Landstar System Reports Record Second Quarter Net Income
And Diluted Earnings Per Share
And Diluted Earnings Per Share
JACKSONVILLE, Fla., July 17 /PRNewswire-FirstCall/ -- Landstar System, Inc. (Nasdaq: LSTR) reported 2003 record second quarter net income of $13.6 million, or $.84 per diluted share, in line with analysts' estimates. Net income in the 2002 second quarter was $12.2 million, or $.72 per diluted share. Revenue was $390.1 million for the thirteen-week period ended June 28, 2003, compared with $391.2 million for the thirteen-week period ended June 29, 2002. Landstar's carrier group of companies generated $303.2 million of revenue in the 2003 second quarter compared with $310.0 million in the 2002 second quarter. In the 2003 and 2002 second quarters, the carrier group invoiced customers $10.0 million and $2.5 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 reported revenue of $79.9 million in the 2003 second quarter compared to $74.3 million in the 2002 second quarter. Operating margin was 5.8 percent in the 2003 second quarter up from 5.4 percent in the 2002 second quarter.
Net income for the twenty-six-week period ended June 28, 2003 was $23.7 million, or $1.45 per diluted share, compared to net income of $20.8 million, or $1.23 per diluted share, for the twenty-six-week period ended June 29, 2002. Revenue was $755.8 million in the 2003 first half, compared to revenue of $726.9 million in the 2002 first half. Landstar's carrier group of companies generated $593.3 million of revenue in the twenty- six-week period ended June 28, 2003 compared with $580.0 million in the twenty-six-week period ended June 29, 2002. In the 2003 and 2002 twenty-six- week periods, the carrier group invoiced customer $18.6 million and $3.2 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 $148.6 million of revenue in the 2003 twenty-six-week period compared with $133.1 million in the 2002 period. Operating margin for the 2003 twenty-six-week period was 5.2 percent compared with 5.0 percent in the 2002 comparable period.
"I am pleased with Landstar's 2003 second quarter performance," said Landstar Chairman and CEO Jeff Crowe. "Revenue in the 2003 second quarter was the second highest second quarter revenue amount in Landstar history. Despite lower revenue from the automotive and expedited sectors, revenue in the 2003 second quarter was approximately the same as revenue in the 2002 second quarter. Revenue generated through other third party truck capacity providers (brokerage) continued to be strong and increased more than 28 percent in the 2003 second quarter. In addition, Landstar improved its operating margin in the 2003 second quarter to 5.8 percent and increased earnings per diluted share 16 percent."
"Trailing twelve-month return on average equity remained high at 37 percent and return on invested capital, net income divided by the sum of average equity plus average debt, was 24 percent. During the 2003 first half, we purchased 775,051 shares of common stock at a total cost of $44,214,000, as we continued to use Landstar's superior cash flow to enhance shareholder value," Crowe said. "The Company has the ability to purchase an additional 670,070 shares of its common stock under its authorized share repurchase program."
"Based upon the current operating environment and anticipated revenue growth of 3 to 8 percent over the 2002 third quarter, I currently estimate 2003 third quarter earnings per diluted share to be within a range of $.80 to $.90 per diluted share," said Crowe.
Landstar will provide a live webcast of its quarterly earnings conference call this afternoon at 1:30 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 our 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; and substantial industry competition. 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's carrier group is comprised of Landstar Gemini, Inc., Landstar Inway, Inc., Landstar Ligon, Inc. and Landstar Ranger, Inc. and delivers excellence in complete over-the-road transportation services. Landstar's multimodal group is comprised of Landstar Express America, Inc. and Landstar Logistics, Inc., provides 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)
Twenty Six Weeks Ended Thirteen Weeks Ended
June 28, June 29, June 28, June 29,
2003 2002 2003 2002
Revenue $ 755,802 $ 726,909 $ 390,084 $ 391,216
Investment income 623 1,078 299 515
Costs and expenses:
Purchased transportation 561,464 536,422 290,002 289,234
Commissions to agents 58,623 56,905 30,539 30,817
Other operating costs 17,840 17,814 8,609 9,708
Insurance and claims 22,161 24,384 11,533 13,477
Selling, general and
administrative 50,336 50,723 23,955 24,675
Depreciation and
amortization 6,345 5,700 3,179 2,821
Total costs and
expenses 716,769 691,948 367,817 370,732
Operating income 39,656 36,039 22,566 20,999
Interest and debt expense 1,544 2,552 774 1,244
Income before income taxes 38,112 33,487 21,792 19,755
Income taxes 14,387 12,725 8,226 7,507
Net income $ 23,725 $ 20,762 $ 13,566 $ 12,248
Earnings per common share $ 1.51 $ 1.28 $ 0.87 $ 0.75
Diluted earnings per share $ 1.45 $ 1.23 $ 0.84 $ 0.72
Average number of shares
outstanding:
Earnings per common
share 15,713,000 16,223,000 15,652,000 16,252,000
Diluted earnings per
share 16,322,000 16,829,000 16,227,000 16,914,000
Landstar System, Inc.
Selected Segment Information
(Dollars in thousands)
(Unaudited)
Twenty Six Weeks
Ended Thirteen Weeks Ended
June 28, June 29, June 28, June 29,
2003 2002 2003 2002
External Revenue
Carrier segment $ 593,286 $ 579,964 $ 303,241 $ 310,001
Multimodal segment 148,640 133,059 79,931 74,340
Insurance segment 13,876 13,886 6,912 6,875
External revenue $ 755,802 $ 726,909 $ 390,084 $ 391,216
Operating Income
Carrier segment $ 42,856 $ 41,459 $ 24,360 $ 24,603
Multimodal segment 2,991 2,785 1,067 1,645
Insurance segment 11,061 7,560 5,626 2,238
Other (17,252) (15,765) (8,487) (7,487)
Operating income $ 39,656 $ 36,039 $ 22,566 $ 20,999
Landstar System, Inc.
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
(Unaudited)
June 28, December 28,
2003 2002
ASSETS
Current assets:
Cash $ 64,519 $ 65,447
Short-term investments 3,336 3,130
Trade accounts receivable, less
allowance of $3,380 and $3,953 186,602 190,052
Other receivables, including
advances to independent
contractors, less allowance of
$6,093 and $5,331 14,813 12,640
Prepaid expenses and other
current assets 10,057 3,338
Total current assets 279,327 274,607
Operating property, less
accumulated depreciation
and amortization of $56,421
and $52,841 72,306 76,774
Goodwill 31,134 31,134
Other assets 18,984 18,233
Total assets $ 401,751 $ 400,748
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Cash overdraft $ 16,601 $ 16,545
Accounts payable 65,747 60,297
Current maturities of long-term
debt 10,629 12,123
Insurance claims 26,923 24,419
Other current liabilities 33,127 40,593
Total current liabilities 153,027 153,977
Long-term debt, excluding current
maturities 73,757 65,237
Insurance claims 27,508 25,276
Deferred income taxes 7,726 7,165
Shareholders' equity:
Common stock, $.01 par value,
authorized 50,000,000 and
20,000,000 shares, issued
16,657,602 and 16,337,506
shares 167 163
Additional paid-in capital 13,301 2,609
Retained earnings 197,542 173,817
Cost of 1,329,930 and 554,879
shares of common
stock in treasury (70,520) (26,306)
Notes receivable arising from
exercise of stock options (757) (1,190)
Total shareholders' equity 139,733 149,093
Total liabilities and shareholders'
equity $ 401,751 $ 400,748
Landstar System, Inc.
Supplemental Information
June 28, 2003
(Unaudited)
Twenty Six Weeks
Ended Thirteen Weeks Ended
June 28, June 29, June 28, June 29,
2003 2002 2003 2002
Carrier Segment
External revenue generated
through (in thousands):
Business Capacity
Owners (1) $ 509,872 $ 519,624 $ 260,348 $ 277,920
Other third party truck
capacity providers 83,414 60,340 42,893 32,081
$ 593,286 $ 579,964 $ 303,241 $ 310,001
Revenue per revenue mile $ 1.73 $ 1.68 $ 1.73 $ 1.68
Revenue per load $ 1,193 $ 1,153 $ 1,188 $ 1,173
Average length of haul (miles) 688 688 686 700
Number of loads 497,290 502,975 255,291 264,351
Multimodal Segment
External revenue generated
through (in thousands):
Business Capacity
Owners (1)(2) $ 22,753 $ 27,720 $ 11,995 $ 14,832
Other third party truck
capacity providers 80,801 63,462 43,852 35,464
Rail and Air Carriers 45,086 41,877 24,084 24,044
$ 148,640 $ 133,059 $ 79,931 $ 74,340
Revenue per load $1,280 $1,097 $1,307 $1,129
Number of loads 116,119 121,324 61,137 65,821
As of As of
June 28, Dec. 28,
2003 2002
Capacity
Business Capacity Owners (1)(3)
7,271 7,365
Other third party truck
capacity providers:
Approved and active (4) 8,872 8,610
Approved 6,093 5,310
14,965 13,920
Total available truck capacity
providers 22,236 21,285
(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 8,263 and 8,402,
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.