JACKSONVILLE, Fla., July 16 /PRNewswire-FirstCall/ -- Landstar System,
Inc. (Nasdaq: LSTR) reported record second quarter revenue, operating income,
net income and diluted earnings per share in the 2008 thirteen-week period
ended June 28, 2008. Revenue in the 2008 second quarter increased
approximately 10 percent to $698 million compared to $633 million for the 2007
second quarter. Net income for the thirteen-week period ended June 28, 2008
was $29.8 million, or $0.56 per diluted share, compared to net income of $29.7
million, or $0.53 per diluted share, for the thirteen-week period ended June
30, 2007.
Revenue hauled by BCO Independent Contractors in the second quarter of
2008 was $375.4 million, or 54 percent of revenue, compared to $364.2 million,
or 58 percent of revenue, in the 2007 second quarter. Moreover, in the second
quarters of 2008 and 2007, the Company invoiced customers $90.3 million and
$45.1 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 $261.7 million, or 38
percent of revenue, in the 2008 second quarter compared to $217.1 million, or
34 percent of revenue, in the 2007 second quarter. Revenue hauled by rail,
air, and ocean cargo carriers was $51.5 million, or 7 percent of revenue, in
the 2008 second quarter compared to $42.5 million, or 7 percent of revenue, in
the 2007 second quarter.
Revenue in the twenty-six-week period ended June 28, 2008 increased
approximately 8 percent to $1.306 billion compared to $1.210 billion for the
2007 twenty-six-week period. Net income for the twenty-six-week period ended
June 28, 2008 was $53.5 million, or $1.01 per diluted share, compared to net
income of $51.3 million, or $0.91 per diluted share, for the twenty-six-week
period ended June 30, 2007.
Revenue hauled by BCO Independent Contractors in the 2008 twenty-six-week
period was $700.2 million, or 54 percent of revenue, compared to $684.7
million, or 57 percent of revenue, in the 2007 twenty-six-week period. In the
twenty-six-week periods of 2008 and 2007, the Company invoiced customers
$148.1 million and $79.8 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 $490.3
million, or 38 percent of revenue, in the 2008 twenty-six-week period compared
to $423.0 million, or 35 percent of revenue, in the 2007 twenty-six-week
period. Revenue hauled by rail, air, and ocean cargo carriers was $97.3
million, or 7 percent of revenue, in the 2008 twenty-six-week period compared
to $80.0 million, or 7 percent of revenue, in the 2007 twenty-six-week period.
Landstar System, Inc. announced that its Board of Directors authorized the
purchase of up to an additional 2,000,000 shares of its common stock from time
to time in the open market and in privately negotiated transactions. The
Company may purchase up to an additional 734,400 shares of its common stock
under its previously authorized share purchase program. The Company now has a
total of 2,734,400 shares of its common stock available for purchase.
Landstar System, Inc. also announced that its Board of Directors has
declared a quarterly dividend of $0.04 per share. This represents a 7 percent
increase in the Company's quarterly dividend. The dividend is payable on
August 29, 2008 to stockholders of record at the close of business on August
11, 2008. It is the intention of the Board of Directors to continue to pay a
quarterly dividend.
"I continue to be pleased with the Company's 2008 performance," said
Landstar President and Chief Executive Officer Henry Gerkens. "In the 2008
second quarter, Landstar delivered double digit revenue growth and experienced
strong revenue increases across multiple service offerings, as revenue hauled
by BCO Independent Contractors increased over 3 percent, revenue hauled by
truck brokerage carriers increased 21 percent, revenue hauled by rail carriers
increased 23 percent and revenue hauled by ocean cargo carriers increased 76
percent. Landstar's operating margin was 7.2 percent in the 2008 second
quarter compared to 7.8 percent in the 2007 second quarter. Despite increased
rates for purchased transportation paid to third-party truck brokerage
carriers, rail carriers and air and ocean cargo carriers in the 2008 second
quarter, the Company generated record second quarter operating income of $50.2
million, which is the fourth highest quarterly operating income in any quarter
in Landstar's history."
"Landstar's 2008 second quarter diluted earnings per share of $0.56
compared to 2007 second quarter diluted earnings per share of $0.53
represented an increase of 6 percent quarter over quarter. For comparative
purposes, it should be noted that the 2008 second quarter included
approximately $0.03 per diluted share of costs related to employee bonus
accruals not included in the 2007 second quarter. Landstar's solid results
once again demonstrate the strength and consistency of its non-asset based
variable cost business model."
"Landstar continues to generate outstanding returns. Trailing twelve
month return on average shareholders' equity remained high at 52 percent and
trailing twelve month return on invested capital, net income divided by the
sum of average equity plus average debt, was 32 percent. Additionally, during
the 2008 second quarter, the Company entered into a new senior credit facility
in the form of a five year $225 million revolving credit agreement to
refinance its existing credit facility. The new credit facility will expire
in June 2013."
Gerkens continued, "I anticipate the freight environment in the third
quarter of 2008 to be similar to that of the 2008 second quarter. As such, I
would anticipate revenue for the third quarter of 2008 as compared to the
third quarter of 2007 to increase in a range from the upper single to lower
double digits. Based upon the above revenue forecast, I would anticipate
Landstar's earnings for the 2008 third quarter to be within a range of $0.54
to $0.60 per diluted share."
Landstar will provide a live webcast of its quarterly earnings conference
call this afternoon at 5 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 Second 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.
About Landstar:
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. All Landstar operating companies are
certified to ISO 9001:2000 quality management system standards. Landstar
System, Inc. is headquartered in Jacksonville, Florida. Its common stock
trades on The NASDAQ Stock Market(R) under the symbol LSTR.
Landstar System, Inc.
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)
Twenty Six Weeks Ended Thirteen Weeks Ended
June 28, June 30, June 28, June 30,
2008 2007 2008 2007
Revenue $1,306,479 $1,209,601 $697,651 $632,952
Investment income 1,869 2,997 773 1,257
Costs and expenses:
Purchased transportation 1,003,345 912,835 538,316 478,777
Commissions to agents 99,590 97,404 52,776 50,772
Other operating costs 13,940 13,222 7,356 7,716
Insurance and claims 19,034 29,559 9,513 12,019
Selling, general and
administrative 70,958 63,920 35,101 30,755
Depreciation and
amortization 10,307 9,279 5,177 4,662
Total costs and
expenses 1,217,174 1,126,219 648,239 584,701
Operating income 91,174 86,379 50,185 49,508
Interest and debt expense 3,878 2,700 1,736 1,108
Income before income taxes 87,296 83,679 48,449 48,400
Income taxes 33,788 32,405 18,684 18,730
Net income $53,508 $51,274 $29,765 $29,670
Earnings per common share $1.01 $0.92 $0.56 $0.53
Diluted earnings per share $1.01 $0.91 $0.56 $0.53
Average number of shares
outstanding:
Earnings per common
share 52,726,000 55,761,000 52,851,000 55,597,000
Diluted earnings per
share 53,198,000 56,328,000 53,373,000 56,191,000
Dividends paid per common
share $0.0750 $0.0600 $0.0375 $0.0300
Landstar System, Inc.
Selected Segment Information
(Dollars in thousands)
(Unaudited)
Twenty Six Weeks Ended Thirteen Weeks Ended
June 28, June 30, June 28, June 30,
2008 2007 2008 2007
Revenue
Transportation logistics
segment $1,288,231 $1,191,170 $688,631 $623,731
Insurance segment 18,248 18,431 9,020 9,221
Revenue $1,306,479 $1,209,601 $697,651 $632,952
Operating Income
Transportation logistics
segment $73,560 $72,370 $41,174 $38,858
Insurance segment 17,614 14,009 9,011 10,650
Operating income $91,174 $86,379 $50,185 $49,508
Landstar System, Inc.
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
(Unaudited)
June 28, Dec 29,
2008 2007
ASSETS
Current assets:
Cash and cash equivalents $78,792 $60,750
Short-term investments 24,023 22,921
Trade accounts receivable, less
allowance of $4,858 and $4,469 351,422 310,258
Other receivables, including
advances to independent contractors,
less allowance of $4,446 and $4,792 14,259 11,170
Deferred income taxes and other
current assets 33,840 28,554
Total current assets 502,336 433,653
Operating property, less accumulated
depreciation and amortization of $97,363
and $88,284 126,732 132,369
Goodwill 31,134 31,134
Other assets 33,863 31,845
Total assets $694,065 $629,001
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Cash overdraft $30,137 $25,769
Accounts payable 132,786 117,122
Current maturities of long-term debt 23,514 23,155
Insurance claims 28,113 28,163
Accrued income taxes 13,666 14,865
Other current liabilities 40,219 40,501
Total current liabilities 268,435 249,575
Long-term debt, excluding current maturities 117,469 141,598
Insurance claims 37,241 37,631
Deferred income taxes 23,109 19,411
Shareholders' equity:
Common stock, $0.01 par value, authorized
160,000,000 shares, issued 66,073,547
and 65,630,383 shares 661 656
Additional paid-in capital 150,392 132,788
Retained earnings 651,090 601,537
Cost of 13,121,109 shares of common
stock in treasury (554,252) (554,252)
Accumulated other comprehensive
income/(loss) (80) 57
Total shareholders' equity 247,811 180,786
Total liabilities and shareholders' equity $694,065 $629,001
Landstar System, Inc.
Supplemental Information
(Unaudited)
Twenty Six Weeks Ended Thirteen Weeks Ended
June 28, June 30, June 28, June 30,
2008 2007 2008 2007
Revenue generated through (in
thousands):
Business Capacity Owners (1) $700,195 $684,704 $375,391 $364,171
Truck Brokerage Carriers 490,334 422,967 261,701 217,070
Rail intermodal 71,598 57,677 37,809 30,706
Ocean carriers 18,220 11,539 9,786 5,569
Air carriers 7,449 10,806 3,860 6,191
Other (2) 18,683 21,908 9,104 9,245
$1,306,479 $1,209,601 $697,651 $632,952
Number of loads:
Business Capacity Owners (1) 429,080 433,370 225,880 227,770
Truck Brokerage Carriers 288,970 288,850 146,940 151,030
Rail intermodal 31,000 26,760 16,020 14,660
Ocean carriers 2,590 2,100 1,340 1,060
Air carriers 3,870 6,440 1,880 3,160
755,510 757,520 392,060 397,680
Revenue per load:
Business Capacity Owners (1) $1,632 $1,580 $1,662 $1,599
Truck Brokerage Carriers 1,697 1,464 1,781 1,437
Rail intermodal 2,310 2,155 2,360 2,095
Ocean carriers 7,035 5,495 7,303 5,254
Air carriers 1,925 1,678 2,053 1,959
June 28, June 30,
2008 2007
Truck Capacity
Business Capacity Owners (1) (3) 8,222 8,431
Truck Brokerage Carriers:
Approved and active (4) 16,080 15,100
Approved 9,219 8,700
25,299 23,800
Total available truck
capacity providers 33,521 32,231
Agent Locations 1,409 1,381
(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, if any for the periods presented, 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 8,804 and 9,036 at
June 28, 2008 and June 30, 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.
CONTACT:
Jim Gattoni of Landstar System, Inc.,
+1-904-398-9400
Web site: http://www.landstar.com
(LSTR)
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