Landstar System Reports Record Quarterly Revenue Of $868 Million And Record Quarterly Diluted Earnings Per Share From Continuing Operations Of $0.92

News provided by

Landstar System, Inc.

Jul 23, 2015, 04:05 ET

JACKSONVILLE, Fla., July 23, 2015 /PRNewswire/ -- Landstar System, Inc. (NASDAQ: LSTR) reported record quarterly diluted earnings per share from continuing operations of $0.92, on record quarterly revenue of $868 million in the 2015 second quarter. Landstar reported diluted earnings per share of $0.80 on revenue of $814 million in the 2014 second quarter. Gross profit (defined as revenue less the cost of purchased transportation and commissions to agents) was $130.8 million in the 2015 second quarter compared to $121.6 million of gross profit in the 2014 second quarter. Operating margin, representing operating income divided by gross profit, was 50.5 percent in the 2015 second quarter.

Truck transportation revenue hauled by independent business capacity owners ("BCOs") and truck brokerage carriers in the 2015 second quarter was $809.2 million, or 93 percent of revenue, compared to $764.7 million, or 94 percent of revenue, in the 2014 second quarter.  Truckload transportation revenue hauled via van equipment in the 2015 second quarter was $496.9 million compared to $458.7 million in the 2014 second quarter. Truckload transportation revenue hauled via unsided/platform equipment in the 2015 second quarter was $291.0 million compared to $285.5 million in the 2014 second quarter. Revenue hauled by rail, air and ocean cargo carriers was $48.1 million, or 6 percent of revenue, in the 2015 second quarter compared to $39.9 million, or 5 percent of revenue, in the 2014 second quarter. 

Trailing twelve-month return on average shareholders' equity was 30 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 approximately 1,307,000 shares of its common stock during 2015 at an aggregate cost of $84.6 million. Currently, there are 3,000,000 shares of the Company's common stock available for purchase under Landstar's authorized share purchase program. As of June 27, 2015, the Company had $131 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 August 28, 2015, to stockholders of record as of the close of business on August 10, 2015.  This represents a 14 percent increase in the Company's quarterly dividend. It is currently the intention of the Board to pay dividends on a quarterly basis going forward.

"I am extremely pleased with our 2015 second quarter operating performance," said Landstar's President and Chief Executive Officer, Jim Gattoni. "Demand for Landstar's services was strong throughout the quarter. Revenue, gross profit, operating income and diluted earnings per share from continuing operations in the 2015 second quarter were all second quarter records. The number of loads hauled via truck exceeded the 2014 second quarter by 9 percent and the number of loads hauled via railroads, ocean cargo carriers and air cargo carriers increased 31 percent over the 2014 second quarter. The growth in the number of loads hauled via truck was driven by increased volumes for unsided/platform equipment, van equipment and less-than-truckload of 10 percent, 8 percent and 20 percent, respectively. As expected, revenue per load on loads hauled via truck softened in the 2015 second quarter as compared to the 2014 second quarter. Truck revenue per load in the 2015 second quarter was 3 percent lower as compared to the 2014 second quarter mostly due to the record truck revenue per load experienced in 2014 and the impact of lower diesel fuel costs on loads hauled via truck brokerage carriers in 2015. Operating income for the 2015 second quarter was $66.0 million, the highest second quarter operating income in Landstar history, and operating margin was 50.5 percent. Finally, diluted earnings per share in the 2015 second quarter increased 15 percent over the 2014 second quarter."

Gattoni continued, "Demand for Landstar's services thus far in July remains very strong. I expect the number of loads hauled via truck in the 2015 third quarter to increase in a mid-to-upper single digit percentage range over the 2014 third quarter.  As it pertains to revenue per load on loads hauled via truck, year-over-prior-year comparisons continue to be difficult due to the all-time high revenue per load reported in the 2014 third quarter along with the effect of lower diesel fuel costs on loads hauled via truck brokerage carriers in 2015.  During the first few weeks of fiscal July, revenue per load on loads hauled via truck is consistent with that experienced in fiscal June, yet lower than fiscal July 2014. I do not expect a significant change in these recent trends over the balance of the 2015 third quarter.  As such, I expect revenue per load on loads hauled via truck in the 2015 third quarter to be below the 2014 third quarter in a low-to-mid-single digit percentage range, as experienced in the first few weeks of July.  Assuming the current environment continues throughout the 2015 third quarter, I anticipate revenue for the 2015 third quarter to be in a range of $830 million to $880 million and, assuming that range of estimated revenue, I would anticipate 2015 third quarter diluted earnings per share to be in a range of $0.87 to $0.92 per share compared to $0.82 per diluted share in the 2014 third quarter."

Landstar will provide a live webcast of its quarterly earnings conference call this afternoon at 5:00 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 Second Quarter 2015 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; 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 2014 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 an asset-light provider of integrated transportation management solutions delivering safe, specialized transportation services to a broad range of customers utilizing a network of agents, third party capacity owners 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.

www.landstar.com

Landstar System, Inc. and Subsidiary

Consolidated Statements of Income

(Dollars in thousands, except per share amounts)

(Unaudited)
































Twenty Six Weeks Ended

Thirteen Weeks Ended






June 27,

June 28,

June 27,

June 28,






2015

2014

2015

2014













Revenue


$        1,630,763

$         1,502,640

$          868,383

$       814,443

Investment income

693

695

339

332













Costs and expenses:









Purchased transportation

1,254,730

1,158,964

667,577

628,933

Commissions to agents

129,816

116,565

70,032

63,861

Other operating costs, net of gains on asset sales/dispositions

15,670

12,829

7,981

6,243

Insurance and claims

27,108

25,706

12,312

13,849

Selling, general and administrative

74,986

72,352

37,738

36,752

Depreciation and amortization

14,068

13,333

7,049

6,565















Total costs and expenses

1,516,378

1,399,749

802,689

756,203













Operating income

115,078

103,586

66,033

58,572

Interest and debt expense

1,494

1,486

713

718













Income before income taxes

113,584

102,100

65,320

57,854

Income taxes 


43,098

38,537

24,849

21,929













Net income


$            70,486

$             63,563

$           40,471

$         35,925


























Earnings per common share

$                1.59

$                 1.41

$               0.92

$             0.80













Diluted earnings per share

$                1.59

$                 1.40

$               0.92

$             0.80













Average number of shares outstanding:








Earnings per common share  

44,240,000

45,171,000

43,892,000

44,935,000

Diluted earnings per share

44,397,000

45,362,000

44,033,000

45,128,000













Dividends per common share

$                0.14

$                 0.12

$               0.07

$             0.06

Landstar System, Inc. and Subsidiary

Consolidated Balance Sheets

(Dollars in thousands, except per share amounts)

(Unaudited)



























June 27,

December 27,







2015

2014

ASSETS





Current assets:






Cash and cash equivalents

$        82,426

$      163,944

Short-term investments

48,864

37,007

Trade accounts receivable, less allowance




of $4,441 and $4,338

481,605

492,642

Other receivables, including advances to independent




contractors, less allowance of $4,304 and $4,189

21,678

15,132

Deferred income taxes and other current assets

22,307

23,603


Total current assets

656,880

732,328










Operating property, less accumulated depreciation





and amortization of $169,110 and $160,681

190,082

202,203

Goodwill



31,134

31,134

Other assets


68,848

78,547

Total assets


$      946,944

$   1,044,212










LIABILITIES AND SHAREHOLDERS' EQUITY


Current liabilities:






Cash overdraft


$        31,717

$        34,629

Accounts payable

216,807

220,077

Current maturities of long-term debt

34,189

35,064

Insurance claims

22,123

24,233

Dividends payable

-

44,794

Other current liabilities

41,617

51,654


Total current liabilities

346,453

410,451










Long-term debt, excluding current maturities

59,020

76,257

Insurance claims


23,491

21,769

Deferred income taxes and other non-current liabilities

48,478

47,474










Shareholders' equity:





Common stock, $0.01 par value, authorized 160,000,000 




shares, issued 67,357,102 and 67,268,817 shares

674

673

Additional paid-in capital

191,221

189,012

Retained earnings

1,319,674

1,255,374

Cost of 23,781,485 and 22,474,331 shares of common




stock in treasury

(1,040,248)

(955,613)

Accumulated other comprehensive loss

(1,819)

(1,185)


Total shareholders' equity

469,502

488,261

Total liabilities and shareholders' equity 

$      946,944

$   1,044,212































Landstar System, Inc. and Subsidiary

Supplemental Information

(Unaudited)































Twenty Six Weeks Ended

Thirteen Weeks Ended





June 27,

June 28,

June 27,

June 28,





2015

2014

2015

2014

Revenue generated through (in thousands):






















Truck transportation










Truckload:











Van equipment

$     946,598

$     856,010

$     496,910

$      458,749



Unsided/platform equipment

530,515

516,496

291,032

285,477


Less-than-truckload

40,956

37,337

21,258

20,452



Total truck transportation

1,518,069

1,409,843

809,200

764,678

Rail intermodal

49,522

37,021

26,341

20,526

Ocean and air cargo carriers

41,410

36,437

21,778

19,421

Other (1)   

21,762

19,339

11,064

9,818





$  1,630,763

$  1,502,640

$     868,383

$      814,443














Revenue on loads hauled via BCO Independent Contractors (2)










included in total truck transportation

$     752,030

$     740,689

$     401,705

$      397,037













Number of loads:






















Truck transportation










Truckload:











Van equipment

544,714

506,921

285,762

264,185



Unsided/platform equipment

229,452

217,794

127,286

115,901


Less-than-truckload

54,904

43,825

28,912

24,134



Total truck transportation

829,070

768,540

441,960

404,220

Rail intermodal

20,680

14,280

11,200

7,870

Ocean and air cargo carriers

8,620

8,010

4,490

4,120





858,370

790,830

457,650

416,210














Loads hauled via BCO Independent Contractors (2)










included in total truck transportation

406,230

411,370

214,930

212,500













Revenue per load:






















Truck transportation










Truckload:











Van equipment

$          1,738

$          1,689

$         1,739

$          1,736



Unsided/platform equipment

2,312

2,371

2,286

2,463


Less-than-truckload

746

852

735

847



Total truck transportation

1,831

1,834

1,831

1,892

Rail intermodal

2,395

2,593

2,352

2,608

Ocean and air cargo carriers

4,804

4,549

4,850

4,714














Revenue per load on loads hauled via BCO Independent Contractors (2)

$          1,851

$          1,801

$         1,869

$          1,868













Revenue by capacity type (as a % of total revenue);






















Truck capacity providers:










BCO Independent Contractors (2)

46%

49%

46%

49%


Truck Brokerage Carriers

47%

45%

47%

45%

Rail intermodal

3%

3%

3%

3%

Ocean and air cargo carriers

3%

2%

3%

2%

Other

1%

1%

1%

1%



































June 27,

June 28,









2015

2014

Truck Capacity Providers






















BCO Independent Contractors (2)




8,726

8,074

Truck Brokerage Carriers:









     Approved and active (3)




28,387

23,807

     Other approved




13,126

11,743









41,513

35,550

Total available truck capacity providers




50,239

43,624














Trucks provided by BCO Independent Contractors (2)




9,308

8,591


























(1) Includes primarily premium revenue generated by the insurance segment.













(2) BCO Independent Contractors are independent contractors who provide truck capacity to the Company under exclusive lease arrangements.













(3) Active refers to Truck Brokerage Carriers who have moved at least one load in the 180 days immediately preceeding the fiscal quarter end.

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SOURCE Landstar System, Inc.

Related Links

http://www.landstar.com

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