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 12, 2021 |
||
Part III |
Page |
||||||
Item 1. |
3 |
|||||
Item 1A. |
11 |
|||||
Item 1B. |
18 |
|||||
Item 2. |
18 |
|||||
Item 3. |
18 |
|||||
Item 4. |
18 |
|||||
Item 5. |
19 |
|||||
Item 6. |
21 |
|||||
Item 7. |
21 |
|||||
Item 7A. |
34 |
|||||
Item 8. |
35 |
|||||
Item 9. |
60 |
|||||
Item 9A. |
60 |
|||||
Item 9B. |
64 |
|||||
Item 10. |
65 |
|||||
Item 11. |
65 |
|||||
Item 12. |
65 |
|||||
Item 13. |
65 |
|||||
Item 14. |
65 |
|||||
Item 15. |
66 |
|||||
69 |
||||||
EX – 31.1 Section 302 CEO Certification |
| |||||
EX – 32.1 Section 906 CEO Certification |
|
Trailers by Type |
||||
Van |
13,822 | |||
Unsided/platform, including flatbeds, step decks, drop decks and low boys |
3,067 | |||
Temperature-controlled |
172 | |||
|
|
|||
Total |
17,061 | |||
|
|
• | Create and maintain an environment in which continuous improvement is encouraged and expected by everyone within the organization; |
• | Engage each Landstar employee in the Company’s vision to inspire and empower entrepreneurs to succeed in the highly competitive, technology driven transportation industry; and |
• | Ensure that all Landstar employees fully understand the requirements of their job and the role their job plays within Landstar. |
• | Shifting the vast majority of our employees to a remote work environment; |
• | Initiating regular communication to employees regarding impacts of the COVID-19 pandemic, including health and safety protocols and procedures to address actual and suspected COVID-19 cases and potential exposure of our employees; |
• | Establishing physical distancing procedures and providing personal protective equipment and cleaning supplies for employees who need to be on-site; |
• | Increasing cleaning protocols at our offices; |
• | Modifying work spaces with plexiglass dividers, rearranged office layouts and touchless faucets; |
• | Expanding the use of virtual interactions in all aspects of our business; |
• | Cancelling the annual agent convention, BCO All-Star Celebration and various other events; |
• | Instituting a pandemic relief program whereby Landstar paid an extra $50 for each load delivered by a BCO Independent Contractor with a confirmed delivery date from April 1, 2020 through May 30, 2020 to both the BCO Independent Contractor hauling the load and the independent sales agent dispatching the load; |
• | Providing up to $2,000 to a BCO Independent Contractor who tests positive for COVID-19 or is placed under a mandatory quarantine by a public health authority; |
• | Providing paid time-off for employees directly impacted by COVID-19, and instructing those who are infected to stay home; and |
• | Prohibiting non-essential business travel for all employees. |
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 |
17,650 | $ | 54.16 | 3,732,872 | ||||||||
Equity Compensation Plans Not Approved by Security Holders |
0 | 0 | 0 |
Fiscal Years |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Number of Million Dollar Agents |
508 | 555 | 608 | |||||||||
|
|
|
|
|
|
|||||||
Average revenue generated per Million Dollar Agent |
$ | 7,489,000 | $ | 6,880,000 | $ | 7,150,000 | ||||||
|
|
|
|
|
|
|||||||
Percent of consolidated revenue generated by Million Dollar Agents |
92 | % | 93 | % | 94 | % | ||||||
|
|
|
|
|
|
Fiscal Years |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Revenue generated through (in thousands) : |
||||||||||||
Truck transportation |
||||||||||||
Truckload: |
||||||||||||
Van equipment |
$ | 2,515,940 | $ | 2,371,188 | $ | 2,791,494 | ||||||
Unsided/platform equipment |
1,202,295 | 1,295,817 | 1,386,387 | |||||||||
Less-than-truckload |
97,546 | 98,324 | 102,531 | |||||||||
|
|
|
|
|
|
|||||||
Total truck transportation |
3,815,781 | 3,765,329 | 4,280,412 | |||||||||
Rail intermodal |
114,313 | 118,305 | 128,976 | |||||||||
Ocean and air cargo carriers |
132,180 | 121,485 | 134,577 | |||||||||
Other (1) |
70,707 | 79,458 | 71,179 | |||||||||
|
|
|
|
|
|
|||||||
$ | 4,132,981 | $ | 4,084,577 | $ | 4,615,144 | |||||||
|
|
|
|
|
|
|||||||
Revenue on loads hauled via BCO Independent Contractors included in total truck transportation |
$ | 1,866,526 | $ | 1,831,752 | $ | 2,001,665 | ||||||
Number of loads : |
||||||||||||
Truck transportation |
||||||||||||
Truckload: |
||||||||||||
Van equipment |
1,318,768 | 1,337,089 | 1,398,388 | |||||||||
Unsided/platform equipment |
487,348 | 513,579 | 516,613 | |||||||||
Less-than-truckload |
163,024 | 155,592 | 145,269 | |||||||||
|
|
|
|
|
|
|||||||
Total truck transportation |
1,969,140 | 2,006,260 | 2,060,270 | |||||||||
Rail intermodal |
46,280 | 47,590 | 53,030 | |||||||||
Ocean and air cargo carriers |
31,900 | 30,110 | 28,970 | |||||||||
|
|
|
|
|
|
|||||||
2,047,320 | 2,083,960 | 2,142,270 | ||||||||||
|
|
|
|
|
|
|||||||
Loads hauled via BCO Independent Contractors included in total truck transportation |
945,210 | 954,990 | 949,330 | |||||||||
Revenue per load : |
||||||||||||
Truck transportation |
||||||||||||
Truckload: |
||||||||||||
Van equipment |
$ | 1,908 | $ | 1,773 | $ | 1,996 | ||||||
Unsided/platform equipment |
2,467 | 2,523 | 2,684 | |||||||||
Less-than-truckload |
598 | 632 | 706 | |||||||||
Total truck transportation |
1,938 | 1,877 | 2,078 | |||||||||
Rail intermodal |
2,470 | 2,486 | 2,432 | |||||||||
Ocean and air cargo carriers |
4,144 | 4,035 | 4,645 | |||||||||
Revenue per load on loads hauled via BCO Independent Contractors |
$ | 1,975 | $ | 1,918 | $ | 2,109 | ||||||
Revenue by capacity type (as a % of total revenue) : |
||||||||||||
Truck capacity providers: |
||||||||||||
BCO Independent Contractors |
45 | % | 45 | % | 43 | % | ||||||
Truck Brokerage Carriers |
47 | % | 47 | % | 49 | % | ||||||
Rail intermodal |
3 | % | 3 | % | 3 | % | ||||||
Ocean and air cargo carriers |
3 | % | 3 | % | 3 | % | ||||||
Other |
2 | % | 2 | % | 2 | % |
(1) |
Includes primarily reinsurance premium revenue generated by the insurance segment and intra-Mexico transportation services revenue generated by Landstar Metro. |
Dec. 26, 2020 |
Dec. 28, 2019 |
Dec. 29, 2018 |
||||||||||
BCO Independent Contractors |
10,242 | 9,554 | 9,884 | |||||||||
Truck Brokerage Carriers: |
||||||||||||
Approved and active (1) |
46,053 | 39,497 | 41,069 | |||||||||
Other approved |
22,972 | 16,820 | 17,985 | |||||||||
|
|
|
|
|
|
|||||||
69,025 | 56,317 | 59,054 | ||||||||||
|
|
|
|
|
|
|||||||
Total available truck capacity providers |
79,267 | 65,871 | 68,938 | |||||||||
|
|
|
|
|
|
|||||||
Trucks provided by BCO Independent Contractors |
10,991 | 10,243 | 10,599 |
(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 |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Revenue |
100.0 | % | 100.0 | % | 100.0 | % | ||||||
Purchased transportation |
77.3 | 76.6 | 77.4 | |||||||||
Commissions to agents |
8.2 | 8.4 | 8.2 | |||||||||
|
|
|
|
|
|
|||||||
Gross profit margin |
14.5 | % | 15.1 | % | 14.5 | % | ||||||
|
|
|
|
|
|
|||||||
Gross profit |
100.0 | % | 100.0 | % | 100.0 | % | ||||||
Investment income |
0.6 | 0.8 | 0.6 | |||||||||
Indirect costs and expenses: |
||||||||||||
Other operating costs, net of gains on asset sales/dispositions |
5.1 | 6.1 | 4.8 | |||||||||
Insurance and claims |
14.6 | 13.1 | 11.3 | |||||||||
Selling, general and administrative |
28.0 | 25.9 | 28.2 | |||||||||
Depreciation and amortization |
7.7 | 7.2 | 6.5 | |||||||||
Impairment of intangible and other assets |
0.4 | — | — | |||||||||
Commission program termination costs |
2.6 | — | — | |||||||||
|
|
|
|
|
|
|||||||
Total costs and expenses |
58.4 | 52.2 | 50.9 | |||||||||
|
|
|
|
|
|
|||||||
Operating margin |
42.2 | % | 48.6 | % | 49.7 | % | ||||||
|
|
|
|
|
|
Dec. 26, 2020 |
Dec. 28, 2019 |
|||||||
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 |
||||||||
Other current liabilities |
||||||||
|
|
|
|
|||||
Total current liabilities |
||||||||
|
|
|
|
|||||
Long-term debt, excluding current maturities |
||||||||
Insurance claims |
||||||||
Deferred income taxes and other noncurrent liabilities |
||||||||
Shareholders’ Equity |
||||||||
Common stock, $ |
||||||||
Additional paid-in capital |
||||||||
Retained earnings |
||||||||
Cost of |
( |
) | ( |
) | ||||
Accumulated other comprehensive loss |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total shareholders’ equity |
||||||||
|
|
|
|
|||||
Total liabilities and equity |
$ | $ | ||||||
|
|
|
|
Fiscal Years Ended |
||||||||||||
December 26, 2020 |
December 28, 2019 |
December 29, 2018 |
||||||||||
Revenue |
$ | $ | $ | |||||||||
Investment income |
||||||||||||
Costs and expenses: |
||||||||||||
Purchased transportation |
||||||||||||
Commissions to agents |
||||||||||||
Other operating costs, net of gains/losses on asset sales/dispositions |
||||||||||||
Insurance and claims |
||||||||||||
Selling, general and administrative |
||||||||||||
Depreciation and amortization |
||||||||||||
Impairment of intangible and other assets |
— | — | ||||||||||
Commission program termination costs |
— | — | ||||||||||
|
|
|
|
|
|
|||||||
Total costs and expenses |
||||||||||||
|
|
|
|
|
|
|||||||
Operating income |
||||||||||||
Interest and debt expense |
||||||||||||
|
|
|
|
|
|
|||||||
Income before income taxes |
||||||||||||
Income taxes |
||||||||||||
|
|
|
|
|
|
|||||||
Net income |
||||||||||||
Less: Net loss attributable to noncontrolling interest |
— | ( |
) | ( |
) | |||||||
|
|
|
|
|
|
|||||||
Net income attributable to Landstar System, Inc. and subsidiary |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|||||||
Earnings per common share attributable to Landstar System, Inc. and subsidiary |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|||||||
Diluted earnings per share attributable to Landstar System, Inc. and subsidiary |
$ | $ | $ | |||||||||
|
|
|
|
|
|
|||||||
Average number of shares outstanding: |
||||||||||||
Earnings per common share |
||||||||||||
|
|
|
|
|
|
|||||||
Diluted earnings per share |
||||||||||||
|
|
|
|
|
|
|||||||
Dividends per common share |
$ | $ | $ | |||||||||
|
|
|
|
|
|
Fiscal Years Ended |
||||||||||||
Dec. 26, 2020 |
Dec. 28, 2019 |
Dec. 29, 2018 |
||||||||||
Net income attributable to Landstar System, Inc. and subsidiary |
$ | |
$ | |
$ | |||||||
Other comprehensive income (loss): |
||||||||||||
Unrealized holding gains (losses) on available-for-sale |
( |
) | ||||||||||
Foreign currency translation (losses) gains |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
Other comprehensive income (loss) |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Comprehensive income attributable to Landstar System, Inc. and subsidiary |
$ | $ | $ | |||||||||
|
|
|
|
|
|
Fiscal Years Ended |
||||||||||||
Dec. 26, 2020 |
Dec. 28, 2019 |
Dec. 29, 2018 |
||||||||||
OPERATING ACTIVITIES |
||||||||||||
Net income |
$ | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||||||
Depreciation and amortization of operating property and intangible assets |
||||||||||||
Non-cash interest charges |
||||||||||||
Provisions for losses on trade and other accounts receivable |
||||||||||||
Gains on sales/disposals of operating property |
( |
) | ( |
) | ( |
) | ||||||
Impairment of intangible and other assets |
— | — | ||||||||||
Deferred income taxes, net |
||||||||||||
Stock-based compensation |
||||||||||||
Changes in operating assets and liabilities: |
||||||||||||
(Increase) decrease in trade and other accounts receivable |
( |
) | ( |
) | ||||||||
Increase in other assets |
( |
) | ( |
) | ( |
) | ||||||
Increase (decrease) in accounts payable |
( |
) | ||||||||||
Increase (decrease) in other liabilities |
( |
) | ||||||||||
Increase in insurance claims |
||||||||||||
|
|
|
|
|
|
|||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES |
||||||||||||
|
|
|
|
|
|
|||||||
INVESTING ACTIVITIES |
||||||||||||
Net change in other short-term investments |
( |
) | — | |||||||||
Sales and maturities of investments |
||||||||||||
Purchases of investments |
( |
) | ( |
) | ( |
) | ||||||
Purchases of operating property |
( |
) | ( |
) | ( |
) | ||||||
Proceeds from sales of operating property |
||||||||||||
Consideration paid for acquisition |
( |
) | — | — | ||||||||
|
|
|
|
|
|
|||||||
NET CASH USED BY INVESTING ACTIVITIES |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
FINANCING ACTIVITIES |
||||||||||||
Increase (decrease) in cash overdraft |
( |
) | ||||||||||
Dividends paid |
( |
) | ( |
) | ( |
) | ||||||
Payment for debt issue costs |
( |
) | — | — | ||||||||
Proceeds from exercises of stock options |
||||||||||||
Taxes paid in lieu of shares issued related to stock-based compensation plans |
( |
) | ( |
) | ( |
) | ||||||
Purchases of common stock |
( |
) | ( |
) | ( |
) | ||||||
Principal payments on finance lease obligations |
( |
) | ( |
) | ( |
) | ||||||
Purchase of noncontrolling interest |
— | ( |
) | — | ||||||||
Payment of contingent consideration |
— | — | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
NET CASH USED BY FINANCING ACTIVITIES |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Effect of exchange rate changes on cash and cash equivalents |
( |
) | ( |
) | ||||||||
|
|
|
|
|
|
|||||||
(Decrease) increase in cash and cash equivalents |
( |
) | ( |
) | ||||||||
Cash and cash equivalents at beginning of period |
||||||||||||
|
|
|
|
|
|
|||||||
Cash and cash equivalents at end of period |
$ | $ | $ | |||||||||
|
|
|
|
|
|
Landstar System, Inc. and Subsidiary Shareholders |
||||||||||||||||||||||||||||||||||||
Additional |
Accumulated Other |
Non- |
||||||||||||||||||||||||||||||||||
Common Stock |
Paid-In |
Retained |
Treasury Stock at Cost |
Comprehensive |
controlling |
|||||||||||||||||||||||||||||||
Shares |
Amount |
Capital |
Earnings |
Shares |
Amount |
(Loss) Income |
Interests |
Total |
||||||||||||||||||||||||||||
Balance December 30, 2017 |
$ |
$ |
$ |
$ |
( |
) |
$ ( |
$ |
$ |
|||||||||||||||||||||||||||
Adoption of accounting standards (Note 1) |
||||||||||||||||||||||||||||||||||||
Net income (loss) |
( |
) |
||||||||||||||||||||||||||||||||||
Dividends ($ |
( |
) |
( |
) | ||||||||||||||||||||||||||||||||
Purchases of common stock |
( |
) |
( |
) | ||||||||||||||||||||||||||||||||
Transaction with noncontrolling interests |
( |
) |
— |
|||||||||||||||||||||||||||||||||
Issuance of stock related to stock-based compensation plans |
( |
) |
( |
) |
( |
) | ||||||||||||||||||||||||||||||
Stock-based compensation |
||||||||||||||||||||||||||||||||||||
Other comprehensive (loss) income |
( |
) |
( |
) | ||||||||||||||||||||||||||||||||
Balance December 29, 2018 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
$ |
|||||||||||||||||||||||||
Net income (loss) |
( |
) |
||||||||||||||||||||||||||||||||||
Dividends ($ |
( |
) |
( |
) | ||||||||||||||||||||||||||||||||
Purchases of common stock |
( |
) |
( |
) | ||||||||||||||||||||||||||||||||
Purchase noncontrolling interests |
( |
) |
( |
) | ||||||||||||||||||||||||||||||||
Issuance of stock related to stock-based compensation plans |
( |
) |
( |
) |
( |
) | ||||||||||||||||||||||||||||||
Stock-based compensation |
||||||||||||||||||||||||||||||||||||
Other comprehensive income |
||||||||||||||||||||||||||||||||||||
Balance December 28, 2019 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
— |
$ |
||||||||||||||||||||||||
Adoption of accounting standards (Note 1 6 ) |
( |
) |