Landstar System Reports Increased Fourth Quarter Revenue and Earnings Per Diluted Share
JACKSONVILLE, Fla., Jan. 31 /PRNewswire-FirstCall/ -- Landstar System, Inc. (Nasdaq: LSTR) reported consolidated revenue for the fourth quarter of 2007 of $643 million compared to $611 million for the 2006 fourth quarter. Net income for the thirteen-week period ended December 29, 2007 was $29.0 million, or $0.54 per diluted share, compared to net income of $28.7 million, or $0.50 per diluted share, for the thirteen-week period ended December 30, 2006. Net income included $317 thousand in the 2007 fourth quarter compared to $1.5 million, or $0.03 per diluted share, in the 2006 fourth quarter, from revenue of $2.3 million and $14.7 million in the 2007 and 2006 fourth quarters, respectively, for services provided under the contract between Landstar Express America, Inc. and the United States Department of Transportation/Federal Aviation Administration (the "FAA"). Operating income in the 2007 fourth quarter included $515 thousand of income related to revenue under the FAA contract compared to $2.4 million in the 2006 fourth quarter.
Landstar's carrier group of companies generated $454 million and $440 million of revenue in the 2007 and 2006 thirteen-week periods, respectively. In the 2007 and 2006 thirteen-week periods, the carrier group invoiced customers $52.1 million and $38.4 million, respectively, in fuel surcharges that were passed on 100 percent to business capacity owners and excluded from revenue. Landstar's global logistics group of companies generated $180 million of revenue in the 2007 thirteen-week period, which included $2.3 million related to transportation services provided under the FAA contract, compared with $162 million of revenue, which included $14.7 million related to transportation services provided under the FAA contract, in the 2006 thirteen- week period.
Net income for the fiscal year ended December 29, 2007 was $109.7 million, or $1.99 per diluted share, compared to net income of $113.1 million, or $1.93 per diluted share, in the fiscal year ended 2006. Net income included $1.3 million, or $0.02 per diluted share, in the fiscal year ended 2007 compared to $8.9 million, or $0.15 per diluted share, in the fiscal year ended 2006, from revenue of $8.5 million and $100.7 million in the 2007 and 2006 fiscal years ended, respectively, for services provided under the FAA contract. Operating income in the fiscal year ended 2007 included $2.2 million of income related to revenue under the FAA contract compared to $14.6 million in the fiscal year ended 2006. Overall, consolidated revenue, including revenue under the FAA contract, for the fiscal year ended 2007 was $2.487 billion compared to $2.514 billion for the fiscal year ended 2006. Excluding revenue under the FAA contract from both periods, fiscal year 2007 revenue increased approximately 3 percent over revenue in the 2006 fiscal year.
Landstar's carrier group of companies generated $1.808 billion of revenue in the fiscal year ended December 29, 2007, compared with $1.797 billion in the fiscal year ended December 30, 2006. In the fiscal years ended 2007 and 2006, the carrier group invoiced customers $173.6 million and $167.8 million, respectively, in fuel surcharges that were passed on 100 percent to business capacity owners and excluded from revenue. Landstar's global logistics group of companies generated $642 million of revenue, which included $8.5 million related to transportation services under the FAA contract, in the fiscal year ended 2007 compared with $683 million of revenue, which included $100.7 million related to the transportation services provided under the FAA contract, in the fiscal year ended 2006.
Landstar System, Inc. announced that its Board of Directors has declared a quarterly dividend of $0.0375 per share. The dividend is payable on February 29, 2008 to stockholders of record at the close of business on February 8, 2008. It is the intention of the Board of Directors to continue to pay a quarterly dividend.
Commenting on Landstar's 2007 fourth quarter performance, Landstar's President and CEO Henry Gerkens said, "Excluding the revenue for services provided under the FAA contract, Landstar's revenue increased 7.4 percent quarter over quarter. Revenue at the carrier group increased 3 percent, while revenue at Landstar's global logistics group, excluding FAA revenue from both the 2007 and 2006 fourth quarters, increased an outstanding 20 percent. Additionally, excluding the net income effect of revenue generated under the FAA contract from each of the 2007 and 2006 fourth quarters, Landstar's diluted earnings per share increased over 12 percent quarter over quarter. Overall, although van pricing remained challenging, market share gains resulted in stronger volumes across both of the company's operating segments. In short, Landstar had a very good quarter in a difficult freight market."
"Landstar continues to generate outstanding returns. Trailing twelve month return on average shareholders' equity remained high at 51 percent and return on invested capital, net income divided by the sum of average equity plus average debt, was 33 percent. During the 2007 fourth quarter, Landstar purchased 1,266,000 shares of its common stock at a total cost of $50,441,000 bringing the total number of common shares purchased during the fiscal year ended December 29, 2007 to 4,093,000 at a total cost of $176,590,000. The Company may purchase an additional 734,400 shares of its common stock under its authorized share purchase program."
Gerkens continued, "January of any given year is typically the slowest month of the year. Nevertheless, through the first part of January 2008, we continued to see volume growth in our core business at a rate consistent with the quarter-over-quarter growth rate experienced in the 2007 fourth quarter. There continues to be pressure on van pricing, however, it appears to be stabilizing. I also anticipate volumes to continue to strengthen."
"Assuming pricing indeed has stabilized and volumes continue to strengthen, I anticipate revenue for the first quarter of 2008 as compared to the first quarter of 2007 to grow in the mid-to-high single digits, while revenue growth for the full 2008 fiscal year compared to the full fiscal year 2007 to grow in the high single to low double digits. I anticipate Landstar's earnings for the 2008 first quarter to be within a range of $0.41 to $0.46 per diluted share and I anticipate diluted earnings per share for the 2008 full fiscal year to be within a range of $2.00 to $2.25 per share."
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 "Investor Relations" and "Webcasts," then click on "Landstar's Fourth Quarter 2007 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 2006 fiscal year, described in Item 1A 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.
About Landstar:
Landstar System, Inc. delivers safe, specialized transportation services to a broad range of customers worldwide. The Company identifies and fulfills shippers' needs through the coordination of individual businesses comprised of independent sales agents and third-party transportation capacity providers. Landstar's carrier group delivers excellence in complete over-the-road transportation services. Landstar's global logistics group provides third party logistics services, including international and domestic multimodal (over-the-road, air, ocean and rail) transportation, contract logistics and warehousing services. Landstar System, Inc. is headquartered in Jacksonville, Florida. Its common stock trades on The NASDAQ Stock Market(R) under the symbol LSTR.
Landstar System, Inc. Consolidated Statements of Income (Dollars in thousands, except per share amounts) (Unaudited) Fiscal Year Ended Thirteen Weeks Ended Dec 29, Dec 30, Dec 29, Dec 30, 2007 2006 2007 2006 Revenue $2,487,277 $2,513,756 $642,865 $611,279 Investment income 5,347 4,250 1,244 1,661 Costs and expenses: Purchased transportation 1,884,207 1,890,755 489,426 460,344 Commissions to agents 200,630 199,775 52,056 50,081 Other operating costs 28,997 45,700 7,789 8,575 Insurance and claims 49,832 39,522 10,954 9,292 Selling, general and administrative 125,177 134,239 30,175 31,430 Depreciation and amortization 19,088 16,796 5,043 4,566 Total costs and expenses 2,307,931 2,326,787 595,443 564,288 Operating income 184,693 191,219 48,666 48,652 Interest and debt expense 6,685 6,821 2,221 1,871 Income before income taxes 178,008 184,398 46,445 46,781 Income taxes 68,355 71,313 17,414 18,091 Net income $109,653 $113,085 $29,031 $28,690 Earnings per common share $2.01 $1.95 $0.55 $0.51 Diluted earnings per share $1.99 $1.93 $0.54 $0.50 Average number of shares outstanding: Earnings per common share 54,681,000 57,854,000 53,062,000 56,728,000 Diluted earnings per share 55,156,000 58,654,000 53,422,000 57,328,000 Dividends paid per common share $0.1350 $0.1100 $0.0375 $0.0300 Landstar System, Inc. Selected Segment Information (Dollars in thousands) (Unaudited) Fiscal Year Ended Thirteen Weeks Ended Dec 29, Dec 30, Dec 29, Dec 30, 2007 2006 2007 2006 External Revenue Carrier segment $1,808,391 $1,796,616 $453,536 $439,836 Global Logistics segment 642,020 682,542 180,124 162,462 Insurance segment 36,866 34,598 9,205 8,981 External revenue $2,487,277 $2,513,756 $642,865 $611,279 Operating Income Carrier segment $180,247 $181,550 $44,705 $44,152 Global Logistics segment 21,397 31,433 8,523 6,080 Insurance segment 34,055 35,673 8,469 11,617 Other (51,006) (57,437) (13,031) (13,197) Operating income $184,693 $191,219 $48,666 $48,652 Landstar System, Inc. Consolidated Balance Sheets (Dollars in thousands, except per share amounts) (Unaudited) Dec 29, Dec 30, 2007 2006 ASSETS Current assets: Cash and cash equivalents $60,750 $91,491 Short-term investments 22,921 21,548 Trade accounts receivable, less allowance of $4,469 and $4,834 310,258 318,983 Other receivables, including advances to independent contractors, less allowance of $4,792 and $4,512 11,170 14,198 Deferred income taxes and other current assets 28,554 25,142 Total current assets 433,653 471,362 Operating property, less accumulated depreciation and amortization of $88,284 and $77,938 132,369 110,957 Goodwill 31,134 31,134 Other assets 31,845 33,198 Total assets $629,001 $646,651 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Cash overdraft $25,769 $25,435 Accounts payable 117,122 122,313 Current maturities of long-term debt 23,155 18,730 Insurance claims 28,163 25,238 Other current liabilities 55,366 58,478 Total current liabilities 249,575 250,194 Long-term debt, excluding current maturities 141,598 110,591 Insurance claims 37,631 36,232 Deferred income taxes 19,411 19,360 Shareholders' equity: Common stock, $.01 par value, authorized 160,000,000 shares, issued 65,630,383 and 64,993,143 shares 656 650 Additional paid-in capital 132,788 108,020 Retained earnings 601,537 499,273 Cost of 13,121,109 and 9,028,009 shares of common stock in treasury (554,252) (377,662) Accumulated other comprehensive gain/(loss) 57 (7) Total shareholders' equity 180,786 230,274 Total liabilities and shareholders' equity $629,001 $646,651 Landstar System, Inc. Supplemental Information (Unaudited) Fiscal Year Ended Thirteen Weeks Ended Dec 29, Dec 30, Dec 29, Dec 30, 2007 2006 2007 2006 Carrier Segment External revenue generated through (in thousands): Business Capacity Owners (1) $1,288,070 $1,270,649 $317,638 $306,389 Other third party truck capacity providers 520,321 525,967 135,898 133,447 $1,808,391 $1,796,616 $453,536 $439,836 Revenue per revenue mile $2.04 $2.02 $2.08 $2.02 Revenue per load $1,612 $1,621 $1,623 $1,647 Average length of haul (miles) 791 803 780 814 Number of loads 1,121,900 1,108,300 279,400 267,100 Global Logistics Segment External revenue generated through (in thousands): Business Capacity Owners (1) (2) $103,155 $103,588 $26,980 $25,280 Other third party truck capacity providers 361,257 396,141 99,913 93,395 Rail, Air, Ocean and Bus Carriers (3) 177,608 182,813 53,231 43,787 $642,020 $682,542 $180,124 $162,462 Revenue per load (4) (5) $1,572 $1,528 $1,744 $1,584 Number of loads (4) (5) 402,900 380,700 101,900 93,300 As of As of Dec 29, Dec 30, 2007 2006 Capacity Business Capacity Owners (1)(6) 8,403 8,516 Other third party truck capacity providers: Approved and active (7) 16,053 15,247 Approved 9,362 8,574 25,415 23,821 Total available truck capacity providers 33,818 32,337 Agent Locations 1,397 1,345 (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) Included in the 2007 and 2006 fiscal year periods was $481,000 and $25,067,000, respectively, of revenue attributable to buses provided under the FAA contract. Included in the 2006 thirteen-week period was $2,035,000 of revenue attributable to buses provided under the FAA contract. (4) Number of loads and revenue per load exclude the effect of revenue derived from transportation services provided under the FAA contract and warehousing. (5) The number of loads in the fiscal year period ended 2006 were restated. This change had no impact on reported revenue in either period. (6) Trucks provided by business capacity owners were 8,993 and 9,205 at December 29, 2007 and December 30, 2006, respectively. (7) 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.
CONTACT:
Jim Gattoni of Landstar System, Inc.,
+1-904-398-9400
Web site: http://www.landstar.com
(LSTR)