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United States securities and exchange commission logo
April 14, 2021
James Todd
Vice President & Corporate Controller
Landstar System Inc.
13410 Sutton Park Drive South
Jacksonville, FL 32224
Re: Landstar System
Inc.
Form 10-K for the
Fiscal Year ended December 26, 2020
Filed February 23,
2021
File No. 000-21238
Dear Mr. Todd:
We have reviewed your filing and have the following comment. In
our comment, we
may ask you to provide us with information so we may better understand
your disclosure.
Please respond to this comment within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comment applies to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to this comment, we may have additional comments.
Form 10-K for the Fiscal Year ended December 26, 2020
Management's Discussion and Analysis of Financial Condition and Results
of Operations
Changes in Financial Condition and Results of Operations, page 22
1. We note that you have a
table on page 27 presenting, under the heading of "indirect costs
and expenses,"
percentages that various amounts reported in your financial statements are
of your measure of
gross profit, similarly for operating income and we see that
you describe your
computation of gross profit on page 25 as "revenue less the cost of
purchased
transportation and commissions to agents."
However, on page 26 you
describe certain items that are reported in other cost categories
which appear to
represent costs that would be attributable to costs of revenues under
GAAP, and thereby
ordinarily considered in calculating gross profit in accordance with
GAAP. For example, you
explain that maintenance on your trailering equipment, BCO
Independent Contractor
recruiting and qualification costs, and trailer rental costs are
components of other
operating costs, and that depreciation and amortization primarily
James Todd
Landstar System Inc.
April 14, 2021
Page 2
relates to trailing equipment and information technology hardware and
software.
We see that you have utilized the percentages based on your apparently
incomplete gross
profit measure in your discussion and analysis of operating results on
pages 29 and 31 and
have quantified the measure in earnings releases and presentations
filed on Form 8-K.
Please revise your filing to distinguish the measures that you have
presented from those
that would be calculated in accordance with GAAP. Specifically, you
should (i)
recalculate gross profit to reflect all costs of sales as would be
reported in accordance with
GAAP, (ii) chose an alternate label for your non-GAAP measure, and
(iii) provide a
reconciliation between gross profit in accordance with GAAP and your
non-GAAP
measure. Please refer to Item 10(e)(1)(i)(A), Item 10(e)(1)(ii)(E),
and Item 10(e)(1)(i)(B)
of Regulation S-K. Similar requirements are applicable with regard to
your
earnings releases and presentations pursuant to 244.100(a) of
Regulation G.
Please ensure that when presenting non-GAAP measures you include
corresponding
information based on the most directly comparable GAAP measures with
equal or greater
prominence. Given your current disclosures, this would include adding
tabulations and
narratives based on gross profit in accordance with GAAP. You may
refer to the Answer
to Question 102.10 of our Compliance and Disclosure Interpretations,
dated April 4, 2018,
which is available on our website at the following address.
https://www.sec.gov/divisions/corpfin/guidance/nongaapinterp.htm
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
You may contact Mark Wojciechowski, Staff Accountant, at (202) 551-3759
or Karl
Hiller, Branch Chief, at (202) 551-3686 if you have questions.
FirstName LastNameJames Todd Sincerely,
Comapany NameLandstar System Inc.
Division of
Corporation Finance
April 14, 2021 Page 2 Office of
Energy & Transportation
FirstName LastName