JACKSONVILLE, Fla., July 15 /PRNewswire-FirstCall/ -- Landstar
System, Inc. (NASDAQ:LSTR) reported 2009 second quarter net income
of $17.9 million, or $0.35 per diluted share, from revenue of
$491.2 million. Included in the 2009 second quarter was $2.0
million of costs, or $0.02 per diluted share, related to two
acquisitions that were completed in the first week of the 2009
third quarter. Net income for the 2008 second quarter was $29.8
million, or $0.56 per diluted share, from revenue of $697.7
million. Revenue hauled by BCO Independent Contractors in the
second quarter of 2009 was $288.6 million, or 59 percent of
revenue, compared to $375.4 million, or 54 percent of revenue, in
the 2008 second quarter. Moreover, in the second quarters of 2009
and 2008, the Company invoiced customers $27.3 million and $90.3
million, respectively, in fuel surcharges that were passed on 100
percent to BCO Independent Contractors and excluded from revenue.
Revenue hauled by third-party truck brokerage carriers was $165.2
million, or 34 percent of revenue, in the 2009 second quarter
compared to $261.7 million, or 38 percent of revenue, in the 2008
second quarter. Included in third-party truck brokerage revenue in
the 2009 and 2008 second quarters was $9.2 million and $39.9
million, respectively, of fuel surcharges invoiced to customers.
Revenue hauled by rail, air and ocean cargo carriers was $28.2
million, or 6 percent of revenue, in the 2009 second quarter
compared to $51.5 million, or 7 percent of revenue, in the 2008
second quarter. Revenue in the twenty-six-week period ended June
27, 2009 was $960 million compared to $1.306 billion for the 2008
twenty-six-week period. Net income for the twenty-six-week period
ended June 27, 2009 was $31.8 million, or $0.61 per diluted share,
compared to net income of $53.5 million, or $1.01 per diluted
share, for the twenty-six-week period ended June 28, 2008. Revenue
hauled by BCO Independent Contractors in the 2009 twenty-six-week
period was $550.7 million, or 57 percent of revenue, compared to
$700.2 million, or 54 percent of revenue, in the 2008
twenty-six-week period. In the twenty-six-week periods of 2009 and
2008, the Company invoiced customers $51.5 million and $148.1
million, respectively, in fuel surcharges that were passed on 100
percent to BCO Independent Contractors and excluded from revenue.
Revenue hauled by third-party truck brokerage carriers was $329.5
million, or 34 percent of revenue, in the 2009 twenty-six-week
period compared to $490.3 million, or 38 percent of revenue, in the
2008 twenty-six-week period. Included in the third-party truck
brokerage revenue in the 2009 and 2008 twenty-six-week periods was
$19.0 million and $67.7 million, respectively, of fuel surcharges
invoiced to customers. Revenue hauled by rail, air and ocean cargo
carriers was $61.8 million, or 6 percent of revenue, in the 2009
twenty-six-week period compared to $97.3 million, or 7 percent of
revenue, in the 2008 twenty-six-week period. Landstar System, Inc.
also announced that its Board of Directors has declared a quarterly
dividend of $0.045 per share. This represents a 13 percent increase
in the Company's quarterly dividend. The dividend is payable on
August 28, 2009 to stockholders of record at the close of business
on August 10, 2009. It is the intention of the Board of Directors
to continue to pay a quarterly dividend. Under the Company's
authorized share purchase programs, the Company currently has a
total of 2,556,200 shares of its common stock available for
purchase. "In the 2009 second quarter, Landstar's revenue continued
to be negatively impacted by the severe recession in the domestic
and global economies," said Landstar President and Chief Executive
Officer Henry Gerkens. "As was the case in the 2009 first quarter,
revenue declines were experienced in just about every sector,
including revenue generated from the U.S. Department of Defense. As
anticipated, significant revenue declines occurred in the
automotive sector and in our substitute line haul service offering.
From a load volume perspective, the number of loads hauled in the
2009 second quarter decreased 16 percent compared to the 2008
second quarter, better than the 17 percent decline experienced in
the 2009 first quarter compared to the 2008 first quarter,
demonstrating a slow improvement in overall demand. However, this
improvement was more than offset by continued pressure on price
which was caused in part by lower fuel surcharge revenue on freight
hauled by third-party truck brokerage carriers and rail, ocean and
air cargo carriers. Revenue per load for revenue hauled by BCO
Independent Contractors in the 2009 second quarter was 11 percent
below the 2008 second quarter and revenue per load on freight
hauled by third-party truck brokerage carriers, which includes the
impact of lower fuel surcharges invoiced to customers in the 2009
second quarter, decreased 24 percent compared to the 2008 second
quarter. "Irrespective of the current economic environment,
Landstar continues to generate outstanding returns. Trailing twelve
month return on average shareholders' equity remained high at 35
percent and trailing twelve month return on invested capital, net
income divided by the sum of average equity plus average debt, was
24 percent. "Landstar's net revenue margin, defined as revenue less
purchased transportation and commissions to agents divided by
revenue, was 17.2%, up from 15.3% in the 2008 second quarter. And,
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 6.1%, despite the revenue
decline. If one were to exclude the $2.0 million in one-time
acquisition costs, the operating margin was 6.5%, a very
respectable margin in a very difficult operating climate. "In the
first week of the Company's fiscal third quarter, Landstar
completed the acquisitions of two supply chain transportation
integration companies. I am excited about the opportunities that
these acquisitions will provide to our independent agent and
capacity network," Gerkens said. "The technology platforms acquired
with these businesses should provide our independent agents the
ability to offer customers complete supply chain solutions with
industry leading technology and, in turn, provide additional
loading opportunities to our vast capacity network. Landstar now
possesses the tools to become a major player in the freight under
management business. The Company expects that the acquisitions will
not have a material effect on its revenue and earnings for the
third and fourth quarters of 2009." Gerkens continued, "I do not
foresee a significant change in the current freight environment as
we move through the third quarter. However, there has been a slight
improvement in volume trends. In addition, some of the very
difficult revenue comparisons experienced during the first half of
2009 begin to ease toward the end of the 2009 third quarter and
into the 2009 fourth quarter. I believe the worst is over. That
being said, there continues to be some level of uncertainty in the
marketplace and, as such, Landstar will not be providing guidance
at this time. However, I continue to believe that the sensitivity
analysis provided with prior earnings releases continues to reflect
how Landstar's variable cost business model would react to varying
levels of revenue. It should be noted that the Company's 2008 third
quarter results included revenue, net income, and diluted earnings
per share of $27.6 million, $1.7 million and $0.03, respectively,
for bus capacity provided in connection with evacuation assistance
related to the storms that impacted the Gulf Coast." 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 Second 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. delivers safe, specialized transportation and
logistics services to a broad range of customers worldwide. The
Company identifies and fulfills shippers' needs through the
coordination of individual businesses comprised of independent
sales agents and third-party transportation and logistics capacity
providers. Through its operating subsidiaries, Landstar delivers
excellence in complete transportation logistics services and
solutions. 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. (Tables
follow) Landstar System, Inc. Consolidated Statements of Income
(Dollars in thousands, except per share amounts) (Unaudited) Twenty
Six Weeks Ended Thirteen Weeks Ended ----------------------
-------------------- June 27, June 28, June 27, June 28, 2009 2008
2009 2008 ---------- ---------- ---------- ---------- Revenue
$960,411 $1,306,479 $491,164 $697,651 Investment income 675 1,869
250 773 Costs and expenses: Purchased transportation 717,891
1,003,345 366,567 538,316 Commissions to agents 78,251 99,590
39,927 52,776 Other operating costs 14,838 13,940 7,388 7,356
Insurance and claims 18,799 19,034 9,797 9,513 Selling, general and
administrative (1) 66,612 70,958 32,243 35,101 Depreciation and
amortization 11,201 10,307 5,716 5,177 ---------- ----------
---------- ---------- Total costs and expenses (1) 907,592
1,217,174 461,638 648,239 ---------- ---------- ----------
---------- Operating income (1) 53,494 91,174 29,776 50,185
Interest and debt expense 2,136 3,878 973 1,736 ----------
---------- ---------- ---------- Income before income taxes (1)
51,358 87,296 28,803 48,449 Income taxes 19,607 33,788 10,946
18,684 ---------- ---------- ---------- ---------- Net income (1)
$31,751 $53,508 $17,857 $29,765 ========== ========== ==========
========== Earnings per common share (1) $0.62 $1.01 $0.35 $0.56
========== ========== ========== ========== Diluted earnings per
share (1) $0.61 $1.01 $0.35 $0.56 ========== ========== ==========
========== Average number of shares outstanding: Earnings per
common share 51,453,000 52,726,000 51,330,000 52,851,000 ==========
========== ========== ========== Diluted earnings per share
51,636,000 53,198,000 51,487,000 53,373,000 ========== ==========
========== ========== Dividends paid per common share $0.0800
$0.0750 $0.0400 $0.0375 ========== ========== ========== ==========
(1) The 2009 twenty-six and thirteen-week periods include $2,005 of
costs related to the acquisition of two supply chain transportation
integration companies in the first week of the Company's fiscal
third quarter. Net of related income tax benefits, these costs
reduced net income for the twenty-six and thirteen-week periods
ended June 27, 2009 by $1,243, or $0.02 per common share ($0.02 per
diluted share). Landstar System, Inc. Consolidated Balance Sheets
(Dollars in thousands, except per share amounts) (Unaudited) June
27, Dec. 27, 2009 2008 -------- -------- ASSETS Current assets:
Cash and cash equivalents $92,091 $98,904 Short-term investments
23,791 23,479 Trade accounts receivable, less allowance of $7,092
and $6,230 237,516 315,065 Other receivables, including advances to
independent contractors, less allowance of $5,344 and $4,298 12,639
10,083 Deferred income taxes and other current assets 28,128 27,871
-------- -------- Total current assets 394,165 475,402 --------
-------- Operating property, less accumulated depreciation and
amortization of $115,023 and $106,635 124,513 124,178 Goodwill
31,134 31,134 Other assets 33,512 32,816 -------- -------- Total
assets $583,324 $663,530 ======== ======== LIABILITIES AND
SHAREHOLDERS' EQUITY Current liabilities: Cash overdraft $20,471
$32,065 Accounts payable 91,858 105,882 Current maturities of
long-term debt 25,881 24,693 Insurance claims 27,410 23,545 Accrued
income taxes 11,948 12,239 Other current liabilities 34,435 38,161
-------- -------- Total current liabilities 212,003 236,585
-------- -------- Long-term debt, excluding current maturities
37,778 111,752 Insurance claims 34,459 38,278 Deferred income taxes
27,825 23,779 Shareholders' equity: Common stock, $0.01 par value,
authorized 160,000,000 shares, issued 66,181,267 and 66,109,547
shares 662 661 Additional paid-in capital 158,543 154,533 Retained
earnings 731,959 704,331 Cost of 14,868,687 and 14,424,887 shares
of common stock in treasury (619,609) (605,828) Accumulated other
comprehensive loss (296) (561) -------- -------- Total
shareholders' equity 271,259 253,136 -------- -------- Total
liabilities and shareholders' equity $583,324 $663,530 ========
======== Landstar System, Inc. Supplemental Information (Unaudited)
Twenty Six Weeks Thirteen Weeks Ended Ended ----------------
-------------- June 27, June 28, June 27, June 28, 2009 2008 2009
2008 -------- ---------- -------- -------- Revenue generated
through (in thousands): -----------------------------------------
Business Capacity Owners (1) $550,665 $700,195 $288,600 $375,391
Truck Brokerage Carriers 329,479 490,334 165,236 261,701 Rail
intermodal 36,728 71,598 17,410 37,809 Ocean cargo carriers 17,518
18,220 8,667 9,786 Air cargo carriers 7,508 7,449 2,121 3,860 Other
(2) 18,513 18,683 9,130 9,104 -------- ---------- -------- --------
$960,411 $1,306,479 $491,164 $697,651 ======== ========== ========
======== Number of loads: ---------------- Business Capacity Owners
(1) 365,000 429,080 194,350 225,880 Truck Brokerage Carriers
240,020 288,970 122,370 146,940 Rail intermodal 18,290 31,000 8,710
16,020 Ocean cargo carriers 2,590 2,590 1,350 1,340 Air cargo
carriers 5,100 3,870 1,840 1,880 -------- ---------- --------
-------- 631,000 755,510 328,620 392,060 ======== ==========
======== ======== Revenue per load: ----------------- Business
Capacity Owners (1) $1,509 $1,632 $1,485 $1,662 Truck Brokerage
Carriers 1,373 1,697 1,350 1,781 Rail intermodal 2,008 2,310 1,999
2,360 Ocean cargo carriers 6,764 7,035 6,420 7,303 Air cargo
carriers 1,472 1,925 1,153 2,053 June 27, June 28, 2009 2008
-------- -------- Truck Capacity -------------- Business Capacity
Owners (1) (3) 8,286 8,222 ------ ------ Truck Brokerage Carriers:
Approved and active (4) 14,827 16,080 Approved 11,082 9,219 ------
------ 25,909 25,299 ------ ------ Total available truck capacity
providers 34,195 33,521 ====== ====== Agent Locations 1,436 1,409
--------------- ====== ====== (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 revenue
generated by the transportation logistics segment. (3) Trucks
provided by Business Capacity Owners were 8,875 and 8,804 at June
27, 2009 and June 28, 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, Landstar System, Inc., +1-904-398-9400 Web Site:
http://www.landstar.com/
Copyright
