EX-99.1 2 g25880exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
(Landstar LH)
For Immediate Release   Contact: Jim Gattoni
    Landstar System, Inc.
    www.landstar.com
February 1, 2011   904-398-9400
LANDSTAR SYSTEM REPORTS 35 PERCENT INCREASE IN
FOURTH QUARTER EARNINGS PER SHARE
Jacksonville, FL — Landstar System, Inc. (NASDAQ: LSTR) reported 2010 fourth quarter net income of $24.1 million, or $0.50 per diluted share, compared to net income of $18.6 million, or $0.37 per diluted share, for the 2009 fourth quarter. Revenue for the 2010 fourth quarter was $587.5 million compared to $547.7 million in the 2009 fourth quarter.
Truck transportation revenue hauled by independent business capacity owners (“BCOs”) and truck brokerage carriers in the 2010 fourth quarter was $537.6 million, or 91 percent of revenue, compared to $498.4 million, or 91 percent of revenue, in the 2009 fourth quarter. In the 2010 and 2009 fourth quarters, the Company invoiced customers $51.1 million and $40.7 million, respectively, of fuel surcharges that were passed 100 percent to BCOs and excluded from revenue. Revenue hauled by rail, air and ocean cargo carriers was $36.7 million, or 6 percent of revenue, in the 2010 fourth quarter compared to $35.0 million, or 6 percent of revenue, in the 2009 fourth quarter. Transportation management fee revenue generated by the supply chain solutions companies was $4.4 million, or 1 percent of revenue, in both the 2010 and 2009 fourth quarters.

 

 

LANDSTAR SYSTEM/2
 
Commenting on Landstar’s 2010 fourth quarter, Henry Gerkens, Landstar’s Chairman, President and CEO said, “I am very pleased with the way the Company finished the year. Operating income and diluted earnings per share in the 2010 fourth quarter increased 30 percent and 35 percent, respectively, over the 2009 fourth quarter. Gross profit, defined as revenue less the cost of purchased transportation and commissions to agents, in the 2010 fourth quarter increased 8 percent over the 2009 fourth quarter. As anticipated, revenue in the 2010 fourth quarter compared to revenue in the 2009 fourth quarter was negatively impacted by a significant decrease in the number of loads hauled under the Company’s less-than-truckload substitute line haul service offering. Revenue under the Company’s less-than-truckload substitute line haul service offering decreased to 4 percent of revenue in the 2010 fourth quarter compared to 13 percent of revenue in the 2009 fourth quarter. Excluding the impact of the revenue decline in this service offering, the total number of truck transportation loads hauled in the 2010 fourth quarter increased 8 percent over the 2009 fourth quarter and revenue per load for truck transportation for the fourth quarter of 2010 increased 12 percent over the 2009 fourth quarter. In addition, the number of loads hauled by air and ocean carriers in the 2010 fourth quarter increased 50 percent and 31 percent, respectively, over the 2009 fourth quarter.”
“Landstar continues to generate outstanding returns. Return on average shareholder’s equity was 32 percent and return on invested capital, net income divided by the sum of average equity plus average debt, was 22 percent. Landstar System, Inc. also announced that its Board of Directors has declared a quarterly dividend of $0.05 per share. The dividend is payable on March 11, 2011 to stockholders of record at the close of business on February 14, 2011. It is the intention of the Board of Directors to continue to pay a quarterly dividend. During the 2010 fourth quarter, Landstar purchased 1,277,000 shares of its common stock at a total cost of $48.1 million. During 2010, the Company purchased 2,653,000 shares of its common stock at a total cost of $102.7 million. Under the Company’s authorized share purchase program, the Company currently has a total of 723,000 shares of its common stock available for purchase.”
Gerkens continued, “As reported by FIRST CALL, the current ranges of analysts’ earnings estimates for the 2011 first quarter and full year are $0.38 to $0.45 per diluted share and $1.95 to $2.29 per diluted share. Based upon current revenue trends and the anticipated continuation of those trends through the balance of the year, I am comfortable with the current range of analysts’ earnings estimates for both the 2011 first quarter and full year.”

 

 

LANDSTAR SYSTEM/3
 
Landstar will provide a live webcast of its quarterly earnings conference call this afternoon at 2:00 pm ET. To access the webcast, visit the Company’s website at www.landstar.com; click on “Investor Relations” and “Webcasts,” then click on “Landstar’s Fourth Quarter 2010 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 2009 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.

 

 

LANDSTAR SYSTEM/4
 
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 9001:2008 quality management system standards and RC14001:2008 environmental, health, safety and security management system standards. Landstar System, Inc. is headquartered in Jacksonville, Florida. Its common stock trades on The NASDAQ Stock Market® under the symbol LSTR.
(Tables follow)

 

 

LANDSTAR SYSTEM/5
 
Landstar System, Inc. and Subsidiary
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)
                                 
    Fiscal Year Ended     Thirteen Weeks Ended  
    December 25,     December 26,     December 25,     December 26,  
    2010     2009     2010     2009  
Revenue
   $ 2,400,170     $ 2,008,796     $ 587,535     $ 547,715  
Investment income
     1,558       1,268       489       314  
 
                                
Costs and expenses:
                                
Purchased transportation
     1,824,308       1,503,520       442,353       413,301  
Commissions to agents
     181,405       160,571       46,710       42,836  
Other operating costs
     28,826       29,173       6,874       7,424  
Insurance and claims
     49,334       45,918       11,725       16,862  
Selling, general and administrative
     153,080       133,612       38,194       33,922  
Depreciation and amortization
     24,804       23,528       6,360       6,114  
 
                        
 
                                
Total costs and expenses
     2,261,757       1,896,322       552,216       520,459  
 
                        
 
                                
Operating income
     139,971       113,742       35,808       27,570  
Interest and debt expense
     3,623       4,030       924       937  
 
                        
 
                                
Income before income taxes
     136,348       109,712       34,884       26,633  
Income taxes
     49,766       39,762       11,005       8,296  
 
                                
 
                        
Net income
     86,582       69,950       23,879       18,337  
Less: Net loss attributable to noncontrolling interest
     (932 )     (445 )     (220 )     (231 )
 
                        
Net income attributable to Landstar System, Inc. and subsidiary
   $ 87,514     $ 70,395     $ 24,099     $ 18,568  
 
                        
 
                                
Earnings per common share attributable to Landstar System, Inc. and subsidiary
   $ 1.77     $ 1.38     $ 0.50     $ 0.37  
 
                        
 
                                
Diluted earnings per share attributable to Landstar System, Inc. and subsidiary
   $ 1.77     $ 1.37     $ 0.50     $ 0.37  
 
                        
 
                                
Average number of shares outstanding:
                                
Earnings per common share
     49,523,000       51,095,000       48,327,000       50,404,000  
 
                        
Diluted earnings per share
     49,580,000       51,280,000       48,358,000       50,594,000  
 
                        
 
                                
Dividends paid per common share
   $ 0.1900     $ 0.1700     $ 0.0500     $ 0.0450  
 
                        

 

 

LANDSTAR SYSTEM/6
 
Landstar System, Inc. and Subsidiary
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
(Unaudited)
                 
    Dec. 25,     Dec. 26,  
    2010     2009  
ASSETS
                
Current assets:
                
Cash and cash equivalents
   $ 44,706     $ 85,719  
Short-term investments
     23,266       24,325  
Trade accounts receivable, less allowance of $5,324 and $5,547
     307,350       278,854  
Other receivables, including advances to independent contractors, less allowance of $5,511 and $5,797
     23,943       18,149  
Deferred income taxes and other current assets
     21,652       19,565  
 
            
Total current assets
     420,917       426,612  
 
            
 
                
Operating property, less accumulated depreciation and amortization of $137,830 and $124,810
     132,649       116,656  
Goodwill
     57,470       57,470  
Other assets
     72,846       48,054  
 
            
Total assets
   $ 683,882     $ 648,792  
 
            
 
                
LIABILITIES AND EQUITY
                
Current liabilities:
                
Cash overdraft
   $ 24,877     $ 28,919  
Accounts payable
     137,297       121,030  
Current maturities of long-term debt
     22,172       24,585  
Insurance claims
     40,215       41,627  
Other current liabilities
     53,785       42,474  
 
            
Total current liabilities
     278,346       258,635  
 
            
 
                
Long-term debt, excluding current maturities
     99,439       68,313  
Insurance claims
     31,468       30,680  
Deferred income taxes
     23,662       23,013  
 
                
Equity
                
Landstar System, Inc. and subsidiary shareholders’ equity
Common stock, $0.01 par value, authorized 160,000,000
shares, issued 66,535,169 and 66,255,358 shares
     665       663  
Additional paid-in capital
     169,268       161,261  
Retained earnings
     844,132       766,040  
Cost of 18,674,902 and 16,022,111 shares of common stock in treasury
     (763,182 )     (660,446 )
Accumulated other comprehensive income
     881       498  
 
            
Total Landstar System, Inc. and subsidiary shareholders’ equity
     251,764       268,016  
 
            
Noncontrolling interest
     (797 )     135  
 
            
Total equity
     250,967       268,151  
 
            
Total liabilities and equity
   $ 683,882     $ 648,792  
 
            

 

 

LANDSTAR SYSTEM/7
 
Landstar System, Inc. and Subsidiary
Supplemental Information
(Unaudited)
                                 
    Fiscal Year Ended     Thirteen Weeks Ended  
    December 25,     December 26,     December 25,     December 26,  
    2010     2009     2010     2009  
Revenue generated through (in thousands):
                                
Business Capacity Owners (1)
   $ 1,289,395     $ 1,140,004     $ 323,174     $ 299,613  
Truck Brokerage Carriers
     919,605       694,467       214,416       198,806  
Rail intermodal
     70,299       76,346       18,459       19,252  
Ocean cargo carriers
     46,064       33,835       12,019       8,376  
Air cargo carriers
     20,104       17,621       6,251       7,362  
Other (2)
     54,703       46,523       13,216       14,306  
 
                        
 
   $ 2,400,170     $ 2,008,796     $ 587,535     $ 547,715  
 
                        
 
                                
Number of loads:
                                
Business Capacity Owners (1)
     821,330       761,940       197,060       200,100  
Truck Brokerage Carriers
     591,810       501,980       135,400       138,980  
Rail intermodal
     31,070       37,890       7,950       9,290  
Ocean cargo carriers
     6,830       5,370       1,900       1,450  
Air cargo carriers
     6,880       7,780       2,010       1,340  
 
                        
 
     1,457,920       1,314,960       344,320       351,160  
 
                        
 
                                
Revenue per load:
                                
Business Capacity Owners (1)
   $ 1,570     $ 1,496     $ 1,640     $ 1,497  
Truck Brokerage Carriers
     1,554       1,383       1,584       1,430  
Rail intermodal
     2,263       2,015       2,322       2,072  
Ocean cargo carriers
     6,744       6,301       6,326       5,777  
Air cargo carriers
     2,922       2,265       3,110       5,494  
                 
    December 25,     December 26,  
    2010     2009  
Truck Capacity
                
Business Capacity Owners (1) (3)
     7,865       7,926  
 
            
Truck Brokerage Carriers:
                
Approved and active (4)
     18,049       14,887  
Approved
     9,938       9,886  
 
            
 
     27,987       24,773  
 
            
Total available truck capacity providers
     35,852       32,699  
 
            
 
                                
Million Dollar Agents (5)
     468       405  
 
            
 
(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 transportation management fee revenue generated by the transportation logistics segment.
 
(3)   Trucks provided by Business Capacity Owners were 8,452 and 8,519 at December 25, 2010 and December 26, 2009, respectively.
 
(4)   Active refers to Truck Brokerage Carriers who have moved at least one load in the past 180 days.
 
(5)   Independent commission sales agents who on an annual basis generate $1 million or more of Landstar revenue.