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) January 27, 2010

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 January 27, 2010, Landstar System, Inc. issued a press release announcing results for the fourth 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 January 27, 2010 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
904-398-9400

January 27, 2010

LANDSTAR SYSTEM REPORTS FOURTH QUARTER RESULTS

Jacksonville, FL — Landstar System, Inc. (NASDAQ: LSTR) reported 2009 fourth quarter net income of $18.6 million, or $0.37 per diluted share, from revenue of $547.7 million. Net income for the 2008 fourth quarter was $24.6 million, or $0.47 per diluted share, from revenue of $603.8 million.

Revenue hauled by third-party truck capacity providers in the 2009 fourth quarter was $498.4 million, or 91 percent of revenue, compared to $547.4 million, or 91 percent of revenue, in the 2008 fourth quarter. Included in revenue hauled by third-party truck capacity providers in the 2009 and 2008 fourth quarters were $16.8 million and $24.6 million, respectively, of fuel surcharges invoiced to customers on revenue hauled by third-party truck brokerage carriers. In the 2009 and 2008 fourth quarters, the Company also invoiced customers $40.7 million and $54.5 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 $35.0 million, or 6 percent of revenue, in the 2009 fourth quarter compared to $47.0 million, or 8 percent of revenue, in the 2008 fourth quarter. Transportation management fee revenue was $4.4 million, or 1 percent of revenue, in the 2009 fourth quarter.

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 February 26, 2010 to stockholders of record at the close of business on February 5, 2010. It is the intention of the Board of Directors to continue to pay a quarterly dividend. During the 2009 fourth quarter, Landstar purchased 665,000 shares of its common stock at a total cost of $24.1 million.

LANDSTAR SYSTEM/2

 

The Company’s variable cost business model continues to generate significant cash flow. During 2009, the Company purchased 1,625,000 shares of its common stock at a total cost of $55.8 million and completed two acquisitions, while at the same time reduced borrowings on its senior credit facility by $30 million. Under the Company’s authorized share purchase program, the Company currently has a total of 1,375,000 shares of its common stock available for purchase.

Commenting on Landstar’s 2009 fourth quarter, Landstar’s Chairman, President and CEO, Henry Gerkens said, “I am pleased with the way the Company finished 2009, particularly as it relates to revenue. Sequentially, Landstar was able to increase revenue by 9 percent over the 2009 third quarter, and that was significantly better than has been experienced in the fourth quarter compared to the third quarter in each of the prior three years. The increased revenue was primarily the result of a general increase in rate per load of approximately 4 percent, combined with increased loadings of approximately 6 percent over the 2009 third quarter. 2009 fourth quarter revenue compared to the 2008 fourth quarter decreased 9 percent, significantly better than the 28 percent decrease experienced during the first nine months of 2009 compared to the first nine months of 2008.

Gerkens continued, “Diluted earnings per share in the 2009 fourth quarter compared to the 2008 fourth quarter was negatively impacted by $0.10 per diluted share due to increased insurance and claims expense attributable to an unusual amount of adverse development of commercial trucking claims in the 2009 fourth quarter, partly offset by $0.03 per diluted share from a lower provision for taxes. Although the cost of insurance and claims in the quarter was much higher than a typical quarter, our 2009 accident frequency rate was the lowest in Landstar history, demonstrating the Company’s continued emphasis on safety. Operating margin was 5.0 percent in the 2009 fourth quarter compared to 6.8 percent in the 2008 fourth quarter, primarily as a result of the adverse development of commercial trucking claims.”

LANDSTAR SYSTEM/3

 

“As we moved through the 2009 fourth quarter, both the number of loads and rate per load continued to show signs of strengthening. Through the first several weeks of January, I have seen daily volume increases of approximately five to ten percent compared to January 2009, while rate per load continues to show improvement. Assuming these trends continue for the balance of the quarter, I would anticipate 2010 first quarter revenue to increase over the 2009 first quarter revenue in a mid to upper single digit range. As a result, I anticipate Landstar’s earnings to be within a range of $0.28 to $0.32 per diluted share. Although I remain cautiously optimistic about 2010, I will not be providing specific annual revenue and earnings guidance. From a longer term perspective, our goals are to achieve a cumulative average growth rate in revenue over a three to five year period in a mid-teen range, to increase annual operating margins and to grow earnings per share at a slightly higher rate than the rate of revenue increase.”

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 Fourth 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. 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-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/5

 

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

		Fiscal Year End								Thirteen Weeks Ended
		December 26,				December 27,				December 26,				December 27,
		2009				2008				2009				2008
Revenue		$	2,008,796			$	2,643,069			$	547,715			$	603,837
Investment income			1,268				3,339				314				653
Costs and expenses:
Purchased transportation			1,503,520				2,033,384				413,301				460,175
Commissions to agents			160,571				203,058				42,836				49,201
Other operating costs			29,173				28,033				7,424				7,219
Insurance and claims			45,918				36,374				16,862				9,215
Selling, general and administrative			133,612				137,758				33,922				32,301
Depreciation and amortization			23,528				20,960				6,114				5,402
Total costs and expenses			1,896,322				2,459,567				520,459				563,513
Operating income			113,742				186,841				27,570				40,977
Interest and debt expense			4,030				7,351				937				1,716
Income before income taxes			109,712				179,490				26,633				39,261
Income taxes			39,762				68,560				8,296				14,656
Net income			69,950				110,930				18,337				24,605
Less: Net loss attributable to noncontrolling interest			(445	)			—				(231	)			—
Net income attributable to Landstar System, Inc. and subsidiary		$	70,395			$	110,930			$	18,568			$	24,605
Earnings per common share attributable to Landstar System, Inc. and subsidiary		$	1.38			$	2.11			$	0.37			$	0.47
Diluted earnings per share attributable to Landstar System, Inc. and subsidiary		$	1.37			$	2.10			$	0.37			$	0.47
Average number of shares outstanding:
Earnings per common share			51,095,000				52,503,000				50,404,000				51,973,000
Diluted earnings per share			51,280,000				52,854,000				50,594,000				52,197,000
Dividends paid per common share		$	0.1700			$	0.1550			$	0.0450			$	0.0400

LANDSTAR SYSTEM/6

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

		Dec. 26,				Dec. 27,
		2009				2008
ASSETS
Current assets:
Cash and cash equivalents		$	85,719			$	98,904
Short-term investments			24,325				23,479
Trade accounts receivable, less allowance of $5,547 and $6,230			278,854				315,065
Other receivables, including advances to independent contractors, less allowance of $5,797 and $4,298			18,149				10,083
Deferred income taxes and other current assets			19,565				27,871
Total current assets			426,612				475,402
Operating property, less accumulated depreciation and amortization of $124,810 and $106,635			116,656				124,178
Goodwill			57,470				31,134
Other assets			48,054				32,816
Total assets		$	648,792			$	663,530
LIABILITIES AND EQUITY
Current liabilities:
Cash overdraft		$	28,919			$	32,065
Accounts payable			121,030				105,882
Current maturities of long-term debt			24,585				24,693
Insurance claims			41,627				23,545
Accrued income taxes			9,957				12,239
Other current liabilities			32,517				38,161
Total current liabilities			258,635				236,585
Long-term debt, excluding current maturities			68,313				111,752
Insurance claims			30,680				38,278
Deferred income taxes			23,013				23,779
Equity
Landstar System, Inc. and subsidiary shareholders’ equity
Common stock, $0.01 par value, authorized 160,000,000 shares, issued 66,255,358 and 66,109,547 shares			663				661
Additional paid-in capital			161,261				154,533
Retained earnings			766,040				704,331
Cost of 16,022,111 and 14,424,887 shares of common stock in treasury			(660,446	)			(605,828	)
Accumulated other comprehensive income (loss)			498				(561	)
Total Landstar System, Inc. and subsidiary shareholders’ equity			268,016				253,136
Noncontrolling interest			135				—
Total equity			268,151				253,136
Total liabilities and equity		$	648,792			$	663,530

LANDSTAR SYSTEM/7

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

		Fiscal Year End								Thirteen Weeks Ended
		December 26,				December 27,				December 26,				December 27,
		2009				2008				2009				2008
Revenue generated through (in thousands):
Business Capacity Owners (1)		$	1,140,004			$	1,388,353			$	299,613			$	317,371
Truck Brokerage Carriers			694,467				996,269				198,806				230,007
Rail intermodal			76,346				136,367				19,252				29,431
Ocean cargo carriers			33,835				42,153				8,376				12,824
Air cargo carriers			17,621				14,891				7,362				4,756
Other (2)			46,523				65,036				14,306				9,448
		$	2,008,796			$	2,643,069			$	547,715			$	603,837
Number of loads:
Business Capacity Owners (1)			761,940				820,680				200,100				182,350
Truck Brokerage Carriers			501,980				571,600				138,980				136,350
Rail intermodal			37,890				58,510				9,290				12,900
Ocean cargo carriers			5,370				5,380				1,450				1,390
Air cargo carriers			7,780				8,260				1,340				2,740
			1,314,960				1,464,430				351,160				335,730
Revenue per load:
Business Capacity Owners (1)		$	1,496			$	1,692			$	1,497			$	1,740
Truck Brokerage Carriers			1,383				1,743				1,430				1,687
Rail intermodal			2,015				2,331				2,072				2,281
Ocean cargo carriers			6,301				7,835				5,777				9,226
Air cargo carriers			2,265				1,803				5,494				1,736

		December 26,				December 27,
		2009				2008
Truck Capacity
Business Capacity Owners (1) (3)			7,926				8,455
Truck Brokerage Carriers:
Approved and active (4)			14,887				16,135
Approved			9,886				10,036
			24,773				26,171
Total available truck capacity providers			32,699				34,626
Agent Locations			1,366				1,428