UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) April 15, 2009

LANDSTAR SYSTEM, INC.

(Exact name of registrant as specified in its charter)

Delaware		021238		06-1313069
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

13410 Sutton Park Drive South, Jacksonville, Florida		32224
(Address of principal executive offices)		(Zip Code)

(904) 398-9400
(Registrant’s telephone number, including area code)

N/A
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 2.02 Results of Operations and Financial Condition

On April 15, 2009, Landstar System, Inc. (the “Company”) issued a press release announcing results for the first quarter of fiscal 2009. A copy of the press release is attached hereto as Exhibit 99.1.

The information furnished under Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.

Item 9.01 Financial Statements and Exhibits

Exhibits
	99.1			News Release dated April 15, 2009 of Landstar System, Inc.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Exhibit 99.1

For Immediate Release		Contact: Jim Gattoni
		Landstar System, Inc.
		www.landstar.com
April 15, 2009		904-398-9400

LANDSTAR SYSTEM REPORTS FIRST QUARTER

DILUTED EARNINGS PER SHARE OF $0.27

Jacksonville, FL — Landstar System, Inc. (NASDAQ: LSTR) reported 2009 first quarter net income of $13.9 million, or $0.27 per diluted share, on revenue of $469.2 million compared to net income of $23.7 million, or $0.45 per diluted share, on revenue of $608.8 million in the 2008 first quarter.

Revenue hauled by BCO Independent Contractors in the first quarter of 2009 was $262.1 million, or 56 percent of revenue, compared to $324.8 million, or 53 percent of revenue, in the 2008 first quarter. In the 2009 and 2008 first quarters, the Company invoiced customers $24.2 million and $57.8 million, respectively, in fuel surcharges that were passed on 100 percent to BCO Independent Contractors and excluded from revenue. Revenue hauled by third-party truck brokerage carriers was $164.2 million, or 35 percent of revenue, in the 2009 first quarter compared to $228.6 million, or 38 percent of revenue, in the 2008 first quarter. Revenue hauled by rail, air and ocean cargo carriers was $33.6 million, or 7 percent of revenue, in the 2009 first quarter compared to $45.8 million, or 8 percent of revenue, in the 2008 first quarter.

LANDSTAR SYSTEM/2

 

Landstar System, Inc. announced that its Board of Directors has declared a quarterly dividend of $0.04 per share. The dividend is payable on May 29, 2009 to stockholders of record at the close of business on May 7, 2009. It is the intention of the Board of Directors to continue to pay a quarterly dividend. During the 2009 first quarter, Landstar purchased approximately 391,000 shares of its common stock at a total cost of $12.0 million. Currently, there are approximately 2,609,000 shares of the Company’s common stock available for purchase under Landstar’s authorized share purchase programs.

“In the 2009 first quarter, Landstar’s revenue continued to be negatively impacted by the severe downturn in the domestic and global economies,” said Landstar President and Chief Executive Officer Henry Gerkens. “Overall, the number of loads hauled during the 2009 first quarter was approximately 17 percent lower than the number of loads hauled during the 2008 first quarter. The number of loads hauled for shippers in the automotive industry and for shippers in our substitute line haul business were significantly below prior year levels. Volume declines were experienced in just about every sector serviced by the Company. Revenue per load for revenue hauled by the BCO Independent Contractors and Truck Brokerage Carriers decreased in the 2009 first quarter compared to the 2008 first quarter as excess capacity and low freight demand created increased pressure on price.”

Gerkens continued, “Although volume declines compared to the 2008 first quarter remained generally consistent with the year over year volume decline experienced during the last four weeks of December 2008, the increased pressure on price, along with lower fuel surcharge revenue on freight hauled by truck brokerage carriers, caused overall revenue to decline 23 percent quarter over quarter.”

“Regardless of the current economic environment, Landstar’s non-asset based variable cost business model continues to generate significant cash flow and outstanding returns. During the 2009 first quarter, cash from operations was $81 million, compared to $34 million in the 2008 first quarter. At March 28, 2009, there was $147 million available for borrowings under the Company’s senior credit facility, while the ratio of debt to capital was 32 percent. Since December 2008, cash and short term investments increased $32 million to $154 million at March 28, 2009. Trailing twelve month return on average shareholders’ equity remained high at 41 percent and trailing twelve month return on invested capital, net income divided by the sum of average equity plus average debt was 26 percent. Landstar’s balance sheet remains strong.”

LANDSTAR SYSTEM/3

 

“Although there are some encouraging signs, there is still much uncertainty and as such Landstar will not be providing second quarter 2009 revenue and earnings guidance at this time. However, as an example of how Landstar’s variable cost business model would react under certain negative assumptions, it is worth noting that if one were to assume a revenue decline in the 2009 second quarter over the 2008 second quarter at the same percentage rate of decline experienced in the 2009 first quarter over the 2008 first quarter, and taking into account certain cost reduction actions taken by the Company, Landstar should generate diluted earnings per share in a range of $0.40 to $0.45. This in no way should be interpreted as any sort of guidance, but rather a demonstration of the resiliency of our model and that Landstar’s ability to generate earnings is somewhat insulated from possible effects of a prolonged recession. ”

Landstar will provide a live webcast of its quarterly earnings conference call this afternoon at 5:00 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 First Quarter 2009 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 2008 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.

LANDSTAR SYSTEM/4

 

About Landstar:
Landstar System, Inc. delivers safe, specialized transportation and logistics 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 and logistics capacity providers. Through its operating subsidiaries, Landstar delivers excellence in complete transportation logistics services and solutions. 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^® under the symbol LSTR.

(Tables follow)

LANDSTAR SYSTEM/5

 

Landstar System, Inc.
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)

		Thirteen Weeks Ended
		March 28,				March 29,
		2009				2008
Revenue		$	469,247			$	608,828
Investment income			425				1,096
Costs and expenses:
Purchased transportation			351,324				465,029
Commissions to agents			38,324				46,814
Other operating costs			7,450				6,584
Insurance and claims			9,002				9,521
Selling, general and administrative			34,369				35,857
Depreciation and amortization			5,485				5,130
Total costs and expenses			445,954				568,935
Operating income			23,718				40,989
Interest and debt expense			1,163				2,142
Income before income taxes			22,555				38,847
Income taxes			8,661				15,104
Net income		$	13,894			$	23,743
Earnings per common share		$	0.27			$	0.45
Diluted earnings per share		$	0.27			$	0.45
Average number of shares outstanding:
Earnings per common share			51,575,000				52,601,000
Diluted earnings per share			51,782,000				53,003,000
Dividends paid per common share		$	0.0400			$	0.0375

LANDSTAR SYSTEM/6

 

Landstar System, Inc.
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
(Unaudited)

		March 28,				Dec 27,
		2009				2008
ASSETS
Current assets:
Cash and cash equivalents		$	130,378			$	98,904
Short-term investments			23,860				23,479
Trade accounts receivable, less allowance of $6,926 and $6,230			232,206				315,065
Other receivables, including advances to independent contractors, less allowance of $5,016 and $4,298			18,251				10,083
Deferred income taxes and other current assets			20,554				27,871
Total current assets			425,249				475,402
Operating property, less accumulated depreciation and amortization of $111,600 and $106,635			125,803				124,178
Goodwill			31,134				31,134
Other assets			34,350				32,816
Total assets		$	616,536			$	663,530
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Cash overdraft		$	23,835			$	32,065
Accounts payable			88,037				105,882
Current maturities of long-term debt			26,274				24,693
Insurance claims			24,016				23,545
Accrued income taxes			11,921				12,239
Other current liabilities			33,246				38,161
Total current liabilities			207,329				236,585
Long-term debt, excluding current maturities			91,216				111,752
Insurance claims			38,217				38,278
Deferred income taxes			24,848				23,779
Shareholders’ equity:
Common stock, $0.01 par value, authorized 160,000,000 shares, issued 66,150,467 and 66,109,547 shares			662				661
Additional paid-in capital			156,693				154,533
Retained earnings			716,157				704,331
Cost of 14,815,905 and 14,424,887 shares of common stock in treasury			(617,786	)			(605,828	)
Accumulated other comprehensive loss			(800	)			(561	)
Total shareholders’ equity			254,926				253,136
Total liabilities and shareholders’ equity		$	616,536			$	663,530

LANDSTAR SYSTEM/7

 

Landstar System, Inc.
Supplemental Information
(Unaudited)

		Thirteen Weeks Ended
		March 28,				March 29,
		2009				2008
Revenue generated through (in thousands):
Business Capacity Owners (1)		$	262,065			$	324,804
Truck Brokerage Carriers			164,243				228,633
Rail intermodal			19,318				33,789
Ocean carriers			8,851				8,434
Air carriers			5,387				3,589
Other (2)			9,383				9,579
		$	469,247			$	608,828
Number of loads:
Business Capacity Owners (1)			170,650				203,200
Truck Brokerage Carriers			117,650				142,030
Rail intermodal			9,580				14,980
Ocean carriers			1,240				1,250
Air carriers			3,260				1,990
			302,380				363,450
Revenue per load:
Business Capacity Owners (1)		$	1,536			$	1,598
Truck Brokerage Carriers			1,396				1,610
Rail intermodal			2,016				2,256
Ocean carriers			7,138				6,747
Air carriers			1,652				1,804

		March 28,				March 29,
		2009				2008
Truck Capacity
Business Capacity Owners (1)(3)			8,424				8,277
Truck Brokerage Carriers:
Approved and active (4)			14,877				15,820
Approved			10,682				9,515
			25,559				25,335
Total available truck capacity providers			33,983				33,612
Agent Locations			1,445				1,375