ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|
| |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
|
| |
(Address of principal executive offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
|
|
|
|
☒ |
Accelerated filer |
☐ | |||
Non-accelerated filer |
☐ |
Smaller reporting company |
| |||
Emerging growth company |
|
Document |
Part of 10-K Into Which Incorporated |
|||
Proxy Statement relating to Landstar System, Inc.’s Annual Meeting of Stockholders scheduled to be held on May 19, 2020 |
Part III |
Page |
||||||
Item 1. |
3 |
|||||
Item 1A. |
10 |
|||||
Item 1B. |
16 |
|||||
Item 2. |
16 |
|||||
Item 3. |
17 |
|||||
Item 4. |
17 |
|||||
Item 5. |
18 |
|||||
Item 6. |
20 |
|||||
Item 7. |
20 |
|||||
Item 7A. |
33 |
|||||
Item 8. |
35 |
|||||
Item 9. |
62 |
|||||
Item 9A. |
62 |
|||||
Item 9B. |
65 |
|||||
Item 10. |
66 |
|||||
Item 11. |
66 |
|||||
Item 12. |
66 |
|||||
Item 13. |
66 |
|||||
Item 14. |
66 |
|||||
Item 15. |
67 |
|||||
70 |
||||||
EX – 31.1 Section 302 CEO Certification |
||||||
EX – 31.2 Section 302 CFO Certification |
||||||
EX – 32.1 Section 906 CEO Certification |
||||||
EX – 32.2 Section 906 CFO Certification |
Item 1. |
Business |
Trailers by Type |
||||
Van |
13,841 |
|||
Unsided/platform, including flatbeds, step decks, drop decks and low boys |
3,092 |
|||
Temperature-controlled |
134 |
|||
Total |
17,067 |
|||
Item 1A. |
Risk Factors |
Item 1B. |
Unresolved Staff Comments |
Item 2. |
Properties |
Item 3. |
Legal Proceedings |
Item 4. |
Mine Safety Disclosures |
Item 5. |
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
Plan Category |
Number of Securities to be Issued Upon Exercise of Outstanding Options |
Weighted-average Exercise Price of Outstanding Options |
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans |
|||||||||
Equity Compensation Plans Approved by Security Holders |
44,467 |
$ | 51.24 |
3,625,196 |
||||||||
Equity Compensation Plans Not Approved by Security Holders |
0 |
0 |
0 |
Item 6. |
Selected Financial Data |
Fiscal Years |
||||||||||||||||||||
Income Statement Data: |
2019 |
2018 |
2017 |
2016 |
2015 |
|||||||||||||||
Revenue |
$ | 4,084,577 |
$ | 4,615,144 |
$ | 3,646,364 |
$ | 3,167,634 |
$ | 3,321,091 |
||||||||||
Investment income |
5,041 |
3,816 |
2,498 |
1,502 |
1,396 |
|||||||||||||||
Costs and expenses: |
||||||||||||||||||||
Purchased transportation |
3,127,474 |
3,569,961 |
2,805,109 |
2,415,663 |
2,551,343 |
|||||||||||||||
Commissions to agents |
342,226 |
378,002 |
297,410 |
264,205 |
270,260 |
|||||||||||||||
Other operating costs, net of gains on asset sales/dispositions |
37,274 |
31,803 |
28,687 |
29,702 |
31,618 |
|||||||||||||||
Insurance and claims |
80,319 |
75,677 |
62,545 |
57,280 |
48,754 |
|||||||||||||||
Selling, general and administrative |
158,953 |
188,212 |
170,583 |
143,239 |
149,704 |
|||||||||||||||
Depreciation and amortization |
44,468 |
43,570 |
40,560 |
35,796 |
29,102 |
|||||||||||||||
Total costs and expenses |
3,790,714 |
4,287,225 |
3,404,894 |
2,945,885 |
3,080,781 |
|||||||||||||||
Operating income |
298,904 |
331,735 |
243,968 |
223,251 |
241,706 |
|||||||||||||||
Interest and debt expense |
3,141 |
3,354 |
3,166 |
3,794 |
2,949 |
|||||||||||||||
Income before income taxes |
295,763 |
328,381 |
240,802 |
219,457 |
238,757 |
|||||||||||||||
Income taxes |
68,060 |
73,168 |
63,806 |
82,107 |
91,068 |
|||||||||||||||
Net income |
227,703 |
255,213 |
176,996 |
137,350 |
147,689 |
|||||||||||||||
Less: Net loss attributable to noncontrolling interest |
(17 |
) | (68 |
) | (92 |
) | — |
— |
||||||||||||
Net income attributable to Landstar System, Inc. and subsidiary |
$ | 227,720 |
$ | 255,281 |
$ | 177,088 |
$ | 137,350 |
$ | 147,689 |
||||||||||
Earnings per common share attributable to Landstar System, Inc. and subsidiary |
$ | 5.72 |
$ | 6.19 |
$ | 4.22 |
$ | 3.26 |
$ | 3.38 |
||||||||||
Diluted earnings per share attributable to Landstar System, Inc. and subsidiary |
$ | 5.72 |
$ | 6.18 |
$ | 4.21 |
$ | 3.25 |
$ | 3.37 |
||||||||||
Dividends per common share |
$ | 2.70 |
$ | 0.63 |
$ | 1.88 |
$ | 0.34 |
$ | 0.30 |
Balance Sheet Data: |
Dec. 28, 2019 |
Dec. 29, 2018 |
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
|||||||||||||||
Total assets |
$ | 1,427,711 |
$ | 1,380,564 |
$ | 1,352,460 |
$ | 1,096,591 |
$ | 991,518 |
||||||||||
Long-term debt, including current maturities |
112,844 |
128,425 |
125,113 |
138,304 |
124,292 |
|||||||||||||||
Equity |
721,469 |
689,133 |
653,877 |
542,557 |
466,237 |
Item 7. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Fiscal Years |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
Number of Million Dollar Agents |
555 |
608 |
542 |
|||||||||
Average revenue generated per Million Dollar Agent |
$ | 6,880,000 |
$ | 7,150,000 |
$ | 6,191,000 |
||||||
Percent of consolidated revenue generated by Million Dollar Agents |
93 |
% | 94 |
% | 92 |
% | ||||||
Fiscal Years |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
Revenue generated through (in thousands): |
||||||||||||
Truck transportation |
||||||||||||
Truckload: |
||||||||||||
Van equipment |
$ | 2,371,188 |
$ | 2,791,494 |
$ | 2,163,832 |
||||||
Unsided/platform equipment |
1,295,817 |
1,386,387 |
1,134,660 |
|||||||||
Less-than-truckload |
98,324 |
102,531 |
89,041 |
|||||||||
Total truck transportation |
3,765,329 |
4,280,412 |
3,387,533 |
|||||||||
Rail intermodal |
118,305 |
128,976 |
96,416 |
|||||||||
Ocean and air cargo carriers |
121,485 |
134,577 |
110,898 |
|||||||||
Other (1) |
79,458 |
71,179 |
51,517 |
|||||||||
$ | 4,084,577 |
$ | 4,615,144 |
$ | 3,646,364 |
|||||||
Revenue on loads hauled via BCO Independent Contractors included in total truck transportation |
$ | 1,831,752 |
$ | 2,001,665 |
$ | 1,655,026 |
||||||
Number of loads: |
||||||||||||
Truck transportation |
||||||||||||
Truckload: |
||||||||||||
Van equipment |
1,337,089 |
1,398,388 |
1,282,632 |
|||||||||
Unsided/platform equipment |
513,579 |
516,613 |
487,652 |
|||||||||
Less-than-truckload |
155,592 |
145,269 |
132,776 |
|||||||||
Total truck transportation |
2,006,260 |
2,060,270 |
1,903,060 |
|||||||||
Rail intermodal |
47,590 |
53,030 |
45,000 |
|||||||||
Ocean and air cargo carriers |
30,110 |
28,970 |
25,420 |
|||||||||
2,083,960 |
2,142,270 |
1,973,480 |
||||||||||
Loads hauled via BCO Independent Contractors included in total truck transportation |
954,990 |
949,330 |
916,190 |
|||||||||
Revenue per load: |
||||||||||||
Truck transportation |
||||||||||||
Truckload: |
||||||||||||
Van equipment |
$ | 1,773 |
$ | 1,996 |
$ | 1,687 |
||||||
Unsided/platform equipment |
2,523 |
2,684 |
2,327 |
|||||||||
Less-than-truckload |
632 |
706 |
671 |
|||||||||
Total truck transportation |
1,877 |
2,078 |
1,780 |
|||||||||
Rail intermodal |
2,486 |
2,432 |
2,143 |
|||||||||
Ocean and air cargo carriers |
4,035 |
4,645 |
4,363 |
|||||||||
Revenue per load on loads hauled via BCO Independent Contractors |
$ | 1,918 |
$ | 2,109 |
$ | 1,806 |
||||||
Revenue by capacity type (as a % of total revenue): |
||||||||||||
Truck capacity providers: |
||||||||||||
BCO Independent Contractors |
45 |
% | 43 |
% | 45 |
% | ||||||
Truck Brokerage Carriers |
47 |
% | 49 |
% | 48 |
% | ||||||
Rail intermodal |
3 |
% | 3 |
% | 3 |
% | ||||||
Ocean and air cargo carriers |
3 |
% | 3 |
% | 3 |
% | ||||||
Other |
2 |
% | 2 |
% | 1 |
% |
(1) |
Includes primarily reinsurance premium revenue generated by the insurance segment and intra-Mexico transportation services revenue generated by Landstar Metro. |
Dec. 28, 2019 |
Dec. 29, 2018 |
Dec. 30, 2017 |
||||||||||
BCO Independent Contractors |
9,554 |
9,884 |
9,087 |
|||||||||
Truck Brokerage Carriers: |
||||||||||||
Approved and active (1) |
39,497 |
41,069 |
34,243 |
|||||||||
Other approved |
16,820 |
17,985 |
15,691 |
|||||||||
56,317 |
59,054 |
49,934 |
||||||||||
Total available truck capacity providers |
65,871 |
68,938 |
59,021 |
|||||||||
Trucks provided by BCO Independent Contractors |
10,243 |
10,599 |
9,696 |
(1) | Active refers to Truck Brokerage Carriers who moved at least one load in the 180 days immediately preceding the fiscal year end. |
Fiscal Years |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
Revenue |
100.0 |
% | 100.0 |
% | 100.0 |
% | ||||||
Purchased transportation |
76.6 |
77.4 |
76.9 |
|||||||||
Commissions to agents |
8.4 |
8.2 |
8.2 |
|||||||||
Gross profit margin |
15.1 |
% | 14.5 |
% | 14.9 |
% | ||||||
Gross profit |
100.0 |
% | 100.0 |
% | 100.0 |
% | ||||||
Investment income |
0.8 |
0.6 |
0.5 |
|||||||||
Indirect costs and expenses: |
||||||||||||
Other operating costs, net of gains on asset sales/dispositions |
6.1 |
4.8 |
5.3 |
|||||||||
Insurance and claims |
13.1 |
11.3 |
11.5 |
|||||||||
Selling, general and administrative |
25.9 |
28.2 |
31.4 |
|||||||||
Depreciation and amortization |
7.2 |
6.5 |
7.5 |
|||||||||
Total costs and expenses |
52.2 |
50.9 |
55.6 |
|||||||||
Operating margin |
48.6 |
% | 49.7 |
% | 44.9 |
% | ||||||
Contractual Obligation |
Total |
Less Than 1 Year |
1-3 Years |
3-5 Years |
More Than 5 Years |
|||||||||||||||
Finance lease obligations |
$ | 119,327 |
$ | 45,670 |
$ | 53,401 |
$ | 20,256 |
$ | — |
||||||||||
Operating lease obligations |
3,003 |
725 |
1,325 |
953 |
— |
|||||||||||||||
Purchase obligations |
10,127 |
4,970 |
3,851 |
1,306 |
— |
|||||||||||||||
$ | 132,457 |
$ | 51,365 |
$ | 58,577 |
$ | 22,515 |
$ | — |
|||||||||||
Item 7A. |
Quantitative and Qualitative Disclosures About Market Risk |
Item 8. |
Financial Statements and Supplementary Data |
Dec. 28, 2019 |
Dec. 29, 2018 |
|||||||
ASSETS |
||||||||
Current Assets |
||||||||
Cash and cash equivalents |
$ | $ | ||||||
Short-term investments |
||||||||
Trade accounts receivable, less allowance of $ |
||||||||
Other receivables, including advances to independent contractors, less allowance of $ |
||||||||
Other current assets |
||||||||
Total current assets |
||||||||
Operating property, less accumulated depreciation and amortization of $ |
||||||||
Goodwill |
||||||||
Other assets |
||||||||
Total assets |
$ | $ | ||||||
LIABILITIES AND EQUITY |
||||||||
Current Liabilities |
||||||||
Cash overdraft |
$ | $ | ||||||
Accounts payable |
||||||||
Current maturities of long-term debt |
||||||||
Insurance claims |
||||||||
Dividends payable |
— |
|||||||
Accrued compensation |
||||||||
Other current liabilities |
||||||||
Total current liabilities |
||||||||
Long-term debt, excluding current maturities |
||||||||
Insurance claims |
||||||||
Deferred income taxes and other noncurrent liabilities |
||||||||
Equity |
||||||||
Landstar System, Inc. and subsidiary shareholders’ equity: |
||||||||
Common stock, $ |
||||||||
Additional paid-in capital |
||||||||
Retained earnings |
||||||||
Cost of |
( |
) | ( |
) | ||||
Accumulated other comprehensive loss |
( |
) | ( |
) | ||||
Total Landstar System, Inc. and subsidiary shareholders’ equity |
||||||||
Noncontrolling interest |
— |
|||||||
Total equity |
||||||||
Total liabilities and equity |
$ | $ | ||||||
Fiscal Years Ended |
||||||||||||
Dec. 28, 2019 |
Dec. 29, 2018 |
Dec. 30, 2017 |
||||||||||
Revenue |
$ | |
$ | |
$ | |
||||||
Investment income |
|