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 17, 2003 LANDSTAR SYSTEM, INC. (Exact name of registrant as specified in its charter) Delaware 021238 06-1313069 (State or other (Commission (I.R.S. Employer jurisdiction File Number) Identification No.) of incorporation) 13410 Sutton Park Drive South, Jacksonville, Florida (Address of principal executive offices) 32224 (Zip Code) Registrant's telephone number, including area code (904) 398-9400 N/A (Former name or former address, if changed since last report.)
Item 7. Financial Statement and Exhibits (c) Exhibits 99.1 Press Release, dated April 17, 2003. Item 9. Regulation FD Disclosure The information included in this section is being furnished under this "Item 9" and "Item 12. Disclosure of Results of Operations and Financial Condition" in accordance with SEC Release No. 33-8216. On April 17, 2003, Landstar System, Inc. issued a press release announcing results for the first quarter of fiscal 2003. A copy of the press release is attached hereto as exhibit 99.1. The information furnished under Item 9 and Item 12 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.
EXHIBIT INDEX Exhibit Description of Exhibit 99.1 Press Release, dated April 17, 2003
PRESS RELEASE, EXHIBIT 99.1 dated April 17, 2003 For Immediate Release Contact: Henry H. Gerkens Landstar System, Inc. www.landstar.com 904-398-9400 April 17, 2003 LANDSTAR SYSTEM REPORTS RECORD FIRST QUARTER REVENUE, NET INCOME AND EARNINGS PER DILUTED SHARE OF $.62 Jacksonville, Florida - Landstar System, Inc. (NASDAQ: LSTR) reported 2003 record first quarter net income of $10.2 million, or $.62 per diluted share, compared with net income of $8.5 million, or $.51 per diluted share, in the 2002 first quarter. Revenue was a record $366 million for the thirteen-week period ended March 29, 2003, compared with revenue of $336 million in the comparable 2002 period. Operating margin was 4.7 percent in the 2003 first quarter compared with 4.5 percent in the 2002 first quarter. Landstar's carrier group of companies generated $290 million of revenue in the 2003 first quarter compared with revenue of $270 million in the 2002 first quarter. In the 2003 and 2002 first quarters, the carrier group invoiced customers $8.6 million and $.8 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 $69 million of revenue in the 2003 first quarter compared with $59 million of revenue in the 2002 first quarter. "I am very pleased with Landstar's 2003 first quarter performance," said Landstar Chairman and CEO Jeff Crowe. "Earnings per diluted share increased 22 percent quarter over quarter. Consolidated revenue increased by nearly 9 percent to the highest first quarter revenue in Landstar history. Compared to the 2002 first quarter,
revenue generated through other third party truck capacity providers (brokerage) increased more than 37 percent, revenue generated through rail and air carriers increased nearly 18 percent and revenue hauled by Landstar BCOs increased more than 2 percent. In addition, revenue from the U.S. Government increased approximately $21 million compared to the 2002 first quarter. In the 2003 first quarter, we continued to increase revenue by providing our customers with the most efficient form of safe capacity available while improving our operating margin", Crowe said. "Trailing twelve-month return on average equity remained high at 36 percent and return on invested capital, net income divided by the sum of average equity plus average debt, was 23 percent. During the 2003 first quarter, we purchased 159,851 shares of common stock at a total cost of $8,467,000 and reduced debt by more that $15 million. Shareholder's equity represented 72 percent of total capitalization, up from 66 percent at the end of 2002," Crowe said. "The company has the ability to purchase an additional 285,270 shares of its common stock under its authorized share repurchase program." "As reported by FIRST CALL, the current range of analysts' earnings estimates for the second quarter of 2003 is $.78 to $.88 per diluted share. Currently, I anticipate results to be within that range. The current range of analysts' earnings estimates for the 2003 fiscal year is $3.15 to $3.45. I am currently more comfortable with the middle of that range," 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 our 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; and substantial industry competition. 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 compromised of Landstar Gemini, Inc., Landstar Inway, Inc., Landstar Ligon, Inc. and Landstar Ranger, Inc. delivers excellence in safe and complete over-the-road transportation services. The Landstar multimodal group compromised 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/4 LANDSTAR SYSTEM, INC. CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share amounts) (Unaudited) Thirteen Weeks Ended ----------------------- March 29, March 30, 2003 2002 ---------- ---------- Revenue $ 365,718 $ 335,693 Investment income 324 563 Costs and expenses: Purchased transportation 271,462 247,188 Commissions to agents 28,084 26,088 Other operating costs 9,231 8,106 Insurance and claims 10,628 10,907 Selling, general and administrative 26,381 26,048 Depreciation and amortization 3,166 2,879 ---------- ---------- Total costs and expenses 348,952 321,216 ---------- ---------- Operating income 17,090 15,040 Interest and debt expense 770 1,308 ---------- ---------- Income before income taxes 16,320 13,732 Income taxes 6,161 5,218 ---------- ---------- Net income $ 10,159 $ 8,514 ========== ========== Earnings per common share (1) $ 0.64 $ 0.53 ========== ========== Diluted earnings per share (1) $ 0.62 $ 0.51 ========== ========== Average number of shares outstanding: Earnings per common share (1) 15,774,000 16,193,000 ========== ========== Diluted earnings per share (1) 16,426,000 16,727,000 ========== ========== (1) 2002 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 July 17, 2002.
LANDSTAR SYSTEM/5 LANDSTAR SYSTEM, INC. SELECTED SEGMENT INFORMATION (Dollars in thousands) (Unaudited) Thirteen Weeks Ended ------------------------ March 29, March 30, 2003 2002 --------- --------- External Revenue ---------------- Carrier segment $ 290,045 $ 269,963 Multimodal segment 68,709 58,719 Insurance segment 6,964 7,011 --------- --------- External revenue $ 365,718 $ 335,693 ========= ========= Operating Income ---------------- Carrier segment $ 18,496 $ 16,856 Multimodal segment 1,924 1,140 Insurance segment 5,435 5,322 Other (8,765) (8,278) --------- --------- Operating income $ 17,090 $ 15,040 ========= =========
LANDSTAR SYSTEM/6 LANDSTAR SYSTEM, INC. CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share amounts) (Unaudited) March 29, Dec. 28, 2003 2002 ---------- ------------ ASSETS Current assets: Cash $ 68,136 $ 65,447 Short-term investments 2,724 3,130 Trade accounts receivable, less allowance of $3,932 and $3,953 182,746 190,052 Other receivables, including advances to independent contractors, less allowance of $5,469 and $5,331 21,347 12,640 Prepaid expenses and other current assets 3,227 3,338 ---------- ----------- Total current assets 278,180 274,607 ---------- ----------- Operating property, less accumulated depreciation and amortization of $55,226 and $52,841 74,198 76,774 Goodwill 31,134 31,134 Other assets 15,247 18,233 ---------- ----------- Total assets $ 398,759 $ 400,748 ========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Cash overdraft $ 18,410 $ 16,545 Accounts payable 61,248 60,297 Current maturities of long-term debt 11,434 12,123 Insurance claims 25,859 24,419 Other current liabilities 40,699 40,593 ---------- ----------- Total current liabilities 157,650 153,977 ---------- ----------- Long-term debt, excluding current maturities 50,569 65,237 Insurance claims 27,342 25,276 Deferred income taxes 7,524 7,165 Shareholders' equity: Common stock, $.01 par value, authorized 20,000,000 shares, issued 16,540,507 and 16,337,506 shares 165 163 Additional paid-in capital 7,248 2,609 Retained earnings 183,976 173,817 Cost of 714,730 and 554,879 shares of common stock in treasury (34,773) (26,306) Notes receivable arising from exercise of stock options (942) (1,190) ---------- ----------- Total shareholders' equity 155,674 149,093 ---------- ----------- Total liabilities and shareholders' equity $ 398,759 $ 400,748 ========== ===========
LANDSTAR SYSTEM/7 LANDSTAR SYSTEM, INC. SUPPLEMENTAL INFORMATION March 29, 2003 (Unaudited) March 29, March 30, 2003 2002 ---------- ------------ Carrier Segment External revenue generated through (in thousands): Business Capacity Owners (1) $ 249,524 $ 241,704 Other third party truck capacity providers 40,521 28,259 ---------- ----------- $ 290,045 $ 269,963 ---------- ----------- Revenue per revenue mile $ 1.74 $ 1.68 ---------- ----------- Revenue per load $ 1,199 $ 1,125 ---------- ----------- Average length of haul (miles) 690 671 ---------- ----------- Number of loads 241,999 240,013 ---------- ----------- Multimodal Segment External revenue generated through (in thousands): Business Capacity Owners (1) $ 10,758 (2) $ 12,888 (2) Other third party truck capacity providers 36,949 27,998 Rail and Air Carriers 21,002 17,833 ---------- ----------- $ 68,709 $ 58,719 ---------- ----------- Revenue per load $ 1,250 $ 1,058 ---------- ----------- Number of loads 54,982 55,503 ---------- ----------- As of As of March 29, Dec. 28, 2003 2002 ---------- ----------- Capacity Business Capacity Owners (1) 7,272 (3) 7,365 (3) ---------- ----------- Other third party truck capacity providers: Approved and active (4) 8,669 8,610 Approved 5,840 5,310 ---------- ----------- 14,509 13,920 ---------- ----------- Total available truck capacity providers 21,781 21,285 ========== =========== (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 8,267 and 8,402, respectively. (4) Active refers to other third party truck capacity providers who have moved at least one load in the past 180 days.