Landstar System Reports First Quarter Revenue Increase of 15 Percent
and Earnings Per Diluted Share of $.26
and Earnings Per Diluted Share of $.26
JACKSONVILLE, Fla., April 15 /PRNewswire-FirstCall/ -- Landstar System, Inc. (Nasdaq: LSTR) reported revenue rose 15 percent to a record $421 million in the 2004 first quarter from $366 million in the 2003 first quarter. 2004 first quarter net income was $8.1 million, or $.26 per diluted share, which included a $7.6 million charge for the cost incurred to settle a previously disclosed severe accident which occurred at the beginning of the 2004 fiscal year. This charge, net of related income tax benefits, reduced 2004 first quarter net income by $4.9 million, or $.16 per diluted share. Net income for the 2003 first quarter was $10.2 million, or $.31 per diluted share. Operating margin was 3.3 percent in the 2004 first quarter, which was reduced 1.8 percent by the previously referred to accident, compared with 4.7 percent in the 2003 first quarter.
Landstar's carrier group of companies generated $322 million of revenue in the 2004 first quarter, compared with revenue of $290 million in the 2003 first quarter. In the 2004 and 2003 first quarters, the carrier group invoiced customers $8.3 million and $8.6 million, respectively, of fuel surcharges that were passed on 100 percent to business capacity owners and excluded from revenue. Landstar's multimodal services group of companies generated $92 million of revenue in the 2004 first quarter compared with $69 million of revenue in the 2003 first quarter.
"We are off to a great start," said Landstar Chairman and CEO Jeff Crowe. "Consolidated revenue increased by 15 percent to the highest first quarter revenue in Landstar history. This increase reflected strong growth at the carrier segment and a 34 percent increase in revenue at the multimodal segment. Compared to the 2003 first quarter, revenue generated through other third party truck capacity providers (truck brokerage) increased 33 percent, revenue hauled by Landstar BCOs increased 11 percent and revenue generated through rail, air and ocean carriers increased 10 percent," Crowe said.
"Trailing twelve-month return on average equity remained high at 33 percent and return on invested capital, net income divided by the sum of average equity plus average debt, was 22 percent. During the 2004 first quarter, we purchased 462,000 shares of common stock at a total cost of $16,407,000 and reduced debt by approximately $2 million," Crowe said. "The Company has the ability to purchase an additional 918,140 shares of its common stock under its authorized share repurchase program."
"I would anticipate revenue growth for the remainder of the 2004 fiscal year to be within a range of 8 to 12 percent. The current range of analysts' earnings estimates, as reported by FIRST CALL, for the second quarter of 2004 is $.47 to $.52 per diluted share and $1.74 to $1.83 per diluted share for the full 2004 fiscal year. I am currently very comfortable with both of those ranges," said Crowe.
Landstar will provide a live webcast of its quarterly earnings conference call this afternoon at 2 pm ET. To access the webcast, visit the company's website at www.landstar.com. Click on Investors and then the webcast icon.
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 and expectations. Terms such as "anticipates," "believes," "estimates," "plans," "predicts," "may," "should," "will," the negative thereof and similar expressions, including any such expressions with respect to the level of comfort with analyst estimates, 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 accident claims; dependence on independent sales agents; dependence on third party capacity providers; disruptions or failures in our computer systems; a downturn in domestic 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 2003 fiscal year, described in the section Factors That May Affect Future Results and/or Forward-Looking Statements, 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 headquartered in Jacksonville, Florida. The Landstar carrier group comprised of Landstar Gemini, Inc., Landstar Inway, Inc., Landstar Ligon, Inc., Landstar Ranger, Inc. and Landstar Carrier Services, Inc. delivers excellence in safe and complete over-the-road transportation services. The Landstar multimodal group comprised of Landstar Express America, Inc. and Landstar Logistics, Inc. delivers excellence in safe, expedited, contract logistics and intermodal transportation services. All Landstar operating companies are certified to ISO 9001:2000 quality management system standards. Landstar System, Inc.'s common stock trades on the Nasdaq Stock Market(R) under the symbol LSTR.
(tables follow) Landstar System, Inc. Consolidated Statements of Income (Dollars in thousands, except per share amounts) (Unaudited) Thirteen Weeks Ended March 27, March 29, 2004 2003 Revenue $421,026 $365,718 Investment income 303 324 Costs and expenses: Purchased transportation 313,797 271,462 Commissions to agents 32,434 28,084 Other operating costs 9,894 9,231 Insurance and claims 20,706 10,628 Selling, general and administrative 27,410 26,381 Depreciation and amortization 3,199 3,166 Total costs and expenses 407,440 348,952 Operating income 13,889 17,090 Interest and debt expense 768 770 Income before income taxes 13,121 16,320 Income taxes 5,019 6,161 Net income $8,102 $10,159 Earnings per common share (1) $0.27 $0.32 Diluted earnings per share (1) $0.26 $0.31 Average number of shares outstanding: Earnings per common share (1) 29,855,000 31,548,000 Diluted earnings per share (1) 30,968,000 32,852,000 (1) 2003 earnings per share amounts and average number of shares outstanding have been restated to give retroactive effect to a two- for-one stock split effected in the form of a 100% stock dividend declared October 15, 2003. Landstar System, Inc. Selected Segment Information (Dollars in thousands) (Unaudited) Thirteen Weeks Ended March 27, March 29, 2004 2003 External Revenue Carrier segment $321,608 $290,045 Multimodal segment 92,014 68,709 Insurance segment 7,404 6,964 External revenue $421,026 $365,718 Operating Income Carrier segment $23,697 $18,496 Multimodal segment 2,739 1,924 Insurance segment (2,826) 5,435 Other (9,721) (8,765) Operating income $13,889 $17,090 Landstar System, Inc. Consolidated Balance Sheets (Dollars in thousands, except per share amounts) (Unaudited) March 27, December 27, 2004 2003 ASSETS Current assets: Cash and cash equivalents $48,476 $42,640 Short-term investments 29,311 30,890 Trade accounts receivable, less allowance of $3,499 and $3,410 221,116 219,039 Other receivables, including advances to independent contractors, less allowance of $5,223 and $4,077 18,837 13,196 Deferred income taxes and other current assets 15,415 14,936 Total current assets 333,155 320,701 Operating property, less accumulated depreciation and amortization of $58,989 and $58,480 66,289 67,639 Goodwill 31,134 31,134 Other assets 15,836 18,983 Total assets $446,414 $438,457 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Cash overdraft $19,338 $20,523 Accounts payable 82,942 71,713 Current maturities of long-term debt 79,641 9,434 Insurance claims 32,505 26,293 Other current liabilities 42,244 45,223 Total current liabilities 256,670 173,186 Long-term debt, excluding current maturities 10,136 82,022 Insurance claims 27,265 27,282 Deferred income taxes 13,494 13,452 Shareholders' equity: Common stock, $.01 par value, authorized 50,000,000 and 20,000,000 shares, issued 32,048,102 and 31,816,860 shares 320 318 Additional paid-in capital 23,013 18,382 Retained earnings 232,470 224,368 Cost of 2,271,930 and 1,809,930 shares of common stock in treasury (116,557) (100,150) Accumulated other comprehensive income 188 182 Notes receivable arising from exercise of stock options (585) (585) Total shareholders' equity 138,849 142,515 Total liabilities and shareholders' equity $446,414 $438,457 Landstar System, Inc. Supplemental Information March 27, 2004 (Unaudited) Thirteen Weeks Ended March 27, March 29, 2004 2003 Carrier Segment External revenue generated through (in thousands): Business Capacity Owners (1) $272,231 $249,524 Other third party truck capacity providers 49,377 40,521 $321,608 $290,045 Revenue per revenue mile $1.75 $1.74 Revenue per load $1,318 $1,199 Average length of haul (miles) 752 690 Number of loads 244,000 242,000 Multimodal Segment External revenue generated through (in thousands): Business Capacity Owners (1) (2) $15,413 $10,758 Other third party truck capacity providers 53,484 36,949 Rail, Air and Ocean Carriers 23,117 21,002 $92,014 $68,709 Revenue per load $1,373 $1,250 Number of loads 67,000 55,000 As of As of March 27, March 29, 2004 2003 Capacity Business Capacity Owners (1) (3) 7,637 7,272 Other third party truck capacity providers: Approved and active(4) 9,584 8,669 Approved 6,321 5,840 15,905 14,509 Total available truck capacity providers 23,542 21,781 (1) Business Capacity Owners are independent contractors who provide truck capacity to the Company under exclusive lease arrangements. (2) Includes revenue generated through Carrier Segment Business Capacity Owners. (3) Trucks provided by business capacity owners were 8,583 and 8,267, respectively. (4) Active refers to other third party truck capacity providers who have moved at least one load in the past 180 days.
SOURCE Landstar System, Inc.