Landstar System Reports Record Fourth Quarter Diluted Earnings Per Share of $0.73

Jan 31, 2013, 07:50 ET from Landstar System, Inc.

JACKSONVILLE, Fla., Jan. 31, 2013 /PRNewswire/ -- Landstar System, Inc. (NASDAQ: LSTR) reported record diluted earnings per share of $0.73 in the thirteen week 2012 fourth quarter compared to diluted earnings per share of $0.70 in the fourteen week 2011 fourth quarter.  The Company's fiscal year ends on the last Saturday in December.  As such, the Company's 2012 fourth quarter included thirteen weeks whereas the 2011 fourth quarter included fourteen weeks.  Prior to 2011, 2005 was the most recent fourth quarter to include fourteen weeks.  Revenue in the 2012 fourth quarter was $691.3 million and was a record for a thirteen week fourth quarter.  Revenue in the 2011 fourteen week fourth quarter was $717.5 million.  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 45 percent in both the 2012 and 2011 fourth quarters. 

Truck transportation revenue hauled by independent business capacity owners ("BCOs") and truck brokerage carriers in the 2012 thirteen week period was $639.3 million, or 92 percent of revenue, compared to $659.3 million, or 92 percent of revenue, in the 2011 fourteen week period.  Revenue hauled by rail, air and ocean cargo carriers was $36.6 million, or five percent of revenue, in the 2012 thirteen week period compared to $44.2 million, or six percent of revenue, in the 2011 fourteen week period. 

Trailing twelve-month return on average shareholder's equity was 38 percent and trailing twelve-month return on invested capital, net income divided by the sum of average equity plus average debt, was 28 percent.  Landstar purchased 524,700 shares of its common stock during 2012 at an aggregate cost of $25.8 million.  Currently, there are 1,992,000 shares of the Company's common stock available for purchase under Landstar's authorized share purchase programs. 

"Landstar produced solid operating results in the 2012 thirteen week period, despite inconsistent demand and a much tougher quarter over prior year quarter comparison due to fewer business days in the 2012 fourth quarter compared to the 2011 fourth quarter," said Landstar Chairman, President and Chief Executive Officer Henry Gerkens.  "Loads hauled via truck capacity in the 2012 thirteen week period were a thirteen week fourth quarter record of 361,000 loads.  Average truck revenue per load in the 2012 period remained relatively high at $1,772 per load compared to revenue of $1,744 per load in the 2011 period.  I estimate that the extra week in the 2011 fourteen week period contributed approximately $25 to $30 million in additional revenue.  Assuming a gross profit margin equal to the gross profit margin experienced in the 2011 fourth quarter, I would estimate that the extra week contributed approximately $.05 to $.06 per diluted share in the 2011 fourth quarter. Also, favorable resolutions of various tax matters lowered the Company's effective tax rate and contributed approximately $0.08 and $0.03 per diluted share to diluted earnings per share in the 2012 and 2011 fourth quarters, respectively."

Gerkens continued, "The 2012 full year operating results were very good.  Landstar completed the 2012 fifty-two week fiscal year with record annual revenue of $2,793 million compared to $2,649 million for the fifty-three week 2011 fiscal year and record annual diluted earnings per share of $2.77 in 2012 compared to $2.38 in 2011.  Landstar also achieved one of its key financial goals as operating margin was a record 46.2 percent for the 2012 fiscal year compared to 42.4 percent for the 2011 fiscal year.  Over the next three to five year period, our new goal is to push that operating margin to over 50 percent.

"In my opinion, there remains much economic uncertainty, and as such, I will not be providing specific ranges of 2013 first quarter and full year revenue and earnings projections at this time.  That being said, right now, I would anticipate that the 2013 first quarter results should be similar to the 2012 first quarter results."

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 Fourth Quarter 2012 Earnings Release Conference Call."  The webcast will be available on the Company's website through Saturday, February 2, 2013.

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.

(Tables follow)

 

Landstar System, Inc. and Subsidiary

Consolidated Statements of Income

(Dollars in thousands, except per share amounts)

(Unaudited)

Fiscal Year Ended

Fiscal Quarter Ended

December 29,

December 31,

December 29,

December 31,

2012

2011

2012

2011

Revenue

$        2,793,420

$         2,649,082

$          691,256

$       717,522

Investment income

1,563

1,705

378

411

Costs and expenses:

Purchased transportation

2,129,345

2,007,102

525,480

547,442

Commissions to agents

218,363

210,088

55,635

56,923

Other operating costs

22,949

28,865

5,314

6,815

Insurance and claims

37,451

42,766

9,040

8,670

Selling, general and administrative

153,566

152,907

39,650

40,655

Depreciation and amortization

27,456

25,814

6,980

6,478

Total costs and expenses

2,589,130

2,467,542

642,099

666,983

Operating income

205,853

183,245

49,535

50,950

Interest and debt expense

3,104

3,112

792

772

Income before income taxes

202,749

180,133

48,743

50,178

Income taxes 

72,968

67,188

14,765

17,546

Net income

129,781

112,945

33,978

32,632

Less: Net loss attributable to noncontrolling interest 

-

(62)

-

-

Net income attributable to Landstar System,

Inc. and subsidiary

$          129,781

$           113,007

$           33,978

$         32,632

Earnings per common share attributable to

Landstar System, Inc. and subsidiary

$                2.78

$                 2.38

$               0.73

$             0.70

Diluted earnings per share attributable to 

Landstar System, Inc. and subsidiary

$                2.77

$                 2.38

$               0.73

$             0.70

Average number of shares outstanding:

Earnings per common share  

46,698,000

47,444,000

46,468,000

46,812,000

Diluted earnings per share

46,877,000

47,524,000

46,614,000

46,939,000

Dividends paid per common share

$              0.730

$               0.210

$             0.560

$           0.055

 

Landstar System, Inc. and Subsidiary

Consolidated Balance Sheets

(Dollars in thousands, except per share amounts)

(Unaudited)

Dec. 29,

Dec. 31,

2012

2011

ASSETS

Current assets:

Cash and cash equivalents

$        74,284

$        80,900

Short-term investments

35,528

27,944

Trade accounts receivable, less allowance

of $8,650 and $6,591

408,787

368,377

Other receivables, including advances to independent

contractors, less allowance of $4,657 and $5,384

55,278

53,263

Deferred income taxes and other current assets

18,067

21,308

Total current assets

591,944

551,792

Operating property, less accumulated depreciation

and amortization of $158,999 and $145,804

158,953

142,146

Goodwill

57,470

57,470

Other assets

71,054

57,041

Total assets

$      879,421

$      808,449

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Cash overdraft

$        33,647

$        25,905

Accounts payable

188,981

163,307

Current maturities of long-term debt

19,016

17,212

Insurance claims

64,509

76,624

Other current liabilities

38,186

48,065

Total current liabilities

344,339

331,113

Long-term debt, excluding current maturities

95,125

115,130

Insurance claims

21,896

27,494

Deferred income taxes and other non-current liabilities

38,607

34,135

Shareholders' equity:

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

shares, issued 66,859,864 and 66,602,486 shares

669

666

Additional paid-in capital

173,976

165,712

Retained earnings

1,042,956

947,156

Cost of 20,411,736 and 19,882,289 shares of common

stock in treasury

(839,517)

(813,684)

Accumulated other comprehensive income

1,370

727

Total shareholders' equity

379,454

300,577

Total liabilities and shareholders' equity 

$      879,421

$      808,449

 

Landstar System, Inc. and Subsidiary

Supplemental Information

(Unaudited)

Fiscal Year Ended

Fiscal Quarter Ended

December 29,

December 31,

December 29,

December 31,

2012

2011

2012

2011

Revenue generated through (in thousands):

Business Capacity Owners (1)

$  1,385,046

$  1,374,664

$     327,937

$      353,808

Truck Brokerage Carriers

1,197,876

1,052,605

311,344

305,483

Rail intermodal

73,932

75,979

18,930

21,988

Ocean and air cargo carriers

77,898

90,424

17,671

22,163

Other (2)   

58,668

55,410

15,374

14,080

$  2,793,420

$  2,649,082

$     691,256

$      717,522

Number of loads:

Business Capacity Owners (1)

806,350

808,210

190,150

206,220

Truck Brokerage Carriers

680,970

613,790

170,610

171,860

Rail intermodal

29,810

31,370

7,520

8,620

Ocean and air cargo carriers

15,390

16,440

3,630

4,290

1,532,520

1,469,810

371,910

390,990

Revenue per load:

Business Capacity Owners (1)

$          1,718

$          1,701

$         1,725

$          1,716

Truck Brokerage Carriers

1,759

1,715

1,825

1,778

Rail intermodal

2,480

2,422

2,517

2,551

Ocean and air cargo carriers

5,062

5,500

4,868

5,166

December 29,

December 31,

2012

2011

Truck Capacity Providers

Business Capacity Owners (1) (3)

8,010

7,871

Truck Brokerage Carriers:

     Approved and active (4)

20,922

19,223

     Approved

10,623

9,272

31,545

28,495

Total available truck capacity providers

39,555

36,366

Million Dollar Agents (5)

504

504

(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 8,523 and 8,371 at December 29, 2012 and December 31, 2011, 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.

SOURCE Landstar System, Inc.



RELATED LINKS

http://www.landstar.com