Landstar System Reports First Quarter Revenue Of $712 Million And Record First Quarter Diluted Earnings Per Share Of $0.69

JACKSONVILLE, Fla., April 20, 2016 /PRNewswire/ -- Landstar System, Inc. (NASDAQ: LSTR) reported record first quarter diluted earnings per share of $0.69, on revenue of $712 million in the 2016 first quarter.  Landstar reported diluted earnings per share of $0.67 on revenue of $762 million in the 2015 first quarter. Gross profit (defined as revenue less the cost of purchased transportation and commissions to agents) was $112.2 million in the 2016 first quarter compared to $115.4 million in the 2015 first quarter.  Operating margin, representing operating income divided by gross profit, was 42.7 percent in the 2016 first quarter.

Truck transportation revenue hauled by independent business capacity owners ("BCOs") and truck brokerage carriers in the 2016 first quarter was $655.1 million, or 92 percent of revenue, compared to $708.9 million, or 93 percent of revenue, in the 2015 first quarter.  Truckload transportation revenue hauled via van equipment in the 2016 first quarter was $428.2 million compared to $449.7 million in the 2015 first quarter.  Truckload transportation revenue hauled via unsided/platform equipment in the 2016 first quarter was $209.4 million compared to $239.5 million in the 2015 first quarter. Revenue hauled by rail, air and ocean cargo carriers was $44.9 million, or 6 percent of revenue, in the 2016 first quarter compared to $42.8 million, or 6 percent of revenue, in the 2015 first quarter.

Trailing twelve-month return on average shareholders' equity was 31 percent and trailing twelve-month return on invested capital, net income divided by the sum of average equity plus average debt, was 25 percent.  Landstar purchased 175,000 shares of its common stock during 2016 at an aggregate cost of $10.2 million.  Currently, there are approximately 1,634,000 shares of the Company's common stock available for purchase under Landstar's authorized share purchase program.  As of March 26, 2016, the Company had $217 million in cash and short term investments and $192 million available for borrowings under the Company's senior credit facility.

In addition, Landstar announced today that its Board of Directors has declared a quarterly dividend of $0.08 per share payable on May 27, 2016, to stockholders of record as of the close of business on May 5, 2016.  It is currently the intention of the Board to pay dividends on a quarterly basis going forward.

"During the 2016 first quarter, the number of loads hauled via truck was higher than any first quarter in Landstar history.  Given the freight environment during the quarter, where demand was somewhat softer than during the 2015 first quarter, I am pleased with the continued execution of adding increased volumes," said Landstar's President and Chief Executive Officer, Jim Gattoni.   

Gattoni continued, "Overall, however, 2016 first quarter revenue was 7 percent below the comparable prior year period entirely due to lower revenue per load, particularly on loads hauled via truck.  The number of loads hauled via truck in the 2016 first quarter increased 3 percent over the 2015 first quarter, driven by a 4 percent increase in the number of loads hauled via van equipment, a 1 percent increase in the number of loads hauled via unsided/platform equipment and a 3 percent increase in less-than-truckload volume.  The number of loads hauled via unsided/platform equipment was impacted by a 5 percent decrease in the number of heavy/specialized loads, which comprised approximately 28 percent of Landstar's unsided/platform revenue in the 2016 first quarter.  Landstar also achieved a 22 percent increase in the 2016 first quarter over the 2015 first quarter in the number of loads hauled via railroads, ocean cargo carriers and air cargo carriers."

Gattoni further commented, "As I mentioned earlier, our truckload services experienced pricing pressure throughout the 2016 first quarter, as industry-wide truck capacity was more readily available as compared to the 2015 first quarter. This pricing pressure was more apparent in the U.S. spot market, in which the Company mostly operates. Additionally, the average cost of a gallon of diesel fuel was over 25 percent lower during the 2016 first quarter compared to the 2015 first quarter putting additional pressure on pricing, especially as it relates to loads hauled via truck brokerage carriers. As such, revenue per load on loads hauled via truck was 10 percent lower in the 2016 first quarter compared to the 2015 first quarter. Despite the softer pricing environment, 2016 first quarter operating margin was 42.7 percent, in line with seasonal historical first quarter results, and diluted earnings per share in the 2016 first quarter increased 3 percent over the 2015 first quarter."

Gattoni continued, "Through the first several weeks of April, the number of loads hauled via truck exceeded the prior year comparable period in a low single digit percentage, consistent with the growth rate Landstar experienced in the 2016 first quarter.  In mid-April 2015, we began a project to haul a significant number of loads for a single account in the automotive industry.  That project ended at the end of 2015.  Excluding the 13,000 loads hauled via truck in the 2015 second quarter related to that project (representing approximately $27 million in revenue), I expect the number of loads hauled via truck in the 2016 second quarter to increase in a low single digit range over the 2015 second quarter.  Although we have recently experienced the normal seasonal uptick in revenue per load as we moved into April, I anticipate truck revenue per load in the 2016 second quarter to be below the 2015 second quarter in a high single digit to low double digit percentage range.  My expectation is that pricing conditions for truck services in the 2016 second quarter will continue to be impacted by more readily available truck capacity as compared to the prior year second quarter and a relatively low per gallon cost of diesel fuel.  Assuming the current environment continues throughout the 2016 second quarter, I anticipate revenue for the 2016 second quarter to be in a range of $770 million to $820 million and, assuming that range of estimated revenue, I would anticipate 2016 second quarter diluted earnings per share to be in a range of $0.80 to $0.85 per share compared to $0.92 per diluted share in the 2015 second quarter."

Landstar will provide a live webcast of its quarterly earnings conference call tomorrow morning at 8:00 a.m. 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 First Quarter 2016 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 and expectations.  Terms such as "anticipates," "believes," "estimates," "intention," "expects," "plans," "predicts," "may," "should," "could," "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 other claims; unfavorable development of existing accident claims; dependence on third party insurance companies; dependence on independent commission sales agents; dependence on third party capacity providers; decreased demand for transportation services; substantial industry competition; disruptions or failures in the Company's computer systems; cyber incidents; dependence on key vendors; changes in fuel taxes; status of independent contractors; regulatory and legislative changes; catastrophic loss of a Company facility; intellectual property; unclaimed property; and other operational, financial or legal risks or uncertainties detailed in Landstar's Form 10K for the 2015 fiscal year, described in Item 1A Risk Factors, and in 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 the Company undertakes no obligation to publicly update or revise any forward-looking statements.

About Landstar:

Landstar System, Inc. is a worldwide, asset-light provider of integrated transportation management solutions delivering safe, specialized transportation logistics services to a broad range of customers utilizing a network of agents, third-party capacity providers and employees.  All Landstar transportation services companies are certified to ISO 9001:2008 quality management system standards and RC14001:2013 environmental, health, safety and security management system standards.  Landstar System, Inc. is headquartered in Jacksonville, Florida. Its common stock trades on The NASDAQ Stock Market® under the symbol LSTR.

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SOURCE Landstar System, Inc.

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