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Hub Group, Inc. Reports Record First Quarter 2006 Earnings

DOWNERS GROVE, Ill., April 19 /PRNewswire-FirstCall/ -- Hub Group, Inc. (Nasdaq: HUBG) today reported record income from continuing operations for the quarter ended March 31, 2006 of $8.5 million. This represents an 80% increase in first quarter income versus the first quarter of 2005. Hub Group's diluted earnings per share from continuing operations of $0.41 for the first quarter 2006 represents an increase of 86% compared to last year's first quarter of $0.22. Hub's gross margin as a percent of revenue has increased to 13.3% in 2006 from 12.2% in 2005 due to a focus on margin improvement. Results for the quarter include one month of operations of Comtrak, a drayage company acquired on February 28, 2006.

Hub's revenue grew by 8.3% to $356.7 million compared to $329.4 million in the first quarter of 2005. First quarter intermodal revenue increased 11.3% to $260.7 million, which includes the addition of Comtrak. Truckload brokerage revenue increased 16.4% to $69.5 million this quarter. First quarter logistics revenue decreased 25.3% to $26.5 million.

Hub Group Distribution Services (HGDS) is currently a wholly owned subsidiary of Hub Group. As previously disclosed, in November 2004, Hub Group entered into a Purchase Option and Right of First Refusal Agreement and gave a third party the option to buy HGDS. This individual has given Hub Group written notice that he intends to exercise this option within the next sixty days. Although there can be no assurances that the transaction will in fact close, the Company anticipates it will be completed in the second quarter of 2006. The comparative results of HGDS have been reported as "discontinued operations" in the Company's Consolidated Financial Statements. These discontinued operations generated $0.03 of diluted earnings per share in the first quarter of 2006 and 2005.

Commenting on the results, David P. Yeager, Vice-Chairman and Chief Executive Officer of Hub Group stated, "We are very pleased with the quarter. The divesture of our HGDS installation business furthers our strategy of focusing on our core transportation business and our acquisition of Comtrak strengthens our intermodal franchise."


Given the current operating environment, the Company is comfortable that the earnings from continuing operations for 2006 will be within the analysts' range of $1.90 to $2.02 per diluted share.


Hub will hold a conference call at 5:00 p.m. Eastern Time (4:00 p.m. Central Time) on Wednesday, April 19, 2006 to discuss its first 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 Investor Relations link at Hub Group's Web site at or individual investors can access the audio webcast at and institutional investors can access the webcast at 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 62583642. 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 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, 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 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. Hub Group assumes no liability to update any such forward-looking statements.

                                 HUB GROUP, INC.
                    (in thousands, except per share amounts)

                                                         Three Months
                                                         Ended March 31,
                                                       2006          2005
    Revenue                                          $356,745      $329,405

    Transportation costs                              309,175       289,297
     Gross margin                                      47,570        40,108

    Costs and expenses:
     Salaries and benefits                             22,854        20,610
     General and administrative                         9,158         9,226
     Depreciation and amortization of property,
      equipment and intangibles                         1,859         2,222
      Total costs and expenses                         33,871        32,058

       Operating income                                13,699         8,050

    Other income (expense):
     Interest expense                                    (127)         (207)
     Interest income                                      446           200
     Other, net                                           105            14
      Total other income                                  424             7

    Income from continuing operations
     before provision for income taxes                 14,123         8,057

    Provision for income taxes                          5,649         3,344

    Income from continuing operations                   8,474         4,713

    Discontinued operations:
    Income from discontinued operations of HGDS
     before provision for income taxes                  1,094         1,085
     Provision for income taxes                           438           450
    Income from discontinued operations                   656           635

    Net Income                                         $9,130        $5,348

    Basic earnings per common share
      Income from continuing operations                 $0.42         $0.23
      Income from discontinued operations                0.03          0.03
      Net Income                                        $0.45         $0.26

    Diluted earnings per common share
      Income from continuing operations                 $0.41         $0.22
      Income from discontinued operations                0.03          0.03
      Net Income                                        $0.44         $0.25

    Basic weighted average number of shares
     outstanding                                       20,098        20,282
    Diluted weighted average number of shares
     outstanding                                       20,651        21,158

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

                                                     March 31,   December 31,
                                                       2006          2005
      Cash and cash equivalents                       $17,314       $36,133
      Restricted investments                            1,973         1,387
      Accounts receivable
       Trade, net                                     139,641       147,004
       Other                                            9,943        10,603
      Prepaid taxes                                     5,777         6,040
      Prepaid expenses and other current assets         5,683         3,860
      Assets of discontinued operations                15,690        17,855
        TOTAL CURRENT ASSETS                          196,021       222,882

     Property and Equipment, net                       25,315        12,767
     Other Intangibles, net                             7,837            -
     Goodwill, net                                    220,168       208,150
     Other Assets                                         325           619
         TOTAL ASSETS                                $449,666      $444,418

      Accounts payable
       Trade                                         $108,440      $114,094
       Other                                            6,767         3,668
      Accrued expenses
       Payroll                                         11,873        20,909
       Other                                           20,443        18,917
      Deferred Taxes                                      687           960
      Liabilities of discontinued operations            3,916         5,341
        TOTAL CURRENT LIABILITIES                     152,126       163,889

     DEFERRED TAXES                                    39,694        38,454
      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; 20,281,248 shares issued and
        19,995,823 outstanding in 2006;
        20,281,248 shares issued and
        19,650,094 outstanding in 2005                    203           203
       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                      174,364       183,733
      Purchase price in excess of
       predecessor basis, net of tax
       benefit of $10,306                             (15,458)      (15,458)
      Retained earnings                               106,687        97,557
      Unearned compensation                                 -        (6,259)
      Treasury stock, at cost (285,425 shares
       in 2006 and 631,154 shares in 2005)             (7,957)      (17,708)
       TOTAL STOCKHOLDERS' EQUITY                     257,846       242,075
         TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $449,666      $444,418

                                 HUB GROUP, INC.
                                 (in thousands)

                                                       Three Months Ended
                                                            March 31,
                                                        2006         2005
    Cash flows from operating activities:
     Income from continuing operations                 $8,474       $4,713
     Adjustments to reconcile income from continuing
      operations to net cash provided by operating
       Depreciation and amortization of property,
        equipment and intangibles                       2,175        2,332
       Deferred taxes                                     917        2,558
       Compensation expense related to share based
        compensation plans                                771          520
       Loss (Gain) on sale of assets                       26          (12)
       Other assets                                       299          511
       Changes in working capital net of effects
        of purchase transaction:
        Restricted investments                           (586)        (661)
        Accounts receivable, net                       18,172        2,256
        Prepaid taxes                                    (125)           -
        Prepaid expenses and other current assets      (1,628)       1,011
        Accounts payable                               (5,090)         381
        Accrued expenses                               (8,372)     (11,727)
         Net cash provided by operating activities     15,033        1,882

    Cash flows from investing activities:
     Proceeds from sale of equipment                       26           12
     Purchases of property and equipment, net          (1,047)        (932)
     Cash used in acquisition of Comtrak, Inc         (40,491)           -
        Net cash used in investing activities         (41,512)        (920)

    Cash flows from financing activities:
     Proceeds from stock options exercised              1,141        2,184
     Purchase of treasury stock                           (38)      (5,599)
     Excess tax benefits from share-based
      compensation                                      4,767            -
        Net cash provided by (used in) financing
         activities                                     5,870       (3,415)

    Cash flows from operating activities
     of discontinued operations                         1,822        1,245
    Cash flows used in investing activities of
     discontinued operations                              (32)         (28)
        Net cash provided by discontinued operations    1,790        1,217

    Net decrease in cash and cash equivalents         (18,819)      (1,236)
    Cash and cash equivalents beginning of period      36,133       16,806
    Cash and cash equivalents end of period           $17,314      $15,570

    Supplemental disclosures of cash flow
     Cash paid for:
      Income taxes                                        $91         $333
SOURCE  Hub Group, Inc.
    -0-                             04/19/2006
    /CONTACT:  Renee Jurczyk of Hub Group, Inc., +1-630-271-3611/
    /Web site:

CO:  Hub Group, Inc.
ST:  Illinois

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