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Hub Group, Inc. Reports Third Quarter 2011 Earnings

DOWNERS GROVE, Ill., Oct. 24, 2011 /PRNewswire via COMTEX/ —

Hub Group, Inc. (NASDAQ: HUBG) today announced financial results for the quarter ended September 30, 2011.

Hub Group reported income of $16.3 million for the third quarter ended September 30, 2011, an increase of 29% compared to the third quarter of 2010. Hub Group’s diluted earnings per share was $0.44 for the third quarter of 2011, which represents an increase of 29% when compared with the prior year period.

The Hub segment’s revenue increased 17% to $561 million. Third quarter intermodal revenue increased 19% to $402 million. The increase was attributable to a 10% volume increase and a 9% increase for fuel, price and mix. Truck brokerage revenue decreased 3% to $83 million this quarter. Third quarter Unyson Logistics revenue increased 39% to $76 million. Hub’s operating income increased $4.2 million, which represents an increase of 20% when compared with the prior year period. The Hub results include approximately $335,000 of restructuring costs related to truck brokerage operations.

The Mode segment’s revenue was $206 million for the third quarter. Operating income was $1.7 million. The Mode results include approximately $800,000 of costs related to integration.

Hub Group ended the quarter with $43 million in cash.

CONFERENCE CALL

Hub will hold a conference call at 5:00 p.m. Eastern Time on Monday, October 24, 2011 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) 713-4211. The conference call participant code is 96261580. Participants may pre-register for the call at https://www.theconferencingservice.com/prereg/key.process?key=PH9K4Q4KR. 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 and June 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

Nine Months

Ended September 30,

Ended September 30,

2011

2010

2011

2010

Revenue

$ 760,379

$ 478,417

$ 2,005,467

$ 1,353,824

Transportation costs

673,657

421,020

1,776,685

1,197,033

Gross margin

86,722

57,397

228,782

156,791

Costs and expenses:

Salaries and benefits

32,023

25,547

91,570

72,868

Agent fees and commissions

13,884

641

28,400

1,774

General and administrative

12,612

9,564

37,523

28,640

Depreciation and amortization

1,560

938

3,968

2,845

Total costs and expenses

60,079

36,690

161,461

106,127

Operating income

26,643

20,707

67,321

50,664

Other income (expense):

Interest expense

(236)

(12)

(319)

(38)

Interest and dividend income

41

35

118

83

Other, net

17

(68)

286

84

Total other (expense) income

(178)

(45)

85

129

Income before provision for income taxes

26,465

20,662

67,406

50,793

Provision for income taxes

10,189

8,045

26,242

19,844

Net income

$ 16,276

$ 12,617

$ 41,164

$ 30,949

Basic earnings per common share

$ 0.44

$ 0.34

$ 1.12

$ 0.83

Diluted earnings per common share

$ 0.44

$ 0.34

$ 1.11

$ 0.83

Basic weighted average number of shares outstanding

36,923

37,118

36,903

37,358

Diluted weighted average number of shares outstanding

37,065

37,288

37,049

37,504

HUB GROUP, INC.

FINANCIAL INFORMATION BY SEGMENT

(in thousands)

Three Months

Ended September 30, 2011

Hub

Mode

Inter-Segment
Elims

Hub Group
Consolidated

Revenue

$ 560,810

$ 205,961

$ (6,392)

$ 760,379

Transportation costs

497,204

182,845

(6,392)

673,657

Gross margin

63,606

23,116

86,722

Costs and expenses:

Salaries and benefits

26,884

5,139

32,023

Agent fees and commissions

660

13,224

13,884

General and administrative

10,141

2,471

12,612

Depreciation and amortization

1,003

557

1,560

Total costs and expenses

38,688

21,391

60,079

Operating income

24,918

1,725

26,643

HUB GROUP, INC.

FINANCIAL INFORMATION BY SEGMENT

(in thousands)

Nine Months

Ended September 30, 2011

Hub

Mode

Inter-Segment
Elims

Hub Group
Consolidated

Revenue

$ 1,606,607

$ 407,717

$ (8,857)

$ 2,005,467

Transportation costs

1,423,108

362,434

(8,857)

1,776,685

Gross margin

183,499

45,283

228,782

Costs and expenses:

Salaries and benefits

81,796

9,774

91,570

Agent fees and commissions

2,049

26,351

28,400

General and administrative

32,464

5,059

37,523

Depreciation and amortization

2,890

1,078

3,968

Total costs and expenses

119,199

42,262

161,461

Operating income

64,300

3,021

67,321

HUB GROUP, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)

September 30,

December 31,

2011

2010

(Unaudited)

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$ 42,652

$ 115,144

Accounts receivable trade, net

343,579

185,879

Accounts receivable other

19,068

17,958

Prepaid taxes

128

296

Deferred taxes

7,421

3,314

Prepaid expenses and other current assets

9,603

6,569

TOTAL CURRENT ASSETS

422,451

329,160

Restricted investments

13,237

11,421

Property and equipment, net

110,055

47,806

Other intangibles, net

20,496

5,856

Goodwill, net

262,640

233,029

Other assets

2,406

2,135

TOTAL ASSETS

$ 831,285

$ 629,407

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:

Accounts payable trade

$ 210,993

$ 121,078

Accounts payable other

17,209

10,064

Accrued payroll

18,535

14,378

Accrued other

37,824

21,898

Current portion of capital lease

2,219

TOTAL CURRENT LIABILITIES

286,780

167,418

Non-current liabilities

16,971

13,950

Deferred taxes

82,728

71,739

Non-current portion of capital lease

24,038

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; 36,855,343 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

167,846

169,722

Purchase price in excess of predecessor basis, net of tax

benefit of $10,306

(15,458)

(15,458)

Retained earnings

384,174

343,010

Other comprehensive income

1

6

Treasury stock; at cost, 4,369,449 shares in 2011

and 4,586,433 shares in 2010

(116,214)

(121,399)

TOTAL STOCKHOLDERS’ EQUITY

420,768

376,300

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

$ 831,285

$ 629,407

HUB GROUP, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Nine Months Ended

September 30,

2011

2010

Cash flows from operating activities:

Net income

$ 41,164

$ 30,949

Adjustments to reconcile net income

to net cash provided by operating activities:

Depreciation and amortization

10,944

6,078

Deferred taxes

7,189

7,325

Compensation expense related to share-based compensation plans

3,675

2,720

(Gain) loss on sale of assets

(16)

46

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

Restricted investments

362

(938)

Accounts receivable, net

(57,275)

(66,443)

Prepaid taxes

167

464

Prepaid expenses and other current assets

(2,275)

517

Other assets

406

(491)

Accounts payable

29,316

39,692

Accrued expenses

12,881

6,497

Non-current liabilities

(344)

847

Net cash provided by operating activities

46,194

27,263

Cash flows from investing activities:

Proceeds from sale of equipment

316

871

Purchases of property and equipment

(35,382)

(13,362)

Cash used in acquisitions, net of cash acquired

(83,057)

Net cash used in investing activities

(118,123)

(12,491)

Cash flows from financing activities:

Proceeds from stock options exercised

78

18

Purchase of treasury stock

(1,513)

(23,822)

Capital lease payments

(185)

Excess tax benefits from share-based compensation

1,069

198

Net cash used in financing activities

(551)

(23,606)

Effect of exchange rate changes on cash and cash equivalents

(12)

14

Net decrease in cash and cash equivalents

(72,492)

(8,820)

Cash and cash equivalents beginning of period

115,144

126,863

Cash and cash equivalents end of period

$ 42,652

$ 118,043

SOURCE Hub Group, Inc.

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