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Press release from PR Newswire

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

Thursday, January 31, 2013

Landstar System Reports Record Fourth Quarter Diluted Earnings Per Share of $0.7307:50 EST Thursday, January 31, 2013JACKSONVILLE, 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 SubsidiaryConsolidated Statements of Income(Dollars in thousands, except per share amounts)(Unaudited)Fiscal Year EndedFiscal Quarter EndedDecember 29,December 31,December 29,December 31,2012201120122011Revenue$        2,793,420$         2,649,082$          691,256$       717,522Investment income1,5631,705378411Costs and expenses:Purchased transportation2,129,3452,007,102525,480547,442Commissions to agents218,363210,08855,63556,923Other operating costs22,94928,8655,3146,815Insurance and claims37,45142,7669,0408,670Selling, general and administrative153,566152,90739,65040,655Depreciation and amortization27,45625,8146,9806,478Total costs and expenses2,589,1302,467,542642,099666,983Operating income205,853183,24549,53550,950Interest and debt expense3,1043,112792772Income before income taxes202,749180,13348,74350,178Income taxes 72,96867,18814,76517,546Net income129,781112,94533,97832,632Less: Net loss attributable to noncontrolling interest  -(62)--Net income attributable to Landstar System,Inc. and subsidiary$          129,781$           113,007$           33,978$         32,632Earnings per common share attributable toLandstar System, Inc. and subsidiary$                2.78$                 2.38$               0.73$             0.70Diluted earnings per share attributable to Landstar System, Inc. and subsidiary$                2.77$                 2.38$               0.73$             0.70Average number of shares outstanding:Earnings per common share  46,698,00047,444,00046,468,00046,812,000Diluted earnings per share46,877,00047,524,00046,614,00046,939,000Dividends paid per common share$              0.730$               0.210$             0.560$           0.055 Landstar System, Inc. and SubsidiaryConsolidated Balance Sheets(Dollars in thousands, except per share amounts)(Unaudited)Dec. 29,Dec. 31,20122011ASSETSCurrent assets:Cash and cash equivalents$        74,284$        80,900Short-term investments35,52827,944Trade accounts receivable, less allowanceof $8,650 and $6,591408,787368,377Other receivables, including advances to independentcontractors, less allowance of $4,657 and $5,38455,27853,263Deferred income taxes and other current assets18,06721,308Total current assets591,944551,792Operating property, less accumulated depreciationand amortization of $158,999 and $145,804158,953142,146Goodwill57,47057,470Other assets71,05457,041Total assets$      879,421$      808,449LIABILITIES AND SHAREHOLDERS' EQUITYCurrent liabilities:Cash overdraft$        33,647$        25,905Accounts payable188,981163,307Current maturities of long-term debt19,01617,212Insurance claims64,50976,624Other current liabilities38,18648,065Total current liabilities344,339331,113Long-term debt, excluding current maturities95,125115,130Insurance claims21,89627,494Deferred income taxes and other non-current liabilities38,60734,135Shareholders' equity:Common stock, $0.01 par value, authorized 160,000,000   shares, issued 66,859,864 and 66,602,486 shares669666Additional paid-in capital173,976165,712Retained earnings1,042,956947,156Cost of 20,411,736 and 19,882,289 shares of commonstock in treasury(839,517)(813,684)Accumulated other comprehensive income1,370727Total shareholders' equity379,454300,577Total liabilities and shareholders' equity $      879,421$      808,449 Landstar System, Inc. and SubsidiarySupplemental Information(Unaudited)Fiscal Year EndedFiscal Quarter EndedDecember 29,December 31,December 29,December 31,2012201120122011Revenue generated through (in thousands):Business Capacity Owners (1)$  1,385,046$  1,374,664$     327,937$      353,808Truck Brokerage Carriers1,197,8761,052,605311,344305,483Rail intermodal73,93275,97918,93021,988Ocean and air cargo carriers77,89890,42417,67122,163Other (2)   58,66855,41015,37414,080$  2,793,420$  2,649,082$     691,256$      717,522Number of loads:Business Capacity Owners (1)806,350808,210190,150206,220Truck Brokerage Carriers680,970613,790170,610171,860Rail intermodal29,81031,3707,5208,620Ocean and air cargo carriers15,39016,4403,6304,2901,532,5201,469,810371,910390,990Revenue per load:Business Capacity Owners (1)$          1,718$          1,701$         1,725$          1,716Truck Brokerage Carriers1,7591,7151,8251,778Rail intermodal2,4802,4222,5172,551Ocean and air cargo carriers5,0625,5004,8685,166December 29,December 31,20122011Truck Capacity ProvidersBusiness Capacity Owners (1) (3)8,0107,871Truck Brokerage Carriers:     Approved and active (4)20,92219,223     Approved10,6239,27231,54528,495Total available truck capacity providers39,55536,366Million Dollar Agents (5)504504(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.For further information: Jim Gattoni, Landstar System, Inc., www.landstar.com, +1-904-398-9400