Press Release

Hub Group, Inc. Reports Record Third Quarter 2006 Revenue and Earnings

DOWNERS GROVE, Ill., Oct. 24 /PRNewswire-FirstCall/ -- Hub Group, Inc. (Nasdaq: HUBG) today reported record income from continuing operations for the quarter ended September 30, 2006 of $13.5 million, a 60% increase versus continuing operations from the third quarter of 2005. Hub Group's diluted earnings per share from continuing operations was $0.33 for the third quarter 2006. This represents an increase of 57% compared to last year's third quarter diluted earnings per share from continuing operations of $0.21. Hub Group's operating margin increased to 5.1% in 2006 from 3.5% in 2005 due to yield enhancement efforts, growth in drayage and truck brokerage and leveraging its operations with a stable cost platform.

Hub Group's revenue grew by 11.5% to $432.0 million compared to $387.4 million in the third quarter of 2005. Third quarter intermodal revenue increased 12.3% to $318.9 million, which includes the addition of Comtrak for the entire quarter. Truck brokerage revenue increased 14.1% to $77.1 million this quarter. Third quarter logistics revenue increased 0.4% to $36.0 million.

Commenting on the results, David P. Yeager, Vice-Chairman and Chief Executive Officer of Hub Group stated, "We are proud of our results for the quarter. In addition to strong operating results, we executed our $45 million stock buyback plan and ended the quarter with $32.9 million in cash."

FULL YEAR 2006

The Company expects earnings from continuing operations for 2006 to be within the analysts' range of $1.10 to $1.15 per diluted share.

CONFERENCE CALL

Hub will hold a conference call at 5:00 p.m. Eastern Time (4:00 p.m. Central Time) on Tuesday, October 24, 2006 to discuss its third quarter 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.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 (866) 700-6067. The conference call participant code is 93567962. 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 asset light freight transportation management company providing comprehensive intermodal, truck brokerage and logistics 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, 2005 and our reports on Form 10-Q for the quarters ended March 31, 2006 and June 30, 2006. 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)

                                      Three Months          Nine Months
                                  Ended September 30,   Ended September 30,
                                     2006      2005       2006        2005
    Revenue                        $432,009  $387,434  $1,184,069  $1,078,661

    Transportation costs            374,673   342,173   1,023,869     949,472
      Gross margin                   57,336    45,261     160,200     129,189

    Costs and expenses:
      Salaries and benefits          23,965    20,985      71,271      62,125
      General and administrative      9,890     8,367      28,585      26,589
      Depreciation and amortization   1,642     2,262       5,029       6,736
        Total costs and expenses     35,497    31,614     104,885      95,450

          Operating income           21,839    13,647      55,315      33,739

    Other income (expense):
      Interest expense                  (22)      (17)        (65)       (109)
      Interest income                   670       217       1,668         601
      Other, net                          7        60          63          91
        Total other income              655       260       1,666         583

    Income from continuing
     operations before provision
     for income taxes                22,494    13,907      56,981      34,322

    Provision for income taxes        9,000     5,481      22,795      13,953

    Income from continuing
     operations                      13,494     8,426      34,186      20,369

    Discontinued operations:
    Income from discontinued
     operations of HGDS (including
     loss on disposal of $70 in
      2006)                               -     1,954       1,634       4,228
    Provision for income taxes            -       770         653       1,714
    Income from discontinued
     operations                           -     1,184         981       2,514


    Net income                      $13,494    $9,610     $35,167     $22,883

    Basic earnings per common
     share
      Income from continuing
       operations                     $0.34     $0.21       $0.85       $0.51
      Income from discontinued
       operations                         -      0.03       $0.02        0.06
      Net income                      $0.34     $0.24       $0.87       $0.57

    Diluted earnings per common
     share
      Income from continuing
       operations                     $0.33     $0.21       $0.83       $0.49
      Income from discontinued
       operations                         -      0.03        0.02        0.06
      Net income                      $0.33     $0.24       $0.85       $0.55

    Basic weighted average number
     of shares outstanding           39,773    39,280      40,246      39,932
    Diluted weighted average
     number of shares outstanding    40,572    40,812      41,161      41,572


       All share and per share amounts have been adjusted to give retroactive
       effect to the stock split which was paid on June 6, 2006.



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


                                             September 30,        December 31,
                                                 2006                2005
                                              (Unaudited)
    ASSETS
      CURRENT ASSETS:
        Cash and cash equivalents               $32,936             $36,133
        Restricted investments                    2,550               1,387
        Accounts receivable
          Trade, net                            166,801             147,004
          Other                                   6,570              10,603
      Prepaid taxes                                 141               6,040
      Deferred taxes                                454                   -
      Prepaid expenses and other
       current assets                             5,355               3,860
      Assets of discontinued operations               -              17,855
         TOTAL CURRENT ASSETS                   214,807             222,882

     Property and equipment, net                 25,192              12,767
     Other intangibles, net                       7,614                   -
     Goodwill, net                              220,448             208,150
     Other assets                                   390                 619
         TOTAL ASSETS                          $468,451            $444,418


    LIABILITIES AND STOCKHOLDERS'
     EQUITY
      CURRENT LIABILITIES:
        Accounts payable
          Trade                                $126,534            $114,094
          Other                                   7,131               3,668
        Accrued expenses
          Payroll                                18,810              20,909
          Other                                  31,525              18,917
        Deferred taxes                                -                 960
        Liabilities of discontinued
         operations                                   -               5,341
          TOTAL CURRENT LIABILITIES             184,000             163,889

     DEFERRED TAXES                              39,930              38,454
     STOCKHOLDERS' EQUITY:
       Preferred stock, $.01 par value,
        2,000,000 shares authorized;
        no shares issued or outstanding
        in 2006 and 2005                              -                   -
       Common stock
         Class A: $.01 par value;
          47,337,700 shares authorized;
          41,224,792 shares issued and
          39,090,050 outstanding in
          2006;
         41,224,792 shares issued and
          39,962,484 outstanding in
          2005                                      412                 412
         Class B:  $.01 par value;
          662,300 shares authorized;
          662,296 shares issued and
          outstanding in 2006 and 2005                7                   7
       Additional paid-in capital               174,273             183,524
       Purchase price in excess of
        predecessor basis, net of tax
        benefit of $10,306                      (15,458)            (15,458)
       Retained earnings                        132,724              97,557
       Unearned compensation                          -              (6,259)
       Treasury stock; at cost,
        2,134,742 shares in 2006 and
        1,262,308 shares in 2005                (47,437)            (17,708)
         TOTAL STOCKHOLDERS' EQUITY             244,521             242,075
           TOTAL LIABILITIES AND
            STOCKHOLDERS' EQUITY               $468,451            $444,418



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

                                                     Nine Months Ended
                                                        September 30,
                                                   2006               2005

    Cash flows from operating activities:
      Income from continuing operations           $34,186            $20,369
      Adjustments to reconcile income
       from continuing operations
       to net cash provided by operating
       activities:
        Depreciation and amortization               6,410              7,031
        Deferred taxes                                 12              8,810
        Compensation expense related to
         share-based compensation plans             2,649              1,581
        (Gain) on sale of assets                      (31)              (271)
        Other assets                                  234                530
        Changes in working capital
         excluding effects of purchase
         transaction:
          Restricted investments                   (1,163)            (1,173)
          Accounts receivable, net                 (6,325)           (22,251)
          Prepaid taxes                             5,295                  -
          Prepaid expenses and other
           current assets                          (1,202)               379
          Accounts payable                         13,904             17,119
          Accrued expenses                          9,152               (664)
           Net cash provided by operating
            activities                             63,121             31,460

    Cash flows from investing
     activities:
      Proceeds from sale of equipment                 228                573
      Purchases of property and equipment          (5,247)            (3,188)
      Cash used in acquisition of
       Comtrak, Inc.                              (39,942)                 -
      Proceeds from the disposal of
       discontinued operations                     12,203                  -
        Net cash used in investing
         activities                               (32,758)            (2,615)

    Cash flows from financing
     activities:
      Proceeds from stock options exercised         1,924              4,304
      Purchase of treasury stock                  (45,191)           (30,571)
      Excess tax benefits from share-
       based compensation                           7,897                  -
        Net cash (used in) financing
         activities                               (35,370)           (26,267)

    Cash flows from operating activities
     of discontinued operations                     1,848              7,752
    Cash flows used in investing activities
     of discontinued operations                       (38)              (289)
        Net cash provided by discontinued
         operations                                 1,810              7,463


    Net increase (decrease) in cash and
     cash equivalents                              (3,197)            10,041
    Cash and cash equivalents beginning
     of period                                     36,133             16,806
    Cash and cash equivalents end of
     period                                       $32,936            $26,847

    Supplemental disclosures of cash
     flow information
      Cash paid for:
        Interest                                      $64                $59
        Income taxes                               $6,573             $3,310

SOURCE  Hub Group, Inc.
    -0-                             10/24/2006
    /CONTACT:  Amy Lisek of Hub Group, Inc., +1-630-795-2214/
    /Web site:  http://www.hubgroup.com /
    (HUBG)

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

CT-CM
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7525 10/24/2006 16:03 EDT http://www.prnewswire.com