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) July 14, 2010

LANDSTAR SYSTEM, INC.

(Exact name of registrant as specified in its charter)

Delaware		021238		06-1313069
(State or other jurisdiction		(Commission		(I.R.S. Employer
of incorporation)		File Number)		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 July 14, 2010, Landstar System, Inc. issued a press release announcing results for the second quarter of fiscal 2010. 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

	99.1			News Release dated July 14, 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

Landstar System, Inc.
13410 Sutton Park Drive, South
Jacksonville, FL 32224
904 398 9400

For Immediate Release		Contact: Jim Gattoni
		Landstar System, Inc.
		www.landstar.com
July 14, 2010		904-398-9400

LANDSTAR SYSTEM REPORTS 31 PERCENT INCREASE IN REVENUE AND
A 40 PERCENT INCREASE IN DILUTED EARNINGS PER SHARE

Jacksonville, FL — Landstar System, Inc. (NASDAQ: LSTR) reported a 31 percent increase in revenue to $641.7 million in the 2010 second quarter, up from $491.2 million in the 2009 second quarter. Net income for the 2010 second quarter was $24.4 million, or $0.49 per diluted share, compared to $17.9 million, or $0.35 per diluted share for the 2009 second quarter. Operating income increased 34 percent to $40.0 million in the 2010 second quarter compared to $29.8 million in the 2009 second quarter.

Truck transportation revenue hauled by business capacity owners and truck brokerage carriers in the 2010 second quarter was $592.0 million, or 92 percent of revenue, compared to $453.8 million, or 92 percent of revenue, in the 2009 second quarter. Included in revenue hauled by truck brokerage carriers in the 2010 and 2009 second quarters were $23.1 million and $9.2 million, respectively, of fuel surcharges invoiced to customers. In the 2010 and 2009 second quarters, the Company also invoiced customers $53.1 million and $27.3 million, respectively, of fuel surcharges that were passed 100 percent to business capacity owners and excluded from revenue. Revenue hauled by rail, air and ocean cargo carriers was $35.0 million, or 6 percent of revenue, in the 2010 second quarter compared to $28.2 million, or 6 percent of revenue, in the 2009 second quarter. Transportation management fee revenue generated by the supply chain solutions companies was $6.1 million, or 1 percent of revenue, in the 2010 second quarter.

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Landstar System, Inc. also announced that its Board of Directors has declared a quarterly dividend of $0.05 per share. This represents an 11 percent increase in the Company’s quarterly dividend. The dividend is payable on August 27, 2010 to stockholders of record at the close of business on August 9, 2010. It is the intention of the Board of Directors to continue to pay a quarterly dividend. During the 2010 second quarter, Landstar purchased 510,062 shares of its common stock at a total cost of $20.6 million. Under the Company’s authorized share purchase program, the Company currently has a total of 745,000 shares of its common stock available for purchase.

Commenting on Landstar’s 2010 second quarter, Landstar’s Chairman, President and CEO, Henry Gerkens said, “I am very pleased with the Company’s performance in the 2010 second quarter. 2010 second quarter revenue, operating income and diluted earnings per share all increased sharply over the corresponding 2009 second quarter amounts. Revenue increased 31 percent due to stronger volumes and pricing, operating income increased 34 percent, despite higher purchased transportation costs and insurance and claims costs, and diluted earnings per share increased 40 percent. The total number of truck transportation loads hauled by business capacity owners and truck brokerage carriers in the 2010 second quarter was the highest reported number of truck transportation loads hauled by business capacity owners and truck brokerage carriers in any quarter of any year in Landstar’s history. Additionally, from a pricing standpoint, revenue per load for truck transportation on freight hauled by business capacity owners and truck brokerage carriers continued to strengthen as we moved through the 2010 second quarter.

“The overall freight environment continues to be strong. Recent trends in June, and thus far in July, indicate that both the revenue per load and the number of loads hauled remain strong compared to the corresponding prior year periods. I expect these trends to continue throughout the 2010 third quarter. I would anticipate 2010 third quarter results to be similar to those experienced in the 2010 second quarter. As such, I expect 2010 third quarter revenue to increase in a range of 25 percent to 33 percent over 2009 third quarter revenue and diluted earnings per share to be in a range of $0.47 to $0.52.”

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

LANDSTAR SYSTEM/3

www.landstar.com; click on “Investor Relations” and “Webcasts,” then click on “Landstar’s Second Quarter 2010 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 2009 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, 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 9001:2008 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/4

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

		Twenty Six Weeks Ended								Thirteen Weeks Ended
		June 26,				June 27,				June 26,				June 27,
		2010				2009				2010				2009
Revenue		$	1,189,809			$	960,411			$	641,721			$	491,164
Investment income			574				675				289				250
Costs and expenses:
Purchased transportation			907,290				717,891				490,089				366,567
Commissions to agents			87,379				78,251				46,971				39,927
Other operating costs			15,504				14,838				7,968				7,388
Insurance and claims			26,129				18,799				13,831				9,797
Selling, general and administrative			73,816				66,612				36,973				32,243
Depreciation and amortization			11,988				11,201				6,196				5,716
Total costs and expenses			1,122,106				907,592				602,028				461,638
Operating income			68,277				53,494				39,982				29,776
Interest and debt expense			1,664				2,136				810				973
Income before income taxes			66,613				51,358				39,172				28,803
Income taxes			25,446				19,607				14,962				10,946
Net income			41,167				31,751				24,210				17,857
Less: Net loss attributable to noncontrolling interest			(446	)			—				(227	)			—
Net income attributable to Landstar System, Inc. and subsidiary		$	41,613			$	31,751			$	24,437			$	17,857
Earnings per common share attributable to Landstar System, Inc. and subsidiary		$	0.83			$	0.62			$	0.49			$	0.35
Diluted earnings per share attributable to Landstar System, Inc. and subsidiary		$	0.83			$	0.61			$	0.49			$	0.35
Average number of shares outstanding:
Earnings per common share			50,165,000				51,453,000				50,123,000				51,330,000
Diluted earnings per share			50,259,000				51,636,000				50,215,000				51,487,000
Dividends paid per common share		$	0.0900			$	0.0800			$	0.0450			$	0.0400

LANDSTAR SYSTEM/5

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

		June 26,				Dec. 26,
		2010				2009
ASSETS
Current assets:
Cash and cash equivalents		$	45,081			$	85,719
Short-term investments			33,156				24,325
Trade accounts receivable, less allowance of $5,597 and $5,547			338,877				278,854
Other receivables, including advances to independent contractors, less allowance of $5,543 and $5,797			22,119				18,149
Deferred income taxes and other current assets			22,232				19,565
Total current assets			461,465				426,612
Operating property, less accumulated depreciation and amortization of $133,957 and $124,810			143,505				116,656
Goodwill			57,470				57,470
Other assets			66,662				48,054
Total assets		$	729,102			$	648,792
LIABILITIES AND EQUITY
Current liabilities:
Cash overdraft		$	30,293			$	28,919
Accounts payable			159,548				121,030
Current maturities of long-term debt			24,886				24,585
Insurance claims			34,902				41,627
Other current liabilities			47,180				42,474
Total current liabilities			296,809				258,635
Long-term debt, excluding current maturities			93,956				68,313
Insurance claims			30,022				30,680
Deferred income taxes			23,368				23,013
Equity
Landstar System, Inc. and subsidiary shareholders’ equity
Common stock, $0.01 par value, authorized 160,000,000 shares, issued 66,487,151 and 66,255,358 shares			665				663
Additional paid-in capital			166,292				161,261
Retained earnings			803,126				766,040
Cost of 16,652,344 and 16,022,111 shares of common stock in treasury			(685,506	)			(660,446	)
Accumulated other comprehensive income			681				498
Total Landstar System, Inc. and subsidiary shareholders’ equity			285,258				268,016
Noncontrolling interest			(311	)			135
Total equity			284,947				268,151
Total liabilities and equity		$	729,102			$	648,792

LANDSTAR SYSTEM/6

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

		Twenty Six Weeks Ended								Thirteen Weeks Ended
		June 26,				June 27,				June 26,				June 27,
		2010				2009				2010				2009
Revenue generated through (in thousands):
Business Capacity Owners (1)		$	631,736			$	550,665			$	345,595			$	288,600
Truck Brokerage Carriers			466,163				329,479				246,408				165,236
Rail intermodal			34,092				36,728				19,316				17,410
Ocean cargo carriers			20,835				17,518				11,700				8,667
Air cargo carriers			8,562				7,508				3,959				2,121
Other (2)			28,421				18,513				14,743				9,130
		$	1,189,809			$	960,411			$	641,721			$	491,164
Number of loads:
Business Capacity Owners (1)			420,770				365,000				223,020				194,350
Truck Brokerage Carriers			308,330				240,020				158,980				122,370
Rail intermodal			15,490				18,290				8,620				8,710
Ocean cargo carriers			3,110				2,590				1,650				1,350
Air cargo carriers			3,130				5,100				1,630				1,840
			750,830				631,000				393,900				328,620
Revenue per load:
Business Capacity Owners (1)		$	1,501			$	1,509			$	1,550			$	1,485
Truck Brokerage Carriers			1,512				1,373				1,550				1,350
Rail intermodal			2,201				2,008				2,241				1,999
Ocean cargo carriers			6,699				6,764				7,091				6,420
Air cargo carriers			2,735				1,472				2,429				1,153

		June 26,				June 27,
		2010				2009
Truck Capacity
Business Capacity Owners (1) (3)			7,818				8,286
Truck Brokerage Carriers:
Approved and active (4)			16,670				14,827
Approved			9,047				11,082
			25,717				25,909
Total available truck capacity providers			33,535				34,195
Agent Locations			1,343				1,436