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|Landstar System Reports 18 Percent Increase in Earnings Per Diluted Share|
JACKSONVILLE, Fla., April 17 /PRNewswire-FirstCall/ -- Landstar System, Inc. (Nasdaq: LSTR) reported revenue in the 2008 first quarter increased approximately 6 percent to $609 million compared to $577 million for the 2007 first quarter. Net income for the thirteen-week period ended March 29, 2008 was $23.7 million, or $0.45 per diluted share, compared to net income of $21.6 million, or $0.38 per diluted share, for the thirteen-week period ended March 31, 2007.
Revenue hauled by BCO Independent Contractors in the first quarter of 2008 was $324.8 million, or 54 percent of transportation logistics revenue, compared to $320.5 million, or 57 percent of transportation logistics revenue, in the 2007 first quarter. Moreover, in the first quarters of 2008 and 2007, the Company invoiced customers $57.8 million and $34.7 million, respectively, in fuel surcharges that were passed on 100 percent to BCO Independent Contractors and excluded from revenue. Revenue hauled by third-party truck brokerage carriers was $228.6 million, or 38 percent of transportation logistics revenue, in the 2008 first quarter compared to $205.9 million, or 36 percent of transportation logistics revenue, in the 2007 first quarter. Revenue hauled by rail, air, and ocean cargo carriers was $45.8 million or 8 percent of transportation logistics revenue, in the 2008 first quarter compared to $37.6 million, or 7 percent of transportation logistics revenue, in the 2007 first quarter.
As of the first quarter of 2008, the Company revised the format of its financial statement segment reporting presentation to consolidate from three segments (carrier, global logistics and insurance) to two segments (transportation logistics and insurance). This change in segment reporting reflects increased centralization and consolidation of the administrative and sales functions across all of the Company's operating subsidiaries and the increased similarity of the services provided by the operations of the Company's various operating subsidiaries, primarily with respect to truck brokerage services. As a result of this change in presentation, the revenue and operating results formerly reported in the carrier and global logistics segments, together with corporate overhead which was formerly included as "other" in the segment information, have been consolidated into the transportation logistics segment. This change in segment reporting has no impact on reporting with respect to the Company's insurance segment.
Landstar System, Inc. announced that its Board of Directors has declared a quarterly dividend of $0.0375 per share. The dividend is payable on May 30, 2008 to stockholders of record at the close of business on May 9, 2008. It is the intention of the Board of Directors to continue to pay a quarterly dividend.
"I am pleased with the Company's 2008 first quarter performance," said Landstar President and Chief Executive Officer Henry Gerkens. "Despite a continuing weak freight environment, Landstar continued to increase its revenue. Consolidated revenue in the 2008 first quarter increased approximately 6 percent over the 2007 first quarter, as revenue hauled by truck brokerage carriers increased 11 percent, revenue hauled by rail carriers increased 25 percent and revenue hauled by ocean cargo carriers increased 41 percent. Landstar also improved its operating margin to 6.7 percent in the 2008 first quarter compared to 6.4 percent in the 2007 first quarter. Landstar's solid results are directly attributable to sound execution and its unique non asset based business model."
"Additionally, Landstar continues to generate outstanding returns. Trailing twelve month return on average shareholders' equity remained high at 53 percent and trailing twelve month return on invested capital, net income divided by the sum of average equity plus average debt, was 33 percent. During the 2008 first quarter, the Company reduced debt by $17 million and increased cash and short-term investments by $21 million, ending the quarter with $105 million in cash and short-term investments. As of March 29, 2008, there were 734,400 shares of the Company's common stock available for purchase by the Company under its most recently authorized share purchase program."
Gerkens continued, "I anticipate the second quarter of 2008 to be similar to that of the 2008 first quarter. As such, I would anticipate revenue for the second quarter of 2008 as compared to the second quarter of 2007 to increase in the mid to upper single digits. Based upon the above revenue forecast, I would anticipate Landstar's earnings for the 2008 second quarter to be within a range of $0.51 to $0.57 per diluted share."
Landstar will provide a live webcast of its quarterly earnings conference call this afternoon at 2 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 2008 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 2007 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.
Landstar System, Inc. delivers safe, specialized transportation and logistics services to a broad range of customers worldwide. The Company identifies and fulfills shippers' needs through the coordination of individual businesses comprised of independent sales agents and third-party transportation and logistics capacity providers. Through its operating subsidiaries, Landstar delivers excellence in complete transportation logistics services and solutions. Landstar System, Inc. is headquartered in Jacksonville, Florida. Its common stock trades on The NASDAQ Stock Market(R) under the symbol LSTR.
(Tables follow) Landstar System, Inc. Consolidated Statements of Income (Dollars in thousands, except per share amounts) (Unaudited) Thirteen Weeks Ended March 29, March 31, 2008 2007 Revenue $608,828 $576,649 Investment income 1,096 1,740 Costs and expenses: Purchased transportation 465,029 434,058 Commissions to agents 46,814 46,632 Other operating costs 6,584 5,506 Insurance and claims 9,521 17,540 Selling, general and administrative 35,857 33,165 Depreciation and amortization 5,130 4,617 Total costs and expenses 568,935 541,518 Operating income 40,989 36,871 Interest and debt expense 2,142 1,592 Income before income taxes 38,847 35,279 Income taxes 15,104 13,675 Net income $23,743 $21,604 Earnings per common share $0.45 $0.39 Diluted earnings per share $0.45 $0.38 Average number of shares outstanding: Earnings per common share 52,601,000 55,926,000 Diluted earnings per share 53,003,000 56,470,000 Dividends paid per common share $0.0375 $0.0300 Landstar System, Inc. Selected Segment Information (Dollars in thousands) (Unaudited) Thirteen Weeks Ended March 29, March 31, 2008 2007 Revenue Transportation logistics segment $599,600 $567,439 Insurance segment 9,228 9,210 Revenue $608,828 $576,649 Operating Income Transportation logistics segment $32,386 $33,512 Insurance segment 8,603 3,359 Operating income $40,989 $36,871 Landstar System, Inc. Consolidated Balance Sheets (Dollars in thousands, except per share amounts) (Unaudited) March 29, Dec 29, 2008 2007 ASSETS Current assets: Cash and cash equivalents $80,980 $60,750 Short-term investments 24,046 22,921 Trade accounts receivable, less allowance of $4,264 and $4,469 303,588 310,258 Other receivables, including advances to independent contractors, less allowance of $4,987 and $4,792 19,896 11,170 Deferred income taxes and other current assets 17,252 28,554 Total current assets 445,762 433,653 Operating property, less accumulated depreciation and amortization of $93,254 and $88,284 128,291 132,369 Goodwill 31,134 31,134 Other assets 33,010 31,845 Total assets $638,197 $629,001 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Cash overdraft $27,211 $25,769 Accounts payable 110,980 117,122 Current maturities of long-term debt 23,525 23,155 Insurance claims 27,705 28,163 Accrued income taxes 15,278 14,865 Other current liabilities 41,239 40,501 Total current liabilities 245,938 249,575 Long-term debt, excluding current maturities 124,172 141,598 Insurance claims 36,458 37,631 Deferred income taxes 21,063 19,411 Shareholders' equity: Common stock, $0.01 par value, authorized 160,000,000 shares, issued 65,856,787 and 65,630,383 shares 659 656 Additional paid-in capital 140,590 132,788 Retained earnings 623,308 601,537 Cost of 13,121,109 shares of common stock in treasury (554,252) (554,252) Accumulated other comprehensive income 261 57 Total shareholders' equity 210,566 180,786 Total liabilities and shareholders' equity $638,197 $629,001 Landstar System, Inc. Supplemental Information (Unaudited) Thirteen Weeks Ended March 29, March 31, 2008 2007 Revenue generated through (in thousands): Business Capacity Owners (1) $324,804 $320,533 Truck Brokerage Carriers 228,633 205,897 Rail intermodal 33,789 26,971 Ocean carriers 8,434 5,970 Air carriers 3,589 4,615 Other (2) 9,579 12,663 $608,828 $576,649 Number of loads: Business Capacity Owners (1) 203,200 205,600 Truck Brokerage Carriers 142,030 137,820 Rail intermodal 14,980 12,100 Ocean carriers 1,250 1,040 Air carriers 1,990 3,280 363,450 359,840 Revenue per load: Business Capacity Owners (1) $1,598 $1,559 Truck Brokerage Carriers 1,610 1,494 Rail intermodal 2,256 2,229 Ocean carriers 6,747 5,740 Air carriers 1,804 1,407 March 29, March 31, 2008 2007 Truck Capacity Business Capacity Owners (1)(3) 8,277 8,510 Truck Brokerage Carriers: Approved and active (4) 15,820 14,784 Approved 9,515 8,758 25,335 23,542 Total available truck capacity providers 33,612 32,052 Agent Locations 1,375 1,338 (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, warehousing revenue generated by the Transportation Logistics segment and revenue derived from transportation services provided in support of disaster relief efforts provided primarily under a contract between Landstar Express America, Inc. and the United States Department of Transportation/Federal Aviation Administration. (3) Trucks provided by Business Capacity Owners were 8,856 and 9,158 at March 29, 2008 and March 31, 2007, respectively. (4) Active refers to Truck Brokerage Carriers who have moved at least one load in the past 180 days.
SOURCE Landstar System, Inc.