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8-K - 8-K - LANDSTAR SYSTEM INCd528501d8k.htm

Exhibit 99.1

 

LOGO

 

For Immediate Release   Contact: Jim Gattoni
  Landstar System, Inc.
  www.landstar.com
April 25, 2013   904-398-9400

 

LANDSTAR SYSTEM REPORTS FIRST QUARTER

DILUTED EARNINGS PER SHARE OF $0.57

Jacksonville, FL – 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


LANDSTAR SYSTEM/2

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 SYSTEM/3

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.


LANDSTAR SYSTEM/4

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/5

Landstar System, Inc. and Subsidiary

Consolidated Statements of Income

(Dollars in thousands, except per share amounts)

(Unaudited)

      Thirteen Weeks Ended  
      March 30,
2013
     March 31,
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/6

Landstar System, Inc. and Subsidiary

Consolidated Balance Sheets

(Dollars in thousands, except per share amounts)

(Unaudited)

 

      Mar. 30,
2013
    Dec. 29,
2012
 

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 90,782      $ 74,284   

Short-term investments

     48,974        35,528   

Trade accounts receivable, less allowanceof $8,333 and $8,650

     378,931        408,787   

Other receivables, including advances to independentcontractors, 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 depreciationand 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 commonstock 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/7

Landstar System, Inc. and Subsidiary

Supplemental Information

(Unaudited)

 

      Thirteen Weeks Ended  
      March 30,
2013
     March 31,
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,
2013
     March 31,
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.