Landstar System Reports Record Third Quarter Revenue Of $842 Million And Record Third Quarter Diluted Earnings Per Share Of $0.90

JACKSONVILLE, Fla., Oct. 22, 2015 /PRNewswire/ -- Landstar System, Inc. (NASDAQ: LSTR) reported record third quarter net income of $39.3 million, or $0.90 per diluted share, on record third quarter revenue of $842 million in the 2015 third quarter. Revenue and diluted earnings per share for the 2015 third quarter were the highest third quarter revenue and diluted earnings per share amounts in Landstar history. Landstar reported net income of $36.8 million, or $0.82 per diluted share, on revenue of $819 million in the 2014 third quarter. Gross profit (defined as revenue less the cost of purchased transportation and commissions to agents) was $126.8 million in the 2015 third quarter compared to $121.1 million in gross profit in the 2014 third quarter. Operating margin, representing operating income divided by gross profit, was 50.4 percent in the 2015 third quarter. Gross profit and operating margin for the 2015 third quarter were also the highest third quarter amounts in Landstar history. 

Truck transportation revenue hauled by independent business capacity owners ("BCOs") and truck brokerage carriers in the 2015 third quarter was $779.8 million, or 93 percent of revenue, compared to $767.5 million, or 94 percent of revenue, in the 2014 third quarter.  Truckload transportation revenue hauled via van equipment in the 2015 third quarter was $466.2 million compared to $458.5 million in the 2014 third quarter. Truckload transportation revenue hauled via unsided/platform equipment in the 2015 third quarter was $293.3 million compared to $287.9 million in the 2014 third quarter. Revenue hauled by rail, air and ocean cargo carriers was $50.5 million, or 6 percent of revenue, in the 2015 third quarter compared to $41.7 million, or 5 percent of revenue, in the 2014 third 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 approximately 412,000 shares of its common stock during the 13 weeks ended September 26, 2015 at an aggregate cost of $28.0 million. Landstar purchased approximately 1,719,000 shares of its common stock during the 39 weeks ended September 26, 2015 at an aggregate cost of $112.7 million. Currently, there are approximately 2,588,000 shares of the Company's common stock available for purchase under Landstar's authorized share purchase program.  As of September 26, 2015, the Company had $158 million in cash and short term investments and had $192 million available for borrowing under the Company's senior credit facility. 

In addition, Landstar announced that its Board of Directors has declared a quarterly dividend of $0.08 per share payable on December 4, 2015 to stockholders of record at the close of business on November 10, 2015.  It is currently the intention of the Board to pay dividends on a quarterly basis going forward.

"Landstar's 2015 third quarter results were again outstanding," said Landstar's President and Chief Executive Officer, Jim Gattoni. "Revenue, gross profit, operating income, operating margin, net income, and diluted earnings per share were all third quarter records. Overall, demand for Landstar's truck transportation services in the 2015 third quarter continued to be strong, as the number of loads hauled via truck increased 8 percent over the 2014 third quarter.  In addition, the number of loads hauled via railroads, ocean cargo carriers and air cargo carriers increased 29 percent over the 2014 third 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 14 percent, 6 percent, and 12 percent, respectively.  The growth in the number of loads hauled via unsided/platform equipment in the 2015 third quarter was entirely driven by demand from one shipper in the automotive sector.  Otherwise, unsided/platform volumes softened during the third quarter.  We expect the strong volumes from that shipper to continue throughout the 2015 fourth quarter, keeping unsided/platform volumes elevated for the remainder of 2015.  As expected, revenue per load on loads hauled via truck was lower in the 2015 third quarter as compared to the 2014 third quarter.   Truck revenue per load in the 2015 third quarter was 6 percent lower as compared to the 2014 third quarter mostly due to the impact of lower diesel fuel costs on loads hauled via truck brokerage carriers and the difficult comparison to record truck revenue per load experienced in 2014. Operating income for the 2015 third quarter was $64.0 million, the highest third quarter operating income in Landstar history, and operating margin was 50.4 percent.  Finally, diluted earnings per share in the 2015 third quarter increased 10 percent over the 2014 third quarter."

Gattoni continued, "Demand for Landstar's services thus far in October remains strong.  I expect the number of loads hauled via truck in the 2015 fourth quarter to increase in a mid-single digit percentage range over the 2014 fourth 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 fourth 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 October, revenue per load on loads hauled via truck is consistent with that experienced in fiscal September, yet lower than that of fiscal October 2014.  I do not expect a significant change in these recent trends over the balance of the 2015 fourth quarter.  As such, I expect revenue per load on loads hauled via truck in the 2015 fourth quarter to be below the 2014 fourth quarter in an upper-single digit percentage range.  Assuming the current environment continues throughout the 2015 fourth quarter, I anticipate revenue for the 2015 fourth quarter to be in a range of $815 million to $865 million and, assuming that range of estimated revenue, I would anticipate 2015 fourth quarter diluted earnings per share to be in a range of $0.85 to $0.90 per share."

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 Third 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 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 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.

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SOURCE Landstar System, Inc.

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