Landstar System Reports Third Quarter Earnings Per Diluted Share of $0.54
Landstar's carrier group of companies generated $461 million of revenue in both the 2007 and 2006 thirteen-week periods. In the 2007 and 2006 thirteen- week periods, the carrier group invoiced customers $44.1 million and $48.9 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 $165 million of revenue in the 2007 thirteen-week period, which included $2.8 million related to transportation services provided under the FAA contract, compared with $180 million of revenue, which included $29.7 million related to transportation services provided under the FAA contract, in the 2006 thirteen-week period.
Net income for the thirty-nine-week period ended September 29, 2007 was $80.6 million, or $1.45 per diluted share, compared to net income of $84.4 million, or $1.43 per diluted share, in the 2006 thirty-nine-week period. Net income included $1.0 million, or $0.02 per diluted share in the 2007 thirty- nine-week period compared to $7.5 million, or $0.13 per diluted share in the 2006 thirty-nine-week period, from revenue of $6.2 million and $86.0 million in the 2007 and 2006 thirty-nine-week periods, respectively, for services provided under the FAA contract. Operating income in the 2007 thirty-nine-week period included $1.6 million of income related to FAA revenue compared to $12.2 million in the 2006 thirty-nine-week period. Excluding the revenue and operating income related to the services provided under the FAA contract, operating margin was 7.3 percent in the 2007 thirty-nine-week period compared to 7.2 percent in the 2006 thirty-nine-week period. Overall, consolidated revenue, including FAA revenue, for the thirty-nine-week period of 2007 was $1.844 billion compared to $1.902 billion for the 2006 thirty-nine-week period.
Landstar's carrier group of companies generated $1.355 billion of revenue in the thirty-nine-week period ended September 29, 2007, compared with $1.357 billion in the thirty-nine-week period ended September 30, 2006. In the 2007 and 2006 thirty-nine-week periods, the carrier group invoiced customers $121.5 million and $129.4 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 $462 million of revenue, which included $6.2 million related to transportation services under the FAA contract, in the 2007 thirty-nine-week period compared with $520 million of revenue, which included $86.0 million related to the transportation services provided under the FAA contract, in the 2006 thirty-nine-week period.
Landstar System, Inc. announced that its Board of Directors has declared a quarterly dividend of $0.0375 per share. The dividend is payable on November 30, 2007 to stockholders of record at the close of business on November 12, 2007. It is the intention of the Board of Directors to continue to pay a quarterly dividend.
Commenting on Landstar's 2007 third quarter performance, Landstar's President and CEO Henry Gerkens said, "Despite a continued unpredictable and sluggish freight environment, Landstar delivered another solid quarterly performance. Excluding the FAA revenue and related net income from both the 2007 and 2006 third quarters, Landstar's revenue increased 2 percent quarter over quarter, diluted earnings per share increased 10 percent quarter over quarter and operating margin increased by 14 basis points quarter over quarter."
"Landstar continues to generate outstanding returns. Trailing twelve month return on average shareholders' equity remained high at 48 percent and return on invested capital, net income divided by the sum of average equity plus average debt, was 32 percent. During the 2007 third quarter, Landstar purchased 1,320,786 shares of its common stock at a total cost of $58,394,000 bringing the total number of common shares purchased during the thirty-nine weeks ended September 29, 2007 to 2,827,501 at a total cost of $126,148,000. The Company may purchase an additional 2,000,000 shares of its common stock under its authorized share purchase program."
Gerkens continued, "The fourth quarter of 2006 included $15 million in revenue generated under the FAA contract. We estimate in the 2007 fourth quarter approximately $2 million of such revenue. Based upon current business levels, no change in the current freight environment, and excluding FAA revenue from both the 2007 and 2006 fourth quarter, I anticipate revenue to increase in the low to mid single digit range quarter over quarter. Diluted earnings per share in the 2006 fourth quarter was $0.50, which included $0.03 per diluted share from the revenue recognized under the FAA contract. Based upon our current revenue forecast, I anticipate diluted earnings per share for the fourth quarter of 2007 to be within a range of $0.47 to $0.52 per diluted 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 Third 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, which is comprised of Landstar Gemini, Inc., Landstar Inway, Inc., Landstar Ligon, Inc., Landstar Ranger, Inc. and Landstar Carrier Services, Inc., delivers excellence in complete over-the-road transportation services. Landstar's global logistics group, which is comprised of Landstar Global Logistics, Inc. and its subsidiary Landstar Express America, Inc., provides international and domestic multimodal (over-the-road, air, ocean and rail) transportation, expedited, contract logistics and warehousing services. All Landstar operating companies are certified to ISO 9001:2000 quality management system standards. 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)
Thirty Nine Weeks Ended Thirteen Weeks Ended
Sept 29, Sept 30, Sept 29, Sept 30,
2007 2006 2007 2006
Revenue $1,844,412 $1,902,477 $634,811 $649,197
Investment income 4,103 2,589 1,106 1,337
Costs and expenses:
Purchased transportation 1,394,781 1,430,411 481,946 486,102
Commissions to agents 148,574 149,694 51,170 52,173
Other operating costs 21,208 37,125 7,986 14,837
Insurance and claims 38,878 30,230 9,319 9,656
Selling, general and
administrative 95,002 102,809 31,082 31,885
Depreciation and
amortization 14,045 12,230 4,766 4,180
Total costs and
expenses 1,712,488 1,762,499 586,269 598,833
Operating income 136,027 142,567 49,648 51,701
Interest and debt expense 4,464 4,950 1,764 1,808
Income before income taxes 131,563 137,617 47,884 49,893
Income taxes 50,941 53,222 18,536 19,313
Net income $80,622 $84,395 $29,348 $30,580
Earnings per common share $1.46 $1.45 $0.54 $0.53
Diluted earnings per share $1.45 $1.43 $0.54 $0.53
Average number of shares
outstanding:
Earnings per common
share 55,221,000 58,229,000 54,189,000 57,287,000
Diluted earnings per
share 55,740,000 59,155,000 54,608,000 57,948,000
Dividends paid per common
share $0.0975 $0.0800 $0.0375 $0.0300
Landstar System, Inc.
Selected Segment Information
(Dollars in thousands)
(Unaudited)
Thirty Nine Weeks Ended Thirteen Weeks Ended
Sept 29, Sept 30, Sept 29, Sept 30,
2007 2006 2007 2006
External Revenue
Carrier segment $1,354,855 $1,356,780 $460,894 $460,847
Global Logistics segment 461,896 520,080 164,687 179,613
Insurance segment 27,661 25,617 9,230 8,737
External revenue $1,844,412 $1,902,477 $634,811 $649,197
Operating Income
Carrier segment $135,542 $137,398 $45,664 $49,334
Global Logistics segment 12,874 25,353 4,858 8,331
Insurance segment 25,586 24,056 11,577 8,967
Other (37,975) (44,240) (12,451) (14,931)
Operating income $136,027 $142,567 $49,648 $51,701
Landstar System, Inc.
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
(Unaudited)
Sept 29, Dec 30,
2007 2006
ASSETS
Current assets:
Cash and cash equivalents $59,047 $91,491
Short-term investments 20,948 21,548
Trade accounts receivable, less allowance
of $5,326 and $4,834 310,110 318,983
Other receivables, including advances
to independent contractors, less allowance
of $4,744 and $4,512 11,398 14,198
Deferred income taxes and other
current assets 34,984 25,142
Total current assets 436,487 471,362
Operating property, less accumulated
depreciation
and amortization of $83,696 and $77,938 128,203 110,957
Goodwill 31,134 31,134
Other assets 36,355 33,198
Total assets $632,179 $646,651
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Cash overdraft $32,201 $25,435
Accounts payable 125,068 122,313
Current maturities of long-term debt 21,848 18,730
Insurance claims 26,099 25,238
Other current liabilities 57,096 58,478
Total current liabilities 262,312 250,194
Long-term debt, excluding current maturities 106,187 110,591
Insurance claims 40,042 36,232
Deferred income taxes 22,178 19,360
Shareholders' equity:
Common stock, $.01 par value, authorized
160,000,000 shares, issued 65,613,866
and 64,993,143 shares 656 650
Additional paid-in capital 130,116 108,020
Retained earnings 574,505 499,273
Cost of 11,855,510 and 9,028,009
shares of common stock in treasury (503,810) (377,662)
Accumulated other comprehensive loss (7) (7)
Total shareholders' equity 201,460 230,274
Total liabilities and shareholders' equity $632,179 $646,651
Landstar System, Inc.
Supplemental Information
(Unaudited)
Thirty Nine Weeks Ended Thirteen Weeks Ended
Sept 29, Sept 30, Sept 29, Sept 30,
2007 2006 2007 2006
Carrier Segment
External revenue generated
through (in thousands):
Business Capacity
Owners (1) $970,432 $964,260 $330,776 $323,664
Other third party truck
capacity providers 384,423 392,520 130,118 137,183
$1,354,855 $1,356,780 $460,894 $460,847
Revenue per revenue mile $2.02 $2.02 $2.06 $2.05
Revenue per load $1,608 $1,613 $1,645 $1,651
Average length of haul (miles) 795 800 798 806
Number of loads 842,500 841,200 280,200 279,200
Global Logistics Segment
External revenue generated
through (in thousands):
Business Capacity
Owners (1) (2) $76,175 $78,308 $23,990 $31,145
Other third party truck
capacity providers 261,344 302,746 95,449 104,445
Rail, Air, Ocean and
Bus Carriers (3) 124,377 139,026 45,248 44,023
$461,896 $520,080 $164,687 $179,613
Revenue per load (4) (5) $1,514 $1,510 $1,530 $1,520
Number of loads (4) (5) 301,000 287,400 105,800 98,600
As of As of
Sept 29, Sept 30,
2007 2006
Capacity
Business Capacity Owners (1)(6) 8,452 8,463
Other third party truck
capacity providers:
Approved and active (7) 15,765 14,604
Approved 9,224 8,009
24,989 22,613
Total available truck
capacity providers 33,441 31,076
Agent Locations 1,414 1,291
(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 thirty nine week periods was $481,000
and $23,032,000, respectively, of revenue attributable to buses provided
under the FAA contract. Included in the 2006 thirteen week period was
$3,594,000 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.
(5) The number of loads in the thirty nine and thirteen week periods ended
2006 were restated. This change had no impact on reported revenue in
either period.
(6) Trucks provided by business capacity owners were 9,056 and 9,164,
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.
http://www.landstar.com/