Hub Group, Inc. Reports Third Quarter 2010 Earnings

10/19/10

DOWNERS GROVE, Ill., Oct 19, 2010 /PRNewswire via COMTEX/ --

Hub Group, Inc. (Nasdaq: HUBG) today announced financial results for the quarter ended September 30, 2010.

"We are pleased with our third quarter results which include continued volume growth along with improving margins," commented David P. Yeager, Chairman and Chief Executive Officer. "Our intermodal, truck brokerage and logistics revenue each grew by more than 15% and, for the second quarter in a row, we increased our intermodal volume by more than 20%. We look forward to a strong finish to the year."

Hub Group reported income of $12.6 million for the third quarter of 2010, an increase of 28% compared to the third quarter of 2009. Hub Group's diluted earnings per share was $0.34 for the third quarter of 2010, which represents an increase of 31% when compared with the prior year period.

Each of the three business lines contributed to Hub Group's overall revenue increase of 23% to $478 million. Third quarter intermodal revenue increased 25% to $338 million. The increase was attributable to a 22% volume increase, a 4% increase for fuel and a 3% increase in pricing, partially offset by a 4% decrease for mix. Truck brokerage revenue increased 16% to $86 million this quarter. Third quarter Unyson Logistics revenue increased 23% to $54 million.

CONFERENCE CALL

Hub Group will hold a conference call at 5:00 p.m. Eastern Time on Tuesday, October 19, 2010 to discuss its third quarter results.

Hosting the conference call will be David P. Yeager, Chairman and Chief Executive Officer and Terri A. Pizzuto, Executive Vice-President, Chief Financial Officer and Treasurer.

This call is being webcast and can be accessed through the Investors link on Hub Group's Web site at www.hubgroup.com . 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 (888) 713-4217. The conference call participant code is 54227813. Participants may pre-register for the call at https://www.theconferencingservice.com/prereg/key.process?key=PMQRCBPNC. Pre-registrants will be issued a pin number to use when dialing into the live call which will provide quick access to the conference, bypassing the operator. 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 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, 2009 and the reports on Form 10-Q for the periods ended March 31, 2010 and June 30, 2010. Hub Group assumes no liability to update any such forward-looking statements.

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

			Three Months		Nine Months
			Ended September 30,		Ended September 30,
			2010	2009	2010	2009
Revenue			$ 478,417	$ 388,781	$ 1,353,824	$ 1,103,089

Transportation costs			421,020	340,581	1,197,033	963,958
	Gross margin		57,397	48,200	156,791	139,131

Costs and expenses:
	Salaries and benefits		25,547	22,237	72,868	67,514
	General and administrative		10,205	9,122	30,414	28,374
	Depreciation and amortization		938	949	2,845	3,229
		Total costs and expenses	36,690	32,308	106,127	99,117

Operating income			20,707	15,892	50,664	40,014

Other income (expense):
	Interest expense		(12)	(26)	(38)	(76)
	Interest and dividend income		35	29	83	120
	Other, net		(68)	116	84	188
		Total other income	(45)	119	129	232

Income before provision for income taxes			20,662	16,011	50,793	40,246

Provision for income taxes			8,045	6,180	19,844	15,932

Net income			$ 12,617	$ 9,831	$ 30,949	$ 24,314

Basic earnings per common share			$ 0.34	$ 0.26	$ 0.83	$ 0.65

Diluted earnings per common share			$ 0.34	$ 0.26	$ 0.83	$ 0.65

Basic weighted average number of shares outstanding			37,118	37,373	37,358	37,346
Diluted weighted average number of shares outstanding			37,288	37,550	37,504	37,481

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


						September 30,	December 31,
						2010	2009
						(Unaudited)
ASSETS
	CURRENT ASSETS:
		Cash and cash equivalents				$ 118,043	$ 126,863
		Accounts receivable trade, net				210,134	145,317
		Accounts receivable other				13,561	11,932
		Prepaid taxes				129	593
		Deferred taxes				2,260	2,874
		Prepaid expenses and other current assets				6,285	6,801
				TOTAL CURRENT ASSETS		350,412	294,380

	Restricted investments					10,521	9,583
	Property and equipment, net					43,184	28,510
	Other intangibles, net					5,830	6,164
	Goodwill, net					232,727	232,892
	Other assets					2,310	1,819
					TOTAL ASSETS	$ 644,984	$ 573,348


LIABILITIES AND STOCKHOLDERS' EQUITY
	CURRENT LIABILITIES:
		Accounts payable trade				$ 148,057	$ 110,626
		Accounts payable other				9,958	7,695
		Accrued payroll				13,420	8,253
		Accrued other				28,233	18,958
				TOTAL CURRENT LIABILITIES		199,668	145,532

	Non-current liabilities					12,997	12,002
	Deferred taxes					68,401	61,973

	STOCKHOLDERS' EQUITY:
		Preferred stock, $.01 par value; 2,000,000 shares authorized;
			no shares issued or outstanding in 2010 and 2009			-	-
		Common stock
			Class A: $.01 par value; 97,337,700 shares authorized and
				41,224,792 shares issued in 2010 and 2009; 36,652,858 shares
				outstanding in 2010 and 37,253,330 shares outstanding in 2009		412	412
			Class B: $.01 par value; 662,300 shares authorized;
				662,296 shares issued and outstanding in 2010 and 2009		7	7
		Additional paid-in capital				169,181	171,470
		Purchase price in excess of predecessor basis, net of tax
		benefit of $10,306				(15,458)	(15,458)
		Retained earnings				330,501	299,552
		Other comprehensive income (loss)				5	(9)
		Treasury stock; at cost, 4,571,934 shares in 2010
			and 3,971,462 shares in 2009			(120,730)	(102,133)
			TOTAL STOCKHOLDERS' EQUITY			363,918	353,841
				TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$ 644,984	$ 573,348

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

						Nine Months Ended
						September 30,
						2010	2009


Cash flows from operating activities:
	Net income					$ 30,949	$ 24,314
	Adjustments to reconcile net income
		to net cash provided by operating activities:
			Depreciation and amortization			6,078	6,282
			Deferred taxes			7,325	4,465
			Compensation expense related to share-based compensation plans			2,720	3,218
			Loss (gain) on sale of assets			46	(21)
	Changes in operating assets and liabilities:
			Restricted investments			(938)	(2,833)
			Accounts receivable, net			(66,443)	(12,555)
			Prepaid taxes			464	(9)
			Prepaid expenses and other current assets			517	(1,809)
			Other assets			(491)	99
			Accounts payable			39,692	20,542
			Accrued expenses			6,497	(3,544)
			Non-current liabilities			847	1,601
					Net cash provided by operating activities	27,263	39,750

Cash flows from investing activities:
	Proceeds from sale of equipment					871	72
	Purchases of property and equipment					(13,362)	(2,534)
				Net cash used in investing activities		(12,491)	(2,462)

Cash flows from financing activities:
	Proceeds from stock options exercised					18	155
	Purchase of treasury stock					(23,822)	(1,096)
	Excess tax benefits from share-based compensation					198	660
				Net cash used in financing activities		(23,606)	(281)


	Effect of exchange rate changes on cash and cash equivalents					14	2

Net (decrease) increase in cash and cash equivalents						(8,820)	37,009
Cash and cash equivalents beginning of period						126,863	85,799
Cash and cash equivalents end of period						$ 118,043	$ 122,808

SOURCE Hub Group, Inc.

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Hub Group, Inc. Reports Third Quarter 2010 Earnings