 45% increase versus fourth quarter 2004 net income. Hub Group's diluted earnings per share for the quarter ended December 31, 2005 is $0.49. This represents an increase of 48% compared to diluted earnings per share for the quarter ended December 31, 2004 of $0.33.

Hub's revenue grew by 8.6% to $420.6 million compared to $387.4 million in the fourth quarter of 2004. Fourth quarter intermodal revenue increased 11.8% to $302.3 million. Truckload brokerage revenue increased 15.6% to $71.2 million this quarter. Fourth quarter logistics revenue decreased to $29.7 million and Hub Group Distribution Services revenue increased to $17.4 million in the fourth quarter of 2005. Gross margin grew 8.0% to $49.7 million compared to the fourth quarter of 2004.

Costs and expenses decreased 1.7% in the fourth quarter of 2005 to $33.4 million compared to $34.0 million in the fourth quarter of 2004. Other income increased to $0.3 million in 2005 from an expense of $0.1 million in 2004 due primarily to increased interest income on a higher cash balance compared to the fourth quarter of 2004.

FULL YEAR 2005

Revenue for the year was $1,531.5 million compared to $1,426.8 million in 2004, or an increase of 7.3%. Gross margin grew 5.3% to $189.0 million compared to 2004.

Costs and expenses decreased 3.1% in 2005 to $134.6 million compared to $138.9 million in 2004. Other income was $0.8 million in 2005 compared to an expense of $10.6 million in 2004 due primarily to expenses associated with the extinguishment of the private placement debt during the third quarter of 2004 and interest expense in 2004.

Net income increased 53.2% to $32.9 million for 2005 compared to last year's adjusted net income of $21.5 million. Hub Group's diluted earnings per share for the year ended December 31, 2005 is $1.59. This represents an increase of 38% compared to adjusted diluted earnings per share for the year ended December 31, 2004 of $1.15. The 2004 adjusted net income and earnings per share exclude debt extinguishment costs.

On an as-reported basis, net income for 2005 increased to $32.9 million from $17.3 million in 2004. As reported diluted earnings per share increased to $1.59 compared to $0.92 last year.

As of December 31, 2005, the Company had $36.1 million of cash compared to $16.8 million at December 31, 2004.

FULL YEAR 2006

Given the current operating environment, we are comfortable that the earnings for 2006 will be within the current analysts' range of $1.82 to $2.00 per diluted share. Our guidance assumes that our acquisition of Comtrak closes on February 28, 2006.

A tabular reconciliation of the differences between the adjusted financial results for the year ended December 31, 2004 and the Company's financial results determined in accordance with generally accepted accounting principles in the United States of America ("GAAP") is contained in the summary financial statements attached to this press release.

All share and per share amounts have been adjusted to give retroactive effect to the stock split which occurred in the second quarter of 2005. Certain prior year and quarter amounts have been reclassified to conform to the current year presentation.

CONFERENCE CALL

Hub will hold a conference call at 5:00 p.m. Eastern Time (4:00 p.m. Central Time) on Tuesday, February 7, 2006 to discuss its fourth quarter and full year results.

Hosting the conference call will be David P. Yeager, Vice-Chairman and CEO and Thomas M. White, Senior Vice-President, Chief Financial Officer and Treasurer.

This call is being webcast by Thomson/CCBN and can be accessed through the Investors link at Hub Group's Web site at http://www.hubgroup.com or individual investors can access the audio webcast at http://www.earnings.com and institutional investors can access the webcast at http://www.streetevents.com . The webcast is listen-only. Those interested in participating in the question and answer session should follow the telephone dial-in instructions below.

To participate in the conference call by telephone, please call ten minutes early by dialing (800) 659-2037. The conference call participant code is 40679457. The call will be limited to 60 minutes, including questions and answers.

An audio replay will be available through the Investors link on the Company's Web site at http://www.hubgroup.com . This replay will be available for 30 days.

ABOUT HUB GROUP: Hub Group, Inc. is a leading non-asset based freight transportation management company providing comprehensive intermodal, truckload brokerage, logistics and distribution services. The Company operates through a network of over 30 offices throughout the United States, Canada and Mexico.

CERTAIN FORWARD-LOOKING STATEMENTS: Statements in this press release that are not historical, including statements about Hub Group's or management's earnings guidance, intentions, beliefs, expectations, representations, projections, plans or predictions of the future, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are inherently uncertain and subject to risks. Such statements should be viewed with caution. Actual results or experience could differ materially from the forward-looking statements as a result of many factors. Factors that could cause actual results to differ materially include the factors listed from time to time in Hub Group's SEC reports including, but not limited to, the annual report on Form 10-K for the year ended December 31, 2004 and Form 10-Q for the periods ended March 31, 2005, June 30, 2005 and September 30, 2005. Hub Group assumes no liability to update any such forward-looking statements.




                                 HUB GROUP, INC.
              UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                     (in thousands, except per share amounts)

                                      Three Months          Years Ended
                                   Ended December 31,       December 31,
                                     2005      2004       2005        2004

    Revenue                        $420,611  $387,428  $1,531,499  $1,426,806

    Transportation costs            370,869   341,377   1,342,476   1,247,258
      Gross margin                   49,742    46,051     189,023     179,548

    Costs and expenses:
      Salaries and benefits          22,561    21,623      88,182      88,193
      General and administrative      8,556     9,599      36,850      39,218
      Depreciation and amortization
       of property and equipment      2,274     2,752       9,611      11,539
       Total costs and expenses      33,391    33,974     134,643     138,950

       Operating income              16,351    12,077      54,380      40,598

    Other income (expense):
      Interest expense                 (146)     (308)       (638)     (4,276)
      Interest income                   370        95         971         260
      Debt extinguishment expenses        -         -           -      (7,296)
      Other, net                         63       128         474         712
        Total other income (expense)    287       (85)        807     (10,600)

    Income before provision for
     income taxes                    16,638    11,992      55,187      29,998

    Provision for income taxes        6,575     5,037      22,241      12,719

    Net income                      $10,063    $6,955     $32,946     $17,279


    Basic earnings per common
     share                            $0.51     $0.35       $1.65       $0.98

    Diluted earnings per common
     share                            $0.49     $0.33       $1.59       $0.92

    Basic weighted average number
     of shares outstanding           19,820    19,790      19,930      17,600

    Diluted weighted average
     number of shares outstanding    20,425    20,942      20,696      18,778




                                 HUB GROUP, INC.
                 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
                       (in thousands, except share amounts)

                                              December 31,        December 31,
                                                  2005                2004
    ASSETS
      CURRENT ASSETS:
       Cash and cash equivalents                $36,133             $16,806
       Restricted investments                     1,387                   -
       Accounts receivable
         Trade, net                             156,864             140,762
         Other                                   10,603               8,313
       Deferred taxes - current                       -               4,667
       Prepaid expenses and other
        current assets                            4,007               4,746
       Prepaid taxes                              6,040                   -
         TOTAL CURRENT ASSETS                   215,034             175,294

     PROPERTY AND EQUIPMENT, net                 13,524              19,487
     GOODWILL, net                              215,175             215,175
     OTHER ASSETS                                   685                 889
         TOTAL ASSETS                          $444,418            $410,845


    LIABILITIES AND STOCKHOLDERS'
     EQUITY
      CURRENT LIABILITIES:
        Accounts payable
          Trade                                 $117,712            $115,819
          Other                                    3,735               1,660
        Accrued expenses
          Payroll                                 22,092              19,542
          Other                                   19,390              15,100
        Deferred taxes                               960                   -
          TOTAL CURRENT LIABILITIES              163,889             152,121

     DEFERRED TAXES                               38,454              31,788
     STOCKHOLDERS' EQUITY:
       Preferred stock, $.01 par value,
        2,000,000 shares authorized;                   -                   -
        no shares issued or outstanding
        in 2005 and 2004
       Common stock
         Class A: $.01 par value;
          47,337,700 shares authorized;
          20,281,248 shares issued and
          19,650,094 shares
          outstanding in 2005;
          19,933,610 shares issued and
          outstanding in 2004                        197                 199
         Class B:  $.01 par value;
          662,300 shares authorized;
          662,296 shares issued and
          outstanding in 2005 and 2004                 7                   7
       Additional paid-in capital                183,733             182,262
       Purchase price in excess of
        predecessor basis, net of tax
        benefit of $10,306                       (15,458)            (15,458)
       Retained earnings                          97,557              64,611
       Unearned compensation                      (6,259)             (4,685)
       Treasury stock, at cost (631,154
        shares in 2005)                          (17,702)                  -
         TOTAL STOCKHOLDERS' EQUITY              242,075             226,936
           TOTAL LIABILITIES AND
             STOCKHOLDERS' EQUITY               $444,418            $410,845




                                 HUB GROUP, INC.
            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)

                                                         Years Ended
                                                         December 31,
                                                   2005               2004

    Cash flows from operating activities:
      Net income                                  $32,946            $17,279
      Adjustments to reconcile net
       income to net cash provided
       by operating activities:
        Depreciation and amortization of
         property and equipment                    10,025             11,828
        Deferred taxes                             20,816             12,752
        Compensation expense related to
         restricted stock                           2,177              2,148
        Gain on sale of assets                       (271)              (294)
        Other assets                                  204                128
        Changes in working capital:
          Restricted investments                   (1,387)                 -
          Accounts receivable, net                (18,392)           (13,849)
          Prepaid expenses and other
           current assets                             739               (168)
          Prepaid taxes                            (6,040)                 -
          Accounts payable                          3,968             (2,866)
          Accrued expenses                          6,840              8,893
            Net cash provided by operating
             activities                            51,625             35,851

    Cash flows from investing activities:
      Proceeds from sale of property and
       equipment                                      579                383
      Purchases of property and equipment          (4,370)            (3,549)
        Net cash used in investing activities      (3,791)            (3,166)

    Cash flows from financing activities:
      Proceeds from stock offering, net                 -             55,871
      Proceeds from stock options exercised         4,732              7,394
      Purchase of treasury stock                  (33,239)            (4,110)
      Net payments on revolver                          -             (6,000)
      Payments of long term debt                        -            (69,034)
        Net cash used in financing activities     (28,507)           (15,879)

    Net increase in cash and cash equivalents      19,327             16,806
    Cash and cash equivalents beginning
     of period                                     16,806                  -
    Cash and cash equivalents end of
     period                                       $36,133            $16,806


    Supplemental disclosures of cash
     flow information
      Cash paid for:
        Interest                                     $923             $2,995
        Income taxes                               $6,811               $591




                                 HUB GROUP, INC.
                              MODAL REVENUE SUMMARY
                                  (in thousands)

                            First     Second    Third     Fourth
                           Quarter   Quarter   Quarter   Quarter     Total
                             2005      2005      2005      2005       2005

    Intermodal             $234,133  $259,275  $284,052  $302,339  $1,079,799
    Brokerage                59,755    68,016    67,590    71,185     266,546
    Logistics                35,518    34,531    35,793    29,693     135,535
    Total Core              329,406   361,822   387,435   403,217   1,481,880

    HGDS                     10,452     9,808    11,965    17,394      49,619

    Consolidated           $339,858  $371,630  $399,400  $420,611  $1,531,499




                             First    Second     Third    Fourth
                            Quarter   Quarter   Quarter   Quarter     Total
                             2004      2004      2004      2004       2004

    Intermodal             $236,321  $247,940  $259,958  $270,314  $1,014,533
    Brokerage                50,960    56,778    56,124    61,604     225,466
    Logistics                33,913    33,786    34,028    38,996     140,723
    Total Core              321,194   338,504   350,110   370,914   1,380,722

    HGDS                      7,108    10,467    11,995    16,514      46,084

    Consolidated           $328,302  $348,971  $362,105  $387,428  $1,426,806



       NOTE:    HGDS transferred its Pharmaceutical business to Logistics in
                August 2004, resulting in an increase in Logistics revenue of
                $4,331 in first quarter 2005, $3,384 in second quarter 2005
                and $484 in third quarter 2005.



                               HUB GROUP, INC.
                   RECONCILIATION OF AS REPORTED FINANCIAL
                   RESULTS TO AS ADJUSTED FINANCIAL RESULTS
                   (in thousands, except per share amounts)

                                            Year Ended December 31, 2004
                                       As Reported   Adjustments   As Adjusted

    Operating Income                       $40,598          $-       $40,598
    Interest expense                        (4,276)          -        (4,276)
    Interest income                            260           -           260
    Debt extinguishment expenses            (7,296)     (7,296) a          -
    Other, net                                 712           -           712

    Income before provision for income
     taxes                                  29,998      (7,296)       37,294

    Provision for income taxes              12,719      (3,064) b     15,783

    Net Income                             $17,279     $(4,232)      $21,511

    Basic earnings per common share          $0.98      $(0.24)        $1.22
    Diluted earnings per common share        $0.92      $(0.23)        $1.15

    Basic weighted average number of
     shares outstanding                     17,600      17,600        17,600
    Diluted weighted average number of
     shares outstanding                     18,778      18,778        18,778



    a) Fees and expenses related to our early extinguishment of 9.14% debt
     1)  Pre-payment penalty of $6,804
     2)  Write-off of related deferred financing costs of $492

    b) Income taxes at 42.0%

       Note: The purpose of this statement is to reflect as adjusted earnings
       excluding the one time costs
       associated with prepaying our debt.

SOURCE  Hub Group, Inc.
    -0-                             02/07/2006
    /CONTACT:  Renee Jurczyk of Hub Group, Inc., +1-630-271-3611/
    /Web site:  http://www.hubgroup.com /
    (HUBG)

CO:  Hub Group, Inc.
ST:  Illinois
IN:  FIN TRN
SU:  ERN ERP CCA

CT-JR
-- CGTU022 --
3567 02/07/2006 16:05 EST http://www.prnewswire.com