Landstar System Reports First Quarter Diluted Earnings Per Share of $0.57

  Landstar System Reports First Quarter Diluted Earnings Per Share of $0.57

PR Newswire

JACKSONVILLE, Fla., April 25, 2013

JACKSONVILLE, Fla., April 25, 2013 /PRNewswire/ --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 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 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.

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)
                                       Thirteen Weeks Ended
                                       March 30,           March 31,
                                       2013                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    5,325               6,472
      gains on asset dispositions
      Insurance and claims             11,806              11,095
      Selling, general and             35,226              38,799
      administrative
      Depreciation and amortization    7,183               6,740
                  Total costs and      585,233             606,260
                  expenses
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, Inc. and Subsidiary

Consolidated Balance Sheets

(Dollars in thousands, except per share amounts)

(Unaudited)
                                                Mar. 30,        Dec. 29,
                                                2013            2012
ASSETS
Current assets:
   Cash and cash equivalents                    $            $   
                                                90,782         74,284
   Short-term investments                       48,974          35,528
   Trade accounts receivable, less allowance
          of $8,333 and $8,650                  378,931         408,787
   Other receivables, including advances to
   independent
          contractors, less allowance of $4,227 64,017          55,278
          and $4,657
   Deferred income taxes and other current      14,629          18,067
   assets
          Total current assets                  597,333         591,944
Operating property, less accumulated
depreciation
           and amortization of $161,007    161,459         158,953
          and $158,999
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     38,538          38,607
liabilities
Shareholders' equity:
   Common stock, $0.01 par value, authorized
   160,000,000
          shares, issued 66,973,215 and         670             669
          66,859,864 shares
   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
   common
          stock 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, Inc. and Subsidiary

     Supplemental Information

     (Unaudited)
                                        Thirteen Weeks Ended
                                        March 30,        March 31,
                                        2013             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)      $            $     1,653
                                        1,619
     Truck Brokerage Carriers           1,651            1,714
     Rail intermodal                    2,566            2,428
     Ocean and air cargo carriers       5,316            4,439
                                        March 30,        March 31,
                                        2013             2012
Truck Capacity Providers
     Business Capacity Owners ^(1)      7,851            7,825
     (3)
     Truck Brokerage Carriers:
      Approved and active ^(4)      20,571           18,946
      Approved                      11,200           9,382
                                        31,771           28,328
     Total available truck              39,622           36,153
     capacity providers
(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.





SOURCE Landstar System, Inc.

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