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8-K - FORM 8-K - LANDSTAR SYSTEM INC | g26860e8vk.htm |
Exhibit 99.1
For Immediate Release
|
Contact: Jim Gattoni | |
Landstar System, Inc. | ||
www.landstar.com | ||
April 21, 2011
|
904-398-9400 |
LANDSTAR SYSTEM REPORTS FIRST QUARTER DILUTED EARNINGS PER SHARE INCREASE OF 26 PERCENT TO $0.43
PER DILUTED SHARE
PER DILUTED SHARE
Jacksonville, FL Landstar System, Inc. (NASDAQ: LSTR) reported 2011 first quarter net income of
$20.6 million, or $0.43 per diluted share, compared to net income of $17.2 million, or $0.34 per
diluted share, for the 2010 first quarter. Operating margin was 35.4 percent in the 2011 first
quarter compared to 31.3 percent in the 2010 first quarter. Revenue for the 2011 first quarter was
$572.0 million compared to $548.1 million in the 2010 first quarter.
Truck transportation revenue hauled by independent business capacity owners (BCOs) and truck
brokerage carriers in the 2011 first quarter was $520.6 million, or 91 percent of revenue, compared
to $505.9 million, or 92 percent of revenue, in the 2010 first quarter. In the 2011 and 2010 first
quarters, the Company invoiced customers $58.1 million and $41.3 million, respectively, of fuel
surcharges that were passed 100 percent to BCOs and excluded from revenue. Included in revenue
hauled by third-party truck capacity providers in the 2011 and 2010 first quarters were $19.3
million and $19.0 million, respectively, of fuel surcharges invoiced to customers on revenue hauled
by third-party truck brokerage carriers. Also included in revenue hauled by third-party truck
capacity providers was revenue generated under the Companys less-than-truckload substitute line
haul service offering of $19.4 million and $77.2 million in the 2011 and 2010 first quarters,
respectively. Revenue hauled by rail, air and ocean cargo carriers was $37.9 million, or 7 percent
of revenue, in the 2011 first quarter compared to $28.5 million, or 5 percent of revenue, in the
2010 first quarter. Transportation
LANDSTAR SYSTEM/2
management fee revenue generated by the supply chain solutions companies was $4.8 million and $4.1
million in the 2011 and 2010 first quarters, respectively.
Trailing twelve-month return on average shareholders equity was 33 percent and trailing
twelve-month return on invested capital, net income divided by the sum of average equity plus
average debt, was 23 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 May 27, 2011 to
stockholders of record at the close of business on May 5, 2011. It is the intention of the Board
of Directors to continue to pay a quarterly dividend.
I am very pleased with the Companys 2011 first quarter performance, said Henry Gerkens,
Landstars Chairman, President and CEO. Despite the anticipated revenue decline in our substitute
line haul service offering and the adverse effects of some inclement weather in the 2011 first
quarter, revenue increased four percent over the 2010 first quarter. Gross profit, defined as
revenue less the cost of purchased transportation and commissions to agents, increased 7 percent in
the 2011 first quarter over the 2010 first quarter, operating income increased 20 percent and
earnings per diluted share increased 26 percent. Excluding the substitute line haul revenue from
both the 2011 and 2010 first quarters, revenue increased 17 percent, as demand and pricing were
both strong in the 2011 first quarter.
Gerkens continued, In the 2011 first quarter, overall truckload capacity was seasonally tighter
than experienced during prior year first quarters, which led to
improved pricing. So far, in April, truckload pricing has continued to
increase from the 2011 first quarter. I anticipate that trend to continue throughout the second
quarter as freight demand increases over the 2011 first quarter. Assuming those operating trends
continue throughout the quarter, I would expect operating margin in the 2011 second quarter to be
about 42 percent and 2011 second quarter earnings to be in a range of $0.56 to $0.61 per diluted
share.
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 Companys website at www.landstar.com; click on
Investor Relations and Webcasts, then click on Landstars First Quarter 2011 Earnings Release
Conference Call.
LANDSTAR SYSTEM/3
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 Landstars 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 Landstars Form 10K for the 2010 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 9001:2008 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/4
Landstar System, Inc. and Subsidiary
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)
Thirteen Weeks Ended | ||||||||
March 26, | March 27, | |||||||
2011 | 2010 | |||||||
Revenue |
$ | 571,986 | $ | 548,088 | ||||
Investment income |
528 | 285 | ||||||
Costs and expenses: |
||||||||
Purchased transportation |
431,378 | 417,201 | ||||||
Commissions to agents |
44,171 | 40,408 | ||||||
Other operating costs |
7,944 | 7,536 | ||||||
Insurance and claims |
11,266 | 12,298 | ||||||
Selling, general and administrative |
37,264 | 36,843 | ||||||
Depreciation and amortization |
6,399 | 5,792 | ||||||
Total costs and expenses |
538,422 | 520,078 | ||||||
Operating income |
34,092 | 28,295 | ||||||
Interest and debt expense |
828 | 854 | ||||||
Income before income taxes |
33,264 | 27,441 | ||||||
Income taxes |
12,707 | 10,484 | ||||||
Net income |
20,557 | 16,957 | ||||||
Less: Net loss attributable to noncontrolling interest |
(62 | ) | (219 | ) | ||||
Net income attributable to Landstar System,
Inc. and subsidiary |
$ | 20,619 | $ | 17,176 | ||||
Earnings per
common share attributable to Landstar System, Inc. and subsidiary |
$ | 0.43 | $ | 0.34 | ||||
Diluted
earnings per share attributable to Landstar System, Inc. and subsidiary |
$ | 0.43 | $ | 0.34 | ||||
Average number of shares outstanding: |
||||||||
Earnings per common share |
47,870,000 | 50,207,000 | ||||||
Diluted earnings per share |
47,900,000 | 50,318,000 | ||||||
Dividends paid per common share |
$ | 0.050 | $ | 0.045 | ||||
LANDSTAR SYSTEM/5
Landstar System, Inc. and Subsidiary
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
(Unaudited)
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
(Unaudited)
Mar. 26, | Dec. 25, | |||||||
2011 | 2010 | |||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | 45,230 | $ | 44,706 | ||||
Short-term investments |
30,756 | 23,266 | ||||||
Trade accounts receivable, less allowance
of $5,525 and $5,324 |
344,459 | 307,350 | ||||||
Other receivables, including advances to independent
contractors, less allowance of $5,018 and $5,511 |
30,972 | 23,943 | ||||||
Deferred income taxes and other current assets |
15,218 | 21,652 | ||||||
Total current assets |
466,635 | 420,917 | ||||||
Operating property, less accumulated depreciation
and amortization of $142,330 and $137,830 |
127,957 | 132,649 | ||||||
Goodwill |
57,470 | 57,470 | ||||||
Other assets |
62,373 | 72,846 | ||||||
Total assets |
$ | 714,435 | $ | 683,882 | ||||
LIABILITIES AND EQUITY |
||||||||
Current liabilities: |
||||||||
Cash overdraft |
$ | 23,407 | $ | 24,877 | ||||
Accounts payable |
160,704 | 137,297 | ||||||
Current maturities of long-term debt |
19,878 | 22,172 | ||||||
Insurance claims |
43,027 | 40,215 | ||||||
Other current liabilities |
55,072 | 53,785 | ||||||
Total current liabilities |
302,088 | 278,346 | ||||||
Long-term debt, excluding current maturities |
95,710 | 99,439 | ||||||
Insurance claims |
31,627 | 31,468 | ||||||
Deferred income taxes |
22,573 | 23,662 | ||||||
Equity |
||||||||
Landstar System, Inc. and subsidiary shareholders equity |
||||||||
Common stock, $0.01 par value, authorized 160,000,000
shares, issued 66,553,099 and 66,535,169 shares |
666 | 665 | ||||||
Additional paid-in capital |
161,502 | 169,268 | ||||||
Retained earnings |
862,357 | 844,132 | ||||||
Cost of 18,674,902 shares of common
stock in treasury |
(763,182 | ) | (763,182 | ) | ||||
Accumulated other comprehensive income |
1,094 | 881 | ||||||
Total Landstar System, Inc. and subsidiary shareholders
equity |
262,437 | 251,764 | ||||||
Noncontrolling interest |
| (797 | ) | |||||
Total equity |
262,437 | 250,967 | ||||||
Total liabilities and equity |
$ | 714,435 | $ | 683,882 | ||||
LANDSTAR SYSTEM/6
Landstar System, Inc. and Subsidiary
Supplemental Information
(Unaudited)
Supplemental Information
(Unaudited)
Thirteen Weeks Ended | ||||||||
March 26, | March 27, | |||||||
2011 | 2010 | |||||||
Revenue generated through (in thousands): |
||||||||
Business Capacity Owners (1) |
$ | 306,894 | $ | 286,141 | ||||
Truck Brokerage Carriers |
213,723 | 219,755 | ||||||
Rail intermodal |
16,465 | 14,776 | ||||||
Ocean cargo carriers |
13,833 | 9,135 | ||||||
Air cargo carriers |
7,560 | 4,603 | ||||||
Other (2) |
13,511 | 13,678 | ||||||
$ | 571,986 | $ | 548,088 | |||||
Number of loads: |
||||||||
Business Capacity Owners (1) |
192,040 | 197,750 | ||||||
Truck Brokerage Carriers |
135,740 | 149,350 | ||||||
Rail intermodal |
7,260 | 6,870 | ||||||
Ocean cargo carriers |
1,830 | 1,460 | ||||||
Air cargo carriers |
1,950 | 1,500 | ||||||
338,820 | 356,930 | |||||||
Revenue per load: |
||||||||
Business Capacity Owners (1) |
$ | 1,598 | $ | 1,447 | ||||
Truck Brokerage Carriers |
1,575 | 1,471 | ||||||
Rail intermodal |
2,268 | 2,151 | ||||||
Ocean cargo carriers |
7,559 | 6,257 | ||||||
Air cargo carriers |
3,877 | 3,069 |
March 26, | March 27, | |||||||
2011 | 2010 | |||||||
Truck Capacity |
||||||||
Business Capacity Owners (1) (3) |
7,697 | 7,800 | ||||||
Truck Brokerage Carriers: |
||||||||
Approved and active (4) |
16,773 | 15,644 | ||||||
Approved |
9,347 | 9,674 | ||||||
26,120 | 25,318 | |||||||
Total available truck capacity providers |
33,817 | 33,118 | ||||||
(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 8,226 and 8,384 at March 26, 2011 and March 27, 2010, respectively. | |
(4) | Active refers to Truck Brokerage Carriers who have moved at least one load in the past 180 days. |