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

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.



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