Landstar System Reports First Quarter Revenue Increase of 15 Percent
and Earnings Per Diluted Share of $.26
and Earnings Per Diluted Share of $.26
JACKSONVILLE, Fla., April 15 /PRNewswire-FirstCall/ -- Landstar System, Inc. (Nasdaq: LSTR) reported revenue rose 15 percent to a record $421 million in the 2004 first quarter from $366 million in the 2003 first quarter. 2004 first quarter net income was $8.1 million, or $.26 per diluted share, which included a $7.6 million charge for the cost incurred to settle a previously disclosed severe accident which occurred at the beginning of the 2004 fiscal year. This charge, net of related income tax benefits, reduced 2004 first quarter net income by $4.9 million, or $.16 per diluted share. Net income for the 2003 first quarter was $10.2 million, or $.31 per diluted share. Operating margin was 3.3 percent in the 2004 first quarter, which was reduced 1.8 percent by the previously referred to accident, compared with 4.7 percent in the 2003 first quarter.
Landstar's carrier group of companies generated $322 million of revenue in the 2004 first quarter, compared with revenue of $290 million in the 2003 first quarter. In the 2004 and 2003 first quarters, the carrier group invoiced customers $8.3 million and $8.6 million, respectively, of fuel surcharges that were passed on 100 percent to business capacity owners and excluded from revenue. Landstar's multimodal services group of companies generated $92 million of revenue in the 2004 first quarter compared with $69 million of revenue in the 2003 first quarter.
"We are off to a great start," said Landstar Chairman and CEO Jeff Crowe. "Consolidated revenue increased by 15 percent to the highest first quarter revenue in Landstar history. This increase reflected strong growth at the carrier segment and a 34 percent increase in revenue at the multimodal segment. Compared to the 2003 first quarter, revenue generated through other third party truck capacity providers (truck brokerage) increased 33 percent, revenue hauled by Landstar BCOs increased 11 percent and revenue generated through rail, air and ocean carriers increased 10 percent," Crowe said.
"Trailing twelve-month return on average equity remained high at 33 percent and return on invested capital, net income divided by the sum of average equity plus average debt, was 22 percent. During the 2004 first quarter, we purchased 462,000 shares of common stock at a total cost of $16,407,000 and reduced debt by approximately $2 million," Crowe said. "The Company has the ability to purchase an additional 918,140 shares of its common stock under its authorized share repurchase program."
"I would anticipate revenue growth for the remainder of the 2004 fiscal year to be within a range of 8 to 12 percent. The current range of analysts' earnings estimates, as reported by FIRST CALL, for the second quarter of 2004 is $.47 to $.52 per diluted share and $1.74 to $1.83 per diluted share for the full 2004 fiscal year. I am currently very comfortable with both of those ranges," said Crowe.
Landstar will provide a live webcast of its quarterly earnings conference call this afternoon at 2 pm ET. To access the webcast, visit the company's website at www.landstar.com. Click on Investors and then the webcast icon.
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," "plans," "predicts," "may," "should," "will," the negative thereof and similar expressions, including any such expressions with respect to the level of comfort with analyst estimates, 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 accident claims; dependence on independent sales agents; dependence on third party capacity providers; disruptions or failures in our computer systems; a downturn in domestic 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 2003 fiscal year, described in the section Factors That May Affect Future Results and/or Forward-Looking Statements, 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.
Landstar System, Inc. is headquartered in Jacksonville, Florida. The Landstar carrier group comprised of Landstar Gemini, Inc., Landstar Inway, Inc., Landstar Ligon, Inc., Landstar Ranger, Inc. and Landstar Carrier Services, Inc. delivers excellence in safe and complete over-the-road transportation services. The Landstar multimodal group comprised of Landstar Express America, Inc. and Landstar Logistics, Inc. delivers excellence in safe, expedited, contract logistics and intermodal transportation services. All Landstar operating companies are certified to ISO 9001:2000 quality management system standards. Landstar System, Inc.'s common stock trades on the Nasdaq Stock Market(R) under the symbol LSTR.
(tables follow)
Landstar System, Inc.
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)
Thirteen Weeks Ended
March 27, March 29,
2004 2003
Revenue $421,026 $365,718
Investment income 303 324
Costs and expenses:
Purchased transportation 313,797 271,462
Commissions to agents 32,434 28,084
Other operating costs 9,894 9,231
Insurance and claims 20,706 10,628
Selling, general and
administrative 27,410 26,381
Depreciation and amortization 3,199 3,166
Total costs and expenses 407,440 348,952
Operating income 13,889 17,090
Interest and debt expense 768 770
Income before income taxes 13,121 16,320
Income taxes 5,019 6,161
Net income $8,102 $10,159
Earnings per common share (1) $0.27 $0.32
Diluted earnings per share (1) $0.26 $0.31
Average number of shares
outstanding:
Earnings per common share (1) 29,855,000 31,548,000
Diluted earnings per share (1) 30,968,000 32,852,000
(1) 2003 earnings per share amounts and average number of shares
outstanding have been restated to give retroactive effect to a two-
for-one stock split effected in the form of a 100% stock dividend
declared October 15, 2003.
Landstar System, Inc.
Selected Segment Information
(Dollars in thousands)
(Unaudited)
Thirteen Weeks Ended
March 27, March 29,
2004 2003
External Revenue
Carrier segment $321,608 $290,045
Multimodal segment 92,014 68,709
Insurance segment 7,404 6,964
External revenue $421,026 $365,718
Operating Income
Carrier segment $23,697 $18,496
Multimodal segment 2,739 1,924
Insurance segment (2,826) 5,435
Other (9,721) (8,765)
Operating income $13,889 $17,090
Landstar System, Inc.
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
(Unaudited)
March 27, December 27,
2004 2003
ASSETS
Current assets:
Cash and cash equivalents $48,476 $42,640
Short-term investments 29,311 30,890
Trade accounts receivable, less
allowance of $3,499 and $3,410 221,116 219,039
Other receivables, including
advances to independent
contractors, less allowance of
$5,223 and $4,077 18,837 13,196
Deferred income taxes and other
current assets 15,415 14,936
Total current assets 333,155 320,701
Operating property, less
accumulated depreciation
and amortization of $58,989
and $58,480 66,289 67,639
Goodwill 31,134 31,134
Other assets 15,836 18,983
Total assets $446,414 $438,457
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Cash overdraft $19,338 $20,523
Accounts payable 82,942 71,713
Current maturities of long-term
debt 79,641 9,434
Insurance claims 32,505 26,293
Other current liabilities 42,244 45,223
Total current liabilities 256,670 173,186
Long-term debt, excluding current
maturities 10,136 82,022
Insurance claims 27,265 27,282
Deferred income taxes 13,494 13,452
Shareholders' equity:
Common stock, $.01 par value,
authorized 50,000,000 and
20,000,000 shares, issued
32,048,102 and 31,816,860
shares 320 318
Additional paid-in capital 23,013 18,382
Retained earnings 232,470 224,368
Cost of 2,271,930 and 1,809,930
shares of common stock in
treasury (116,557) (100,150)
Accumulated other comprehensive
income 188 182
Notes receivable arising from
exercise of stock options (585) (585)
Total shareholders' equity 138,849 142,515
Total liabilities and shareholders'
equity $446,414 $438,457
Landstar System, Inc.
Supplemental Information
March 27, 2004
(Unaudited)
Thirteen Weeks Ended
March 27, March 29,
2004 2003
Carrier Segment
External revenue generated
through (in thousands):
Business Capacity Owners
(1) $272,231 $249,524
Other third party truck
capacity providers 49,377 40,521
$321,608 $290,045
Revenue per revenue mile $1.75 $1.74
Revenue per load $1,318 $1,199
Average length of haul (miles) 752 690
Number of loads 244,000 242,000
Multimodal Segment
External revenue generated
through (in thousands):
Business Capacity Owners
(1) (2) $15,413 $10,758
Other third party truck
capacity providers 53,484 36,949
Rail, Air and Ocean
Carriers 23,117 21,002
$92,014 $68,709
Revenue per load $1,373 $1,250
Number of loads 67,000 55,000
As of As of
March 27, March 29,
2004 2003
Capacity
Business Capacity Owners (1) (3) 7,637 7,272
Other third party truck capacity
providers:
Approved and active(4) 9,584 8,669
Approved 6,321 5,840
15,905 14,509
Total available truck capacity
providers 23,542 21,781
(1) Business Capacity Owners are independent contractors who provide
truck capacity to the Company under exclusive lease arrangements.
(2) Includes revenue generated through Carrier Segment Business Capacity
Owners.
(3) Trucks provided by business capacity owners were 8,583 and 8,267,
respectively.
(4) Active refers to other third party truck capacity providers who have
moved at least one load in the past 180 days.
SOURCE Landstar System, Inc.