Press Release

Hub Group, Inc. Reports Record Fourth Quarter 2004 Results and Stock Buy Back Plan

DOWNERS GROVE, Ill., Feb 08, 2005 /PRNewswire-FirstCall via COMTEX/ -- Hub Group, Inc. (Nasdaq: HUBG) today reported record net income for the quarter ended December 31, 2004 of $7.0 million. This represents a 164% increase in fourth quarter net income versus the fourth quarter of 2003. Hub Group's diluted earnings per share of $0.66 for the quarter ended December 31, 2004 represents an increase of 100% compared to last year's fourth quarter diluted earnings per share of $0.33 on 31% higher average diluted shares outstanding in the 2004 period. Hub's gross margin grew 10.4% to $46.1 million as compared to $41.7 million in the fourth quarter of 2003. As a percentage of revenue, gross margin increased to 11.9% this quarter from 11.6% in 2003 due to more effective yield management. Costs and expenses decreased 2.7% in the fourth quarter of 2004 to $34.0 million compared to $34.9 million in the fourth quarter of 2003, reflecting the benefits from the Company's improved operating efficiencies and cost reduction efforts.

Hub's revenue grew by 7.9% to $387.4 million as compared to $359.2 million in the fourth quarter of 2003 due primarily to price increases, mix and fuel surcharges. Fourth quarter intermodal revenue increased 3.2% to $270.3 million. Truckload brokerage revenue increased 15.5% to $61.6 million this quarter. Fourth quarter logistics revenue increased 32.4% to $39.0 million. Hub Group Distribution Services (HGDS) revenue increased to $16.5 million in the fourth quarter 2004 from $14.4 million in the same period last year.

FULL YEAR 2004

Revenue for the year was $1,426.8 million compared to $1,359.6 million in 2003, or an increase of 4.9%. Gross margin grew 5.2% to $179.5 million compared to 2003. Gross margin as a percentage of sales remained constant at 12.6% of sales.

Costs and expenses decreased 5.1% in 2004 to $139.0 million compared to $146.4 million in 2003, decreasing to 9.7% of revenue versus 10.8% in 2003. In addition, debt extinguishment costs of $7.3 million were recorded in the third quarter of 2004 due primarily to the $6.8 million in pre-payment penalties associated with the early extinguishment of debt as well as the write-off of deferred financing costs. Interest expense decreased to $4.3 million compared to $7.7 million in 2003 due to the lower average debt balance in 2004 as compared to 2003.

Net income was $17.3 million for 2004 or $1.84 diluted earnings per share compared to last year's net income of $8.4 million or $1.07 diluted earnings per share. Adjusted net income, excluding the effect of the prepayment penalty and the write off of the deferred financing costs associated with the repayment of debt, was $21.5 million for 2004 or $2.29 diluted earnings per share compared to last year's net income of $8.4 million or $1.07 diluted earnings per share.

As of December 31, 2004, the Company had $16.8 million of cash compared to zero at December 31, 2003. Debt was zero at year end 2004 versus $75.0 million at 2003 year end.

Note: A tabular reconciliation of the differences between the adjusted financial results for the twelve-month period 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") are contained in the summary financial statements attached to this press release.

Commenting on the results, David P. Yeager, Vice-Chairman and Chief Executive Officer of Hub Group stated, "We are very pleased and proud of our results in 2004. Our disciplined focus on yield management, operating efficiency improvements and cost management has translated into record results in a challenging environment."

STOCK BUY-BACK PLAN AND STOCK SPLIT

The Board of Directors has authorized the purchase of up to $30.0 million of Class A common stock. Hub intends to make repurchases from time to time as market and business conditions warrant. Repurchases may be made in the open market or in privately negotiated transactions. Hub intends to hold the repurchased shares in treasury for future use. This program replaces Hub's previous plan to repurchase up to 500,000 shares of Class A common stock originally announced in November 2003 pursuant to which 116,700 shares had been repurchased.

In addition, the Board approved a 2 for 1 stock split. This split is subject to the approval by Hub's shareholders of an increase in the authorized number of shares of Class A common stock. Hub intends to seek shareholder approval at its annual shareholders' meeting which is scheduled for May 4, 2005. If approved by Hub's shareholders, the stock split will be in the form of a 100 percent stock dividend, which will be tax-free to shareholders. The Board of Directors intends to set a record date and a payment date for the stock dividend following receipt of shareholder approval.

FULL YEAR 2005

Given the current operating environment, we are comfortable that the earnings for 2005 will be within the analysts' range of $2.50 to $2.67 per diluted share. These estimates do not reflect the impact of a stock buy-back or stock split.

CONFERENCE CALL

Hub will hold a conference call at 10:00 a.m. Eastern Time (9:00 a.m. Central Time) on Wednesday, February 9, 2005 to discuss its fourth quarter and full year 2004 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 Investor Relations link at Hub Group's Web site at http://www.hubgroup.com or individual investors can access the audio webcast at http://www.fulldisclosure.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) 237-9752. The conference call participant code is 72380302. The call will be limited to 60 minutes, including questions and answers. An audio replay will be available through the Investor Relations 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 and logistics and distribution services. The Company operates through a network of over 30 offices throughout the United States, Canada and Mexico.

Certain prior year amounts have been reclassified to conform to the current year presentation.

CERTAIN FORWARD-LOOKING STATEMENTS: Statements in this press release that are not historical, including statements about Hub Group's or management's 2005 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, 2003, our reports on Form 10-Q for the periods ended March 31, 2004, June 30, 2004 and September 30, 2004 as well as our Prospectus dated June 28, 2004. Hub Group assumes no liability to update any such forward-looking statements.

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

                                      Unaudited
                                     Three Months          Years Ended
                                  Ended December 31,       December 31,
                                    2004      2003       2004        2003

    Revenue                       $387,428  $359,196  $1,426,806  $1,359,614

    Transportation costs           341,377   317,485   1,247,258   1,188,932
      Gross margin                  46,051    41,711     179,548     170,682

    Costs and expenses:
      Salaries and benefits         21,623    21,291      88,193      89,980
      Selling, general and
       administrative                9,599    10,718      39,218      45,650
      Depreciation and
       amortization of property
       and equipment                 2,752     2,892      11,539      10,757
        Total costs and expenses    33,974    34,901     138,950     146,387

          Operating income          12,077     6,810      40,598      24,295

    Other income (expense):
      Interest expense                (308)   (1,711)     (4,276)     (7,691)
      Interest income                   95        43         260         160
      Debt extinguishment expenses       -         -      (7,296)          -
      Other, net                       128        72         712         131
        Total other expense            (85)   (1,596)    (10,600)     (7,400)

    Income before provision for
     income taxes                   11,992     5,214      29,998      16,895

    Provision for income taxes       5,037     2,576      12,719       8,465

    Net Income                      $6,955    $2,638     $17,279      $8,430

    Basic earnings per common
     share                           $0.70     $0.34       $1.96       $1.09

    Diluted earnings per common
     share                           $0.66     $0.33       $1.84       $1.07

    Basic weighted average number
     of shares outstanding           9,895     7,723       8,800       7,712

    Diluted weighted average number
     of shares outstanding          10,471     8,019       9,389       7,865



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

                                                December 31,      December 31,
                                                    2004              2003
    ASSETS
      CURRENT ASSETS:
        Cash and cash equivalents                  $16,806                $-
        Accounts receivable
          Trade, net                               141,078           125,754
          Other                                      7,996             9,472
        Deferred taxes                               4,226             4,676
        Prepaid expenses and other current assets    4,747             4,578
            TOTAL CURRENT ASSETS                   174,853           144,480

      PROPERTY AND EQUIPMENT, net                   19,487            27,855
      GOODWILL, net                                215,175           215,175
      OTHER ASSETS                                     889             1,017
              TOTAL ASSETS                        $410,404          $388,527

    LIABILITIES AND STOCKHOLDERS' EQUITY
      CURRENT LIABILITIES:
        Accounts payable
          Trade                                   $115,819          $117,790
          Other                                      1,660             2,555
        Accrued expenses
          Payroll                                   19,542            14,157
          Other                                     15,100            11,592
        Current portion of long-term debt                -             8,017
              TOTAL CURRENT LIABILITIES            152,121           154,111

      LONG-TERM DEBT, EXCLUDING CURRENT PORTION          -            67,017
      DEFERRED TAXES                                31,347            24,364
      STOCKHOLDERS' EQUITY:
        Preferred stock, $.01 par value,
         2,000,000 shares authorized;                    -                 -
         no shares issued or outstanding
         in 2004 and 2003
        Common stock
          Class A: $.01 par value; 12,337,700
           shares authorized; 9,635,657 shares
           issued and outstanding in 2004;
           7,410,700 issued and 7,390,500
           outstanding in 2003                          96                74
          Class B:  $.01 par value; 662,300
           shares authorized; 662,296 shares
           issued and outstanding in 2004 and 2003       7                 7
        Additional paid-in capital                 182,365           115,820
        Purchase price in excess of predecessor
         basis, net of tax benefit of $10,306      (15,458)          (15,458)
        Retained earnings                           64,611            47,332
        Unearned compensation                       (4,685)           (4,448)
        Treasury stock, at cost (0 shares in
         2004 and 20,200 shares in 2003)                 -              (292)
          TOTAL STOCKHOLDERS' EQUITY               226,936           143,035
            TOTAL LIABILITIES AND STOCKHOLDERS'
             EQUITY                               $410,404          $388,527



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

                                                          Years Ended
                                                          December 31,
                                                     2004              2003

    Cash flows from operating activities:
      Net income                                   $17,279            $8,430
      Adjustments to reconcile net income to net
       cash provided by operating activities:
        Depreciation and amortization of property
         and equipment                              11,828            10,797
        Deferred taxes                              12,752             7,672
        Compensation expense related to
         restricted stock                            2,148               180
        Gain on sale of assets                        (294)              (59)
        Other assets                                   128               457
        Changes in working capital:
          Accounts receivable, net                 (13,849)            5,225
          Prepaid expenses and other current
           assets                                     (168)              154
          Accounts payable                          (2,866)           (7,861)
          Accrued expenses                           8,893             6,503
             Net cash provided by operating
              activities                            35,851            31,498

    Cash flows from investing activities:
      Purchases of property and equipment, net      (3,166)           (4,384)
        Net cash used in investing activities       (3,166)           (4,384)

    Cash flows from financing activities:
      Proceeds from stock offering                  55,871               -
      Proceeds from stock options exercised          7,394               232
      Purchase of treasury stock                    (4,110)             (292)
      Net payments on revolver                      (6,000)          (19,000)
      Payments of long term debt                   (69,034)           (8,054)
        Net cash used in financing activities      (15,879)          (27,114)

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


    Supplemental disclosures of cash flow
     information

      Cash paid for:
        Interest                                    $2,995            $6,355



                               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          $1.96      $(0.48)        $2.44
    Diluted earnings per common share        $1.84      $(0.45)        $2.29

    Basic weighted average number of
     shares outstanding                      8,800       8,800         8,800
    Diluted weighted average number of
     shares outstanding                      9,389       9,389         9,389


    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%

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



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

                           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


                           First     Second    Third     Fourth
                          Quarter   Quarter   Quarter   Quarter      Total
                            2003      2003      2003      2003        2003

    Intermodal            $233,307  $234,413  $246,990  $262,013    $976,723
    Brokerage               50,589    52,899    53,684    53,321     210,493
    Logistics               29,917    28,472    30,766    29,446     118,601
    Total Core             313,813   315,784   331,440   344,780   1,305,817

    HGDS                    15,471    15,866     8,044    14,416      53,797

    Consolidated          $329,284  $331,650  $339,484  $359,196  $1,359,614


      NOTE:  HGDS transferred its Pharmaceutical business to Logistics in
             August 2004, resulting in an increase in Logistics revenue of
             $4,315 for the year ended December 31, 2004.

SOURCE Hub Group, Inc.

Amy Lisek of Hub Group, Inc., +1-630-795-2214
http://www.prnewswire.com