Landstar System Reports 23 Percent Increase In Diluted Earnings Per Share To A Second Quarter Record Of $0.76

26 Jul, 2012, 07:50 ET from Landstar System, Inc.

JACKSONVILLE, Fla., July 26, 2012 /PRNewswire/ -- Landstar System, Inc. (NASDAQ: LSTR) reported 2012 record second quarter diluted earnings per share of $0.76 from net income of $35.9 million, compared to net income of $29.6 million, or $0.62 per diluted share, for the 2011 second quarter.  Operating margin, representing operating income divided by gross profit (gross profit defined as revenue less the cost of purchased transportation and commissions to agents) was 50.4 percent in the 2012 second quarter compared to 43.6 percent in the 2011 second quarter.  Revenue for the 2012 second quarter was a second quarter record of $736.0 million compared to $675.6 million in the 2011 second quarter. 

Truck transportation revenue hauled by independent business capacity owners ("BCOs") and truck brokerage carriers in the 2012 second quarter was $680.0 million, or 92 percent of revenue, compared to $621.5 million, or 92 percent of revenue, in the 2011 second quarter.  In the 2012 and 2011 second quarters, the Company invoiced customers $79.3 million and $78.7 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 2012 and 2011 second quarters were $30.1 million and $25.9 million, respectively, of fuel surcharges invoiced to customers on revenue hauled by third-party truck brokerage carriers.  Revenue hauled by rail, air and ocean cargo carriers was $41.3 million, or 6 percent of revenue, in the 2012 second quarter compared to $39.9 million, or 6 percent of revenue, in the 2011 second quarter. 

Trailing twelve-month return on average shareholder's equity was 41 percent and trailing twelve-month return on invested capital, net income divided by the sum of average equity plus average debt, was 29 percent.  Landstar also announced that its Board of Directors has declared a quarterly dividend of $0.06 per share.  The dividend is payable on August 31, 2012 to stockholders of record at the close of business on August 13, 2012.  Also during the 2012 second quarter, the Company entered into a new credit agreement to refinance its existing credit facility.  The new credit facility will expire in June 2017.

In addition, Landstar announced that its Board of Directors authorized the purchase of an additional 2,000,000 shares of its common stock from time-to-time in the open market and in privately negotiated transactions.  During the 2012 second quarter, Landstar purchased 315,600 shares of its common stock at a total cost of $15,752,000.  Currently, there are approximately 2,200,000 shares of the Company's common stock available for purchase under Landstar's authorized share purchase program. 

"Landstar's 2012 second quarter performance was the best second quarter operating performance in Landstar history," said Landstar Chairman, President and CEO Henry Gerkens. "Revenue in the 2012 second quarter increased approximately $60 million over the 2011 second quarter to record second quarter revenue of $736.0 million.  Gross profit in the 2012 second quarter increased 5 percent over the 2011 second quarter to record second quarter gross profit of $116.7 million.  Operating income in the 2012 second quarter increased 21 percent over the 2011 second quarter to record second quarter operating income of $58.8 million.  Diluted earnings per share in the 2012 second quarter increased 23 percent over the 2011 second quarter to record second quarter diluted earnings per share of $0.76. The record second quarter performance was led by continued strength in demand for Landstar's truck transportation services as Landstar continues to execute on its solutions oriented approach to customers.  The number of loads hauled on truck capacity in the 2012 second quarter increased 8 percent over the 2011 second quarter.  As anticipated, the increase in pricing on truck transportation on a quarter over prior year quarter basis has moderated to some degree, but still remained high in relation to historical amounts."

Gerkens continued, "Demand for the Company's truck transportation services continued to be strong throughout the 2012 second quarter.  Available truck capacity in the flatbed/unsided trailing equipment market continued to lag demand and available truck capacity in the van arena was in-line with demand.  Historically, revenue in the Company's core business during the fiscal third quarter has been relatively consistent with revenue generated in the Company's core business during the fiscal second quarter.  Assuming the current and historical operating trends continue, I would expect 2012 third quarter diluted earnings per share to be within a range of $0.71 to $0.75."

Landstar will hold 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 Second Quarter 2012 Earnings Release Conference Call."  The webcast will be available on the Company's website through Thursday, August 2, 2012.

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 2011 fiscal year, described in Item 1A Risk Factors, and in 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 and logistics services to a broad range of customers worldwide utilizing a network of agents, third-party capacity owners and employees.  All Landstar transportation services 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.

www.landstar.com

 (Tables follow)

  

Landstar System, Inc. and Subsidiary

Consolidated Statements of Income

(Dollars in thousands, except per share amounts)

(Unaudited)

Twenty Six Weeks Ended

Thirteen Weeks Ended

June 30,

June 25,

June 30,

June 25,

2012

2011

2012

2011

Revenue

$                      1,384,996

$  1,247,547

$                   735,973

$     675,561

Investment income

792

921

405

393

Costs and expenses:

Purchased transportation

1,055,703

941,360

562,781

509,982

Commissions to agents

106,692

98,175

56,460

54,004

Other operating costs

11,188

15,623

4,716

7,679

Insurance and claims

20,401

24,715

9,306

13,449

Selling, general and administrative

76,461

73,046

37,662

35,782

Depreciation and amortization

13,404

12,787

6,664

6,388

Total costs and expenses

1,283,849

1,165,706

677,589

627,284

Operating income

101,939

82,762

58,789

48,670

Interest and debt expense

1,494

1,605

770

777

Income before income taxes

100,445

81,157

58,019

47,893

Income taxes 

37,743

31,002

22,164

18,295

Net income

62,702

50,155

35,855

29,598

Less: Net loss attributable to noncontrolling interest

-

(62)

-

-

Net income attributable to Landstar System,

Inc. and subsidiary

$                          62,702

$      50,217

$                     35,855

$      29,598

Earnings per common share attributable to

Landstar System, Inc. and subsidiary

$                              1.34

$          1.05

$                         0.76

$          0.62

Diluted earnings per share attributable to 

Landstar System, Inc. and subsidiary

$                              1.33

$          1.05

$                         0.76

$          0.62

Average number of shares outstanding:

Earnings per common share  

46,856,000

47,826,000

46,915,000

47,782,000

Diluted earnings per share

47,083,000

47,907,000

47,104,000

47,912,000

Dividends paid per common share

$                            0.110

$        0.100

$                       0.055

$        0.050

 

Landstar System, Inc. and Subsidiary

Consolidated Balance Sheets

(Dollars in thousands, except per share amounts)

(Unaudited)

June 30,

Dec. 31,

2012

2011

ASSETS

Current assets:

Cash and cash equivalents

$ 64,395

$ 80,900

Short-term investments

36,601

27,944

Trade accounts receivable, less allowance

of $7,379 and $6,591

423,059

368,377

Other receivables, including advances to independent

contractors, less allowance of $4,727 and $5,384

54,938

53,263

Deferred income taxes and other current assets

23,089

21,308

Total current assets

602,082

551,792

Operating property, less accumulated depreciation

and amortization of $150,687 and $145,804

152,059

142,146

Goodwill

57,470

57,470

Other assets

71,687

57,041

Total assets

$ 883,298

$ 808,449

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Cash overdraft

$ 24,072

$ 25,905

Accounts payable

203,919

163,307

Current maturities of long-term debt

16,937

17,212

Insurance claims

69,156

76,624

Other current liabilities

46,984

48,065

Total current liabilities

361,068

331,113

Long-term debt, excluding current maturities

108,617

115,130

Insurance claims

25,297

27,494

Deferred income taxes and other non-current liabilities

40,557

34,135

Shareholders' equity:

Common stock, $0.01 par value, authorized 160,000,000

shares, issued 66,851,672 and 66,602,486 shares

669

666

Additional paid-in capital

170,921

165,712

Retained earnings

1,004,701

947,156

Cost of 20,202,662 and 19,882,289 shares of common

stock in treasury

(829,443)

(813,684)

Accumulated other comprehensive income

911

727

Total shareholders' equity

347,759

300,577

Total liabilities and shareholders' equity

$ 883,298

$ 808,449

Landstar System, Inc. and Subsidiary

Supplemental Information

(Unaudited)

Twenty Six Weeks Ended

Thirteen Weeks Ended

June 30,

June 25,

June 30,

June 25,

2012

2011

2012

2011

Revenue generated through (in thousands):

Business Capacity Owners (1)

$ 701,248

$ 669,748

$ 371,886

$ 362,854

Truck Brokerage Carriers

578,932

472,391

308,090

258,668

Rail intermodal

36,220

34,832

18,838

18,367

Ocean and air cargo carriers

40,127

42,931

22,458

21,538

Other (2)

28,469

27,645

14,701

14,134

$ 1,384,996

$ 1,247,547

$ 735,973

$ 675,561

Number of loads:

Business Capacity Owners (1)

415,150

402,730

215,950

210,690

Truck Brokerage Carriers

333,600

287,210

175,570

151,470

Rail intermodal

14,820

14,830

7,660

7,570

Ocean and air cargo carriers

7,910

7,950

3,930

4,170

771,480

712,720

403,110

373,900

Revenue per load:

Business Capacity Owners (1)

$ 1,689

$ 1,663

$ 1,722

$ 1,722

Truck Brokerage Carriers

1,735

1,645

1,755

1,708

Rail intermodal

2,444

2,349

2,459

2,426

Ocean and air cargo carriers

5,073

5,400

5,715

5,165

June 30,

June 25,

2012

2011

Truck Capacity Providers

Business Capacity Owners (1) (3)

7,959

7,711

Truck Brokerage Carriers:

   Approved and active (4)

19,283

17,696

   Approved

9,051

8,984

28,334

26,680

Total available truck capacity providers

36,293

34,391

(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 8,478 and 8,231 at June 30, 2012 and June 25, 2011, respectively.

(4) Active refers to Truck Brokerage Carriers who have moved at least one load in the past 180 days.

SOURCE Landstar System, Inc.



RELATED LINKS

http://www.landstar.com