JACKSONVILLE, Fla., Oct. 14 /PRNewswire-FirstCall/ -- Landstar
System, Inc. (NASDAQ:LSTR) reported 2009 third quarter net income
of $20.1 million, or $0.39 per diluted share, from revenue of
$500.7 million. Net income for the 2008 third quarter was $32.8
million, or $0.62 per diluted share, from revenue of $732.8
million. Included in the 2008 third quarter was net income of $1.7
million, or $0.03 per diluted share, from $27.6 million of revenue
for bus capacity provided for evacuation assistance related to the
storms that impacted the Gulf Coast in September 2008. Revenue
hauled by third-party truck capacity providers in the third quarter
of 2009 was $455.9 million, or 91 percent of revenue, compared to
$646.7 million, or 88 percent of revenue, in the 2008 third
quarter. Included in revenue hauled by third-party truck capacity
providers in the 2009 and 2008 third quarters were $12.3 million
and $41.9 million, respectively, of fuel surcharges invoiced to
customers on revenue hauled by third-party truck brokerage
carriers. In the 2009 and 2008 third quarters, the Company also
invoiced customers $36.2 million and $92.5 million, respectively,
of fuel surcharges that were passed 100 percent to third-party BCO
Independent Contractors and excluded from revenue. Revenue hauled
by rail, air and ocean cargo carriers was $31.1 million, or 6
percent of revenue, in the 2009 third quarter compared to $49.1
million, or 7 percent of revenue, in the 2008 third quarter.
Revenue in the thirty-nine-week period ended September 26, 2009 was
$1.46 billion compared to $2.04 billion for the 2008
thirty-nine-week period. Net income for the thirty-nine-week period
ended September 26, 2009 was $51.8 million, or $1.00 per diluted
share, compared to net income of $86.3 million, or $1.62 per
diluted share, for the thirty-nine-week period ended September 27,
2008. Revenue hauled by third-party truck capacity providers in the
2009 thirty-nine-week period was $1.34 billion, or 91 percent of
revenue, compared to $1.84 billion, or 90 percent of revenue, in
the 2008 thirty-nine-week period. Included in revenue hauled by
third-party truck capacity providers in the 2009 and 2008
thirty-nine week periods were $31.3 million and $109.6 million,
respectively, of fuel surcharges invoiced to customers on revenue
hauled by third-party truck brokerage carriers. In the 2009 and
2008 thirty-nine week periods, the Company also invoiced customers
$87.7 million and $240.6 million, respectively, of fuel surcharges
that were passed 100 percent to third-party BCO Independent
Contractors and excluded from revenue. Revenue hauled by rail, air
and ocean cargo carriers was $92.8 million, or 6 percent of
revenue, in the 2009 thirty-nine-week period compared to $146.4
million, or 7 percent of revenue, in the 2008 thirty-nine-week
period. Landstar System, Inc. also announced that its Board of
Directors has declared a quarterly dividend of $0.045 per share.
The dividend is payable on November 27, 2009 to stockholders of
record at the close of business on November 2, 2009. It is the
intention of the Board of Directors to continue to pay a quarterly
dividend. During the 2009 third quarter, Landstar purchased 516,000
shares of its common stock at a total cost of $17.9 million
bringing the total number of common shares purchased during the
thirty-nine weeks ended September 26, 2009 to 959,700 shares at a
total cost of $31.7 million. Under the Company's authorized share
purchase programs, the Company currently has a total of 2,040,000
shares of its common stock available for purchase. Trailing twelve
month return on average shareholders' equity remained high at 29
percent and trailing twelve month return on invested capital, net
income divided by the sum of average equity plus average debt, was
21 percent. "In the 2009 third quarter, Landstar's revenue
continued to be negatively impacted by the recession in the
domestic and global economies," said Landstar President and Chief
Executive Officer Henry Gerkens. "As was the case in the 2009
second quarter, revenue declines were experienced across multiple
sectors affecting a broad range of accounts. Notable 2009 third
quarter over 2008 third quarter revenue declines continued to be
generated from the U.S. Department of Defense as well as with
respect to our substitute line haul service offering. On a positive
note, revenue generated from the automotive sector began to improve
for the first time in a couple of years. "The number of loads
hauled in the 2009 third quarter decreased only 11 percent compared
to the 2008 third quarter, an improvement from the 16 percent
decline experienced in the 2009 second quarter compared to the 2008
second quarter. The number of loads hauled in the 2009 third
quarter increased 1 percent over the 2009 second quarter while the
number of loads hauled in the 2008 third quarter was 5 percent
lower than the number of loads hauled in the 2008 second quarter. I
believe this is a clear indication that the decrease in demand that
began during the latter part of the 2008 third quarter will provide
for easing volume comparisons into the Company's 2009 fourth
quarter and continuing into 2010. "Revenue per load began to
stabilize during the 2009 third quarter. On a sequential basis,
average revenue per load with respect to the Company's truck
transportation services in the 2009 third quarter was approximately
equal to the average revenue per load in the 2009 second quarter.
The general pricing environment, however, still remains somewhat
challenging. "As a direct result of Landstar's variable cost
business model and other cost reduction actions taken in 2009,
Landstar was able to generate an operating profit margin of 6.5
percent, despite the very difficult operating environment.
Additionally, Landstar's net revenue margin, defined as revenue
less purchased transportation and commissions to agents divided by
revenue, was 17.7 percent, in the 2009 third quarter, up from 14.8
percent in the 2008 third quarter." Gerkens continued, "I see a
gradually improving overall freight environment, and I believe that
the worst is over. I am cautiously optimistic as we close out 2009.
The very difficult revenue comparisons to prior year experienced by
Landstar throughout 2009 will continue to ease throughout the 2009
fourth quarter. Based on the current trends, I anticipate 2009
fourth quarter revenue to be similar to the 2009 third quarter
revenue and diluted earnings per share to be within a range of
$0.37 to $0.42 per diluted share." Landstar will provide a live
webcast of its quarterly earnings conference call this afternoon at
5 pm ET. To access the webcast, visit the Company's website at
http://www.landstar.com/; click on "Investor Relations" and
"Webcasts," then click on "Landstar's Third Quarter 2009 Earnings
Release Conference Call." The following is a "safe harbor"
statement under the Private Securities Litigation Reform Act of
1995. Statements contained in this press release that are not based
on historical facts are "forward-looking statements." This press
release contains forward-looking statements, such as statements
which relate to Landstar's business objectives, plans, strategies,
expectations and intentions. Terms such as "anticipates,"
"believes," "estimates," "intention," "plans," "predicts," "may,"
"should," "will," the negative thereof and similar expressions are
intended to identify forward-looking statements. Such statements
are by nature subject to uncertainties and risks, including but not
limited to: an increase in the frequency or severity of accidents
or workers' compensation claims; unfavorable development of
existing claims; dependence on independent sales agents; dependence
on third-party capacity providers; disruptions or failures in our
computer systems; a downturn in domestic or international economic
growth or growth in the transportation sector; substantial industry
competition; and other operational, financial or legal risks or
uncertainties detailed in Landstar's Form 10K for the 2008 fiscal
year, described in Item 1A Risk Factors, and other SEC filings from
time to time. These risks and uncertainties could cause actual
results or events to differ materially from historical results or
those anticipated. Investors should not place undue reliance on
such forward-looking statements, and Landstar undertakes no
obligation to publicly update or revise any forward-looking
statements. About Landstar: Landstar System, Inc. is a non-asset
based provider of integrated supply chain solutions. Landstar
delivers safe, specialized transportation, warehousing and
logistics services to a broad range of customers worldwide
utilizing a network of agents, third-party capacity owners and
employees. All Landstar transportation companies are certified to
ISO 9001:2000 quality management system standards. Landstar System,
Inc. is headquartered in Jacksonville, Florida. Its common stock
trades on The NASDAQ Stock Market® under the symbol LSTR.
http://www.landstar.com/ (Tables follow) Landstar System, Inc. and
Subsidiary Consolidated Statements of Income (Dollars in thousands,
except per share amounts) (Unaudited) Thirty-Nine Weeks Ended
Thirteen Weeks Ended ----------------------- --------------------
September 26, September 27, September 26, September 27, 2009 2008
2009 2008 ------------- ------------- ------------- ------------
Revenue $1,461,081 $2,039,232 $500,670 $732,753 Investment income
954 2,686 279 817 Costs and expenses: Purchased transportation
1,090,219 1,573,209 372,328 569,864 Commissions to agents 117,735
153,857 39,484 54,267 Other operating costs 21,749 20,814 6,911
6,874 Insurance and claims 29,056 27,159 10,257 8,125 Selling,
general and administrative 99,690 105,457 33,078 34,499
Depreciation and amortization 17,414 15,558 6,213 5,251
------------- ------------- ------------- ------------ Total costs
and expenses 1,375,863 1,896,054 468,271 678,880 -------------
------------- ------------- ------------ Operating income 86,172
145,864 32,678 54,690 Interest and debt expense 3,093 5,635 957
1,757 ------------- ------------- ------------- ------------ Income
before income taxes 83,079 140,229 31,721 52,933 Income taxes
31,466 53,904 11,859 20,116 ------------- -------------
------------- ------------ Net income 51,613 86,325 19,862 32,817
Less: Net loss attributable to the noncontrolling interest (214) -
(214) - ------------- ------------- ------------- ------------ Net
income attributable to Landstar System, Inc. and subsidiary $51,827
$86,325 $20,076 $32,817 ============= ============= =============
============ Earnings per common share attributable to Landstar
System, Inc. and subsidiary $1.01 $1.64 $0.39 $0.62 =============
============= ============= ============ Diluted earnings per share
attributable to Landstar System, Inc. and subsidiary $1.01 $1.62
$0.39 $0.62 ============= ============= ============= ============
Average number of shares outstanding: Earnings per common share
51,325,000 52,680,000 51,069,000 52,586,000 =============
============= ============= ============ Diluted earnings per share
51,507,000 53,142,000 51,245,000 53,028,000 =============
============= ============= ============ Dividends paid per common
share $0.1250 $0.1150 $0.0450 $0.0400 ============= =============
============= ============ Landstar System, Inc. and Subsidiary
Consolidated Balance Sheets (Dollars in thousands, except per share
amounts) (Unaudited) Sep. 26, Dec. 27, 2009 2008 -------------
------------ ASSETS Current assets: Cash and cash equivalents
$68,990 $98,904 Short-term investments 23,706 23,479 Trade accounts
receivable, less allowance of $7,190 and $6,230 258,565 315,065
Other receivables, including advances to independent contractors,
less allowance of $4,808 and $4,298 9,978 10,083 Deferred income
taxes and other current assets 26,627 27,871 -------------
------------ Total current assets 387,866 475,402 -------------
------------ Operating property, less accumulated depreciation and
amortization of $119,890 and $106,635 122,297 124,178 Goodwill
57,297 31,134 Other assets 50,284 32,816 ------------- ------------
Total assets $617,744 $663,530 ============= ============
LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Cash
overdraft $21,219 $32,065 Accounts payable 110,029 105,882 Current
maturities of long-term debt 25,988 24,693 Insurance claims 26,039
23,545 Accrued income taxes 12,456 12,239 Other current liabilities
33,941 38,161 ------------- ------------ Total current liabilities
229,672 236,585 ------------- ------------ Long-term debt,
excluding current maturities 49,053 111,752 Insurance claims 35,667
38,278 Deferred income taxes 28,307 23,779 Shareholders' equity:
Common stock, $0.01 par value, authorized 160,000,000 shares,
issued 66,192,767 and 66,109,547 shares 662 661 Additional paid-in
capital 159,581 154,533 Retained earnings 749,739 704,331 Cost of
15,357,268 and 14,424,887 shares of common stock in treasury
(636,349) (605,828) Accumulated other comprehensive gain (loss) 251
(561) ------------- ------------ Total Landstar System, Inc. and
subsidiary shareholders' equity 273,884 253,136 -------------
------------ Noncontrolling interest 1,161 - -------------
------------ Total shareholders' equity 275,045 253,136
------------- ------------ Total liabilities and shareholders'
equity $617,744 $663,530 ============= ============ Landstar
System, Inc. and Subsidiary Supplemental Information (Unaudited)
Thirty-Nine Weeks Ended Thirteen Weeks Ended
----------------------- ------------------------ Sept. 26, Sept.
27, Sept. 26, Sept. 27, 2009 2008 2009 2008 ---------- ----------
---------- ---------- Revenue generated through (in thousands):
------------------------ Business Capacity Owners (1) $840,391
$1,070,982 $289,726 $370,787 Truck Brokerage Carriers 495,661
766,262 166,182 275,928 Rail intermodal 57,094 106,936 20,366
35,338 Ocean cargo carriers 25,459 29,329 7,941 11,109 Air cargo
carriers 10,259 10,135 2,751 2,686 Other (2) 32,217 55,588 13,704
36,905 ---------- ---------- ---------- ---------- $1,461,081
$2,039,232 $500,670 $732,753 ========== ========== ========
======== Number of loads: ---------------- Business Capacity Owners
(1) 561,840 638,330 196,840 209,250 Truck Brokerage Carriers
363,000 435,250 122,980 146,280 Rail intermodal 28,600 45,610
10,310 14,610 Ocean cargo carriers 3,920 3,990 1,330 1,400 Air
cargo carriers 6,440 5,520 1,340 1,650 ---------- ----------
---------- ---------- 963,800 1,128,700 332,800 373,190 =======
========= ======= ======= Revenue per load: -----------------
Business Capacity Owners (1) $1,496 $1,678 $1,472 $1,772 Truck
Brokerage Carriers 1,365 1,761 1,351 1,886 Rail intermodal 1,996
2,345 1,975 2,419 Ocean cargo carriers 6,495 7,351 5,971 7,935 Air
cargo carriers 1,593 1,836 2,053 1,628 September 26, September 27,
2009 2008 ---------- ---------- Truck Capacity --------------
Business Capacity Owners (1) (3) 8,070 8,363 ---------- ----------
Truck Brokerage Carriers: Approved and active (4) 14,541 16,400
Approved 10,576 9,120 ---------- ---------- 25,117 25,520
---------- ---------- Total available truck capacity providers
33,187 33,883 ========== ========== Agent Locations 1,403 1,403
--------------- ========== ========== (1) Business Capacity Owners
are independent contractors who provide truck capacity to the
Company under exclusive lease arrangements. (2) Includes premium
revenue generated by the insurance segment and warehousing and
supply chain solutions revenue generated by the transportation
logistics segment. Also, included in the 2008 thirty-nine-week and
thirteen-week periods was $27,638 of revenue for bus capacity
provided for evacuation assistance related to the storms that
impacted the Gulf Coast in the third quarter of 2008. (3) Trucks
provided by Business Capacity Owners were 8,655 and 8,949 at
September 26, 2009 and September 27, 2008, respectively. (4) Active
refers to Truck Brokerage Carriers who have moved at least one load
in the past 180 days. DATASOURCE: Landstar System, Inc. CONTACT:
Jim Gattoni of Landstar System, Inc., +1-904-398-9400 Web Site:
http://www.landstar.com/
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