Landstar System Reports First Quarter Revenue Increase of 19 Percent and Record First Quarter Earnings Per Diluted Share of $.29
JACKSONVILLE, Fla., April 14 /PRNewswire-FirstCall/ -- Landstar System, Inc. (Nasdaq: LSTR) reported revenue rose 19 percent to a record $502 million in the 2005 first quarter from $421 million in the 2004 first quarter. Net income for the 2005 first quarter was a record $17.9 million, or $.29 per diluted share, compared to net income of $8.1 million, or $.13 per diluted share, for the 2004 first quarter. Included in the 2004 first quarter was $7.6 million of costs to settle one severe accident. This charge, net of related income tax benefits, reduced net income by $4.9 million, or $.08 per diluted share. Operating margin was 6.0 percent in the 2005 first quarter compared to 3.3 percent in the 2004 first quarter, which was reduced 1.8 percent by the previously referred to accident.
Landstar's carrier group of companies generated $371 million of revenue in the 2005 first quarter, compared with revenue of $322 million in the 2004 first quarter. In the 2005 and 2004 first quarters, the carrier group invoiced customers $20.6 million and $8.3 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 $124 million of revenue in the 2005 first quarter compared with $92 million of revenue in the 2004 first quarter.
"Landstar's 2005 first quarter's performance was the best first quarter operating performance in its history," said Landstar President and CEO Henry Gerkens. "Consolidated revenue increased by 19 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. Additionally, revenue generated through other third party truck capacity providers (truck brokerage) increased 63 percent over the 2004 first quarter. The significant increase in utilization of other third party capacity, combined with the outstanding improvement in operating margin, clearly demonstrate the ability of the Landstar system to source capacity and profitably satisfy customer demand," Gerkens said.
"Trailing twelve-month return on average equity remained high at 45 percent and return on invested capital, net income divided by the sum of average equity plus average debt, was 30 percent. During the 2005 first quarter, we purchased 992,418 shares of common stock at a total cost of $34,947,000," Gerkens said. "The Company has the ability to purchase an additional 405,862 shares of its common stock under its authorized share repurchase program."
"Based upon the current operating environment, I would anticipate revenue growth for the 2005 second quarter to be within a range of 14 to 18 percent compared to the 2004 second quarter. The current range of analysts' earnings estimates, as reported by FIRST CALL, for the second quarter of 2005 is $.31 to $.36 per diluted share. I am comfortable with that range and currently anticipate earnings to be in the middle to upper end of the range," said Gerkens.
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 http://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 2004 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, intermodal and ocean 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 26, March 27,
2005 2004
Revenue $502,212 $421,026
Investment income 539 303
Costs and expenses:
Purchased transportation 377,578 313,797
Commissions to agents 39,126 32,434
Other operating costs 8,698 9,894
Insurance and claims 13,125 20,706
Selling, general and administrative 30,303 27,410
Depreciation and amortization 3,962 3,199
Total costs and expenses 472,792 407,440
Operating income 29,959 13,889
Interest and debt expense 937 768
Income before income taxes 29,022 13,121
Income taxes 11,144 5,019
Net income $17,878 $8,102
Earnings per common share (1) $0.30 $0.14
Diluted earnings per share (1) $0.29 $0.13
Average number of shares outstanding:
Earnings per common share (1) 60,396,000 59,709,000
Diluted earnings per share (1) 61,881,000 61,935,000
(1) All earnings per share amounts and average number of shares
outstanding have been adjusted to give retroactive effect to a two-for-
one stock split effected in the form of a 100% stock dividend declared
December 9, 2004.
Landstar System, Inc.
Selected Segment Information
(Dollars in thousands)
(Unaudited)
Thirteen Weeks Ended
March 26, March 27,
2005 2004
External Revenue
Carrier segment $371,043 $321,608
Multimodal segment 123,696 92,014
Insurance segment 7,473 7,404
External revenue $502,212 $421,026
Operating Income
Carrier segment $31,358 $23,697
Multimodal segment 5,351 2,739
Insurance segment 4,092 (2,826)
Other (10,842) (9,721)
Operating income $29,959 $13,889
Landstar System, Inc.
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
(Unaudited)
March 26, December 25,
2005 2004
ASSETS
Current assets:
Cash and cash equivalents $73,118 $61,684
Short-term investments 21,683 21,942
Trade accounts receivable, less
allowance of $4,420 and $4,021 294,875 338,774
Other receivables, including
advances to independent
contractors, less allowance of
$4,347 and $4,245 22,820 13,929
Deferred income taxes and other
current assets 11,036 13,503
Total current assets 423,532 449,832
Operating property, less accumulated
depreciation and amortization of
$66,024 and $65,315 76,574 76,834
Goodwill 31,134 31,134
Other assets 25,891 26,712
Total assets $557,131 $584,512
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Cash overdraft $24,270 $23,547
Accounts payable 99,903 120,197
Current maturities of long-term debt 8,464 8,797
Insurance claims 33,797 32,612
Other current liabilities 53,359 54,926
Total current liabilities 219,793 240,079
Long-term debt, excluding current
maturities 87,168 83,293
Insurance claims 33,774 32,430
Deferred income taxes 15,639 15,871
Shareholders' equity:
Common stock, $.01 par value,
authorized 80,000,000 issued
63,482,706 and 63,154,190 shares 635 632
Additional paid-in capital 47,657 43,845
Retained earnings 313,814 295,936
Cost of 3,464,248 and 2,490,930
shares of common stock in treasury (161,123) (127,151)
Accumulated other comprehensive
income (31) 47
Notes receivable arising from
exercises of stock options (195) (470)
Total shareholders' equity 200,757 212,839
Total liabilities and shareholders'
equity $557,131 $584,512
Landstar System, Inc.
Supplemental Information
(Unaudited)
Thirteen Weeks Ended
March 26, March 27,
2005 2004
Carrier Segment
External revenue generated through
(in thousands):
Business Capacity Owners (1) $282,675 $272,231
Other third party truck
capacity providers 88,368 49,377
$371,043 $321,608
Revenue per revenue mile $1.80 $1.75
Revenue per load $1,444 $1,266
Average length of haul (miles) 802 723
Number of loads (2) 257,000 254,000
Multimodal Segment
External revenue generated through
(in thousands):
Business Capacity Owners (1) (3) $17,838 $15,413
Other third party truck
capacity providers 79,081 53,484
Rail, Air and Ocean Carriers 26,777 23,117
$123,696 $92,014
Revenue per load (6) $1,541 $1,373
Number of loads (6) 76,000 67,000
As of As of
March 26, March 27,
2005 2004
Capacity Providers
Business Capacity Owners (1) (4) 7,828 7,637
Other third party truck capacity
providers:
Approved and active (5) 11,737 9,584
Approved 7,255 6,321
18,992 15,905
Total available truck capacity
providers 26,820 23,542
(1) Business Capacity Owners are independent contractors who provide truck
capacity to the Company under exclusive lease arrangements.
(2) Effective with the 2004 second quarter, the Company modified its
methodology for reporting loads. The application of this new methodology
to the 2004 thirteen week period ended March 26, 2004, resulted in an
increase of 10,000 loads. This change in load recognition has no impact
on reported revenue in any period.
(3) Includes revenue generated through Carrier Segment Business Capacity
Owners.
(4) Trucks provided by business capacity owners were 8,659 and 8,583,
respectively.
(5) Active refers to other third party truck capacity providers who have
moved at least one load in the past 180 days.
(6) Number of loads and revenue per load excludes the effect of revenue
derived from emergency transportation services provided under the FAA
contract.
SOURCE Landstar System, Inc.
CONTACT: Bob LaRose, Landstar System, Inc., +1-904-398-9400