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Landstar System Reports 33 Percent Increase in Diluted Earnings Per Share to a First Quarter Record of $0.57
04/26/12
07:51 AM EDT

JACKSONVILLE, Fla., April 26, 2012 /PRNewswire via COMTEX/ --Landstar System, Inc. (NASDAQ: LSTR) reported 2012 record first quarter diluted earnings per share of $0.57 from net income of $26.8 million, compared to net income of $20.6 million, or $0.43 per diluted share, for the 2011 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 40.8 percent in the 2012 first quarter compared to 35.4 percent in the 2011 first quarter. Revenue for the 2012 first quarter was a first quarter record of $649.0 million compared to $572.0 million in the 2011 first quarter.

Truck transportation revenue hauled by independent business capacity owners ("BCOs") and truck brokerage carriers in the 2012 first quarter was $600.2 million, or 92 percent of revenue, compared to $520.6 million, or 91 percent of revenue, in the 2011 first quarter. In the 2012 and 2011 first quarters, the Company invoiced customers $71.1 million and $58.1 million, respectively, of fuel surcharges that were passed 100 percent to BCOs and excluded from revenue. Included in revenue hauled by third-party truck capacity providers in the 2012 and 2011 first quarters were $25.4 million and $19.3 million, respectively, of fuel surcharges invoiced to customers on revenue hauled by third-party truck brokerage carriers. Revenue hauled by rail, air and ocean cargo carriers was $35.1 million, or 5 percent of revenue, in the 2012 first quarter compared to $37.9 million, or 7 percent of revenue, in the 2011 first quarter. Transportation management fee revenue generated by the supply chain solutions companies was $4.9 million and $4.8 million in the 2012 and 2011 first quarters, respectively.

Trailing twelve-month return on average shareholder's equity was 41 percent and trailing twelve-month return on invested capital, net income divided by the sum of average equity plus average debt, was 29 percent. Landstar also announced that its Board of Directors has declared a quarterly dividend of $0.055 per share. The dividend is payable on June 1, 2012 to stockholders of record at the close of business on May 10, 2012. It is the intention of the Board of Directors to continue to pay a quarterly dividend.

"Landstar's 2012 first quarter performance was the best first quarter operating performance in Landstar history," said Landstar Chairman, President and CEO Henry Gerkens. "Revenue in the 2012 first quarter increased approximately $77 million over the 2011 first quarter, to record first quarter revenue of $649.0 million, gross profit in the 2012 first quarter increased 10 percent over the 2011 first quarter, to record first quarter gross profit of $105.9 million, operating income in the 2012 first quarter increased 27 percent over the 2011 first quarter, to record first quarter operating income of $43.2 million, and diluted earnings per share in the 2012 first quarter increased 33 percent over the 2011 first quarter, to record first quarter diluted earnings per share of $0.57. It was a great start to what we expect will be a very exciting year for Landstar. The record first quarter performance was driven by a 15 percent increase in truck transportation revenue in the 2012 first quarter over the 2011 first quarter, which was comprised of a 9 percent increase in the number of loads hauled on truck capacity and a 6 percent increase in revenue per load on truck transportation revenue."

Gerkens continued, "Demand for the Company's truck transportation services was strong in the 2012 first quarter. Overall, available truckload capacity continues to lag demand, leading to continued strength in pricing. I anticipate that this trend will continue as we enter the second quarter, which has historically been a seasonally stronger quarter. Assuming the current operating trends continue throughout the 2012 second quarter, I would expect 2012 second quarter diluted earnings per share to be within a range of $0.71 to $0.76."

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 2012 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 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 MarketĀ® 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 31,


March 26,







2012


2011










Revenue




$ 649,023


$ 571,986

Investment income



387


528










Costs and expenses:







Purchased transportation


492,922


431,378


Commissions to agents


50,232


44,171


Other operating costs



6,472


7,944


Insurance and claims



11,095


11,266


Selling, general and administrative


38,799


37,264


Depreciation and amortization


6,740


6,399












Total costs and expenses


606,260


538,422










Operating income



43,150


34,092

Interest and debt expense



724


828










Income before income taxes


42,426


33,264

Income taxes




15,579


12,707










Net income




26,847


20,557

Less: Net loss attributable to noncontrolling interest


-


(62)

Net income attributable to Landstar System,






Inc. and subsidiary



$ 26,847


$ 20,619










Earnings per common share attributable to






Landstar System, Inc. and subsidiary


$ 0.57


$ 0.43










Diluted earnings per share attributable to






Landstar System, Inc. and subsidiary


$ 0.57


$ 0.43










Average number of shares outstanding:






Earnings per common share


46,800,000


47,870,000


Diluted earnings per share


47,061,000


47,900,000










Dividends paid per common share


$ 0.055


$ 0.050


























Landstar System, Inc. and Subsidiary

Consolidated Balance Sheets

(Dollars in thousands, except per share amounts)

(Unaudited)




























Mar. 31,


Dec. 31,








2012


2011

ASSETS







Current assets:








Cash and cash equivalents



$ 53,614


$ 80,900


Short-term investments



31,584


27,944


Trade accounts receivable, less allowance





of $6,896 and $6,591



377,985


368,377


Other receivables, including advances to independent





contractors, less allowance of $5,365 and $5,384

60,241


53,263


Deferred income taxes and other current assets

13,596


21,308


Total current assets



537,020


551,792











Operating property, less accumulated depreciation





and amortization of $149,465 and $145,804

144,732


142,146

Goodwill





57,470


57,470

Other assets




72,504


57,041

Total assets




$ 811,726


$ 808,449











LIABILITIES AND SHAREHOLDERS' EQUITY




Current liabilities:








Cash overdraft




$ 22,751


$ 25,905


Accounts payable



165,851


163,307


Current maturities of long-term debt


15,709


17,212


Insurance claims



72,529


76,624


Other current liabilities



43,497


48,065



Total current liabilities



320,337


331,113











Long-term debt, excluding current maturities

99,524


115,130

Insurance claims




25,047


27,494

Deferred income taxes and other non-current liabilities

38,470


34,135











Shareholders' equity:







Common stock, $0.01 par value, authorized 160,000,000





shares, issued 66,833,233 and 66,602,486 shares

668


666


Additional paid-in capital



168,829


165,712


Retained earnings



971,429


947,156


Cost of 19,882,431 and 19,882,289 shares of common





stock in treasury



(813,691)


(813,684)


Accumulated other comprehensive income

1,113


727


Total shareholders' equity



328,348


300,577

Total liabilities and shareholders' equity

$ 811,726


$ 808,449













Landstar System, Inc. and Subsidiary


Supplemental Information


(Unaudited)













Thirteen Weeks Ended



March 31,


March 26,



2012


2011

Revenue generated through (in thousands):










Business Capacity Owners (1)

$ 329,362


$ 306,894


Truck Brokerage Carriers

270,842


213,723


Rail intermodal

17,382


16,465


Ocean and air cargo carriers

17,669


21,393


Other (2)

13,768


13,511



$ 649,023


$ 571,986











Number of loads:










Business Capacity Owners (1)

199,200


192,040


Truck Brokerage Carriers

158,030


135,740


Rail intermodal

7,160


7,260


Ocean and air cargo carriers

3,980


3,780



368,370


338,820











Revenue per load:










Business Capacity Owners (1)

$ 1,653


$ 1,598


Truck Brokerage Carriers

1,714


1,575


Rail intermodal

2,428


2,268


Ocean and air cargo carriers

4,439


5,660













March 31,


March 26,



2012


2011

Truck Capacity Providers










Business Capacity Owners (1) (3)

7,825


7,697


Truck Brokerage Carriers:





Approved and active (4)

18,946


16,773


Approved

9,382


9,347



28,328


26,120


Total available truck capacity providers

36,153


33,817





















(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 8,350 and 8,226 at March 31, 2012 and March 26, 2011, respectively.






(4) Active refers to Truck Brokerage Carriers who have moved at least one load in the past 180 days.











SOURCE Landstar System, Inc.