Landstar System Reports Record Fourth Quarter Diluted Earnings Per Share of $0.73

 Landstar System Reports Record Fourth Quarter Diluted Earnings Per Share of
                                    $0.73

PR Newswire

JACKSONVILLE, Fla., Jan. 31, 2013

JACKSONVILLE, Fla., Jan. 31, 2013 /PRNewswire/ --Landstar System, Inc.
(NASDAQ: LSTR) reported record diluted earnings per share of $0.73 in the
thirteen week 2012 fourth quarter compared to diluted earnings per share of
$0.70 in the fourteen week 2011 fourth quarter. The Company's fiscal year
ends on the last Saturday in December. As such, the Company's 2012 fourth
quarter included thirteen weeks whereas the 2011 fourth quarter included
fourteen weeks. Prior to 2011, 2005 was the most recent fourth quarter to
include fourteen weeks. Revenue in the 2012 fourth quarter was $691.3 million
and was a record for a thirteen week fourth quarter. Revenue in the 2011
fourteen week fourth quarter was $717.5 million. 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 45 percent in both the 2012 and 2011 fourth quarters.

Truck transportation revenue hauled by independent business capacity owners
("BCOs") and truck brokerage carriers in the 2012 thirteen week period was
$639.3 million, or 92 percent of revenue, compared to $659.3 million, or 92
percent of revenue, in the 2011 fourteen week period. Revenue hauled by rail,
air and ocean cargo carriers was $36.6 million, or five percent of revenue, in
the 2012 thirteen week period compared to $44.2 million, or six percent of
revenue, in the 2011 fourteen week period.

Trailing twelve-month return on average shareholder's equity was 38 percent
and trailing twelve-month return on invested capital, net income divided by
the sum of average equity plus average debt, was 28 percent. Landstar
purchased 524,700 shares of its common stock during 2012 at an aggregate cost
of $25.8 million. Currently, there are 1,992,000 shares of the Company's
common stock available for purchase under Landstar's authorized share purchase
programs.

"Landstar produced solid operating results in the 2012 thirteen week period,
despite inconsistent demand and a much tougher quarter over prior year quarter
comparison due to fewer business days in the 2012 fourth quarter compared to
the 2011 fourth quarter," said Landstar Chairman, President and Chief
Executive Officer Henry Gerkens. "Loads hauled via truck capacity in the 2012
thirteen week period were a thirteen week fourth quarter record of 361,000
loads. Average truck revenue per load in the 2012 period remained relatively
high at $1,772 per load compared to revenue of $1,744 per load in the 2011
period. I estimate that the extra week in the 2011 fourteen week period
contributed approximately $25 to $30 million in additional revenue. Assuming
a gross profit margin equal to the gross profit margin experienced in the 2011
fourth quarter, I would estimate that the extra week contributed approximately
$.05 to $.06 per diluted share in the 2011 fourth quarter. Also, favorable
resolutions of various tax matters lowered the Company's effective tax rate
and contributed approximately $0.08 and $0.03 per diluted share to diluted
earnings per share in the 2012 and 2011 fourth quarters, respectively."

Gerkens continued, "The 2012 full year operating results were very good.
Landstar completed the 2012 fifty-two week fiscal year with record annual
revenue of $2,793 million compared to $2,649 million for the fifty-three week
2011 fiscal year and record annual diluted earnings per share of $2.77 in 2012
compared to $2.38 in 2011. Landstar also achieved one of its key financial
goals as operating margin was a record 46.2 percent for the 2012 fiscal year
compared to 42.4 percent for the 2011 fiscal year. Over the next three to
five year period, our new goal is to push that operating margin to over 50
percent.

"In my opinion, there remains much economic uncertainty, and as such, I will
not be providing specific ranges of 2013 first quarter and full year revenue
and earnings projections at this time. That being said, right now, I would
anticipate that the 2013 first quarter results should be similar to the 2012
first quarter results."

Landstar will hold 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 Fourth Quarter 2012 Earnings Release Conference
Call." The webcast will be available on the Company's website through
Saturday, February 2, 2013.

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 2011 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)
                        Fiscal Year Ended           Fiscal Quarter Ended
                        December 29,  December 31,  December 29,  December 31,
                        2012          2011          2012          2011
Revenue                 $          $         $         $   
                        2,793,420    2,649,082     691,256      717,522
Investment income       1,563         1,705         378           411
Costs and expenses:
Purchased               2,129,345     2,007,102     525,480       547,442
transportation
Commissions to agents   218,363       210,088       55,635        56,923
Other operating costs   22,949        28,865        5,314         6,815
Insurance and claims    37,451        42,766        9,040         8,670
Selling, general and    153,566       152,907       39,650        40,655
administrative
Depreciation and        27,456        25,814        6,980         6,478
amortization
Total costs and         2,589,130     2,467,542     642,099       666,983
expenses
Operating income        205,853       183,245       49,535        50,950
Interest and debt       3,104         3,112         792           772
expense
Income before income    202,749       180,133       48,743        50,178
taxes
Income taxes           72,968        67,188        14,765        17,546
Net income              129,781       112,945       33,978        32,632
Less: Net loss
attributable to         -             (62)          -             -
noncontrolling
interest
Net income attributable
to Landstar System,
Inc. and subsidiary     $         $        $        $    
                        129,781      113,007       33,978        32,632
Earnings per common
share attributable to
Landstar System, Inc.   $        $        $        $     
and subsidiary            2.78        2.38      0.73       0.70
Diluted earnings per
share attributable to
Landstar System, Inc.   $        $        $        $     
and subsidiary            2.77        2.38      0.73       0.70
Average number of
shares outstanding:
Earnings per common     46,698,000    47,444,000    46,468,000    46,812,000
share
Diluted earnings per    46,877,000    47,524,000    46,614,000    46,939,000
share
Dividends paid per      $        $        $        $     
common share             0.730        0.210      0.560       0.055



Landstar System, Inc. and Subsidiary
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
(Unaudited)
                                              Dec. 29,         Dec. 31,
                                              2012             2011
ASSETS
Current assets:
    Cash and cash equivalents                 $    74,284  $    80,900
    Short-term investments                    35,528           27,944
    Trade accounts receivable, less allowance
    of $8,650 and $6,591                      408,787          368,377
    Other receivables, including advances to
    independent
    contractors, less allowance of $4,657 and 55,278           53,263
    $5,384
    Deferred income taxes and other current   18,067           21,308
    assets
    Total current assets                      591,944          551,792
Operating property, less accumulated
depreciation
    and amortization of $158,999 and $145,804 158,953          142,146
Goodwill                                      57,470           57,470
Other assets                                  71,054           57,041
Total assets                                  $   879,421   $   808,449
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
    Cash overdraft                            $    33,647  $    25,905
    Accounts payable                          188,981          163,307
    Current maturities of long-term debt      19,016           17,212
    Insurance claims                          64,509           76,624
    Other current liabilities                 38,186           48,065
    Total current liabilities                 344,339          331,113
Long-term debt, excluding current maturities  95,125           115,130
Insurance claims                              21,896           27,494
Deferred income taxes and other non-current   38,607           34,135
liabilities
Shareholders' equity:
    Common stock, $0.01 par value, authorized
    160,000,000
    shares, issued 66,859,864 and 66,602,486  669              666
    shares
    Additional paid-in capital                173,976          165,712
    Retained earnings                         1,042,956        947,156
    Cost of 20,411,736 and 19,882,289 shares
    of common
    stock in treasury                         (839,517)        (813,684)
    Accumulated other comprehensive income    1,370            727
    Total shareholders' equity                379,454          300,577
Total liabilities and shareholders' equity   $   879,421   $   808,449



     Landstar System, Inc. and Subsidiary
     Supplemental Information
     (Unaudited)
                             Fiscal Year Ended            Fiscal Quarter Ended
                             December 29,  December 31,   December   December
                                                          29,        31,
                             2012          2011           2012       2011
Revenue generated through
(in thousands):
     Business Capacity       $ 1,385,046  $ 1,374,664   $        $  
     Owners ^(1)                                          327,937    353,808
     Truck Brokerage         1,197,876     1,052,605      311,344    305,483
     Carriers
     Rail intermodal         73,932        75,979         18,930     21,988
     Ocean and air cargo     77,898        90,424         17,671     22,163
     carriers
     Other ^(2)           58,668        55,410         15,374     14,080
                             $ 2,793,420  $ 2,649,082   $        $  
                                                          691,256    717,522
Number of loads:
     Business Capacity       806,350       808,210        190,150    206,220
     Owners ^(1)
     Truck Brokerage         680,970       613,790        170,610    171,860
     Carriers
     Rail intermodal         29,810        31,370         7,520      8,620
     Ocean and air cargo     15,390        16,440         3,630      4,290
     carriers
                             1,532,520     1,469,810      371,910    390,990
Revenue per load:
     Business Capacity       $         $          $      $    
     Owners ^(1)             1,718        1,701         1,725      1,716
     Truck Brokerage         1,759         1,715          1,825      1,778
     Carriers
     Rail intermodal         2,480         2,422          2,517      2,551
     Ocean and air cargo     5,062         5,500          4,868      5,166
     carriers
                                                          December   December
                                                          29,        31,
                                                          2012       2011
Truck Capacity Providers
     Business Capacity                                    8,010      7,871
     Owners ^(1) (3)
     Truck Brokerage
     Carriers:
      Approved and                                    20,922     19,223
     active ^(4)
      Approved                                        10,623     9,272
                                                          31,545     28,495
     Total available truck                                39,555     36,366
     capacity providers
Million Dollar Agents ^(5)                                504        504
(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 8,523 and 8,371 at
December 29, 2012 and December 31, 2011, respectively.
(4) Active refers to Truck Brokerage Carriers who have moved at
least one load in the past 180 days.
(5) Independent commission sales agents who on an annual basis generate $1
million or more of Landstar revenue.

SOURCE Landstar System, Inc.

Website: http://www.landstar.com
Contact: Jim Gattoni, Landstar System, Inc., www.landstar.com, +1-904-398-9400