Landstar System Reports First Quarter Diluted Earnings per Share Increase of 26 Percent to $0.43 per Diluted Share

JACKSONVILLE, Fla., April 21, 2011 /PRNewswire/ -- 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 Company's 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 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 shareholder's 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 Company's 2011 first quarter performance," said Henry Gerkens, Landstar's 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 Company's website at www.landstar.com; click on "Investor Relations" and "Webcasts," then click on "Landstar's First 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, 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.

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SOURCE Landstar System, Inc.