JACKSONVILLE, Fla., July 18 /PRNewswire-FirstCall/ --Landstar System, Inc. (Nasdaq: LSTR) reported 2002 record second quarter netincome of $12.2 million, or $1.45 per diluted share, compared to net income of$10.9 million, or $1.26 per diluted share, in the 2001 second quarter. The2001 period included $305,000 of goodwill amortization, excluding this chargenet income would have been $11.2 million, or $1.29 per diluted share. Revenuewas $391.2 million for the thirteen-week period ended June 29, 2002, comparedwith $358.0 million for the thirteen-week period ended June 30, 2001.Landstar's carrier group of companies generated $310.0 million of revenue inthe 2002 second quarter compared with $280.2 million in the 2001 secondquarter. Landstar's multimodal services group of companies reported revenueof $74.3 million in the 2002 second quarter compared to $72.2 million in the2001 second quarter. Operating margin was 5.4 percent in the 2002 secondquarter the same as in the 2001 second quarter.

Net income for the twenty-six-week period ended June 29, 2002 was $20.8million, or $2.47 per diluted share, compared to net income of $19.3 million,or $2.21 per diluted share, for the twenty-six-week period ended June 30,2001. The 2001 period included $609,000 of goodwill amortization, excludingthis charge net income would have been $19.9 million, or $2.28 per dilutedshare. Revenue was $726.9 million in the 2002 first half, compared to revenueof $689.3 million in the 2001 first half. Landstar's carrier group ofcompanies generated $580.0 million of revenue in the twenty-six-week periodended June 29, 2002 compared with $543.6 million in the twenty-six-week periodended June 30, 2001. Landstar's multimodal services group of companiesgenerated $133.1 million of revenue in the 2002 twenty-six-week periodcompared with $134.0 million in the 2001 period. Operating margin for the2002 twenty-six-week period was 5.0 percent compared with 5.1 percent in the2001 comparable period.

Landstar also announced that its Board of Directors has declared a two-for-one stock split to be effected in the form of a 100% stock dividend.Stockholders will receive one additional share for every share held on therecord date for the stock-split, which is August 2, 2002. Additional shareswill be mailed or delivered on or about August 12, 2002 by the Company'sTransfer Agent, The Bank of New York.

"I am pleased with Landstar's 2002 second quarter performance," saidLandstar Chairman and CEO, Jeff Crowe. "During the second quarter, Landstargrew consolidated revenue by over 9% to its highest quarterly revenue inLandstar history. Despite the adverse effect of one very serious accidentthat happened in June which reduced our operating margin in the quarter bymore than one full percentage point, Landstar was still able to achieve recordsecond quarter net income.

"Trailing twelve-month return on average equity remained high at 34percent and return on invested capital, net income divided by the sum ofaverage equity plus average debt, was above 21 percent. Landstar's balancesheet continued to strengthen, as we reduced debt by over $29 million sinceyear-end 2001 and ended the quarter with over $49 million in cash and short-term investments. Shareholder's equity represented 66 percent ofcapitalization, up from 54 percent at year-end," Crowe said. "I believe thatLandstar's financial strength is significant and will allow us to takeadvantage of future opportunities as they arise.

"Landstar ended the 2002 second quarter with 8,646 trucks, 133 less thanat year-end and 166 more than at the end of the 2001 second quarter. I expecttruck count to increase during the remainder of the year by approximately 200trucks.

"As reported by FIRST CALL, the range of analysts' earnings estimates forthe 2002 third quarter is $1.50 to $1.62 per diluted share," said Crowe."Based upon the level of business activity experienced during the secondquarter, I am currently comfortable with that range."

Landstar will provide a live webcast of its quarterly earnings conferencecall this afternoon at 1 p.m. EDT. To access the webcast visit the company'swebsite at www.landstar.com. Click on Investor Relations and then on themicrophone at the top of the page. StreetEvents.com will also carry thebroadcast live.

This press release contains forward-looking statements, such as statementsthat relate to Landstar's business objectives, plans, strategies andexpectations. The words "believe", "anticipate", "should" and similarexpressions identify forward-looking statements. While made in good faith andwith a reasonable basis based on information currently available to Landstar'smanagement, there is no assurance that such opinions, beliefs or expectationswill be achieved or accomplished. Various factors could cause actual resultsand events to vary significantly from those expressed in any forward-lookingstatement. Such types of statements are intended to be forward-lookingstatements for purposes of the Private Securities Litigation Reform Act of1995.

The Company is under no obligation to update any forward-looking statementto the extent it becomes aware that it will not be achieved for any reason.

Landstar System, Inc. is headquartered in Jacksonville, Florida. TheLandstar carrier group comprised of Landstar Gemini, Inc., Landstar Inway,Inc., Landstar Ligon, Inc. and Landstar Ranger, Inc. delivers excellence incomplete over-the-road transportation services. The Landstar multimodal groupcomprised of Landstar Express America, Inc. and Landstar Logistics, Inc.delivers excellence in expedited, contract logistics and intermodaltransportation services. All Landstar operating companies are certified toISO 9002 quality management system standards.
(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 29, June 30, June 29, June 30,
2002 2001 2002 2001

Revenue $726,909 $689,299 $391,216 $358,018

Investment income 1,078 1,959 515 903

Costs and expenses:
Purchased transportation 536,422 510,037 289,234 265,882
Commissions to agents 56,905 54,007 30,817 27,890
Other operating costs 17,814 16,895 9,708 8,792
Insurance and claims 24,384 17,025 13,477 9,222
Selling, general and
administrative 50,723 50,975 24,675 24,113
Depreciation and
amortization 5,700 7,026 2,821 3,536
Total costs and expenses 691,948 655,965 370,732 339,435

Operating income 36,039 35,293 20,999 19,486

Interest and debt expense 2,552 3,932 1,244 1,710

Income before income taxes 33,487 31,361 19,755 17,776

Income taxes 12,725 12,074 7,507 6,843

Net income $20,762 $19,287 $12,248 $10,933

Earnings per common share $2.56 $2.27 $1.51 $1.29

Diluted earnings per share $2.47 $2.21 $1.45 $1.26

Average number of shares

outstanding:
Earnings per common share 8,111,000 8,503,000 8,126,000 8,494,000
Diluted earnings per share 8,414,000 8,718,000 8,457,000 8,707,000
Landstar System, Inc.
Selected Segment Information
(Dollars in thousands)
(Unaudited)
Twenty Six Weeks Thirteen Weeks
Ended Ended
June 29, June 30, June 29, June 30,
2002 2001 2002 2001

External Revenue

Carrier segment $579,964 $543,559 $310,001 $280,174

Multimodal segment 133,059 134,019 74,340 72,190

Insurance segment 13,886 11,721 6,875 5,654
External revenue $726,909 $689,299 $391,216 $358,018

Operating Income

Carrier segment $41,459 $37,603 $24,603 $20,569

Multimodal segment 2,785 2,121 1,645 1,535

Insurance segment 7,560 13,708 2,238 6,512

Other (15,765) (18,139) (7,487) (9,130)
Operating income $36,039 $35,293 $20,999 $19,486
Landstar System, Inc.
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
(Unaudited)
June 29, December 29,
2002 2001

ASSETS

Current assets:
Cash $47,877 $47,886
Short-term investments 1,305 2,982
Trade accounts receivable, less
allowance
of $4,009 and $4,416 203,344 185,206
Other receivables, including
advances to independent
contractors, less allowance of
$6,008 and $4,740 14,710 13,779
Prepaid expenses and other current
assets 6,250 4,020
Total current assets 273,486 253,873

Operating property, less accumulated

depreciation
and amortization of $49,218
and $44,455 64,243 68,532

Goodwill 31,134 31,134

Other assets 21,141 11,112

Total assets $390,004 $364,651

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
Cash overdraft $17,638 $13,018
Accounts payable 67,326 55,813
Current maturities of long-term
debt 10,070 9,965
Insurance claims 24,631 21,602
Other current liabilities 38,707 31,667
Total current liabilities 158,372 132,065

Long-term debt, excluding current

maturities 62,439 91,909

Insurance claims 24,552 21,585

Deferred income taxes 2,206 1,652

Shareholders' equity:
Common stock, $.01 par value,
authorized 20,000,000
shares, issued 13,375,794 and
13,328,834 shares 134 133
Additional paid-in capital 76,363 75,036
Retained earnings 278,924 258,162
Cost of 5,241,841 shares of common
stock in treasury (209,926) (209,926)
Notes receivable arising from
exercise of stock options (3,060) (5,965)
Total shareholders' equity 142,435 117,440

Total liabilities and shareholders'

equity $390,004 $364,651
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