Landstar System Reports 45 Percent Increase in Diluted Earnings Per Share to a Third Quarter Record of $0.64

JACKSONVILLE, Fla., Oct. 24, 2011 /PRNewswire/ -- Landstar System, Inc. (NASDAQ: LSTR) reported 2011 record third quarter diluted earnings per share of $0.64 per diluted share, from net income of $30.2 million, compared to net income of $21.8 million, or $0.44 per diluted share, for the 2010 third quarter.  Operating margin was 44.7 percent in the 2011 third quarter compared to 35.6 percent in the 2010 third quarter.  Revenue for the 2011 third quarter was $684.0 million compared to $622.8 million in the 2010 third quarter.  Included in the 2010 third quarter was a one-time charge of $3.8 million, or $0.05 per diluted share, related to the buy-out by the Company of its remaining contingent payment obligation from an acquisition completed in 2009.

Truck transportation revenue hauled by independent business capacity owners ("BCOs") and truck brokerage carriers in the 2011 third quarter was $625.8 million, or 91 percent of revenue, compared to $573.5 million, or 92 percent of revenue, in the 2010 third quarter.  In the 2011 and 2010 third quarters, the Company invoiced customers $72.7 million and $48.5 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 third quarters were $25.9 million and $20.3 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 Company's less-than-truckload substitute line haul service offering of $17.1 million and $48.4 million in the 2011 and 2010 third quarters, respectively.  Revenue hauled by rail, air and ocean cargo carriers was $44.5 million, or 7 percent of revenue, in the 2011 third quarter compared to $36.2 million, or 6 percent of revenue, in the 2010 third quarter.  Transportation management fee revenue generated by the supply chain solutions companies was $5.0 million and $4.3 million in the 2011 and 2010 third quarters, respectively.

Trailing twelve-month return on average shareholder's equity was 39 percent and trailing twelve-month return on invested capital, net income divided by the sum of average equity plus average debt, was 27 percent.  During the 2011 third quarter, the Company purchased 816,814 shares of its common stock under its authorized share purchase programs.  In the thirty-nine week period ended September 24, 2011, the Company purchased a total of 1,013,507 shares of its common stock at a total cost of $41,966,000.  Under the Company's authorized share purchase program, the Company currently has a total of 709,000 shares of its common stock available for purchase.  Landstar System, Inc. also announced that its Board of Directors has declared a quarterly dividend of $0.055 per share.  The dividend is payable on December 2, 2011 to stockholders of record at the close of business on November 8, 2011.  It is the intention of the Board of Directors to continue to pay a quarterly dividend.    

"I am extremely pleased with the Company's 2011 third quarter operating performance," said Henry Gerkens, Landstar's Chairman, President and CEO.  "Revenue increased ten percent over the 2010 third quarter, even after taking into account the anticipated revenue decline in our substitute line haul service offering.  Excluding the substitute line haul revenue from both the 2011 and 2010 third quarters, revenue increased 16 percent.  During the 2011 third quarter, the growth rate in the number of loads hauled increased each month compared to the corresponding prior year month as we moved through the quarter.  Revenue per load continued to be strong.   Consolidated operating income increased 38 percent, while earnings per diluted share increased 45 percent to $0.64 per diluted share, the best third quarter diluted earnings per share in Landstar history."

Gerkens continued, "Although I am very confident as Landstar enters the 2011 fourth quarter, the Company's fourth quarter revenue performance in recent years has been somewhat inconsistent, especially in the latter part of the quarter.  However, recent trends in September, and thus far in October, indicate continued strength in revenue per load and load volume.  Assuming these trends continue throughout the 2011 fourth quarter, I would expect 2011 fourth quarter diluted earnings per share to be within a range of $0.62 to $0.67."

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 Third Quarter 2011 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 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 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.

www.landstar.com

Landstar System, Inc. and Subsidiary

Consolidated Statements of Income

(Dollars in thousands, except per share amounts)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Thirty Nine Weeks Ended

 

Thirteen Weeks Ended

 

 

 

 

 

 

September 24,

 

September 25,

 

September 24,

 

September 25,

 

 

 

 

 

 

2011

 

2010

 

2011

 

2010

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

$        1,931,560

 

$         1,812,635

 

$          684,013

 

$       622,826

Investment income

 

 

1,294

 

1,069

 

373

 

495

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

Purchased transportation

 

1,459,660

 

1,381,955

 

518,300

 

474,665

 

Commissions to agents

 

153,165

 

134,695

 

54,990

 

47,316

 

Other operating costs

 

 

22,050

 

21,952

 

6,427

 

6,448

 

Insurance and claims

 

 

34,096

 

37,609

 

9,381

 

11,480

 

Selling, general and administrative (1)

 

112,252

 

114,886

 

39,206

 

41,070

 

Depreciation and amortization

 

19,336

 

18,444

 

6,549

 

6,456

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total costs and expenses (1)

 

1,800,559

 

1,709,541

 

634,853

 

587,435

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (1)

 

 

132,295

 

104,163

 

49,533

 

35,886

Interest and debt expense

 

 

2,340

 

2,699

 

735

 

1,035

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes (1) 

 

129,955

 

101,464

 

48,798

 

34,851

Income taxes 

 

 

 

49,642

 

38,761

 

18,640

 

13,315

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income(1)

 

 

 

80,313

 

62,703

 

30,158

 

21,536

Less: Net loss attributable to noncontrolling interest

 

(62)

 

(712)

 

-

 

(266)

Net income attributable to Landstar System,

 

 

 

 

 

 

 

 

 

Inc. and subsidiary (1)

 

 

$            80,375

 

$             63,415

 

$           30,158

 

$         21,802

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share attributable to

 

 

 

 

 

 

 

 

 

Landstar System, Inc. and subsidiary (1)

 

$                1.69

 

$                 1.27

 

$               0.64

 

$             0.44

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share attributable to 

 

 

 

 

 

 

 

 

 

Landstar System, Inc. and subsidiary (1)

 

$                1.68

 

$                 1.27

 

$               0.64

 

$             0.44

 

 

 

 

 

 

 

 

 

 

 

 

 

Average number of shares outstanding:

 

 

 

 

 

 

 

 

 

Earnings per common share  

 

47,670,000

 

49,921,000

 

47,358,000

 

49,434,000

 

Diluted earnings per share

 

47,735,000

 

49,990,000

 

47,387,000

 

49,447,000

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends paid per common share

 

$              0.155

 

$             0.1400

 

$             0.055

 

$         0.0500

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

The 2010 thirty-nine and thirteen-week periods include a $3,800 one-time charge for the buyout by the Company of its remaining

 

contingent payment obligation from an acquisition completed in 2009.  Net of related income tax benefits, these costs reduced net

 

income for the thirty-nine and thirteen-week periods ended September 25, 2010 by $2,348, or $0.05 per common share ($0.05 per

 

diluted share).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 
 

Landstar System, Inc. and Subsidiary

Consolidated Balance Sheets

(Dollars in thousands, except per share amounts)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sept. 24,

 

Dec. 25,

 

 

 

 

 

 

 

2011

 

2010

ASSETS

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

$        69,409

 

$        44,706

 

Short-term investments

 

 

28,177

 

23,266

 

Trade accounts receivable, less allowance

 

 

 

 

 

of $4,652 and $5,324

 

 

388,235

 

307,350

 

Other receivables, including advances to independent

 

 

 

 

 

contractors, less allowance of $5,018 and $5,511

53,515

 

23,943

 

Deferred income taxes and other current assets

19,073

 

21,652

 

 

Total current assets

 

 

558,409

 

420,917

 

 

 

 

 

 

 

 

 

 

Operating property, less accumulated depreciation

 

 

 

 

 

 

and amortization of $147,237 and $137,830

128,388

 

132,649

Goodwill

 

 

 

 

57,470

 

57,470

Other assets

 

 

 

59,090

 

72,846

Total assets

 

 

 

$      803,357

 

$      683,882

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Cash overdraft

 

 

 

$        23,061

 

$        24,877

 

Accounts payable

 

 

180,488

 

137,297

 

Current maturities of long-term debt

 

16,548

 

22,172

 

Insurance claims

 

 

75,511

 

40,215

 

Other current liabilities

 

 

68,268

 

53,785

 

 

Total current liabilities

 

 

363,876

 

278,346

 

 

 

 

 

 

 

 

 

 

Long-term debt, excluding current maturities

110,526

 

99,439

Insurance claims

 

 

 

30,336

 

31,468

Deferred income taxes

 

 

20,078

 

23,662

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

Landstar System, Inc. and subsidiary shareholders' equity

 

 

 

 

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

 

 

 

 

 

shares, issued 66,595,036 and 66,535,169 shares

666

 

665

 

Additional paid-in capital

 

 

164,766

 

169,268

 

Retained earnings

 

 

917,100

 

844,132

 

Cost of 19,689,466 and 18,674,902 shares of common

 

 

 

 

 

stock in treasury

 

 

(805,189)

 

(763,182)

 

Accumulated other comprehensive income

1,198

 

881

 

 

Total Landstar System, Inc. and subsidiary shareholders'

 

 

 

 

 

 

equity

 

 

 

278,541

 

251,764

Noncontrolling interest

 

 

-

 

(797)

 

 

Total equity

 

 

 

278,541

 

250,967

Total liabilities and equity 

 

 

$      803,357

 

$      683,882

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Landstar System, Inc. and Subsidiary

 

Supplemental Information

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Thirty Nine Weeks Ended

 

 

Thirteen Weeks Ended

 

 

 

September 24,

 

September 25,

 

 

September 24,

 

September 25,

 

 

 

2011

 

2010

 

 

2011

 

2010

Revenue generated through (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Capacity Owners (1)

 

$  1,020,856

 

$     966,221

 

 

$     351,108

 

$      334,485

 

Truck Brokerage Carriers

 

747,122

 

705,189

 

 

274,731

 

239,026

 

Rail intermodal

 

53,991

 

51,840

 

 

19,159

 

17,748

 

Ocean cargo carriers

 

38,733

 

34,045

 

 

12,702

 

13,210

 

Air cargo carriers

 

29,528

 

13,853

 

 

12,628

 

5,291

 

Other (2)   

 

41,330

 

41,487

 

 

13,685

 

13,066

 

 

 

$  1,931,560

 

$  1,812,635

 

 

$     684,013

 

$      622,826

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of loads:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Capacity Owners (1)

 

601,990

 

624,270

 

 

199,260

 

203,500

 

Truck Brokerage Carriers

 

441,930

 

456,410

 

 

154,720

 

148,080

 

Rail intermodal

 

22,750

 

23,120

 

 

7,920

 

7,630

 

Ocean cargo carriers

 

6,040

 

4,930

 

 

2,090

 

1,820

 

Air cargo carriers

 

6,110

 

4,870

 

 

2,110

 

1,740

 

 

 

1,078,820

 

1,113,600

 

 

366,100

 

362,770

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue per load:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Capacity Owners (1)

 

$          1,696

 

$          1,548

 

 

$         1,762

 

$          1,644

 

Truck Brokerage Carriers

 

1,691

 

1,545

 

 

1,776

 

1,614

 

Rail intermodal

 

2,373

 

2,242

 

 

2,419

 

2,326

 

Ocean cargo carriers

 

6,413

 

6,906

 

 

6,078

 

7,258

 

Air cargo carriers

 

4,833

 

2,845

 

 

5,985

 

3,041

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 24,

 

September 25,

 

 

 

 

 

 

 

 

2011

 

2010

Truck Capacity Providers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business Capacity Owners (1) (3)

 

 

 

 

7,798

7,893

 

Truck Brokerage Carriers:

 

 

 

 

 

 

 

 

 

 

     Approved and active (4)

 

 

 

 

 

 

18,402

 

17,393

 

     Approved

 

 

 

 

 

 

9,088

 

9,490

 

 

 

 

 

 

 

 

27,490

 

26,883

 

Total available truck capacity providers

 

 

 

 

 

 

35,288

 

34,776

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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 8,314 and 8,481 at September 24, 2011 and September 25, 2010, respectively.

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 


 

SOURCE Landstar System, Inc.



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