Landstar System Reports 31 Percent Increase in Revenue and a 40 Percent Increase in Diluted Earnings Per Share
JACKSONVILLE, Fla., July 14, 2010 /PRNewswire via COMTEX/ --
Landstar System, Inc. (Nasdaq: LSTR) reported a 31 percent increase in revenue to $641.7 million in the 2010 second quarter, up from $491.2 million in the 2009 second quarter. Net income for the 2010 second quarter was $24.4 million, or $0.49 per diluted share, compared to $17.9 million, or $0.35 per diluted share for the 2009 second quarter. Operating income increased 34 percent to $40.0 million in the 2010 second quarter compared to $29.8 million in the 2009 second quarter.
Truck transportation revenue hauled by business capacity owners and truck brokerage carriers in the 2010 second quarter was $592.0 million, or 92 percent of revenue, compared to $453.8 million, or 92 percent of revenue, in the 2009 second quarter. Included in revenue hauled by truck brokerage carriers in the 2010 and 2009 second quarters were $23.1 million and $9.2 million, respectively, of fuel surcharges invoiced to customers. In the 2010 and 2009 second quarters, the Company also invoiced customers $53.1 million and $27.3 million, respectively, of fuel surcharges that were passed 100 percent to business capacity owners and excluded from revenue. Revenue hauled by rail, air and ocean cargo carriers was $35.0 million, or 6 percent of revenue, in the 2010 second quarter compared to $28.2 million, or 6 percent of revenue, in the 2009 second quarter. Transportation management fee revenue generated by the supply chain solutions companies was $6.1 million, or 1 percent of revenue, in the 2010 second quarter.
Landstar System, Inc. also announced that its Board of Directors has declared a quarterly dividend of $0.05 per share. This represents an 11 percent increase in the Company's quarterly dividend. The dividend is payable on August 27, 2010 to stockholders of record at the close of business on August 9, 2010. It is the intention of the Board of Directors to continue to pay a quarterly dividend. During the 2010 second quarter, Landstar purchased 510,062 shares of its common stock at a total cost of $20.6 million. Under the Company's authorized share purchase program, the Company currently has a total of 745,000 shares of its common stock available for purchase.
Commenting on Landstar's 2010 second quarter, Landstar's Chairman, President and CEO, Henry Gerkens said, "I am very pleased with the Company's performance in the 2010 second quarter. 2010 second quarter revenue, operating income and diluted earnings per share all increased sharply over the corresponding 2009 second quarter amounts. Revenue increased 31 percent due to stronger volumes and pricing, operating income increased 34 percent, despite higher purchased transportation costs and insurance and claims costs, and diluted earnings per share increased 40 percent. The total number of truck transportation loads hauled by business capacity owners and truck brokerage carriers in the 2010 second quarter was the highest reported number of truck transportation loads hauled by business capacity owners and truck brokerage carriers in any quarter of any year in Landstar's history. Additionally, from a pricing standpoint, revenue per load for truck transportation on freight hauled by business capacity owners and truck brokerage carriers continued to strengthen as we moved through the 2010 second quarter.
"The overall freight environment continues to be strong. Recent trends in June, and thus far in July, indicate that both the revenue per load and the number of loads hauled remain strong compared to the corresponding prior year periods. I expect these trends to continue throughout the 2010 third quarter. I would anticipate 2010 third quarter results to be similar to those experienced in the 2010 second quarter. As such, I expect 2010 third quarter revenue to increase in a range of 25 percent to 33 percent over 2009 third quarter revenue and diluted earnings per share to be in a range of $0.47 to $0.52."
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 2010 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 2009 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 9001:2008 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. and Subsidiary
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)
Twenty Six Weeks Ended Thirteen Weeks Ended
---------------------- --------------------
June 26, June 27, June 26, June 27,
2010 2009 2010 2009
---- ---- ---- ----
Revenue $1,189,809 $960,411 $641,721 $491,164
Investment income 574 675 289 250
Costs and
expenses:
Purchased
transportation 907,290 717,891 490,089 366,567
Commissions to
agents 87,379 78,251 46,971 39,927
Other operating
costs 15,504 14,838 7,968 7,388
Insurance and
claims 26,129 18,799 13,831 9,797
Selling, general
and
administrative 73,816 66,612 36,973 32,243
Depreciation and
amortization 11,988 11,201 6,196 5,716
------ ------ ----- -----
Total costs and
expenses 1,122,106 907,592 602,028 461,638
--------- ------- ------- -------
Operating income 68,277 53,494 39,982 29,776
Interest and debt
expense 1,664 2,136 810 973
----- ----- --- ---
Income before
income taxes 66,613 51,358 39,172 28,803
Income taxes 25,446 19,607 14,962 10,946
Net income 41,167 31,751 24,210 17,857
Less: Net loss
attributable to
noncontrolling
interest (446) - (227) -
---- --- ---- ---
Net income
attributable to
Landstar System,
Inc. and
subsidiary $41,613 $31,751 $24,437 $17,857
======= ======= ======= =======
Earnings per
common share
attributable to
Landstar System,
Inc. and
subsidiary $0.83 $0.62 $0.49 $0.35
===== ===== ===== =====
Diluted earnings
per share
attributable to
Landstar System,
Inc. and
subsidiary $0.83 $0.61 $0.49 $0.35
===== ===== ===== =====
Average number of
shares
outstanding:
Earnings per
common share 50,165,000 51,453,000 50,123,000 51,330,000
========== ========== ========== ==========
Diluted earnings
per share 50,259,000 51,636,000 50,215,000 51,487,000
========== ========== ========== ==========
Dividends paid per
common share $0.0900 $0.0800 $0.0450 $0.0400
======= ======= ======= =======
Landstar System, Inc. and Subsidiary
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
(Unaudited)
June 26, Dec. 26,
2010 2009
---- ----
ASSETS
Current assets:
Cash and cash equivalents $45,081 $85,719
Short-term investments 33,156 24,325
Trade accounts receivable, less allowance
of $5,597 and $5,547 338,877 278,854
Other receivables, including advances to
independent
contractors, less allowance of $5,543 and
$5,797 22,119 18,149
Deferred income taxes and other current
assets 22,232 19,565
------ ------
Total current assets 461,465 426,612
------- -------
Operating property, less accumulated
depreciation
and amortization of $133,957 and $124,810 143,505 116,656
Goodwill 57,470 57,470
Other assets 66,662 48,054
Total assets $729,102 $648,792
======== ========
LIABILITIES AND EQUITY
Current liabilities:
Cash overdraft $30,293 $28,919
Accounts payable 159,548 121,030
Current maturities of long-term debt 24,886 24,585
Insurance claims 34,902 41,627
Other current liabilities 47,180 42,474
------ ------
Total current liabilities 296,809 258,635
------- -------
Long-term debt, excluding current
maturities 93,956 68,313
Insurance claims 30,022 30,680
Deferred income taxes 23,368 23,013
Equity
Landstar System, Inc. and subsidiary
shareholders' equity
Common stock, $0.01 par value, authorized
160,000,000
shares, issued 66,487,151 and 66,255,358
shares 665 663
Additional paid-in capital 166,292 161,261
Retained earnings 803,126 766,040
Cost of 16,652,344 and 16,022,111 shares
of common
stock in treasury (685,506) (660,446)
Accumulated other comprehensive income 681 498
--- ---
Total Landstar System, Inc. and
subsidiary shareholders'
equity 285,258 268,016
------- -------
Noncontrolling interest (311) 135
---- ---
Total equity 284,947 268,151
------- -------
Total liabilities and equity $729,102 $648,792
======== ========
Landstar System, Inc. and Subsidiary
Supplemental Information
(Unaudited)
Twenty Six Weeks
Ended
----------------
June 26, June 27,
2010 2009
---- ----
Revenue generated through
(in thousands):
-------------------------
Business Capacity Owners (1) $631,736 $550,665
Truck Brokerage Carriers 466,163 329,479
Rail intermodal 34,092 36,728
Ocean cargo carriers 20,835 17,518
Air cargo carriers 8,562 7,508
Other (2) 28,421 18,513
$1,189,809 $960,411
========== ========
Number of loads:
----------------
Business Capacity Owners (1) 420,770 365,000
Truck Brokerage Carriers 308,330 240,020
Rail intermodal 15,490 18,290
Ocean cargo carriers 3,110 2,590
Air cargo carriers 3,130 5,100
750,830 631,000
======= =======
Revenue per load:
-----------------
Business Capacity Owners (1) $1,501 $1,509
Truck Brokerage Carriers 1,512 1,373
Rail intermodal 2,201 2,008
Ocean cargo carriers 6,699 6,764
Air cargo carriers 2,735 1,472
Truck Capacity
--------------
Business Capacity Owners (1)
(3)
Truck Brokerage Carriers:
Approved and active (4)
Approved
Total available truck
capacity providers
Agent Locations
---------------
Thirteen Weeks Ended
--------------------
June 26, June 27,
2010 2009
---- ----
Revenue generated through
(in thousands):
-------------------------
Business Capacity Owners (1) $345,595 $288,600
Truck Brokerage Carriers 246,408 165,236
Rail intermodal 19,316 17,410
Ocean cargo carriers 11,700 8,667
Air cargo carriers 3,959 2,121
Other (2) 14,743 9,130
$641,721 $491,164
======== ========
Number of loads:
----------------
Business Capacity Owners (1) 223,020 194,350
Truck Brokerage Carriers 158,980 122,370
Rail intermodal 8,620 8,710
Ocean cargo carriers 1,650 1,350
Air cargo carriers 1,630 1,840
393,900 328,620
======= =======
Revenue per load:
-----------------
Business Capacity Owners (1) $1,550 $1,485
Truck Brokerage Carriers 1,550 1,350
Rail intermodal 2,241 1,999
Ocean cargo carriers 7,091 6,420
Air cargo carriers 2,429 1,153
June 26, June 27,
2010 2009
---- ----
Truck Capacity
--------------
Business Capacity Owners (1)
(3) 7,818 8,286
----- -----
Truck Brokerage Carriers:
Approved and active (4) 16,670 14,827
Approved 9,047 11,082
----- ------
25,717 25,909
------ ------
Total available truck
capacity providers 33,535 34,195
====== ======
Agent Locations 1,343 1,436
--------------- ===== =====
(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 8,399 and 8,875
at June 26, 2010 and June 27, 2009, respectively.
(4) Active refers to Truck Brokerage Carriers who have moved at least
one load in the past 180 days.
SOURCE Landstar System, Inc.