JACKSONVILLE, Fla., Jan. 27 /PRNewswire-FirstCall/ -- Landstar
System, Inc. (NASDAQ:LSTR) reported 2009 fourth quarter net income
of $18.6 million, or $0.37 per diluted share, from revenue of
$547.7 million. Net income for the 2008 fourth quarter was $24.6
million, or $0.47 per diluted share, from revenue of $603.8
million. Revenue hauled by third-party truck capacity providers in
the 2009 fourth quarter was $498.4 million, or 91 percent of
revenue, compared to $547.4 million, or 91 percent of revenue, in
the 2008 fourth quarter. Included in revenue hauled by third-party
truck capacity providers in the 2009 and 2008 fourth quarters were
$16.8 million and $24.6 million, respectively, of fuel surcharges
invoiced to customers on revenue hauled by third-party truck
brokerage carriers. In the 2009 and 2008 fourth quarters, the
Company also invoiced customers $40.7 million and $54.5 million,
respectively, of fuel surcharges that were passed 100 percent to
third-party BCO Independent Contractors and excluded from revenue.
Revenue hauled by rail, air and ocean cargo carriers was $35.0
million, or 6 percent of revenue, in the 2009 fourth quarter
compared to $47.0 million, or 8 percent of revenue, in the 2008
fourth quarter. Transportation management fee revenue was $4.4
million, or 1 percent of revenue, in the 2009 fourth quarter.
Landstar System, Inc. also announced that its Board of Directors
has declared a quarterly dividend of $0.045 per share. The dividend
is payable on February 26, 2010 to stockholders of record at the
close of business on February 5, 2010. It is the intention of the
Board of Directors to continue to pay a quarterly dividend. During
the 2009 fourth quarter, Landstar purchased 665,000 shares of its
common stock at a total cost of $24.1 million. The Company's
variable cost business model continues to generate significant cash
flow. During 2009, the Company purchased 1,625,000 shares of its
common stock at a total cost of $55.8 million and completed two
acquisitions, while at the same time reduced borrowings on its
senior credit facility by $30 million. Under the Company's
authorized share purchase program, the Company currently has a
total of 1,375,000 shares of its common stock available for
purchase. Commenting on Landstar's 2009 fourth quarter, Landstar's
Chairman, President and CEO, Henry Gerkens said, "I am pleased with
the way the Company finished 2009, particularly as it relates to
revenue. Sequentially, Landstar was able to increase revenue by 9
percent over the 2009 third quarter, and that was significantly
better than has been experienced in the fourth quarter compared to
the third quarter in each of the prior three years. The increased
revenue was primarily the result of a general increase in rate per
load of approximately 4 percent, combined with increased loadings
of approximately 6 percent over the 2009 third quarter. 2009 fourth
quarter revenue compared to the 2008 fourth quarter decreased 9
percent, significantly better than the 28 percent decrease
experienced during the first nine months of 2009 compared to the
first nine months of 2008. Gerkens continued, "Diluted earnings per
share in the 2009 fourth quarter compared to the 2008 fourth
quarter was negatively impacted by $0.10 per diluted share due to
increased insurance and claims expense attributable to an unusual
amount of adverse development of commercial trucking claims in the
2009 fourth quarter, partly offset by $0.03 per diluted share from
a lower provision for taxes. Although the cost of insurance and
claims in the quarter was much higher than a typical quarter, our
2009 accident frequency rate was the lowest in Landstar history,
demonstrating the Company's continued emphasis on safety. Operating
margin was 5.0 percent in the 2009 fourth quarter compared to 6.8
percent in the 2008 fourth quarter, primarily as a result of the
adverse development of commercial trucking claims." "As we moved
through the 2009 fourth quarter, both the number of loads and rate
per load continued to show signs of strengthening. Through the
first several weeks of January, I have seen daily volume increases
of approximately five to ten percent compared to January 2009,
while rate per load continues to show improvement. Assuming these
trends continue for the balance of the quarter, I would anticipate
2010 first quarter revenue to increase over the 2009 first quarter
revenue in a mid to upper single digit range. As a result, I
anticipate Landstar's earnings to be within a range of $0.28 to
$0.32 per diluted share. Although I remain cautiously optimistic
about 2010, I will not be providing specific annual revenue and
earnings guidance. From a longer term perspective, our goals are to
achieve a cumulative average growth rate in revenue over a three to
five year period in a mid-teen range, to increase annual operating
margins and to grow earnings per share at a slightly higher rate
than the rate of revenue increase." 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
http://www.landstar.com/; click on "Investor Relations" and
"Webcasts," then click on "Landstar's Fourth Quarter 2009 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 2008 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. is a non-asset
based provider of integrated supply chain solutions. Landstar
delivers safe, specialized transportation, warehousing and
logistics services to a broad range of customers worldwide
utilizing a network of agents, third-party capacity owners and
employees. All Landstar transportation 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® under the symbol LSTR. (Tables
follow) Landstar System, Inc. and Subsidiary Consolidated
Statements of Income (Dollars in thousands, except per share
amounts) (Unaudited) Fiscal Year End Thirteen Weeks Ended
--------------- -------------------- Dec. 26, Dec. 27, Dec. 26,
Dec. 27, 2009 2008 2009 2008 -------- -------- -------- --------
Revenue $2,008,796 $2,643,069 $547,715 $603,837 Investment income
1,268 3,339 314 653 Costs and expenses: Purchased transportation
1,503,520 2,033,384 413,301 460,175 Commissions to agents 160,571
203,058 42,836 49,201 Other operating costs 29,173 28,033 7,424
7,219 Insurance and claims 45,918 36,374 16,862 9,215 Selling,
general and administrative 133,612 137,758 33,922 32,301
Depreciation and amortization 23,528 20,960 6,114 5,402 ---------
--------- ------- ------- Total costs and expenses 1,896,322
2,459,567 520,459 563,513 --------- --------- ------- -------
Operating income 113,742 186,841 27,570 40,977 Interest and debt
expense 4,030 7,351 937 1,716 --------- --------- ------- -------
Income before income taxes 109,712 179,490 26,633 39,261 Income
taxes 39,762 68,560 8,296 14,656 --------- --------- -------
------- Net income 69,950 110,930 18,337 24,605 Less: Net loss
attributable to noncontrolling interest (445) - (231) - ---------
--------- ------- ------- Net income attributable to Landstar
System, Inc. and subsidiary $70,395 $110,930 $18,568 $24,605
========= ========= ======= ======= Earnings per common share
attributable to Landstar System, Inc. and subsidiary $1.38 $2.11
$0.37 $0.47 ========= ========= ======= ======= Diluted earnings
per share attributable to Landstar System, Inc. and subsidiary
$1.37 $2.10 $0.37 $0.47 ========= ========= ======= ======= Average
number of shares outstanding: Earnings per common share 51,095,000
52,503,000 50,404,000 51,973,000 ========== ========== ==========
========== Diluted earnings per share 51,280,000 52,854,000
50,594,000 52,197,000 ========== ========== ========== ==========
Dividends paid per common share $0.1700 $0.1550 $0.0450 $0.0400
========== ========== ========== ========== Landstar System, Inc.
and Subsidiary Consolidated Balance Sheets (Dollars in thousands,
except per share amounts) (Unaudited) Dec. 26, Dec. 27, 2009 2008
-------- -------- ASSETS Current assets: Cash and cash equivalents
$85,719 $98,904 Short-term investments 24,325 23,479 Trade accounts
receivable, less allowance of $5,547 and $6,230 278,854 315,065
Other receivables, including advances to independent contractors,
less allowance of $5,797 and $4,298 18,149 10,083 Deferred income
taxes and other current assets 19,565 27,871 ------- ------- Total
current assets 426,612 475,402 ------- ------- Operating property,
less accumulated Depreciation and amortization of $124,810 and
$106,635 116,656 124,178 Goodwill 57,470 31,134 Other assets 48,054
32,816 -------- -------- Total assets $648,792 $663,530 ========
======== LIABILITIES AND EQUITY Current liabilities: Cash overdraft
$28,919 $32,065 Accounts payable 121,030 105,882 Current maturities
of long-term debt 24,585 24,693 Insurance claims 41,627 23,545
Accrued income taxes 9,957 12,239 Other current liabilities 32,517
38,161 ------- ------- Total current liabilities 258,635 236,585
------- ------- Long-term debt, excluding current maturities 68,313
111,752 Insurance claims 30,680 38,278 Deferred income taxes 23,013
23,779 Equity Landstar System, Inc. and subsidiary shareholders'
equity Common stock, $0.01 par value, authorized 160,000,000
shares, issued 66,255,358 and 66,109,547 shares 663 661 Additional
paid-in capital 161,261 154,533 Retained earnings 766,040 704,331
Cost of 16,022,111 and 14,424,887 shares of common stock in
treasury (660,446) (605,828) Accumulated other comprehensive income
(loss) 498 (561) -------- -------- Total Landstar System, Inc. and
subsidiary shareholders' equity 268,016 253,136 -------- --------
Noncontrolling interest 135 - -------- -------- Total equity
268,151 253,136 -------- -------- Total liabilities and equity
$648,792 $663,530 ======== ======== Landstar System, Inc. and
Subsidiary Supplemental Information (Unaudited) Fiscal Year End
Thirteen Weeks Ended ------------------ -------------------- Dec.
26, Dec. 27, Dec. 26, Dec. 27, 2009 2008 2009 2008 --------
--------- -------- ------- Revenue generated through (in
thousands): ------------------------ Business Capacity Owners (1)
$1,140,004 $1,388,353 $299,613 $317,371 Truck Brokerage Carriers
694,467 996,269 198,806 230,007 Rail intermodal 76,346 136,367
19,252 29,431 Ocean cargo carriers 33,835 42,153 8,376 12,824 Air
cargo carriers 17,621 14,891 7,362 4,756 Other (2) 46,523 65,036
14,306 9,448 ---------- ---------- -------- -------- $2,008,796
$2,643,069 $547,715 $603,837 ========== ========== ========
======== Number of loads: ---------------- Business Capacity Owners
(1) 761,940 820,680 200,100 182,350 Truck Brokerage Carriers
501,980 571,600 138,980 136,350 Rail intermodal 37,890 58,510 9,290
12,900 Ocean cargo carriers 5,370 5,380 1,450 1,390 Air cargo
carriers 7,780 8,260 1,340 2,740 --------- --------- -------
------- 1,314,960 1,464,430 351,160 335,730 ========= =========
======= ======= Revenue per load: ----------------- Business
Capacity Owners (1) $1,496 $1,692 $1,497 $1,740 Truck Brokerage
Carriers 1,383 1,743 1,430 1,687 Rail intermodal 2,015 2,331 2,072
2,281 Ocean cargo carriers 6,301 7,835 5,777 9,226 Air cargo
carriers 2,265 1,803 5,494 1,736 Dec. 26, Dec. 27, 2009 2008
-------- -------- Truck Capacity -------------- Business Capacity
Owners (1) (3) 7,926 8,455 ------ ------ Truck Brokerage Carriers:
Approved and active (4) 14,887 16,135 Approved 9,886 10,036 ------
------ 24,773 26,171 ------ ------ Total available truck capacity
providers 32,699 34,626 ====== ====== Agent Locations 1,366 1,428
--------------- ====== ====== (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. Also, included in the 2008 fiscal
year was $27,638 of revenue for bus capacity provided for
evacuation assistance related to the storms that impacted the Gulf
Coast in the third quarter of 2008. (3) Trucks provided by Business
Capacity Owners were 8,519 and 9,039 at December 26, 2009 and
December 27, 2008, respectively. (4) Active refers to Truck
Brokerage Carriers who have moved at least one load in the past 180
days. DATASOURCE: Landstar System, Inc. CONTACT: Jim Gattoni,
Landstar System, Inc., +1-904-398-9400 Web Site:
http://www.landstar.com/
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