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) January 27, 2010

LANDSTAR SYSTEM, INC.
(Exact name of registrant as specified in its charter)
 	 	 	 	 	
Delaware	 	021238	 	06-1313069	
(State or other jurisdiction
of incorporation)	 	(Commission
File Number)	 	(I.R.S. Employer
Identification No.)	

13410 Sutton Park Drive South, Jacksonville, Florida	 	32224	
(Address of principal executive offices)	 	(Zip Code)	
(904) 398-9400
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 	 	 	
o	 	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	

o	 	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	

o	 	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	

o	 	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

 

 
Item 2.02 Results of Operations and Financial Condition
On January 27, 2010, Landstar System, Inc. issued a press release announcing results for the fourth quarter of fiscal 2009. A copy of the press release is attached hereto as Exhibit 99.1.
The information furnished under Item 2.02 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.
Item 9.01 Financial Statements and Exhibits
 	 	 	 	 	
Exhibits	 	 	
 	 	 	 	 	
 	99.1	 	 	News Release dated January 27, 2010 of Landstar System, Inc.	
2

 
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 	 	 	 	 	
 	LANDSTAR SYSTEM, INC.
 	 	
Date: January 27, 2010 	By:  	/s/ James B. Gattoni  	 	
 	 	Name:  	James B. Gattoni 	 	
 	 	Title:  	Vice President and Chief Financial Officer 	 	
 	
3

Exhibit 99.1

For Immediate Release
Contact: Jim Gattoni
Landstar System, Inc.
www.landstar.com
904-398-9400
January 27, 2010
LANDSTAR SYSTEM REPORTS FOURTH QUARTER RESULTS
Jacksonville, FL — Landstar System, Inc. (NASDAQ: LSTR) reported 2009 fourth quarter net income of $18.6 million, or $0.37 per diluted share, from revenue of $547.7 million. Net income for the 2008 fourth quarter was $24.6 million, or $0.47 per diluted share, from revenue of $603.8 million.
Revenue hauled by third-party truck capacity providers in the 2009 fourth quarter was $498.4 million, or 91 percent of revenue, compared to $547.4 million, or 91 percent of revenue, in the 2008 fourth quarter. Included in revenue hauled by third-party truck capacity providers in the 2009 and 2008 fourth quarters were $16.8 million and $24.6 million, respectively, of fuel surcharges invoiced to customers on revenue hauled by third-party truck brokerage carriers. In the 2009 and 2008 fourth quarters, the Company also invoiced customers $40.7 million and $54.5 million, respectively, of fuel surcharges that were passed 100 percent to third-party BCO Independent Contractors and excluded from revenue. Revenue hauled by rail, air and ocean cargo carriers was $35.0 million, or 6 percent of revenue, in the 2009 fourth quarter compared to $47.0 million, or 8 percent of revenue, in the 2008 fourth quarter. Transportation management fee revenue was $4.4 million, or 1 percent of revenue, in the 2009 fourth quarter.
Landstar System, Inc. also announced that its Board of Directors has declared a quarterly dividend of $0.045 per share. The dividend is payable on February 26, 2010 to stockholders of record at the close of business on February 5, 2010. It is the intention of the Board of Directors to continue to pay a quarterly dividend. During the 2009 fourth quarter, Landstar purchased 665,000 shares of its common stock at a total cost of $24.1 million.

 
LANDSTAR SYSTEM/2
 
The Company’s variable cost business model continues to generate significant cash flow. During 2009, the Company purchased 1,625,000 shares of its common stock at a total cost of $55.8 million and completed two acquisitions, while at the same time reduced borrowings on its senior credit facility by $30 million. Under the Company’s authorized share purchase program, the Company currently has a total of 1,375,000 shares of its common stock available for purchase.
Commenting on Landstar’s 2009 fourth quarter, Landstar’s Chairman, President and CEO, Henry Gerkens said, “I am pleased with the way the Company finished 2009, particularly as it relates to revenue. Sequentially, Landstar was able to increase revenue by 9 percent over the 2009 third quarter, and that was significantly better than has been experienced in the fourth quarter compared to the third quarter in each of the prior three years. The increased revenue was primarily the result of a general increase in rate per load of approximately 4 percent, combined with increased loadings of approximately 6 percent over the 2009 third quarter. 2009 fourth quarter revenue compared to the 2008 fourth quarter decreased 9 percent, significantly better than the 28 percent decrease experienced during the first nine months of 2009 compared to the first nine months of 2008.
Gerkens continued, “Diluted earnings per share in the 2009 fourth quarter compared to the 2008 fourth quarter was negatively impacted by $0.10 per diluted share due to increased insurance and claims expense attributable to an unusual amount of adverse development of commercial trucking claims in the 2009 fourth quarter, partly offset by $0.03 per diluted share from a lower provision for taxes. Although the cost of insurance and claims in the quarter was much higher than a typical quarter, our 2009 accident frequency rate was the lowest in Landstar history, demonstrating the Company’s continued emphasis on safety. Operating margin was 5.0 percent in the 2009 fourth quarter compared to 6.8 percent in the 2008 fourth quarter, primarily as a result of the adverse development of commercial trucking claims.”

 
LANDSTAR SYSTEM/3
 
“As we moved through the 2009 fourth quarter, both the number of loads and rate per load continued to show signs of strengthening. Through the first several weeks of January, I have seen daily volume increases of approximately five to ten percent compared to January 2009, while rate per load continues to show improvement. Assuming these trends continue for the balance of the quarter, I would anticipate 2010 first quarter revenue to increase over the 2009 first quarter revenue in a mid to upper single digit range. As a result, I anticipate Landstar’s earnings to be within a range of $0.28 to $0.32 per diluted share. Although I remain cautiously optimistic about 2010, I will not be providing specific annual revenue and earnings guidance. From a longer term perspective, our goals are to achieve a cumulative average growth rate in revenue over a three to five year period in a mid-teen range, to increase annual operating margins and to grow earnings per share at a slightly higher rate than the rate of revenue increase.”
Landstar will provide a live webcast of its quarterly earnings conference call this afternoon at 5 pm ET. To access the webcast, visit the Company’s website at www.landstar.com; click on “Investor Relations” and “Webcasts,” then click on “Landstar’s Fourth Quarter 2009 Earnings Release Conference Call.”
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, expectations and intentions. Terms such as “anticipates,” “believes,” “estimates,” “intention,” “plans,” “predicts,” “may,” “should,” “will,” the negative thereof and similar expressions 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 claims; dependence on independent sales agents; dependence on third-party capacity providers; disruptions or failures in our computer systems; a downturn in domestic or international 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 2008 fiscal year, described in Item 1A Risk Factors, 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/4
 
About Landstar:
Landstar System, Inc. is a non-asset based provider of integrated supply chain solutions. Landstar delivers safe, specialized transportation, warehousing and logistics services to a broad range of customers worldwide utilizing a network of agents, third-party capacity owners and employees. All Landstar transportation companies are certified to ISO 9001:2000 quality management system standards. Landstar System, Inc. is headquartered in Jacksonville, Florida. Its common stock trades on The NASDAQ Stock Market ®  under the symbol LSTR.
(Tables follow)

 
LANDSTAR SYSTEM/5
 
Landstar System, Inc. and Subsidiary
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Fiscal Year End	 	 	Thirteen Weeks Ended	 	
 	 	December 26,	 	 	December 27,	 	 	December 26,	 	 	December 27,	 	
 	 	2009	 	 	2008	 	 	2009	 	 	2008	 	
Revenue	 	$	2,008,796	 	 	$	2,643,069	 	 	$	547,715	 	 	$	603,837	 	
Investment income	 	 	1,268	 	 	 	3,339	 	 	 	314	 	 	 	653	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Costs and expenses:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Purchased transportation	 	 	1,503,520	 	 	 	2,033,384	 	 	 	413,301	 	 	 	460,175	 	
Commissions to agents	 	 	160,571	 	 	 	203,058	 	 	 	42,836	 	 	 	49,201	 	
Other operating costs	 	 	29,173	 	 	 	28,033	 	 	 	7,424	 	 	 	7,219	 	
Insurance and claims	 	 	45,918	 	 	 	36,374	 	 	 	16,862	 	 	 	9,215	 	
Selling, general and administrative	 	 	133,612	 	 	 	137,758	 	 	 	33,922	 	 	 	32,301	 	
Depreciation and amortization	 	 	23,528	 	 	 	20,960	 	 	 	6,114	 	 	 	5,402	 	

Total costs and expenses	 	 	1,896,322	 	 	 	2,459,567	 	 	 	520,459	 	 	 	563,513	 	

Operating income	 	 	113,742	 	 	 	186,841	 	 	 	27,570	 	 	 	40,977	 	
Interest and debt expense	 	 	4,030	 	 	 	7,351	 	 	 	937	 	 	 	1,716	 	

Income before income taxes	 	 	109,712	 	 	 	179,490	 	 	 	26,633	 	 	 	39,261	 	
Income taxes	 	 	39,762	 	 	 	68,560	 	 	 	8,296	 	 	 	14,656	 	

Net income	 	 	69,950	 	 	 	110,930	 	 	 	18,337	 	 	 	24,605	 	
Less: Net loss attributable to noncontrolling interest	 	 	(445	)	 	 	—	 	 	 	(231	)	 	 	—	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Net income attributable to Landstar System, Inc. and subsidiary	 	$	70,395	 	 	$	110,930	 	 	$	18,568	 	 	$	24,605	 	

Earnings per common share attributable to Landstar System, Inc. and subsidiary	 	$	1.38	 	 	$	2.11	 	 	$	0.37	 	 	$	0.47	 	

Diluted earnings per share attributable to Landstar System, Inc. and subsidiary	 	$	1.37	 	 	$	2.10	 	 	$	0.37	 	 	$	0.47	 	

Average number of shares outstanding:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Earnings per common share	 	 	51,095,000	 	 	 	52,503,000	 	 	 	50,404,000	 	 	 	51,973,000	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
Diluted earnings per share	 	 	51,280,000	 	 	 	52,854,000	 	 	 	50,594,000	 	 	 	52,197,000	 	

Dividends paid per common share	 	$	0.1700	 	 	$	0.1550	 	 	$	0.0450	 	 	$	0.0400	 	

 
LANDSTAR SYSTEM/6
Landstar System, Inc. and Subsidiary
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
(Unaudited)
 	 	 	 	 	 	 	 	 	
 	 	Dec. 26,	 	 	Dec. 27,	 	
 	 	2009	 	 	2008	 	
ASSETS	 	 	 	 	 	 	 	 	
Current assets:	 	 	 	 	 	 	 	 	
Cash and cash equivalents	 	$	85,719	 	 	$	98,904	 	
Short-term investments	 	 	24,325	 	 	 	23,479	 	
Trade accounts receivable, less allowance of $5,547 and $6,230	 	 	278,854	 	 	 	315,065	 	
Other receivables, including advances to independent contractors, less allowance of $5,797 and $4,298	 	 	18,149	 	 	 	10,083	 	
Deferred income taxes and other current assets	 	 	19,565	 	 	 	27,871	 	
 	 	 	 	 	 	 	
Total current assets	 	 	426,612	 	 	 	475,402	 	

Operating property, less accumulated depreciation and amortization of $124,810 and $106,635	 	 	116,656	 	 	 	124,178	 	
Goodwill	 	 	57,470	 	 	 	31,134	 	
Other assets	 	 	48,054	 	 	 	32,816	 	
 	 	 	 	 	 	 	
Total assets	 	$	648,792	 	 	$	663,530	 	

LIABILITIES AND EQUITY	 	 	 	 	 	 	 	 	
Current liabilities:	 	 	 	 	 	 	 	 	
Cash overdraft	 	$	28,919	 	 	$	32,065	 	
Accounts payable	 	 	121,030	 	 	 	105,882	 	
Current maturities of long-term debt	 	 	24,585	 	 	 	24,693	 	
Insurance claims	 	 	41,627	 	 	 	23,545	 	
Accrued income taxes	 	 	9,957	 	 	 	12,239	 	
Other current liabilities	 	 	32,517	 	 	 	38,161	 	
 	 	 	 	 	 	 	
Total current liabilities	 	 	258,635	 	 	 	236,585	 	

Long-term debt, excluding current maturities	 	 	68,313	 	 	 	111,752	 	
Insurance claims	 	 	30,680	 	 	 	38,278	 	
Deferred income taxes	 	 	23,013	 	 	 	23,779	 	
 	 	 	 	 	 	 	 	 	
Equity	 	 	 	 	 	 	 	 	
Landstar System, Inc. and subsidiary shareholders’ equity	 	 	 	 	 	 	 	 	
Common stock, $0.01 par value, authorized 160,000,000 shares, issued 66,255,358 and 66,109,547 shares	 	 	663	 	 	 	661	 	
Additional paid-in capital	 	 	161,261	 	 	 	154,533	 	
Retained earnings	 	 	766,040	 	 	 	704,331	 	
Cost of 16,022,111 and 14,424,887 shares of common stock in treasury	 	 	(660,446	)	 	 	(605,828	)	
Accumulated other comprehensive income (loss)	 	 	498	 	 	 	(561	)	
 	 	 	 	 	 	 	
Total Landstar System, Inc. and subsidiary shareholders’ equity	 	 	268,016	 	 	 	253,136	 	
 	 	 	 	 	 	 	
Noncontrolling interest	 	 	135	 	 	 	—	 	
 	 	 	 	 	 	 	
Total equity	 	 	268,151	 	 	 	253,136	 	
 	 	 	 	 	 	 	
Total liabilities and equity	 	$	648,792	 	 	$	663,530	 	

 
LANDSTAR SYSTEM/7
Landstar System, Inc. and Subsidiary
Supplemental Information
(Unaudited)
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	Fiscal Year End	 	 	Thirteen Weeks Ended	 	
 	 	December 26,	 	 	December 27,	 	 	December 26,	 	 	December 27,	 	
 	 	2009	 	 	2008	 	 	2009	 	 	2008	 	
Revenue generated through (in thousands) :	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Business Capacity Owners (1)	 	$	1,140,004	 	 	$	1,388,353	 	 	$	299,613	 	 	$	317,371	 	
Truck Brokerage Carriers	 	 	694,467	 	 	 	996,269	 	 	 	198,806	 	 	 	230,007	 	
Rail intermodal	 	 	76,346	 	 	 	136,367	 	 	 	19,252	 	 	 	29,431	 	
Ocean cargo carriers	 	 	33,835	 	 	 	42,153	 	 	 	8,376	 	 	 	12,824	 	
Air cargo carriers	 	 	17,621	 	 	 	14,891	 	 	 	7,362	 	 	 	4,756	 	
Other (2)	 	 	46,523	 	 	 	65,036	 	 	 	14,306	 	 	 	9,448	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	$	2,008,796	 	 	$	2,643,069	 	 	$	547,715	 	 	$	603,837	 	

Number of loads:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Business Capacity Owners (1)	 	 	761,940	 	 	 	820,680	 	 	 	200,100	 	 	 	182,350	 	
Truck Brokerage Carriers	 	 	501,980	 	 	 	571,600	 	 	 	138,980	 	 	 	136,350	 	
Rail intermodal	 	 	37,890	 	 	 	58,510	 	 	 	9,290	 	 	 	12,900	 	
Ocean cargo carriers	 	 	5,370	 	 	 	5,380	 	 	 	1,450	 	 	 	1,390	 	
Air cargo carriers	 	 	7,780	 	 	 	8,260	 	 	 	1,340	 	 	 	2,740	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	1,314,960	 	 	 	1,464,430	 	 	 	351,160	 	 	 	335,730	 	

Revenue per load:	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	
Business Capacity Owners (1)	 	$	1,496	 	 	$	1,692	 	 	$	1,497	 	 	$	1,740	 	
Truck Brokerage Carriers	 	 	1,383	 	 	 	1,743	 	 	 	1,430	 	 	 	1,687	 	
Rail intermodal	 	 	2,015	 	 	 	2,331	 	 	 	2,072	 	 	 	2,281	 	
Ocean cargo carriers	 	 	6,301	 	 	 	7,835	 	 	 	5,777	 	 	 	9,226	 	
Air cargo carriers	 	 	2,265	 	 	 	1,803	 	 	 	5,494	 	 	 	1,736	 	

 	 	December 26,	 	 	December 27,	 	
 	 	2009	 	 	2008	 	
Truck Capacity	 	 	 	 	 	 	 	 	
 	 	 	 	 	 	 	 	 	
Business Capacity Owners (1) (3)	 	 	7,926	 	 	 	8,455	 	
 	 	 	 	 	 	 	
Truck Brokerage Carriers:	 	 	 	 	 	 	 	 	
Approved and active (4)	 	 	14,887	 	 	 	16,135	 	
Approved	 	 	9,886	 	 	 	10,036	 	
 	 	 	 	 	 	 	
 	 	 	24,773	 	 	 	26,171	 	
 	 	 	 	 	 	 	
Total available truck capacity providers	 	 	32,699	 	 	 	34,626	 	

Agent Locations	 	 	1,366	 	 	 	1,428	 	

 	 	 	
(1)	 	Business Capacity Owners are independent contractors who provide truck capacity to the Company under exclusive lease arrangements.	
 	 	 	
(2)	 	Includes premium revenue generated by the insurance segment and warehousing and transportation management fee revenue generated by the transportation logistics segment. Also, included in the 2008 fiscal year was $27,638 of revenue for bus capacity provided for evacuation assistance related to the storms that impacted the Gulf Coast in the third quarter of 2008.	
 	 	 	
(3)	 	Trucks provided by Business Capacity Owners were 8,519 and 9,039 at December 26, 2009 and December 27, 2008, respectively.	
 	 	 	
(4)	 	Active refers to Truck Brokerage Carriers who have moved at least one load in the past 180 days.