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 21, 2011

LANDSTAR SYSTEM, INC.

(Exact name of registrant as specified in its charter)

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

13410 Sutton Park Drive South, Jacksonville, Florida (Address of principal executive offices)		32224 (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 21, 2011, Landstar System, Inc. (the "Company") issued a press release announcing results for the first quarter of fiscal 2011. A copy of the press release is attached hereto as Exhibit 99.1.

In the press release attached hereto as Exhibit 99.1, the Company provided the following information that may be deemed a non-GAAP financial measure: percentage change in revenue for the first fiscal quarter of 2011, as compared to first fiscal quarter of 2010, exclusive of substitute line haul revenue.

Management believes that it is appropriate to present this financial information for the following reasons: (1) disclosure of these matters will allow investors to better understand the underlying trends in the Company’s financial condition and results of operations; (2) this information will facilitate comparisons by investors of the Company’s results as compared to the results of peer companies; and (3) management considers this financial information in its decision making.

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 April 21, 2011 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 21, 2011		904-398-9400

LANDSTAR SYSTEM REPORTS FIRST QUARTER DILUTED EARNINGS PER SHARE INCREASE OF 26 PERCENT TO $0.43
PER DILUTED SHARE

Jacksonville, FL — Landstar System, Inc. (NASDAQ: LSTR) reported 2011 first quarter net income of $20.6 million, or $0.43 per diluted share, compared to net income of $17.2 million, or $0.34 per diluted share, for the 2010 first quarter. Operating margin was 35.4 percent in the 2011 first quarter compared to 31.3 percent in the 2010 first quarter. Revenue for the 2011 first quarter was $572.0 million compared to $548.1 million in the 2010 first quarter.

Truck transportation revenue hauled by independent business capacity owners (“BCOs”) and truck brokerage carriers in the 2011 first quarter was $520.6 million, or 91 percent of revenue, compared to $505.9 million, or 92 percent of revenue, in the 2010 first quarter. In the 2011 and 2010 first quarters, the Company invoiced customers $58.1 million and $41.3 million, respectively, of fuel surcharges that were passed 100 percent to BCOs and excluded from revenue. Included in revenue hauled by third-party truck capacity providers in the 2011 and 2010 first quarters were $19.3 million and $19.0 million, respectively, of fuel surcharges invoiced to customers on revenue hauled by third-party truck brokerage carriers. Also included in revenue hauled by third-party truck capacity providers was revenue generated under the Company’s less-than-truckload substitute line haul service offering of $19.4 million and $77.2 million in the 2011 and 2010 first quarters, respectively. Revenue hauled by rail, air and ocean cargo carriers was $37.9 million, or 7 percent of revenue, in the 2011 first quarter compared to $28.5 million, or 5 percent of revenue, in the 2010 first quarter. Transportation

LANDSTAR SYSTEM/2

management fee revenue generated by the supply chain solutions companies was $4.8 million and $4.1 million in the 2011 and 2010 first quarters, respectively.

Trailing twelve-month return on average shareholder’s equity was 33 percent and trailing twelve-month return on invested capital, net income divided by the sum of average equity plus average debt, was 23 percent. Landstar System, Inc. also announced that its Board of Directors has declared a quarterly dividend of $0.05 per share. The dividend is payable on May 27, 2011 to stockholders of record at the close of business on May 5, 2011. It is the intention of the Board of Directors to continue to pay a quarterly dividend.

“I am very pleased with the Company’s 2011 first quarter performance,” said Henry Gerkens, Landstar’s Chairman, President and CEO. “Despite the anticipated revenue decline in our substitute line haul service offering and the adverse effects of some inclement weather in the 2011 first quarter, revenue increased four percent over the 2010 first quarter. Gross profit, defined as revenue less the cost of purchased transportation and commissions to agents, increased 7 percent in the 2011 first quarter over the 2010 first quarter, operating income increased 20 percent and earnings per diluted share increased 26 percent. Excluding the substitute line haul revenue from both the 2011 and 2010 first quarters, revenue increased 17 percent, as demand and pricing were both strong in the 2011 first quarter.”

Gerkens continued, “In the 2011 first quarter, overall truckload capacity was seasonally tighter than experienced during prior year first quarters, which led to improved pricing. So far, in April, truckload pricing has continued to increase from the 2011 first quarter. I anticipate that trend to continue throughout the second quarter as freight demand increases over the 2011 first quarter. Assuming those operating trends continue throughout the quarter, I would expect operating margin in the 2011 second quarter to be about 42 percent and 2011 second quarter earnings to be in a range of $0.56 to $0.61 per diluted share.”

Landstar will provide a live webcast of its quarterly earnings conference call this afternoon at 2:00 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 2011 Earnings Release Conference Call.”

LANDSTAR SYSTEM/3

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 2010 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-party capacity owners and employees. All Landstar transportation companies are certified to ISO 9001:2008 quality management system standards and RC14001:2008 environmental, health, safety and security 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)

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

		Thirteen Weeks Ended
		March 26,				March 27,
		2011				2010
Revenue		$	571,986			$	548,088
Investment income			528				285
Costs and expenses:
Purchased transportation			431,378				417,201
Commissions to agents			44,171				40,408
Other operating costs			7,944				7,536
Insurance and claims			11,266				12,298
Selling, general and administrative			37,264				36,843
Depreciation and amortization			6,399				5,792
Total costs and expenses			538,422				520,078
Operating income			34,092				28,295
Interest and debt expense			828				854
Income before income taxes			33,264				27,441
Income taxes			12,707				10,484
Net income			20,557				16,957
Less: Net loss attributable to noncontrolling interest			(62	)			(219	)
Net income attributable to Landstar System, Inc. and subsidiary		$	20,619			$	17,176
Earnings per common share attributable to Landstar System, Inc. and subsidiary		$	0.43			$	0.34
Diluted earnings per share attributable to Landstar System, Inc. and subsidiary		$	0.43			$	0.34
Average number of shares outstanding:
Earnings per common share			47,870,000				50,207,000
Diluted earnings per share			47,900,000				50,318,000
Dividends paid per common share		$	0.050			$	0.045

LANDSTAR SYSTEM/5

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

		Mar. 26,				Dec. 25,
		2011				2010
ASSETS
Current assets:
Cash and cash equivalents		$	45,230			$	44,706
Short-term investments			30,756				23,266
Trade accounts receivable, less allowance of $5,525 and $5,324			344,459				307,350
Other receivables, including advances to independent contractors, less allowance of $5,018 and $5,511			30,972				23,943
Deferred income taxes and other current assets			15,218				21,652
Total current assets			466,635				420,917
Operating property, less accumulated depreciation and amortization of $142,330 and $137,830			127,957				132,649
Goodwill			57,470				57,470
Other assets			62,373				72,846
Total assets		$	714,435			$	683,882
LIABILITIES AND EQUITY
Current liabilities:
Cash overdraft		$	23,407			$	24,877
Accounts payable			160,704				137,297
Current maturities of long-term debt			19,878				22,172
Insurance claims			43,027				40,215
Other current liabilities			55,072				53,785
Total current liabilities			302,088				278,346
Long-term debt, excluding current maturities			95,710				99,439
Insurance claims			31,627				31,468
Deferred income taxes			22,573				23,662
Equity
Landstar System, Inc. and subsidiary shareholders’ equity
Common stock, $0.01 par value, authorized 160,000,000 shares, issued 66,553,099 and 66,535,169 shares			666				665
Additional paid-in capital			161,502				169,268
Retained earnings			862,357				844,132
Cost of 18,674,902 shares of common stock in treasury			(763,182	)			(763,182	)
Accumulated other comprehensive income			1,094				881
Total Landstar System, Inc. and subsidiary shareholders’ equity			262,437				251,764
Noncontrolling interest			—				(797	)
Total equity			262,437				250,967
Total liabilities and equity		$	714,435			$	683,882

LANDSTAR SYSTEM/6

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

		Thirteen Weeks Ended
		March 26,				March 27,
		2011				2010
Revenue generated through (in thousands):
Business Capacity Owners (1)		$	306,894			$	286,141
Truck Brokerage Carriers			213,723				219,755
Rail intermodal			16,465				14,776
Ocean cargo carriers			13,833				9,135
Air cargo carriers			7,560				4,603
Other (2)			13,511				13,678
		$	571,986			$	548,088
Number of loads:
Business Capacity Owners (1)			192,040				197,750
Truck Brokerage Carriers			135,740				149,350
Rail intermodal			7,260				6,870
Ocean cargo carriers			1,830				1,460
Air cargo carriers			1,950				1,500
			338,820				356,930
Revenue per load:
Business Capacity Owners (1)		$	1,598			$	1,447
Truck Brokerage Carriers			1,575				1,471
Rail intermodal			2,268				2,151
Ocean cargo carriers			7,559				6,257
Air cargo carriers			3,877				3,069

		March 26,				March 27,
		2011				2010
Truck Capacity
Business Capacity Owners (1) (3)			7,697				7,800
Truck Brokerage Carriers:
Approved and active (4)			16,773				15,644
Approved			9,347				9,674
			26,120				25,318
Total available truck capacity providers			33,817				33,118