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.

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SOURCE Landstar System, Inc.