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Press release from PR Newswire

Landstar System Reports First Quarter Diluted Earnings Per Share of $0.57

Thursday, April 25, 2013

Landstar System Reports First Quarter Diluted Earnings Per Share of $0.57

07:50 EDT Thursday, April 25, 2013

JACKSONVILLE, Fla., April 25, 2013 /PRNewswire/ -- Landstar System, Inc. (NASDAQ: LSTR) reported 2013 first quarter diluted earnings per share of $0.57 from net income of $26.8 million, equaling the record first quarter net income and diluted earnings per share that were achieved in the 2012 first quarter.  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 42.3 percent in the 2013 first quarter compared to 40.8 percent in the 2012 first quarter.  Revenue for the 2013 first quarter was the second highest first quarter revenue in Landstar history at $628.3 million compared to $649.0 million in the 2012 first quarter. 

Truck transportation revenue hauled by independent business capacity owners ("BCOs") and truck brokerage carriers in the 2013 first quarter was $574.7 million, or 91 percent of revenue, compared to $600.2 million, or 92 percent of revenue, in the 2012 first quarter.  Revenue hauled by rail, air and ocean cargo carriers was $39.1 million, or 6 percent of revenue, in the 2013 first quarter compared to $35.1 million, or 5 percent of revenue, in the 2012 first quarter. 

The resiliency of Landstar's variable cost business model continues to generate outstanding returns and provide a strong balance sheet.  Trailing twelve-month return on average shareholder's equity was 35 percent and trailing twelve-month return on invested capital, net income divided by the sum of average equity plus average debt, was 27 percent.  As of March 30, 2013, the Company had $139.8 million in cash and short term investments and $25 million in borrowings outstanding under its senior credit facility. As of March 30, 2013, there was $167 million available for borrowing under the Company's senior credit facility. Currently, there are 1,992,000 shares of the Company's common stock available for purchase under Landstar's authorized share purchase program.

Commenting on Landstar's 2013 first quarter performance, Landstar Chairman, President and CEO, Henry Gerkens said,  "Diluted earnings per share was $0.57 in the 2013 first quarter, matching the first quarter record of $0.57, which was set last year.  Operating margin in the 2013 first quarter of 42.3 percent was the highest first quarter operating margin in Landstar history. The Company's annual agent meeting was held in the 2013 second quarter versus in the 2012 first quarter, which resulted in a favorable comparison of the 2013 first quarter operating margin to the 2012 first quarter operating margin. From a revenue standpoint, revenue in the 2013 first quarter was the second highest first quarter revenue in Landstar history.  Demand for the Company's truck services was choppy throughout the 2013 first quarter due in large part to inclement weather. Additionally, the 2013 first quarter had 2 fewer full work days than the 2012 first quarter. In general, Landstar experienced softness throughout the 2013 first quarter in both the number of loads and revenue per load on loads hauled via truck with much of the softness coming from revenue hauled on heavy/specialized platform equipment."

Gerkens continued, "Demand for the Company's truck services continued to be soft during the first few weeks of April. Based on current trends, I anticipate 2013 second quarter revenue to be below revenue for the 2012 second quarter, similar to the shortfall experienced in the 2013 first quarter over the 2012 first quarter. Diluted earnings per share in the 2013 second quarter will be negatively impacted when compared to the 2012 second quarter by approximately $0.03 per diluted share related to the Company's annual agent meeting held in April 2013, as described above. In addition, estimated insurance and claims expense for the 2013 second quarter, calculated using a historical 5 year average of insurance and claims expense as a percentage of BCO revenue, is projected to be higher than insurance and claims expense in the 2012 second quarter. Including the $0.03 per diluted share charge for the Company's annual agent meeting and what amounts to a normalized insurance and claims expense, I anticipate diluted earnings per share to be within a range of $0.68 to $0.73 for the 2013 second quarter."

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 2013 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," "expects," "plans," "predicts," "projects," "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 other claims; unfavorable development of existing accident claims; dependence on third party insurance companies; dependence on independent commission sales agents; dependence on third-party capacity providers; decreased demand for transportation services; substantial industry competition; disruptions or failures in our computer systems; dependence on key vendors; changes in fuel taxes; status of independent contractors; regulatory and legislative changes; catastrophic loss of a Company facility; acquired businesses; intellectual property; and other operational, financial or legal risks or uncertainties detailed in Landstar's Form 10K for the 2012 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 Subsidiary

Consolidated Statements of Income

(Dollars in thousands, except per share amounts)

(Unaudited)

Thirteen Weeks Ended

March 30,

March 31,

2013

2012

Revenue

$          628,321

$       649,023

Investment income

374

387

Costs and expenses:

Purchased transportation

476,605

492,922

Commissions to agents

49,088

50,232

Other operating costs, net of gains on asset dispositions

5,325

6,472

Insurance and claims

11,806

11,095

Selling, general and administrative

35,226

38,799

Depreciation and amortization

7,183

6,740

Total costs and expenses

585,233

606,260

Operating income

43,462

43,150

Interest and debt expense

740

724

Income before income taxes

42,722

42,426

Income taxes 

15,942

15,579

Net income

$           26,780

$         26,847

Earnings per common share

$               0.58

$             0.57

Diluted earnings per share

$               0.57

$             0.57

Average number of shares outstanding:

Earnings per common share  

46,507,000

46,800,000

Diluted earnings per share

46,722,000

47,061,000

Dividends paid per common share

$                  -

$           0.055

 

Landstar System, Inc. and Subsidiary

Consolidated Balance Sheets

(Dollars in thousands, except per share amounts)

(Unaudited)

Mar. 30,

Dec. 29,

2013

2012

ASSETS

Current assets:

Cash and cash equivalents

$        90,782

$        74,284

Short-term investments

48,974

35,528

Trade accounts receivable, less allowance

of $8,333 and $8,650

378,931

408,787

Other receivables, including advances to independent

contractors, less allowance of $4,227 and $4,657

64,017

55,278

Deferred income taxes and other current assets

14,629

18,067

Total current assets

597,333

591,944

Operating property, less accumulated depreciation

      and amortization of $161,007 and $158,999

161,459

158,953

Goodwill

57,470

57,470

Other assets

68,772

71,054

Total assets

$      885,034

$      879,421

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Cash overdraft

$        27,385

$        33,647

Accounts payable

179,014

188,981

Current maturities of long-term debt

20,673

19,016

Insurance claims

65,857

64,509

Other current liabilities

41,890

38,186

Total current liabilities

334,819

344,339

Long-term debt, excluding current maturities

82,448

95,125

Insurance claims

21,427

21,896

Deferred income taxes and other non-current liabilities

38,538

38,607

Shareholders' equity:

Common stock, $0.01 par value, authorized 160,000,000 

shares, issued 66,973,215 and 66,859,864 shares

670

669

Additional paid-in capital

175,841

173,976

Retained earnings

1,069,736

1,042,956

Cost of 20,412,020 and 20,411,736 shares of common

stock in treasury

(839,532)

(839,517)

Accumulated other comprehensive income

1,087

1,370

Total shareholders' equity

407,802

379,454

Total liabilities and shareholders' equity 

$      885,034

$      879,421

 

Landstar System, Inc. and Subsidiary

Supplemental Information

(Unaudited)

Thirteen Weeks Ended

March 30,

March 31,

2013

2012

Revenue generated through (in thousands):

Business Capacity Owners (1)

$     304,049

$      329,362

Truck Brokerage Carriers

270,641

270,842

Rail intermodal

18,011

17,382

Ocean and air cargo carriers

21,103

17,669

Other (2)   

14,517

13,768

$     628,321

$      649,023

Number of loads:

Business Capacity Owners (1)

187,770

199,200

Truck Brokerage Carriers

163,960

158,030

Rail intermodal

7,020

7,160

Ocean and air cargo carriers

3,970

3,980

362,720

368,370

Revenue per load:

Business Capacity Owners (1)

$         1,619

$          1,653

Truck Brokerage Carriers

1,651

1,714

Rail intermodal

2,566

2,428

Ocean and air cargo carriers

5,316

4,439

March 30,

March 31,

2013

2012

Truck Capacity Providers

Business Capacity Owners (1) (3)

7,851

7,825

Truck Brokerage Carriers:

     Approved and active (4)

20,571

18,946

     Approved

11,200

9,382

31,771

28,328

Total available truck capacity providers

39,622

36,153

(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 8,348 and 8,350 at March 30, 2013 and 

March 31, 2012, respectively.

(4) Active refers to Truck Brokerage Carriers who have moved at least one load in the past 180 days.

 

 

SOURCE Landstar System, Inc.

For further information: Jim Gattoni, Landstar System, Inc., www.landstar.com, 904-398-9400

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