UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 25, 2013

LANDSTAR SYSTEM, INC.
(Exact name of registrant as specified in its charter)

Delaware	 	021238	 	06-1313069	
(State or other jurisdiction	 	(Commission	 	(I.R.S. Employer	
of incorporation)	 	File Number)	 	Identification No.)	

13410 Sutton Park Drive South, Jacksonville, Florida	 	32224	
(Address of principal executive offices)	 	(Zip Code)	
(904) 398-9400
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
 
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

 

Item 2.02	Results of Operations and Financial Condition	
On April 25, 2013, Landstar System, Inc. issued a press release announcing results for the first quarter of fiscal 2013. A copy of the press release is attached hereto as Exhibit 99.1.
The information furnished under Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.
Item 9.01 Financial Statements and Exhibits
Exhibits
 
99.1	News Release dated April 25, 2013 of Landstar System, Inc.	

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 	 	 	 	LANDSTAR SYSTEM, INC.	
 	 	 	 	
Date: April 25, 2013	 	 	 	By:	 	/s/ James B. Gattoni	
 	 	 	 	 	 	Name: James B. Gattoni	
 	 	 	 	 	 	Title: Executive Vice President and Chief Financial Officer	

Exhibit 99.1

 
 	 	 	
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.