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Hub Group, Inc. Reports Fourth Quarter Earnings per Share of $0.48 Excluding One-Time Costs

DOWNERS GROVE, Ill., Jan. 26, 2012 /PRNewswire/ — Hub Group, Inc. (NASDAQ: HUBG) today announced financial results for the quarter and year ended December 31, 2011.

Hub Group reported income of $17.0 million for the fourth quarter ended December 31, 2011, an increase of 36% compared to the fourth quarter of 2010.  Hub Group’s diluted earnings per share was $0.46 for the fourth quarter of 2011, which represents an increase of 35% when compared with the prior year period.  Hub Group’s pre-tax income includes integration and restructuring costs of $1.0 million.  Excluding the effects of these items, non-GAAP earnings per share was $0.48 for the quarter (see table below).  Non-GAAP earnings per share increased 41% when compared with the prior year period.  Hub Group’s revenue increased 59% to $763 million.

The Hub segment’s revenue increased 20% to $577 million.  Fourth quarter intermodal revenue increased 23% to $419 million.  The increase was attributable to a 16% volume increase and a 7% increase for fuel, price and mix.  Truck brokerage revenue increased 3% to $82 million this quarter.  Fourth quarter Unyson Logistics revenue increased 27% to $76 million.  Hub’s operating income increased $4.5 million to $23.7 million, which represents an increase of 23% when compared with the prior year period.  The Hub results include approximately $500,000 of restructuring costs.

The Mode segment’s revenue was $195 million for the fourth quarter.  Operating income was $3.4 million.  The Mode results include approximately $500,000 of costs related to integration.

FULL YEAR 2011

Income for the year ended December 31, 2011 was $58 million.  Hub Group’s diluted earnings per share for 2011 was $1.57.  Full year 2011 pre-tax income includes integration and restructuring costs of $4.6 million.  Excluding the effects of these items, non-GAAP earnings per share was $1.65 for the year (see table below).  Full year non-GAAP earnings per share increased 42% when compared with the prior year.  Hub Group’s revenue increased 50% to $2.8 billion.

Hub Group ended the year with $49 million in cash.

“Despite the uncertain economic environment, Hub Group closed out 2011 with another quarter of strong operating results,” said David P. Yeager, Chairman and Chief Executive Officer of Hub Group.

CONFERENCE CALL

Hub will hold a conference call at 5:00 p.m. Eastern Time on Thursday, January 26, 2011 to discuss its fourth quarter and full year results and provide 2012 guidance.

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) 679-8018.  The conference call participant code is 44109733. Participants may pre-register for the call at https://www.theconferencingservice.com/prereg/key.process?key=PX3PNJTNA .  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 offices and independent agents 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, 2010 and the reports on Form 10-Q for the periods ended March 31, 2011, June 30, 2011 and September 30, 2011.  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

Twelve Months

Ended December 31,

Ended December 31,

2011

2010

2011

2010

Revenue

$ 762,775

$ 479,913

$ 2,751,534

$ 1,833,737

Transportation costs

678,964

423,271

2,438,986

1,620,304

Gross margin

83,811

56,642

312,548

213,433

Costs and expenses:

Salaries and benefits

29,522

26,270

121,044

99,138

Agent fees and commissions

13,091

635

41,491

2,410

General and administrative

12,425

9,572

49,951

38,211

Depreciation and amortization

1,635

947

5,603

3,792

Total costs and expenses

56,673

37,424

218,089

143,551

Operating income

27,138

19,218

94,459

69,882

Other income (expense):

Interest expense

(319)

(16)

(638)

(54)

Interest and dividend income

30

36

148

119

Other, net

42

62

328

146

Total other (expense) income

(247)

82

(162)

211

Income before provision for income taxes

26,891

19,300

94,297

70,093

Provision for income taxes

9,877

6,791

36,119

26,635

Net income

$   17,014

$   12,509

$      58,178

$      43,458

Basic earnings per common share

$       0.46

$       0.34

$         1.58

$         1.17

Diluted earnings per common share

$       0.46

$       0.34

$         1.57

$         1.16

Basic weighted average number of shares outstanding

36,943

36,817

36,913

37,223

Diluted weighted average number of shares outstanding

37,104

37,027

37,063

37,385

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)

Three Months

Ended December 31, 2011

Hub

Mode

Inter-Segment

Elims

Hub Group

Consolidated

Revenue

$       577,306

$       195,242

$             (9,773)

$       762,775

Transportation costs

516,157

172,580

(9,773)

678,964

Gross margin

61,149

22,662

83,811

Costs and expenses:

Salaries and benefits

25,582

3,940

29,522

Agent fees and commissions

722

12,369

13,091

General and administrative

10,055

2,370

12,425

Depreciation and amortization

1,085

550

1,635

37,444

19,229

56,673

Operating income

23,705

3,433

27,138

HUB GROUP, INC.

UNAUDITED FINANCIAL INFORMATION BY SEGMENT

(in thousands)

Twelve Months

Ended December 31, 2011

Hub

Mode

Inter-Segment

Elims

Hub Group

Consolidated

Revenue

$    2,183,914

$       586,251

$          (18,631)

$    2,751,534

Transportation costs

1,939,263

518,354

(18,631)

2,438,986

Gross margin

244,651

67,897

312,548

Costs and expenses:

Salaries and benefits

107,378

13,666

121,044

Agent fees and commissions

2,771

38,720

41,491

General and administrative

42,523

7,428

49,951

Depreciation and amortization

3,975

1,628

5,603

Total costs and expenses

156,647

61,442

218,089

Operating income

88,004

6,455

94,459

HUB GROUP, INC.

UNAUDITED NON-GAAP TO GAAP RECONCILIATION

(earnings per share)

Three Months

Twelve Months

Ended, Dec. 31,

Ended, Dec. 31,

Change

Change

Change

Change

2011

2010

$

%

2011

2010

$

%

Diluted GAAP EPS

$    0.46

$    0.34

$   0.12

35.3%

$    1.57

$    1.16

$    0.41

35.3%

Integration expenses and

restructuring costs

$    0.02

$       –

$   0.02

$    0.08

$       –

$    0.08

Diluted NON-GAAP EPS (adjusted)

$    0.48

$    0.34

$   0.14

41.2%

$    1.65

$    1.16

$    0.49

42.2%

Diluted Shares

37,104

37,027

37,063

37,385

In accordance with U.S. generally accepted accounting principles (GAAP), reported earnings per share include the after-tax impact of the items identifiable in this table. For internal purposes, Hub excludes these items from results when evaluating operating performance.  This table and Hub’s internal use of non-GAAP earnings per share are not intended to imply, and should not be interpreted as implying, that non-GAAP earnings per share is a better measure of performance than GAAP earnings per share.

HUB GROUP, INC.

UNAUDITED CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

December 31,

December 31,

2011

2010

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$           49,091

$         115,144

Accounts receivable trade, net

326,537

185,879

Accounts receivable other

23,878

17,958

Prepaid taxes

2,392

296

Deferred taxes

4,838

3,314

Prepaid expenses and other current assets

9,056

6,569

TOTAL CURRENT ASSETS

415,792

329,160

Restricted investments

14,323

11,421

Property and equipment, net

124,587

47,806

Other intangibles, net

21,667

5,856

Goodwill, net

263,470

233,029

Other assets

2,845

2,135

TOTAL ASSETS

$         842,684

$         629,407

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:

Accounts payable trade

$         204,693

$         121,078

Accounts payable other

17,289

10,064

Accrued payroll

16,721

14,378

Accrued other

29,962

21,898

Current portion of capital lease

2,237

TOTAL CURRENT LIABILITIES

270,902

167,418

Non-current liabilities

17,717

13,950

Deferred taxes

91,764

71,739

Non-current portion of capital lease

23,436

STOCKHOLDERS’ EQUITY:

Preferred stock, $.01 par value; 2,000,000 shares authorized;

no shares issued or outstanding in 2011 and 2010

Common stock

Class A: $.01 par value; 97,337,700 shares authorized and

41,224,792 shares issued in 2011 and 2010; 36,860,260 shares

outstanding in 2011 and 36,638,359 shares outstanding in 2010

412

412

Class B:  $.01 par value; 662,300 shares authorized;

662,296 shares issued and outstanding in 2011 and 2010

7

7

Additional paid-in capital

168,800

169,722

Purchase price in excess of predecessor basis, net of tax

benefit of $10,306

(15,458)

(15,458)

Retained earnings

401,188

343,010

Other comprehensive income

4

6

Treasury stock; at cost, 4,364,532 shares in 2011

and 4,586,433 shares in 2010

(116,088)

(121,399)

TOTAL STOCKHOLDERS’ EQUITY

438,865

376,300

    TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$         842,684

$         629,407

HUB GROUP, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Twelve Months Ended

December 30,

2011

2010

Cash flows from operating activities:

Net income

$        58,178

$        43,458

Adjustments to reconcile net income

to net cash provided by operating activities:

Depreciation and amortization

16,340

8,572

Deferred taxes

18,821

9,545

Compensation expense related to share-based compensation plans

4,788

3,576

(Gain) loss on sale of assets

(17)

85

Changes in operating assets and liabilities, net of effects of acquisition:

Restricted investments

(724)

(1,838)

Accounts receivable, net

(45,047)

(46,582)

Prepaid taxes

(2,097)

298

Prepaid expenses and other current assets

(1,728)

233

Other assets

(33)

298

Accounts payable

23,095

12,822

Accrued expenses

2,989

5,277

Non-current liabilities

301

1,910

Net cash provided by operating activities

74,866

37,654

Cash flows from investing activities:

Proceeds from sale of equipment

410

988

Purchases of property and equipment

(55,010)

(25,616)

Cash used in acquisitions, net of cash acquired

(85,182)

(170)

Net cash used in investing activities

(139,782)

(24,798)

Cash flows from financing activities:

Proceeds from stock options exercised

86

46

Purchase of treasury stock

(1,523)

(25,070)

Capital lease payments

(729)

Excess tax benefits from share-based compensation

1,034

434

Net cash used in financing activities

(1,132)

(24,590)

Effect of exchange rate changes on cash and cash equivalents

(5)

15

Net decrease in cash and cash equivalents

(66,053)

(11,719)

Cash and cash equivalents beginning of period

115,144

126,863

Cash and cash equivalents end of period

$        49,091

$      115,144

SOURCE Hub Group, Inc.

Amy Lisek of Hub Group, Inc., +1-630-795-2214

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