Landstar System Reports Results For The 2003 Third Quarter And
Declares Two-For-One Stock Split
Declares Two-For-One Stock Split
JACKSONVILLE, Fla., Oct. 16 /PRNewswire-FirstCall/ -- Landstar System, Inc. (Nasdaq: LSTR) reported 2003 third quarter net income of $11.8 million, or $.76 per diluted share. As previously disclosed, the 2003 third quarter included $3.2 million of costs to defend and settle the Gulf Bridge lawsuit. These costs, net of related income tax benefits, reduced net income in the 2003 period by $2.0 million, or $.13 per diluted share. Excluding the costs related to this litigation, net income was $13.9 million, or $.89 per diluted share. Net income in the 2002 third quarter was $13.9 million, or $.83 per diluted share. Revenue was a record $406.8 million for the thirteen-week period ended September 27, 2003, compared with $385.7 million for the thirteen-week period ended September 28, 2002. Landstar's carrier group of companies generated $307.8 million of revenue in the 2003 third quarter compared with $298.9 million in the 2002 third quarter. In the 2003 and 2002 third quarters, the carrier group invoiced customers $7.8 million and $3.0 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 revenue of $91.9 million in the 2003 third quarter compared with $80.0 million in the 2002 third quarter.
Net income for the thirty-nine-week period ended September 27, 2003 was $35.6 million, or $2.21 per diluted share. The 2003 thirty-nine-week period included $4.2 million of costs to defend and settle the Gulf Bridge lawsuit. These costs, net of related income tax benefits, reduced net income in the 2003 thirty-nine-week period by $2.7 million, or $.16 per diluted share. Excluding the costs related to this litigation, net income was $38.2 million, or $2.37 per diluted share, compared to $34.7 million, or $2.06 per diluted share in the 2002 thirty-nine-week period.
Revenue was $1,163 million in the 2003 thirty-nine-week period, compared to revenue of $1,113 million in the 2002 period. Landstar's carrier group of companies generated $901.0 million of revenue in the thirty-nine-week period ended September 27, 2003 compared with $878.8 million in the thirty-nine-week period ended September 28, 2002. In the 2003 and 2002 thirty-nine-week periods, the carrier group invoiced customers $26.4 million and $6.2 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 $240.6 million of revenue in the 2003 thirty- nine-week period compared with $213.0 million in the comparable 2002 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 the record date for the stock-split, which is November 3, 2003. Additional shares will be mailed or delivered on or about November 13, 2003 by the Company's Transfer Agent, The Bank of New York.
"I am pleased with Landstar's 2003 third quarter performance," said Landstar Chairman and CEO, Jeff Crowe. "Revenue in the 2003 third quarter was the highest third quarter revenue amount in Landstar history. Overall, revenue increased 5.5 percent over the 2002 third quarter. Revenue generated through other third party truck capacity providers (brokerage) continued to be strong and increased more than 23 percent over the 2002 third quarter. In addition, trailing twelve-month return on average equity remained high at 36 percent and return on invested capital, net income divided by the sum of average equity plus average debt, was 23 percent. During the 2003 third quarter, we purchased 480,000 shares of common stock at a total cost of $29,630,000," Crowe said.
"Based upon the current operating environment, I currently believe Landstar will earn between $.85 to $.95 per diluted share for the fourth quarter."
Landstar will provide a live webcast of its quarterly earnings conference call this afternoon at 2 p.m. 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., providing 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.
Landstar System, Inc.
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)
Thirty Nine Weeks Ended Thirteen Weeks Ended
Sept. 27, Sept. 28, Sept. 27, Sept. 28
2003 2002 2003 2002
Revenue $1,162,574 $1,112,569 $406,772 $385,660
Investment income 960 1,552 337 474
Costs and expenses:
Purchased transportation 862,371 822,193 300,907 285,771
Commissions to agents 91,224 87,550 32,601 30,645
Other operating costs 27,571 26,274 9,731 8,460
Insurance and claims 32,187 32,672 10,026 8,288
Selling, general and
administrative (1) 81,004 77,421 30,668 26,698
Depreciation and
amortization 9,558 8,521 3,213 2,821
Total costs and
expenses 1,103,915 1,054,631 387,146 362,683
Operating income (1) 59,619 59,490 19,963 23,451
Interest and debt expense 2,400 3,518 856 966
Income before
income taxes (1) 57,219 55,972 19,107 22,485
Income taxes 21,667 21,269 7,280 8,544
Net income (1) $35,552 $34,703 $11,827 $13,941
Earnings per common
share (1) $2.29 $2.14 $0.78 $0.86
Diluted earnings
per share (1) $2.21 $2.06 $0.76 $0.83
Average number of shares
outstanding:
Earnings per common
share 15,501,000 16,223,000 15,077,000 16,224,000
Diluted earnings per
share 16,097,000 16,847,000 15,643,000 16,875,000
(1) The 2003 thirty-nine and thirteen-week periods include $4,150 and
$3,180, respectively, of costs to defend and settle the Gulf Bridge
lawsuit. Net of related income tax benefits, these costs reduced net
income for the thirty-nine and thirteen-week periods ended September
27, 2003 by $2,650, or $0.17 per common share ($0.16 per diluted
share), and $2,030, or $0.13 per common share ($0.13 per diluted
share), respectively.
Landstar System, Inc.
Selected Segment Information
(Dollars in thousands)
(Unaudited)
Thirty Nine Weeks Ended Thirteen Weeks Ended
Sept. 27, Sept. 28, Sept. 27, Sept. 28,
2003 2002 2003 2002
External Revenue
Carrier segment $901,041 $878,836 $307,755 $298,872
Multimodal segment 240,551 213,018 91,911 79,959
Insurance segment 20,982 20,715 7,106 6,829
External revenue $1,162,574 $1,112,569 $406,772 $385,660
Operating Income
Carrier segment $66,398 $63,912 $23,542 $22,453
Multimodal segment (1) 2,756 5,007 (235) 2,222
Insurance segment 17,830 15,867 6,769 8,307
Other (27,365) (25,296) (10,113) (9,531)
Operating income (1) $59,619 $59,490 $19,963 $23,451
(1) The 2003 thirty-nine and thirteen-week periods include $4,150 and
$3,180, respectively, of costs to defend and settle the Gulf Bridge
lawsuit.
Landstar System, Inc.
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
(Unaudited)
September 27, December 28,
2003 2002
ASSETS
Current assets:
Cash $9,743 $9,775
Short-term investments 53,961 58,802
Trade accounts receivable, less
allowance of $3,120 and $3,953 201,747 190,052
Other receivables, including
advances to independent
contractors, less allowance of
$5,782 and $5,331 11,850 12,640
Prepaid expenses and other
current assets 9,326 3,338
Total current assets 286,627 274,607
Operating property, less
accumulated depreciation
and amortization of $58,296 and $52,841 69,212 76,774
Goodwill 31,134 31,134
Other assets 17,864 18,233
Total assets $404,837 $400,748
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Cash overdraft $15,435 $16,545
Accounts payable 76,721 60,297
Current maturities of long-term
debt 10,629 12,123
Insurance claims 26,878 24,419
Other current liabilities 39,749 40,593
Total current liabilities 169,412 153,977
Long-term debt, excluding current
maturities 78,493 65,237
Insurance claims 26,874 25,276
Deferred income taxes 7,073 7,165
Shareholders' equity:
Common stock, $.01 par value,
authorized 50,000,000 and
20,000,000 shares, issued
16,699,269 and 16,337,506
shares 167 163
Additional paid-in capital 14,356 2,609
Retained earnings 209,369 173,817
Cost of 1,809,930 and 554,879
shares of common
stock in treasury (100,150) (26,306)
Notes receivable arising from
exercise of stock options (757) (1,190)
Total shareholders' equity 122,985 149,093
Total liabilities and shareholders'
equity $404,837 $400,748
Landstar System, Inc.
Supplemental Information
September 27, 2003
(Unaudited)
Thirty Nine Weeks Ended Thirteen Weeks Ended
Sept. 27, Sept. 28, Sept. 27, Sept. 28,
2003 2002 2003 2002
Carrier Segment
External revenue generated
through (in thousands):
Business Capacity
Owners (1) $775,696 $781,990 $265,824 $262,366
Other third party truck
capacity providers 125,345 96,846 41,931 36,506
$901,041 $878,836 $307,755 $298,872
Revenue per revenue mile $1.72 $1.68 $1.70 $1.68
Revenue per load $1,210 $1,163 $1,243 $1,188
Average length of haul (miles) 702 693 730 706
Number of loads 744,875 755,987 247,585 251,623
Multimodal Segment
External revenue generated
through (in thousands):
Business Capacity
Owners (1)(2) $37,674 $42,553 $14,921 $14,833
Other third party truck
capacity providers 131,155 101,588 50,354 38,126
Rail and Air Carriers 71,722 68,877 26,636 27,000
$240,551 $213,018 $91,911 $79,959
Revenue per load $1,305 $1,110 $1,348 $1,133
Number of loads 184,282 191,923 68,163 70,599
As of As of
Sept. 27, Dec. 28,
2003 2002
Capacity
Business Capacity Owners (1) (3) 7,461 7,365
Other third party truck
capacity providers:
Approved and active(4) 9,139 8,610
Approved 6,204 5,310
15,343 13,920
Total available truck capacity
providers 22,804 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 8,451 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.