-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, H1+ReM+BamBp1Raw0qtUMCvzMJgn56ZQBPXdfqhw/aW79rKjDz2e6cXcsSiOXctb +TzCz7IMtHHv+ZlqZfUYRg== 0000853816-96-000009.txt : 19960702 0000853816-96-000009.hdr.sgml : 19960702 ACCESSION NUMBER: 0000853816-96-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960330 FILED AS OF DATE: 19960510 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: LANDSTAR SYSTEM INC CENTRAL INDEX KEY: 0000853816 STANDARD INDUSTRIAL CLASSIFICATION: 4213 IRS NUMBER: 061245498 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-21238 FILM NUMBER: 96559292 BUSINESS ADDRESS: STREET 1: FIRST SHELTON PL STREET 2: 1000 BRIDGEPORT AVE CITY: SHELTON STATE: CT ZIP: 06484 BUSINESS PHONE: 2039252900 MAIL ADDRESS: STREET 1: FIRST SHELTON PL STREET 2: 1000 BRDGEPORT AVE CITY: SHELTON STATE: CT ZIP: 06484 10-Q 1 LANDSTAR SYSTEM, INC. FORM 10-Q, 3/30/96 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 30, 1996 or [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _________________ to _____________________. Commission File Number: 0-21238 LANDSTAR SYSTEM, INC. (Exact name of registrant as specified in its charter) Delaware 06-1313069 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) First Shelton Place, 1000 Bridgeport Avenue, Shelton, Connecticut (Address of principal executive offices) 06484-0898 (Zip Code) (203) 925-2900 (Registrant's telephone number, including area code) N/A (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ( X ) No ( ) The number of shares of the registrant's Common Stock, par value $.01 per share, outstanding as of the close of business on May 6, 1996 was 12,779,633. PART I FINANCIAL INFORMATION Item 1. Financial Statements The interim consolidated financial statements contained herein reflect all adjustments (all of a normal, recurring nature) which, in the opinion of management, are necessary for a fair statement of the financial condition, results of operations, cash flows and changes in shareholders' equity for the periods presented. They have been prepared in accordance with Rule 10-01 of Regulation S-X and do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. Operating results for the thirteen week period ended March 30, 1996 are not necessarily indicative of the results that may be expected for the entire fiscal year ending December 28, 1996. These interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company's 1995 Annual Report on Form 10-K. Index Item 1 Consolidated Balance Sheets as of March 30, 1996 and December 30, 1995 ........................................ Page 3 Consolidated Statements of Income for the Thirteen Weeks Ended March 30, 1996 and April 1, 1995 ....................... Page 4 Consolidated Statements of Cash Flows for the Thirteen Weeks Ended March 30, 1996 and April 1, 1995 ....................... Page 5 Consolidated Statement of Changes in Shareholders' Equity for the Thirteen Weeks Ended March 30, 1996............ Page 6 Notes to Consolidated Financial Statements...................... Page 7 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations ................ Page 9 LANDSTAR SYSTEM, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share amounts) (Unaudited)
March 30, December 30, 1996 1995 ---------- ------------ ASSETS Current assets: Cash $ 4,637 $ 3,415 Trade accounts receivable, less allowance of $6,793 153,896 151,009 and $6,923 Other receivables, including advances to independent contractors, less allowance of $4,755 and $4,205 17,180 13,359 Inventories 2,113 2,292 Prepaid expenses and other current assets 8,520 8,501 ---------- ----------- Total current assets 186,346 178,576 ---------- ----------- Operating property, less accumulated depreciation and amortization of $42,410 and $39,796 111,282 108,052 Goodwill, less accumulated amortization of $5,785 and $5,354 56,618 57,049 Deferred income taxes and other assets 9,152 9,402 ---------- ----------- Total assets $ 363,398 $ 353,079 ========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Cash overdraft $ 9,339 $ 13,449 Accounts payable 44,740 37,427 Current maturities of long-term debt 28,215 20,668 Estimated insurance claims 25,483 23,654 Other current liabilities 29,412 32,018 ---------- ----------- Total current liabilities 137,189 127,216 ---------- ----------- Long-term debt, excluding current maturities 71,362 73,199 Estimated insurance claims 23,049 24,031 Other liabilities 211 237 Shareholders' equity: Common stock, $.01 par value, authorized 20,000,000 shares, issued 12,873,674 shares and 12,871,674 shares 129 129 Additional paid-in capital 61,541 61,504 Retained earnings 71,884 68,730 Cost of 94,041 shares of common stock in treasury (1,967) (1,967) ----------- ----------- Total shareholders' equity 131,587 128,396 ----------- ----------- Total liabilities and shareholders' equity $ 363,398 $ 353,079 =========== =========== See accompanying notes to consolidated financial statements. 3
LANDSTAR SYSTEM, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share amounts) (Unaudited)
Thirteen Weeks Ended -------------------------- March 30, April 1, 1996 1995 ----------- ----------- Revenue $ 295,477 $ 295,706 Costs and expenses: Purchased transportation 200,213 201,024 Drivers' wages and benefits 11,505 11,921 Fuel and other operating costs 17,778 16,907 Insurance and claims 9,797 9,595 Commissions to agents and brokers 18,767 17,220 Selling, general and administrative 24,070 24,670 Depreciation and amortization 6,014 4,671 ----------- ----------- Total costs and expenses 288,144 286,008 ----------- ----------- Operating income 7,333 9,698 Interest and debt expense, net 1,922 1,528 ----------- ----------- Income before income taxes 5,411 8,170 Income taxes 2,257 3,413 ----------- ----------- Net income $ 3,154 $ 4,757 =========== =========== Earnings per share $ 0.25 $ 0.37 =========== =========== Average number of common shares outstanding 12,779,000 12,848,000 =========== =========== See accompanying notes to consolidated financial statements. 4
LANDSTAR SYSTEM, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited)
Thirteen Weeks Ended ---------------------------- March 30, April 1, 1996 1995 ----------- ----------- OPERATING ACTIVITIES Net income $ 3,154 $ 4,757 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of operating property 5,479 4,282 Amortization of goodwill and non-competition agreements 535 389 Non-cash interest charges 66 63 Provisions for losses on trade and other accounts receivable 811 1,465 Gains on sales of operating property (1,132) (219) Deferred income taxes, net 58 213 Changes in operating assets and liabilities, net of businesses acquired: Increase in trade and other accounts receivable (7,519) (1,609) Decrease (increase) in inventories, prepaid expenses and other assets 182 (1,481) Increase (decrease) in accounts payable and other liabilities 4,681 (8,967) Increase in estimated insurance claims 847 2,535 ----------- ----------- NET CASH PROVIDED BY OPERATING ACTIVITIES 7,162 1,428 ----------- ----------- INVESTING ACTIVITIES Purchases of businesses, net of cash acquired (32,403) Purchases of operating property (2,178) (2,657) Proceeds from sales of operating property 3,260 1,548 ----------- ----------- NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES 1,082 (33,512) ----------- ----------- FINANCING ACTIVITIES Borrowings to finance businesses acquired 45,900 Borrowings under revolving credit facility 7,000 Proceeds from exercise of stock options 37 Decrease in cash overdraft (4,110) (2,241) Principal payments on long-term debt and capital lease obligations (9,949) (27,614) ----------- ----------- NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES (7,022) 16,045 ----------- ----------- Increase (decrease) in cash 1,222 (16,039) Cash at beginning of period 3,415 17,755 ----------- ----------- Cash at end of period $ 4,637 $ 1,716 =========== =========== See accompanying notes to consolidated financial statements. 5
LANDSTAR SYSTEM, INC. AND SUBSIDIARY CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY Thirteen Weeks Ended March 30, 1996 (Dollars in thousands) (Unaudited)
Treasury Stock Common Stock Additional at Cost --------------- Paid-In Retained ---------------- Shares Amount Capital Earnings Shares Amount Total ------- ------ -------- --------- ------ -------- -------- Balance December 30, 1995 12,871,674 $129 $61,504 $68,730 94,041 $(1,967) $128,396 Exercise of Stock Options 2,000 37 37 Net income 3,154 3,154 ---------- ---- ------- ------- ------ -------- -------- Balance March 30, 1996 12,873,674 $129 $61,541 $71,884 94,041 $(1,967) $131,587 ========== ==== ======= ======= ====== ======== ======== See accompanying notes to consolidated financial statements. 6
LANDSTAR SYSTEM, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) The consolidated financial statements include the accounts of Landstar System, Inc. and its subsidiary, Landstar System Holdings, Inc., and reflect all adjustments (all of a normal, recurring nature) which are, in the opinion of management, necessary for a fair statement of the results for the periods presented. The preparation of the consolidated financial statements requires the use of management's estimates. Actual results could differ from those estimates. Landstar System, Inc. and its subsidiary are herein referred to as "Landstar". (1) Acquisitions During the first quarter of 1995, Landstar, through different subsidiaries of Landstar System Holdings, Inc. ("LSHI"), acquired the businesses and net assets of Intermodal Transport Company, a California-based intermodal marketing company, LDS Truck Lines, Inc., a California-based drayage company, and T.L.C. Lines, Inc., a Missouri-based temperature-controlled and long-haul, time sensitive dry van carrier. Also in the 1995 first quarter, Landstar, through another subsidiary of LSHI, acquired all of the outstanding common stock of Express America Freight Systems, Inc., a North Carolina-based air freight and truck expedited service provider. The following unaudited pro forma information represents the consolidated results of operations of Landstar and the four acquired businesses as if the acquisitions had occurred at the beginning of the period presented, and gives effect to increased depreciation of operating property, amortization of goodwill and non-competition agreements and increased interest expense, at rates available to Landstar under the acquisition line of its revolving credit facility (in thousands, except per share amounts):
Thirteen Weeks Ended April 1, 1995 --------- Revenue $ 305,306 Net income $ 4,137 Earnings per share $ .32
The above pro forma information is not necessarily indicative of the results of operations which actually would have been obtained during such period. 7 (2) Income Taxes The provisions for income taxes for both the 1996 and 1995 thirteen week periods were based on an estimated combined full year effective income tax rate of approximately 42%, which is higher than the statutory federal income tax rate, primarily as a result of state income taxes, amortization of certain goodwill and the meals and entertainment exclusion. (3) Earnings Per Share Earnings per share amounts were based on the weighted average number of common shares outstanding. (4) Additional Cash Flow Information During the 1996 period, Landstar paid income taxes and interest of $1,688,000 and $1,795,000, respectively, and acquired operating property by entering into capital leases in the amount of $8,659,000. During the 1995 period, Landstar paid income taxes and interest of $3,014,000 and $1,570,000, respectively, and acquired operating property by entering into capital leases in the amount of $6,277,000. (5) Commitments and Contingencies At March 30, 1996, Landstar had commitments for letters of credit outstanding in the amount of $26,939,000, primarily as collateral for estimated insurance claims. Landstar is involved in certain claims and pending litigation arising from the normal conduct of business. Based on the knowledge of the facts and, in certain cases, opinions of outside counsel, management believes that adequate provisions have been made for probable losses with respect to the resolution of all claims and pending litigation and that the ultimate outcome, after provisions thereof, will not have a material adverse effect on the financial condition of Landstar, but could have a material effect on the results of operations in a given quarter or year. 8 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with the attached interim consolidated financial statements and notes thereto, and with the Company's audited financial statements and notes thereto for the fiscal year ended December 30, 1995 and Management's Discussion and Analysis of Financial Condition and Results of Operations, included in the Annual Report to Shareholders. RESULTS OF OPERATIONS Introduction Landstar System, Inc. and its subsidiary, Landstar System Holdings, Inc. ("Landstar" or the "Company"), serve a variety of different market niches through its operating subsidiaries which employ different operating strategies. Four of Landstar's subsidiaries, Landstar Ranger, Inc., Landstar Inway, Inc., Landstar Ligon, Inc. and Landstar Gemini, Inc. (collectively, the "Owner-Operator Companies"), provide truckload transportation services through independent contractors and independent commission sales agents. The nature of the Owner-Operator Companies' business is such that a significant portion of their operating costs vary directly with revenue. Landstar Poole, Inc.("Poole")and Landstar T.L.C., Inc.("TLC") provide truckload transportation services using both company-owned or leased equipment driven by company-employed drivers, and independent contractors. During the thirteen week period ended March 30, 1996, revenue generated through independent contractors was 36.4% of Poole's total revenue and 60.4% of TLC's total revenue. During the first quarter of 1996, the operations of Landstar ITCO, Inc. and Landstar Logistics, Inc. ("Logistics")were combined. As a result, Logistics' operations have been divided into a contract services division and an intermodal services division. The contract services division provides logistics support, single source alternatives, dedicated fleet services, brokerage and other transportation solutions to large customers. The intermodal services division provides intermodal transportation services primarily by arranging for the movement of customers' goods by a combination of rail and truck. Both the railroad and drayage carriers utilized by Logistics are independent contractors. Landstar Express America, Inc. ("Express") provides air and surface expedited transportation services through independent contractors, including air cargo carriers, and principally utilize independent commission sales agents. 9 Purchased transportation represents the amount an independent contractor is paid to haul freight and is primarily based on a contractually agreed upon percentage of revenue generated by the haul for the Owner- Operator Companies, TLC and the truck operations of Express. Purchased transportation for Poole is primarily based on a fixed rate per mile. Purchased transportation for the intermodal services division of Logistics and the air freight operations of Express is based on a contractually agreed-upon fixed rate. Purchased transportation as a percentage of revenue for the intermodal services division of Logistics is normally higher than that of Landstar's other transportation companies. Purchased transportation is the largest component of costs and expenses and, on a consolidated basis, increases or decreases in proportion to the revenue generated through independent contractors. Commissions to agents and brokers are primarily based on contractually agreed upon percentages of revenue except for Express and the intermodal services division of Logistics which are primarily based on contractually agreed upon percentages of gross profit. Commissions to agents and brokers as a percentage of consolidated revenue will vary directly with the revenue generated through independent commission sales agents. Both purchased transportation and commissions to agents and brokers generally will also increase or decrease as a percentage of the Company's consolidated revenue if there is a change in the percentage of revenue contributed by the intermodal services division of Logistics or through air cargo carriers or through company-employed drivers. Drivers' wages and benefits represent the amount Poole and TLC employed drivers are compensated. Drivers are compensated on a cents per mile driven basis. Drivers' wages and benefits as a percentage of consolidated revenue generally will vary only if there is a change in the revenue contribution generated through independent contractors or a change in Poole's or TLC's rate of driver pay or benefit structure. The Company's intention is to continue its expansion of truckload capacity provided by independent contractors and to convert a portion of its truckload capacity provided by company-owned equipment and company- employed drivers to independent contractors. It is also the Company's intention to favor independent commission sales agent locations over company-owned and operated locations. Historically, the intermodal services division of Logistics, and TLC have principally utilized a company employee sales structure and to a lesser degree independent commission sales agents. During the second quarter of 1995, Management began the process of converting company-owned sales locations to independent commission sales agent locations. Accordingly, purchased transportation and commissions to agents and brokers are anticipated to increase as a percentage of total consolidated revenue and drivers' wages and benefits are anticipated to decline as a percentage of total consolidated revenue over time. 10 Potential liability associated with accidents in the trucking industry is severe and occurrences are unpredictable. The industry is also subject to substantial workers' compensation expense. A material increase in the frequency or severity of accidents or workers' compensation claims or the unfavorable development of existing claims can be expected to adversely affect Landstar's operating income. The cost of fuel is the largest component of fuel and other operating costs. Changes in prevailing prices of fuel or increases in fuel taxes can significantly affect Poole's or TLC's operating results. Employee compensation and benefits account for more than half of the Company's selling, general and administrative expense. Other significant components of selling, general and administrative expense are data processing expense, communications costs, rent expense and allowances for doubtful accounts receivable. The following table sets forth the percentage relationships of expense items to revenue for the periods indicated:
Thirteen Weeks Ended ---------------------- March 30, April 1, 1996 1995 ---------- --------- Revenue 100.0% 100.0% Costs and expenses: Purchased transportation 67.8% 68.0% Drivers' wages and benefits 3.9% 4.0% Fuel and other operating costs 6.0% 5.7% Insurance and claims 3.3% 3.3% Commissions to agents and brokers 6.4% 5.8% Selling, general and administrative 8.1% 8.3% Depreciation and amortization 2.0% 1.6% ------- ------- Total costs and expenses 97.5% 96.7% ------- ------- Operating income 2.5% 3.3% Interest and debt expense, net 0.7% 0.5% ------- ------- Income before income taxes 1.8% 2.8% Income taxes 0.7% 1.2% ------- ------- Net income 1.1% 1.6% ======= =======
11 THIRTEEN WEEKS ENDED MARCH 30, 1996 COMPARED TO THIRTEEN WEEKS ENDED APRIL 1, 1995 Revenue for the 1996 thirteen week period was $295,477,000, a decrease of $229,000, or 0.1%, below the 1995 thirteen week period. Revenue from TLC and Express increased $12,812,000 over the prior year primarily due to the inclusion of a full quarter's revenue as these businesses were acquired during the first quarter of 1995. The decrease of $13,041,000, or 4.4%, at the other operating subsidiaries was attributable to a decrease of approximately 5,900,000 revenue miles (volume) to approximately 157,100,000 and a decrease in revenue per revenue mile (price) of approximately 2%. In the 1996 period, revenue generated through independent contractors, including railroads and air cargo carriers, was 88.7% of total consolidated revenue compared with 88.2% in the 1995 period. Purchased transportation was 67.8% of revenue in 1996 compared with 68.0% in 1995. The decrease in purchased transportation as a percentage of revenue was primarily attributable to decreased intermodal revenue and the increased revenue contribution from TLC. Drivers' wages and benefits were 3.9% of revenue in 1996 compared with 4.0% in 1995. The decrease in drivers' wages and benefits as a percentage of revenue was primarily attributable to an increase in the percentage of revenue generated through independent contractors. Fuel and other operating costs were 6.0% of revenue in 1996 compared with 5.7% in 1995. The increase in fuel and other operating costs as a percentage of revenue was attributable to both increased net trailer costs which primarily reflected decreased rental income from independent contractors and the effects of the 1995 first quarter acquisition of TLC. Insurance and claims were 3.3% of revenue in 1996 the same as 1995. Commissions to agents and brokers were 6.4% of revenue in 1996 compared with 5.8% in 1995, primarily due to an increased percentage of revenue generated through independent commission sales agents. Selling, general and administrative costs were 8.1% of revenue in 1996 compared with 8.3% of revenue in 1995, primarily due to a lower bonus accrual under the Company's management incentive compensation plan and lower provisions for bad debts in 1996. Interest and debt expense, net was 0.7% of revenue in 1996 and 0.5% in 1995 primarily attributable to the borrowings incurred as a result of the 1995 first quarter acquisitions. The provisions for income taxes for both the 1996 and 1995 thirteen week periods were based on an estimated full year combined effective income tax rate of approximately 42%, which is higher than the statutory federal income tax rate primarily as a result of state income taxes, amortization of certain goodwill and the meals and entertainment exclusion. 12 Net income was $3,154,000, or $.25 per share, in the 1996 period compared with $4,757,000, or $.37 per share, in the 1995 period. If the 1995 first quarter acquisitions had taken place at the beginning of 1995, net income for the 1995 period would have been $4,137,000, or $.32 per share. CAPITAL RESOURCES AND LIQUIDITY Shareholders' equity increased to $131,587,000 at March 30, 1996, compared with $128,396,000 at December 30, 1995, primarily reflecting the results of operations for the period. Shareholders' equity declined to 56.9% of total capitalization at March 30, 1996, compared with 57.8% at December 30, 1995, as a result of net borrowings, including capital lease additions, in excess of net income during the 1996 period. Working capital and the ratio of current assets to current liabilities were $49,157,000 and 1.36 to 1, respectively, at March 30, 1996, compared with $51,360,000 and 1.40 to 1, respectively, at December 30, 1995. Landstar has historically operated with current ratios ranging from approximately 1.0 to 1 to 1.4 to 1. Cash provided by operating activities was $7,162,000 in the 1996 thirteen week period compared with $1,428,000 in the 1995 thirteen week period. The increase in cash flow provided by operating activities was primarily attributable to the timing of payments. During the 1996 thirteen week period, Landstar purchased $2,178,000 of operating property and acquired $8,659,000 of operating property by entering into capital leases. Landstar plans to acquire approximately $41,000,000 of operating property during the remainder of fiscal year 1996 either by purchase or by lease financing. Management believes that cash flow from operations combined with its borrowing capacity under the Amended and Restated Credit Agreement will be adequate to meet Landstar's debt service requirements, fund continued growth, both internal and through acquisitions, and meet working capital needs. Management does not believe inflation has had a material impact on the results of operations or financial condition of Landstar in the past five years. However, inflation higher than that experienced in the past five years might have an adverse effect on the Company's results of operations. SEASONALITY Landstar's operations are subject to seasonal trends common to the trucking industry. Results of operations for the quarter ending in March is typically lower than the quarters ending June, September and December due to reduced shipments and higher operating costs in the winter months. 13 PART II OTHER INFORMATION Item 1. Legal Proceedings In response to a breach of contract suit filed by Gemini in the Circuit Court, County of Genesee, in the state of Michigan against Vickie and Kevin Cresson, individually and doing business as V&C Trucking (the "Defendants"), who are former agents and independent contractors of Gemini, have asserted breach of contract and state antitrust law counterclaims against Gemini and other parties, including EnviroSource, Landstar, Ranger and John B. Bowron, a director and executive officer of the Company. Defendants' state antitrust counterclaim relates to the alleged re-awarding, by a Gemini customer, of a purported contract from Gemini to Ranger. Defendants have claimed approximately $7,500,000 in actual damages (subject to trebling) as well as punitive damages. On April 25, 1996, a pre-trial conference was held by the Court at which time the Court advised the parties that it intends to rule on the parties' cross-motions for summary judgment but was not then prepared to do so. Following a ruling on the cross-motions, not now anticipated until later this year, the Court indicated further discovery of expert witnesses will be permitted followed by mediation. Trial is now not anticipated until mid to late 1997. The Company believes that it has meritorious defenses to the counter- claims and has and will continue to vigorously contest such counterclaims. The Company is routinely a party to litigation incidental to its business, primarily involving claims for personal injury and property damage incurred in the transportation of freight. The Company maintains insurance which covers liability amounts in excess of retained liabilities from personal injury and property damages claims. Item 2. Changes in Securities None. Item 3. Defaults Upon Senior Securities None. Item 4. Submission of Matters to a Vote of Security Holders None. Item 5. Other Information None. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits The exhibits listed on the attached Exhibit Index are filed as part of this quarterly report on Form 10-Q. (b) Form 8-K No reports on Form 8-K were filed by the registrant during the thirteen week period ended March 30, 1996. 14 EXHIBIT INDEX Registrant's Commission File No.: 0-21238 Exhibit No. Description - - ----------- ----------- (11) Statement re Computation of Per Share Earnings: (11.1)* Statement re: Computation of Per Share Earnings for the Thirteen Weeks ended March 30, 1996 and April 1, 1995. (27) Statement re Financial Data Schedule: (27 )* Statement re: Financial Data Schedule __________________ * Filed herewith SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. LANDSTAR SYSTEM, INC. Date: May 10, 1996 Henry H. Gerkens ---------------------------- Henry H. Gerkens Executive Vice President & Chief Financial Officer; Principal Financial Officer Date: May 10, 1996 Robert C. LaRose --------------------------- Robert C. LaRose Vice President Finance & Treasurer Principal Accounting Officer EX-11.1 2 [DESCRIPTION] CALCULATION OF 1996 AND 1995 EARNINGS PER SHARE EXHIBIT 11.1 LANDSTAR SYSTEM, INC. AND SUBSIDIARY CALCULATION OF EARNINGS PER SHARE (In thousands, except per share amounts) (Unaudited)
Thirteen Thirteen Weeks Ending Weeks Ending March 30, April 1, 1996 1995 ------------ ------------ Earnings available for earnings per share: Net income $ 3,154 $ 4,757 ============ ============ Average number of common shares outstanding 12,779 12,848 ============ ============ Earnings per share $ 0.25 $ 0.37 ============ ============
EX-27 3 FINANCIAL DATA SCHEDULE
5 This schedule contains summary financial information extracted from the Consolidated Balance Sheets at March 30, 1996 (Unaudited) and the Consolidated Statements of Income for the thirteen weeks ended March 30, 1996 (Unaudited) and is qualified in its entirety by reference to such financial statements. 1,000 OTHER DEC-28-1996 DEC-31-1995 MAR-30-1996 4,637 0 160,689 6,793 2,113 186,346 153,692 42,410 363,398 137,189 71,362 0 0 129 131,458 363,398 0 295,477 0 229,496 9,797 811 1,922 5,411 2,257 3,154 0 0 0 3,154 0.25 0.25
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