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) October 19, 2016
LANDSTAR SYSTEM, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 021238 | 06-1313069 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer 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 October 19, 2016, Landstar System, Inc. issued a press release announcing results for the third quarter of fiscal 2016. A copy of the press release is attached hereto as Exhibit 99.1.
The information contained in Item 7.01 concerning the presentation to Landstar investors is hereby incorporated into this Item 2.02 by reference.
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 7.01 Regulation FD Disclosure
A slide presentation, dated October 19, 2016, is attached hereto as Exhibit 99.2 and is incorporated herein by reference. The slide presentation provides information that may be referred to by the Company on its conference call with investors scheduled to occur on October 20, 2016 in connection with the Company’s release of results for the third quarter of fiscal 2016.
The information furnished under Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.2 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 October 19, 2016 of Landstar System, Inc. | |
| 99.2 | Slide Presentation dated October 19, 2016 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: October 19, 2016 |
By: | /s/ L. Kevin Stout | ||
| Name: | L. Kevin Stout | |||
| Title: | Vice President and Chief Financial Officer | |||
Exhibit 99.1
| For Immediate Release | Contact: Kevin Stout | |
| Landstar System, Inc. | ||
| www.landstar.com | ||
| October 19, 2016 | 904-398-9400 |
LANDSTAR SYSTEM REPORTS THIRD QUARTER REVENUE OF $788 MILLION
AND DILUTED EARNINGS PER SHARE OF $0.86
Jacksonville, FL – Landstar System, Inc. (NASDAQ: LSTR) reported third quarter diluted earnings per share of $0.86 on revenue of $788 million in the 2016 third quarter. Landstar reported diluted earnings per share of $0.90 on revenue of $842 million in the 2015 third quarter. Gross profit (defined as revenue less the cost of purchased transportation and commissions to agents) was $121.8 million in the 2016 third quarter compared to $126.8 million in the 2015 third quarter. Operating margin, representing operating income divided by gross profit, was 48.0 percent in the 2016 third quarter.
Truck transportation revenue hauled by independent business capacity owners (“BCOs”) and truck brokerage carriers in the 2016 third quarter was $732.9 million, or 93 percent of revenue, compared to $779.8 million, or 93 percent of revenue, in the 2015 third quarter. Truckload transportation revenue hauled via van equipment in the 2016 third quarter was $465.8 million compared to $466.2 million in the 2015 third quarter. Truckload transportation revenue hauled via unsided/platform equipment in the 2016 third quarter was $248.9 million compared to $293.3 million in the 2015 third quarter. Revenue hauled by rail, air and ocean cargo carriers was $43.4 million, or 6 percent of revenue, in the 2016 third quarter compared to $50.5 million, or 6 percent of revenue, in the 2015 third quarter.
Trailing twelve-month return on average shareholders’ equity was 28 percent and trailing twelve-month return on invested capital, net income divided by the sum of average equity plus average debt, was 22 percent. During the 2016 third quarter,
LANDSTAR SYSTEM/2
Landstar purchased 350,000 shares of its common stock at an aggregate cost of $24.0 million bringing the total number of common shares purchased during the thirty-nine weeks ended September 24, 2016 to 773,000 shares at an aggregate cost of $50.5 million. Currently, there are approximately 1,036,000 shares of the Company’s common stock available for purchase under Landstar’s authorized share purchase program. As of September 24, 2016, the Company had $227 million in cash and short term investments and $214 million available for borrowings under the Company’s senior credit facility.
In addition, Landstar announced today that its Board of Directors has declared a quarterly dividend of $0.09 per share payable on December 2, 2016, to stockholders of record as of the close of business on November 8, 2016. It is currently the intention of the Board to pay dividends on a quarterly basis going forward.
Commenting on Landstar’s 2016 third quarter, Landstar’s President and CEO Jim Gattoni said, “Diluted earnings per share was $0.86 in the 2016 third quarter, the second highest third quarter diluted earnings per share in Landstar history, second only to 2015 third quarter record diluted earnings per share of $0.90. Revenue was $788 million with gross profit of $121.8 million in the 2016 third quarter, the second highest third quarter gross profit in Landstar history, second only to 2015 third quarter record gross profit of $126.8 million. 2015 third quarter revenue was a record $842 million and included $35 million of revenue from a project on behalf of a customer in the automotive sector. That project was completed at the end of 2015. Overall, we continued to have difficult year-over-year comparisons to 2015 driven mostly by tougher overall industry conditions in 2016 and revenue from the previously referenced automotive project in 2015.”
Gattoni continued, “Landstar executed well when considering the softness in U.S. manufacturing and more readily available truck capacity in 2016. Given this environment, Landstar managed a 4 percent increase in the number of loads hauled via truck in the 2016 third quarter over the 2015 third quarter, when excluding approximately 20,000 truckloads hauled via unsided/platform equipment for the automotive project in the 2015 third quarter.
LANDSTAR SYSTEM/3
Overall, the number of loads hauled via truck in the 2016 third quarter decreased 1 percent from the 2015 third quarter. This overall decrease in volume was driven by a 6 percent increase in the number of loads hauled via van equipment, offset by a 14 percent decrease in the number of loads hauled via unsided/platform equipment. Excluding the loadings related to the automotive project, Landstar experienced a 1 percent increase in the number of loads hauled via unsided/platform equipment. Landstar also achieved a 4 percent increase in the number of loads hauled via railroads, ocean cargo carriers and air cargo carriers in the 2016 third quarter over the 2015 third quarter.”
Gattoni further continued, “Revenue per load on loads hauled via truck in the 2016 third quarter was 5 percent below the 2015 third quarter. This represents a sequential improvement, however, as revenue per load on loads hauled via truck in the 2016 first quarter compared to the 2015 first quarter and in the 2016 second quarter compared to the 2015 second quarter decreased 10 percent and 9 percent, respectively. The reduction in the percentage shortfall in revenue per load on loads hauled via truck in the 2016 third quarter was due to an increase in revenue per load in the 2016 third quarter compared to the 2016 second quarter that was slightly ahead of recent second quarter to third quarter trends, coupled with weaker revenue per load in the 2015 third quarter as compared to the first half of 2015. Additionally, the average cost of a gallon of diesel fuel was approximately 10 percent lower during the 2016 third quarter compared to the 2015 third quarter putting additional pressure on pricing, especially as it related to loads hauled via truck brokerage carriers. The softer pricing environment contributed to the decline in the 2016 third quarter operating margin, which was 48.0 percent, compared to 50.4 percent in the 2015 third quarter.”
Commenting on Landstar’s 2016 fourth quarter, Gattoni stated, “I expect the slow growth environment we have experienced during the first three quarters of 2016 to continue through the 2016 fourth quarter. As was the case in our 2016 second and third quarters, fourth quarter 2016 over fourth quarter 2015 revenue comparisons will include the effects of revenue derived from the automotive project previously referenced. The Company’s 2015 fourth quarter included approximately $38 million in revenue from
LANDSTAR SYSTEM/4
approximately 19,000 loads hauled via truck related to that project. Through the first few weeks of October, we have experienced the normal seasonal pattern for revenue per load on loads hauled via truck and, therefore, I anticipate revenue per load on loads hauled via truck to be below prior year’s fourth quarter in a mid-single digit range, consistent with the 2016 third quarter compared to the 2015 third quarter. Landstar’s fiscal year ends on the last Saturday of the calendar year, which this year is December 31, 2016, resulting in fiscal year 2016 representing a 53 week period. As such, the Company’s 2016 fourth quarter includes an extra week of operations. The number of loads hauled via truck during the first few weeks of October is trending slightly ahead of the historical third quarter to fourth quarter trend. Assuming that trend continues, and given the extra week in the 2016 fourth quarter, I would expect the number of loads hauled via truck in the 2016 fourth quarter to exceed the 2015 fourth quarter in a low-single digit range. As such, I expect 2016 fourth quarter revenue to be in a range of $800 million to $850 million. Assuming insurance and claims costs in the 2016 fourth quarter are approximately 3.2 percent of BCO revenue, representing average insurance and claims costs as a percent of BCO revenue over the past 5 years, I would expect diluted earnings per share to be in a range of $0.85 to $0.90 in the 2016 fourth quarter.”
Landstar will provide a live webcast of its quarterly earnings conference call tomorrow morning at 8:00 a.m. 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 Third Quarter 2016 Earnings Release Conference Call.”
This earnings announcement, as well as an accompanying slide presentation, is available through the Company’s website at http://investor.landstar.com under “Presentations” and on a Form 8-K filed with the Securities and Exchange Commission.
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 and expectations. Terms such as “anticipates,” “believes,” “estimates,” “intention,” “expects,” “plans,” “predicts,” “may,” “should,” “could,” “will,” the negative
LANDSTAR SYSTEM/5
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 the Company’s computer systems; cyber and other information security incidents; dependence on key vendors; changes in fuel taxes; status of independent contractors; regulatory and legislative changes; catastrophic loss of a Company facility; intellectual property; unclaimed property; regulations focused on diesel emissions and other air quality matters; and other operational, financial or legal risks or uncertainties detailed in Landstar’s Form 10K for the 2015 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 the Company undertakes no obligation to publicly update or revise any forward-looking statements.
About Landstar:
Landstar System, Inc. is a worldwide, asset-light provider of integrated transportation management solutions delivering safe, specialized transportation logistics services to a broad range of customers utilizing a network of agents, third-party capacity providers and employees. All Landstar transportation services companies are certified to ISO 9001:2008 quality management system standards and RC14001:2013 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/6
Landstar System, Inc. and Subsidiary
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)
| Thirty Nine Weeks Ended | Thirteen Weeks Ended | |||||||||||||||
| September 24, 2016 |
September 26, 2015 |
September 24, 2016 |
September 26, 2015 |
|||||||||||||
| Revenue |
$ | 2,274,805 | $ | 2,472,489 | $ | 787,938 | $ | 841,726 | ||||||||
| Investment income |
1,100 | 1,043 | 357 | 350 | ||||||||||||
| Costs and expenses: |
||||||||||||||||
| Purchased transportation |
1,730,745 | 1,900,313 | 601,002 | 645,583 | ||||||||||||
| Commissions to agents |
189,075 | 199,113 | 65,144 | 69,297 | ||||||||||||
| Other operating costs, net of gains on asset sales/dispositions |
21,484 | 24,388 | 7,492 | 8,718 | ||||||||||||
| Insurance and claims |
42,795 | 37,610 | 12,488 | 10,502 | ||||||||||||
| Selling, general and administrative |
106,211 | 111,797 | 34,692 | 36,811 | ||||||||||||
| Depreciation and amortization |
26,109 | 21,253 | 9,016 | 7,185 | ||||||||||||
|
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|
|
|
|
|
|
|
|||||||||
| Total costs and expenses |
2,116,419 | 2,294,474 | 729,834 | 778,096 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Operating income |
159,486 | 179,058 | 58,461 | 63,980 | ||||||||||||
| Interest and debt expense |
2,725 | 2,208 | 948 | 714 | ||||||||||||
|
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|
|
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|
|
|
|
|||||||||
| Income before income taxes |
156,761 | 176,850 | 57,513 | 63,266 | ||||||||||||
| Income taxes |
58,985 | 67,016 | 21,235 | 23,918 | ||||||||||||
|
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|
|
|
|
|
|
|||||||||
| Net income |
$ | 97,776 | $ | 109,834 | $ | 36,278 | $ | 39,348 | ||||||||
|
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|
|
|
|||||||||
| Earnings per common share |
$ | 2.32 | $ | 2.50 | $ | 0.86 | $ | 0.91 | ||||||||
|
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|
|
|
|
|
|||||||||
| Diluted earnings per share |
$ | 2.31 | $ | 2.49 | $ | 0.86 | $ | 0.90 | ||||||||
|
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|
|
|
|||||||||
| Average number of shares outstanding: |
||||||||||||||||
| Earnings per common share |
42,223,000 | 43,975,000 | 42,039,000 | 43,446,000 | ||||||||||||
|
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|
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|
|
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|
|||||||||
| Diluted earnings per share |
42,341,000 | 44,134,000 | 42,170,000 | 43,607,000 | ||||||||||||
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|||||||||
| Dividends per common share |
$ | 0.25 | $ | 0.22 | $ | 0.09 | $ | 0.08 | ||||||||
|
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|
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|
|||||||||
LANDSTAR SYSTEM/7
Landstar System, Inc. and Subsidiary
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
(Unaudited)
| September 24, 2016 |
December 26, 2015 |
|||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 170,805 | $ | 114,520 | ||||
| Short-term investments |
56,679 | 48,823 | ||||||
| Trade accounts receivable, less allowance of $4,881 and $4,327 |
409,047 | 462,699 | ||||||
| Other receivables, including advances to independent contractors, less allowance of $4,871 and $4,143 |
17,091 | 18,472 | ||||||
| Other current assets |
15,188 | 11,604 | ||||||
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|
|||||
| Total current assets |
668,810 | 656,118 | ||||||
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|||||
| Operating property, less accumulated depreciation and amortization of $187,566 and $182,591 |
261,943 | 225,927 | ||||||
| Goodwill |
31,134 | 31,134 | ||||||
| Other assets |
65,871 | 78,339 | ||||||
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|||||
| Total assets |
$ | 1,027,758 | $ | 991,518 | ||||
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| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Cash overdraft |
$ | 27,725 | $ | 35,609 | ||||
| Accounts payable |
201,872 | 223,709 | ||||||
| Current maturities of long-term debt |
44,784 | 42,499 | ||||||
| Insurance claims |
27,941 | 19,757 | ||||||
| Other current liabilities |
48,027 | 47,963 | ||||||
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|||||
| Total current liabilities |
350,349 | 369,537 | ||||||
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|||||
| Long-term debt, excluding current maturities |
90,817 | 81,793 | ||||||
| Insurance claims |
23,765 | 21,477 | ||||||
| Deferred income taxes and other non-current liabilities |
56,097 | 52,474 | ||||||
| Shareholders’ equity: |
||||||||
| Common stock, $0.01 par value, authorized 160,000,000 shares, issued 67,522,281 and 67,391,616 shares |
675 | 674 | ||||||
| Additional paid-in capital |
198,736 | 195,841 | ||||||
| Retained earnings |
1,477,179 | 1,389,975 | ||||||
| Cost of 25,747,002 and 24,972,079 shares of common stock in treasury |
(1,167,391 | ) | (1,116,765 | ) | ||||
| Accumulated other comprehensive loss |
(2,469 | ) | (3,488 | ) | ||||
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| Total shareholders’ equity |
506,730 | 466,237 | ||||||
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| Total liabilities and shareholders’ equity |
$ | 1,027,758 | $ | 991,518 | ||||
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LANDSTAR SYSTEM/8
Landstar System, Inc. and Subsidiary
Supplemental Information
(Unaudited)
| Thirty Nine Weeks Ended | Thirteen Weeks Ended | |||||||||||||||
| September 24, 2016 |
September 26, 2015 |
September 24, 2016 |
September 26, 2015 |
|||||||||||||
| Revenue generated through (in thousands): |
||||||||||||||||
| Truck transportation |
||||||||||||||||
| Truckload: |
||||||||||||||||
| Van equipment |
$ | 1,351,980 | $ | 1,412,824 | $ | 465,785 | $ | 466,226 | ||||||||
| Unsided/platform equipment |
700,369 | 823,767 | 248,939 | 293,252 | ||||||||||||
| Less-than-truckload |
54,066 | 61,297 | 18,139 | 20,341 | ||||||||||||
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| Total truck transportation |
2,106,415 | 2,297,888 | 732,863 | 779,819 | ||||||||||||
| Rail intermodal |
76,987 | 76,688 | 24,650 | 27,166 | ||||||||||||
| Ocean and air cargo carriers |
56,500 | 64,725 | 18,790 | 23,315 | ||||||||||||
| Other (1) |
34,903 | 33,188 | 11,635 | 11,426 | ||||||||||||
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| $ | 2,274,805 | $ | 2,472,489 | $ | 787,938 | $ | 841,726 | |||||||||
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| Revenue on loads hauled via BCO Independent Contractors (2) included in total truck transportation |
$ | 1,086,848 | $ | 1,140,870 | $ | 379,196 | $ | 388,840 | ||||||||
| Number of loads: |
||||||||||||||||
| Truck transportation |
||||||||||||||||
| Truckload: |
||||||||||||||||
| Van equipment |
847,208 | 820,223 | 291,089 | 275,509 | ||||||||||||
| Unsided/platform equipment |
331,226 | 359,769 | 112,192 | 130,317 | ||||||||||||
| Less-than-truckload |
84,316 | 83,838 | 28,589 | 28,934 | ||||||||||||
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|||||||||
| Total truck transportation |
1,262,750 | 1,263,830 | 431,870 | 434,760 | ||||||||||||
| Rail intermodal |
36,120 | 32,350 | 11,940 | 11,670 | ||||||||||||
| Ocean and air cargo carriers |
14,910 | 13,320 | 5,130 | 4,700 | ||||||||||||
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|||||||||
| 1,313,780 | 1,309,500 | 448,940 | 451,130 | |||||||||||||
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| Loads hauled via BCO Independent Contractors (2) included in total truck transportation |
630,880 | 616,410 | 216,220 | 210,180 | ||||||||||||
| Revenue per load: |
||||||||||||||||
| Truck transportation |
||||||||||||||||
| Truckload: |
||||||||||||||||
| Van equipment |
$ | 1,596 | $ | 1,722 | $ | 1,600 | $ | 1,692 | ||||||||
| Unsided/platform equipment |
2,114 | 2,290 | 2,219 | 2,250 | ||||||||||||
| Less-than-truckload |
641 | 731 | 634 | 703 | ||||||||||||
| Total truck transportation |
1,668 | 1,818 | 1,697 | 1,794 | ||||||||||||
| Rail intermodal |
2,131 | 2,371 | 2,064 | 2,328 | ||||||||||||
| Ocean and air cargo carriers |
3,789 | 4,859 | 3,663 | 4,961 | ||||||||||||
| Revenue per load on loads hauled via BCO Independent Contractors (2) |
$ | 1,723 | $ | 1,851 | $ | 1,754 | $ | 1,850 | ||||||||
| Revenue by capacity type (as a % of total revenue); |
||||||||||||||||
| Truck capacity providers: |
||||||||||||||||
| BCO Independent Contractors (2) |
48 | % | 46 | % | 48 | % | 46 | % | ||||||||
| Truck Brokerage Carriers |
45 | % | 47 | % | 45 | % | 46 | % | ||||||||
| Rail intermodal |
3 | % | 3 | % | 3 | % | 3 | % | ||||||||
| Ocean and air cargo carriers |
2 | % | 3 | % | 2 | % | 3 | % | ||||||||
| Other |
2 | % | 1 | % | 1 | % | 1 | % | ||||||||
| September 24, | September 26, | |||||||||||||||
| 2016 | 2015 | |||||||||||||||
| Truck Capacity Providers |
||||||||||||||||
| BCO Independent Contractors (2) |
8,889 | 8,869 | ||||||||||||||
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|||||||||||||
| Truck Brokerage Carriers: |
||||||||||||||||
| Approved and active (3) |
30,860 | 29,127 | ||||||||||||||
| Other approved |
15,691 | 13,813 | ||||||||||||||
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|||||||||||||
| 46,551 | 42,940 | |||||||||||||||
|
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|||||||||||||
| Total available truck capacity providers |
55,440 | 51,809 | ||||||||||||||
|
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|
|||||||||||||
| Trucks provided by BCO Independent Contractors (2) |
9,510 | 9,441 | ||||||||||||||
| (1) | Includes primarily premium revenue generated by the insurance segment. |
| (2) | BCO Independent Contractors are independent contractors who provide truck capacity to the Company under exclusive lease arrangements. |
| (3) | Active refers to Truck Brokerage Carriers who have moved at least one load in the 180 days immediately preceeding the fiscal quarter end. |
October 19, 2016 Landstar System, Inc. Earnings Conference Call Third Quarter 2016 Date Published: 10/19/2016 Exhibit 99.2
The following is a “safe harbor” statement under the Private Securities Litigation Reform Act of 1995. Statements made during this presentation that are not based on historical facts are “forward looking statements.” During this presentation, I may make certain statements, containing forward-looking statements, such as statements which relate to Landstar’s business objectives, plans, strategies and expectations. Such statements are by nature subject to uncertainties and risks, including but not limited to: the operational, financial and legal risks detailed in Landstar’s Form 10-K for the 2015 fiscal year, described in the section 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. Date Published: 10/19/2016
Model Definition Landstar is a worldwide, asset-light provider of integrated transportation management solutions delivering safe, specialized transportation services to a broad range of customers utilizing a network of agents, third party capacity providers and employees. Date Published: 10/19/2016
The Network Date Published: 10/19/2016 2015 Results $3.3 billion in revenue 1.8 million loadings 512 million dollar agents 9,500 BCO trucks (2015 year-end) 44,000 Carriers (2015 year-end) 14,000 Trailers (2015 year-end)
Transportation Management Services Percentage of Revenue 3Q15 3Q16 Truck Transportation Truckload Van equipment 55% 59% Unsided/platform equipment 35% 32% Less-than-truckload 2% 2% Rail intermodal 3% 3% Ocean and air cargo 3% 2% Date Published: 10/19/2016
Percentage change in rate is calculated on a revenue per load basis. Percentage change in volume is calculated on the number of loads hauled. Date Published: 10/19/2016 Revenue ($’s in thousands) Quarter to Date Year to Date Qtr over Prior Year Qtr Rate (1) Volume (2) Change Truck Revenue -5.4% -0.7% -0.06 Rail Intermodal Revenue -0.113 2.3% -9.3% Ocean/Air Revenue -0.26200000000000001 9.0999999999999998 -0.19400000000000001 Insurance Premiums NA NA 1.9% Total Revenue -6.4% Year over Prior Year Rate (1) Volume (2) Change Truck Revenue -8.3% -1 -8.3% Rail Intermodal Revenue -0.10100000000000001 0.11700000000000001 .4% Ocean/Air Revenue -0.22 0.11899999999999999 -0.127 Insurance Premiums NA NA 5.4% Total Revenue -0.08
Van Equipment Unsided/Platform Equipment Date Published: 10/19/2016 Truckload Loadings and Revenue per Load (Excludes LTL)
Industries Served As a Percentage of Revenue Q3 Q3 2015 2016 Quarter over Prior Year Quarter Growth Consumer Durables 18.7 20.8 4% Machinery 14.3 14.6 -4% Automotive 12.4 8.9 -33% Building Products 8.4 9.0 1% Metals 6.8 6.7 -9% AA&E, Hazmat 7.4 7.9 1% Foodstuffs 5.3 5.5 -3% Energy 4.5 3.7 -24% Other 22.2 22.9 -3% Transportation Revenue 100.0 100.0 -7% Date Published: 10/19/2016
15.1% 15.6% Gross profit equals revenue less the cost of purchased transportation and commissions to agents. Gross profit margin equals gross profit divided by revenue. Revenue on transactions with a fixed gross profit margin was 55% and 56% of revenue in the 2015 and 2016 year-to-date periods, respectively, and 55% of revenue in both the 2015 and 2016 third quarters. Date Published: 10/19/2016 Gross Profit (1) and Gross Profit Margin (2) ($’s in thousands) Quarter to Date Year to Date 15.1% 15.5% 15.1% 15.6% 3rd Qtr (3) Changes in gross profit margin % 2015 Period 15.1 Revenue - fixed gp margin 0.2 Revenue - variable gp margin 0.1 Change in mix and other 0.1 2016 Period 15.5 3rd Qtr YTD (3) Changes in gross profit margin % 2015 Period 15.1 Revenue - fixed gp margin 0.2 Revenue - variable gp margin 0.2 Change in mix and other 0.1 2016 Period 15.6
50.5% 43.9% Operating margin equals operating income divided by gross profit. Date Published: 10/19/2016 Operating Income and Operating Margin (1) ($’s in thousands) Quarter to Date Year to Date 50.4% 48.0% 48.0% 44.9% 3rd Qtr Changes in operating margin % 2015 Period 50.4 Other operating costs 0.7 Insurance and claims -1.9 SG&A 0.5 Depreciation and amortization -1.7 2016 Period 48 3rd Qtr YTD Changes in operating margin % 2015 Period 48 Other operating costs 0.5 Insurance and claims -2 SG&A 0.1 Depreciation and amortization -1.7 2016 Period 44.9
Date Published: 10/19/2016 Truck Capacity Data (All information other than fuel surcharges is provided as of the end of the period) KEY INCOME STATEMENT DATA ($ in Millions) % of 2013 % of 2013 % of 2012 Rev/GP Plan Rev/GP Proj Rev/GP QTR YTD QTR Sep 26, Dec 26, Sep 24, External Revenue $8,907 #REF! #REF! 2015 2015 2016 Purchased Transportation #REF! #REF! #REF! #REF! #REF! #REF! BCO Independent Contractors 8,869 8,907 8,889 Truck Brokerage Carriers: Interest and Debt Expense #REF! #REF! #REF! Approved and Active (1) 29,127 29,728 30,860 Income Before Income Taxes #REF! #REF! #REF! Other Approved 13,813 14,715 15,691 42,940 44,443 46,551 Income Taxes #REF! #REF! #REF! Total Available Truck Capacity Providers 51,809 53,350 55,440 Trucks Provided by BCO Independent Contractors 9,441 9,500 9,510 Fuel Surcharges - BCO Loadings only ($ in thousands)(2) $43,165 $,174,661 $34,702 (1) Active refers to truck brokerage carriers who hauled freight for Landstar in the 180 day period immediately preceding the period end. (2) Fuel surcharges billed to customers during the applicable period on freight hauled by BCO Independent Contractors are paid 100% to the BCO and excluded from revenue and the cost of purchased transportation.
(1) Net cash is defined as cash and cash equivalents plus short term investments less outstanding debt. Date Published: 10/19/2016 Key Balance Sheet and Cash Flow Statistics ($’s in thousands) % of 2013 % of 2013 % of 2012 Rev/GP Plan Rev/GP Proj Rev/GP YTD YTD Sep 26, Sep 24, External Revenue $0.21 #REF! #REF! 2015 2016 Purchased Transportation #REF! #REF! #REF! #REF! #REF! #REF! Balance sheet (period end amounts): Debt to Capital 0.17 0.21 Net Cash (1) $61,636 $91,883 Cash flow: Cash flow from operations $,148,084 $,171,297 Capital expenditures $3,798 $17,833 Income Before Income Taxes #REF! #REF! #REF! Share repurchases $,107,214 $50,516 Dividends paid $54,467 $10,572 Returns: TTM Return on Equity 0.31 0.28000000000000003 TTM Return on Invested Capital 0.25 0.22 TTM Return on Assets 0.15 0.14000000000000001
Free Cash Flow / Share Purchases (In Thousands) Free cash flow is defined as cash flow from operations less capital expenditures, each set forth on the prior slide. YTD through September Date Published: 10/19/2016 Third quarter 2016 YTD (000's) Free cash flow (1) $,153,464 Share purchases $50,516 Ending common share count 41,775
Date Published: 10/19/2016