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

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 October 14, 2009, Landstar System, Inc. issued a press release announcing results for the third 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 October 14, 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
October 14, 2009		904-398-9400

LANDSTAR SYSTEM REPORTS THIRD QUARTER RESULTS

Jacksonville, FL — Landstar System, Inc. (NASDAQ: LSTR) reported 2009 third quarter net income of $20.1 million, or $0.39 per diluted share, from revenue of $500.7 million. Net income for the 2008 third quarter was $32.8 million, or $0.62 per diluted share, from revenue of $732.8 million. Included in the 2008 third quarter was net income of $1.7 million, or $0.03 per diluted share, from $27.6 million of revenue for bus capacity provided for evacuation assistance related to the storms that impacted the Gulf Coast in September 2008.

Revenue hauled by third-party truck capacity providers in the third quarter of 2009 was $455.9 million, or 91 percent of revenue, compared to $646.7 million, or 88 percent of revenue, in the 2008 third quarter. Included in revenue hauled by third-party truck capacity providers in the 2009 and 2008 third quarters were $12.3 million and $41.9 million, respectively, of fuel surcharges invoiced to customers on revenue hauled by third-party truck brokerage carriers. In the 2009 and 2008 third quarters, the Company also invoiced customers $36.2 million and $92.5 million, respectively, of fuel surcharges that were passed 100 percent to third-party BCO Independent Contractors and excluded from revenue. Revenue hauled by rail, air and ocean cargo carriers was $31.1 million, or 6 percent of revenue, in the 2009 third quarter compared to $49.1 million, or 7 percent of revenue, in the 2008 third quarter.

Revenue in the thirty-nine-week period ended September 26, 2009 was $1.46 billion compared to $2.04 billion for the 2008 thirty-nine-week period. Net income for the thirty-

LANDSTAR SYSTEM/2

nine-week period ended September 26, 2009 was $51.8 million, or $1.00 per diluted share, compared to net income of $86.3 million, or $1.62 per diluted share, for the thirty-nine-week period ended September 27, 2008.

Revenue hauled by third-party truck capacity providers in the 2009 thirty-nine-week period was $1.34 billion, or 91 percent of revenue, compared to $1.84 billion, or 90 percent of revenue, in the 2008 thirty-nine-week period. Included in revenue hauled by third-party truck capacity providers in the 2009 and 2008 thirty-nine week periods were $31.3 million and $109.6 million, respectively, of fuel surcharges invoiced to customers on revenue hauled by third-party truck brokerage carriers. In the 2009 and 2008 thirty-nine week periods, the Company also invoiced customers $87.7 million and $240.6 million, respectively, of fuel surcharges that were passed 100 percent to third-party BCO Independent Contractors and excluded from revenue. Revenue hauled by rail, air and ocean cargo carriers was $92.8 million, or 6 percent of revenue, in the 2009 thirty-nine-week period compared to $146.4 million, or 7 percent of revenue, in the 2008 thirty-nine-week period.

Landstar System, Inc. also announced that its Board of Directors has declared a quarterly dividend of $0.045 per share. The dividend is payable on November 27, 2009 to stockholders of record at the close of business on November 2, 2009. It is the intention of the Board of Directors to continue to pay a quarterly dividend. During the 2009 third quarter, Landstar purchased 516,000 shares of its common stock at a total cost of $17.9 million bringing the total number of common shares purchased during the thirty-nine weeks ended September 26, 2009 to 959,700 shares at a total cost of $31.7 million. Under the Company’s authorized share purchase programs, the Company currently has a total of 2,040,000 shares of its common stock available for purchase.

Trailing twelve month return on average shareholders’ equity remained high at 29 percent and trailing twelve month return on invested capital, net income divided by the sum of average equity plus average debt, was 21 percent.

“In the 2009 third quarter, Landstar’s revenue continued to be negatively impacted by the recession in the domestic and global economies,” said Landstar President and Chief

LANDSTAR SYSTEM/3

Executive Officer Henry Gerkens. “As was the case in the 2009 second quarter, revenue declines were experienced across multiple sectors affecting a broad range of accounts. Notable 2009 third quarter over 2008 third quarter revenue declines continued to be generated from the U.S. Department of Defense as well as with respect to our substitute line haul service offering. On a positive note, revenue generated from the automotive sector began to improve for the first time in a couple of years.

“The number of loads hauled in the 2009 third quarter decreased only 11 percent compared to the 2008 third quarter, an improvement from the 16 percent decline experienced in the 2009 second quarter compared to the 2008 second quarter. The number of loads hauled in the 2009 third quarter increased 1 percent over the 2009 second quarter while the number of loads hauled in the 2008 third quarter was 5 percent lower than the number of loads hauled in the 2008 second quarter. I believe this is a clear indication that the decrease in demand that began during the latter part of the 2008 third quarter will provide for easing volume comparisons into the Company’s 2009 fourth quarter and continuing into 2010.

“Revenue per load began to stabilize during the 2009 third quarter. On a sequential basis, average revenue per load with respect to the Company’s truck transportation services in the 2009 third quarter was approximately equal to the average revenue per load in the 2009 second quarter. The general pricing environment, however, still remains somewhat challenging.

“As a direct result of Landstar’s variable cost business model and other cost reduction actions taken in 2009, Landstar was able to generate an operating profit margin of 6.5 percent, despite the very difficult operating environment. Additionally, Landstar’s net revenue margin, defined as revenue less purchased transportation and commissions to agents divided by revenue, was 17.7 percent, in the 2009 third quarter, up from 14.8 percent in the 2008 third quarter.”

Gerkens continued, “I see a gradually improving overall freight environment, and I believe that the worst is over. I am cautiously optimistic as we close out 2009. The very difficult revenue comparisons to prior year experienced by Landstar throughout 2009

LANDSTAR SYSTEM/4

will continue to ease throughout the 2009 fourth quarter. Based on the current trends, I anticipate 2009 fourth quarter revenue to be similar to the 2009 third quarter revenue and diluted earnings per share to be within a range of $0.37 to $0.42 per diluted share.”

Landstar will provide a live webcast of its quarterly earnings conference call this afternoon at 5 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 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.

About Landstar:

Landstar System, Inc. is a non-asset based provider of integrated supply chain solutions. Landstar delivers safe, specialized transportation, warehousing and logistics services to a broad range of customers worldwide utilizing a network of agents, third-

LANDSTAR SYSTEM/5

party capacity owners and employees. All Landstar transportation 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/6

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

		Thirty Nine Weeks Ended								Thirteen Weeks Ended
		September 26,				September 27,				September 26,				September 27,
		2009				2008				2009				2008
Revenue		$	1,461,081			$	2,039,232			$	500,670			$	732,753
Investment income			954				2,686				279				817
Costs and expenses:
Purchased transportation			1,090,219				1,573,209				372,328				569,864
Commissions to agents			117,735				153,857				39,484				54,267
Other operating costs			21,749				20,814				6,911				6,874
Insurance and claims			29,056				27,159				10,257				8,125
Selling, general and administrative			99,690				105,457				33,078				34,499
Depreciation and amortization			17,414				15,558				6,213				5,251
Total costs and expenses			1,375,863				1,896,054				468,271				678,880
Operating income			86,172				145,864				32,678				54,690
Interest and debt expense			3,093				5,635				957				1,757
Income before income taxes			83,079				140,229				31,721				52,933
Income taxes			31,466				53,904				11,859				20,116
Net income			51,613				86,325				19,862				32,817
Less: Net loss attributable to the noncontrolling interest			(214	)			—				(214	)			—
Net income attributable to Landstar System, Inc. and subsidiary		$	51,827			$	86,325			$	20,076			$	32,817
Earnings per common share attributable to Landstar System, Inc. and subsidiary		$	1.01			$	1.64			$	0.39			$	0.62
Diluted earnings per share attributable to Landstar System, Inc. and subsidiary		$	1.01			$	1.62			$	0.39			$	0.62
Average number of shares outstanding:
Earnings per common share			51,325,000				52,680,000				51,069,000				52,586,000
Diluted earnings per share			51,507,000				53,142,000				51,245,000				53,028,000
Dividends paid per common share		$	0.1250			$	0.1150			$	0.0450			$	0.0400

LANDSTAR SYSTEM/7

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

		Sep. 26,				Dec. 27,
		2009				2008
ASSETS
Current assets:
Cash and cash equivalents		$	68,990			$	98,904
Short-term investments			23,706				23,479
Trade accounts receivable, less allowance of $7,190 and $6,230			258,565				315,065
Other receivables, including advances to independent contractors, less allowance of $4,808 and $4,298			9,978				10,083
Deferred income taxes and other current assets			26,627				27,871
Total current assets			387,866				475,402
Operating property, less accumulated depreciation and amortization of $119,890 and $106,635			122,297				124,178
Goodwill			57,297				31,134
Other assets			50,284				32,816
Total assets		$	617,744			$	663,530
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Cash overdraft		$	21,219			$	32,065
Accounts payable			110,029				105,882
Current maturities of long-term debt			25,988				24,693
Insurance claims			26,039				23,545
Accrued income taxes			12,456				12,239
Other current liabilities			33,941				38,161
Total current liabilities			229,672				236,585
Long-term debt, excluding current maturities			49,053				111,752
Insurance claims			35,667				38,278
Deferred income taxes			28,307				23,779
Shareholders’ equity:
Common stock, $0.01 par value, authorized 160,000,000 shares, issued 66,192,767 and 66,109,547 shares			662				661
Additional paid-in capital			159,581				154,533
Retained earnings			749,739				704,331
Cost of 15,357,268 and 14,424,887 shares of common stock in treasury			(636,349	)			(605,828	)
Accumulated other comprehensive gain (loss)			251				(561	)
Total Landstar System, Inc. and subsidiary shareholders’ equity			273,884				253,136
Noncontrolling interest			1,161				—
Total shareholders’ equity			275,045				253,136
Total liabilities and shareholders’ equity		$	617,744			$	663,530

LANDSTAR SYSTEM/8

Landstar System, Inc. and Subsidiary
Supplemental Information
(Unaudited)

		Thirty Nine Weeks Ended								Thirteen Weeks Ended
		September 26,				September 27,				September 26,				September 27,
		2009				2008				2009				2008
Revenue generated through (in thousands):
Business Capacity Owners (1)		$	840,391			$	1,070,982			$	289,726			$	370,787
Truck Brokerage Carriers			495,661				766,262				166,182				275,928
Rail intermodal			57,094				106,936				20,366				35,338
Ocean cargo carriers			25,459				29,329				7,941				11,109
Air cargo carriers			10,259				10,135				2,751				2,686
Other (2)			32,217				55,588				13,704				36,905
		$	1,461,081			$	2,039,232			$	500,670			$	732,753
Number of loads:
Business Capacity Owners (1)			561,840				638,330				196,840				209,250
Truck Brokerage Carriers			363,000				435,250				122,980				146,280
Rail intermodal			28,600				45,610				10,310				14,610
Ocean cargo carriers			3,920				3,990				1,330				1,400
Air cargo carriers			6,440				5,520				1,340				1,650
			963,800				1,128,700				332,800				373,190
Revenue per load:
Business Capacity Owners (1)		$	1,496			$	1,678			$	1,472			$	1,772
Truck Brokerage Carriers			1,365				1,761				1,351				1,886
Rail intermodal			1,996				2,345				1,975				2,419
Ocean cargo carriers			6,495				7,351				5,971				7,935
Air cargo carriers			1,593				1,836				2,053				1,628

		September 26,				September 27,
		2009				2008
Truck Capacity
Business Capacity Owners (1) (3)			8,070				8,363
Truck Brokerage Carriers:
Approved and active (4)			14,541				16,400
Approved			10,576				9,120
			25,117				25,520
Total available truck capacity providers			33,187				33,883
Agent Locations			1,403				1,403