LANDSTAR SYSTEM, INC. JACKSONVILLE, Fla., Jan. 29, 2015 /PRNewswire/ -- Landstar System, Inc. (NASDAQ: LSTR) reported record quarterly revenue of $863 million in the 2014 fourth quarter, the highest quarterly revenue of any quarter in Landstar history. Landstar also reported diluted earnings per share of $0.86 in the 2014 fourth quarter on net income from continuing operations of $38.5 million. This is the highest quarterly diluted earnings per share from continuing operations in Landstar history. With respect to the Company's results from continuing operations for the 2013 fourth quarter, Landstar reported net income of $25.2 million, or $0.55 per diluted share, on revenue of $692 million. Additionally, the 2013 fourth quarter included $0.75 of diluted earnings per share from income from discontinued operations attributable to the sale of the Landstar Supply Chain Solutions companies. Gross profit (defined as revenue less the cost of purchased transportation and commissions to agents) was $124.7 million in the 2014 fourth quarter compared to $102.7 million of gross profit in the 2013 fourth quarter. Operating margin, representing operating income divided by gross profit, was 49.1 percent in the 2014 fourth quarter.
Truck transportation revenue hauled by independent business capacity owners ("BCOs") and truck brokerage carriers in the 2014 fourth quarter was $811.2 million, or 94 percent of revenue, compared to $643.6 million, or 93 percent of revenue, in the 2013 fourth quarter. Truckload transportation revenue hauled via van equipment in the 2014 fourth quarter was $499.7 million compared to $391.4 million in the 2013 fourth quarter. Truckload revenue hauled via unsided/platform equipment in the 2014 fourth quarter was $289.6 million compared to $233.4 million in the 2013 fourth quarter. Revenue hauled by rail, air and ocean cargo carriers was $41.0 million, or 5 percent of revenue, in the 2014 fourth quarter compared to $39.0 million, or 6 percent of revenue, in the 2013 fourth 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 24 percent. Landstar purchased approximately 940,000 shares of its common stock during 2014 at an aggregate cost of $56.4 million. Currently, there are approximately 1,828,000 shares of the Company's common stock available for purchase under Landstar's authorized share purchase program.
As previously announced on December 4, 2014, the Company's Board of Directors declared a special dividend of $1.00 per share payable on January 26, 2015, to stockholders of record as of the close of business on January 12, 2015. In addition, Landstar announced today that its Board of Directors has declared a quarterly dividend of $0.07 per share payable on March 13, 2015, to stockholders of record as of the close of business on February 16, 2015. It is currently the intention of the Board to pay dividends on a quarterly basis going forward.
Landstar also announced that effective January 29, 2015, Landstar President and CEO Jim Gattoni has joined the Board of Directors of Landstar System, Inc.
"Landstar's 2014 fourth quarter results were record setting," said Gattoni. "Revenue and diluted earnings per share for the 2014 fourth quarter were quarterly records for continuing operations. Demand for Landstar's truck transportation services in the 2014 fourth quarter continued to be extremely strong, as the number of loads hauled via truck increased 11 percent over the 2013 fourth quarter. Revenue per load hauled via truck also remained very strong and increased 14 percent over the 2013 fourth quarter. In fact, Landstar's average revenue per load hauled via truck in the 2014 fourth quarter set a new record and was up four percent over the record set in the Company's 2014 third quarter. Landstar experienced very strong revenue growth over the 2013 fourth quarter with respect to both loads hauled via van equipment and loads hauled via unsided/platform equipment. On a quarter-over-prior-year-quarter basis, revenue hauled via van equipment increased 28 percent and revenue hauled via unsided/platform equipment increased 24 percent. Despite a significant provision for incentive compensation, operating margin was an impressive 49.1 percent in the 2014 fourth quarter and was the second highest fourth quarter operating margin in Landstar's history. And finally, diluted earnings per share from continuing operations in the 2014 fourth quarter increased an outstanding 56 percent over the 2013 fourth quarter. 2014 was truly an exceptional year for Landstar as the Company surpassed $3 billion in revenue for the first time in its history. In addition to revenue, annual records were set for many other financial metrics including gross profit, operating income, net income and diluted earnings per share from continuing operations."
Gattoni continued, "The strength in both the number of loads hauled via truck and truck revenue per load experienced in the 2014 fourth quarter has so far continued through the first several weeks of 2015. Assuming continued strength in both load volume and revenue per load from truck transportation services throughout the remainder of the 2015 first quarter, I anticipate revenue for the 2015 first quarter to be in a range of $750 million to $800 million and, assuming that range of estimated revenue, I would anticipate 2015 first quarter diluted earnings per share to be in a range of $0.71 to $0.76 per share compared to $0.61 per diluted share in the 2014 first quarter."
PLEASE NOTE: As of the first quarter of 2015, the Company has revised the format of its financial statement supplemental information presentation to include revenue by trailer type. Included with this earnings release are supplemental information presentations in both the historical format and the new format. The Company intends to use only the new supplemental information presentation format on a going forward basis. Management believes this change in reporting supplemental information will allow investors to better understand underlying trends in the Company's results. This change in the reporting of supplemental information has no impact on reporting with respect to the Company's consolidated balance sheets, income statements, cash flows or changes in shareholders' equity for any periods.
Landstar will provide a live webcast of its quarterly earnings conference call this afternoon at 2:00 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 Fourth Quarter 2014 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 2013 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 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.
(Tables follow)
LANDSTAR SYSTEM/6
Landstar System, Inc. and Subsidiary
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)
Fiscal Year Ended Fiscal Quarter Ended
----------------- --------------------
December 27, December 28, December 27, December 28,
2014 2013 2014 2013
---- ---- ---- ----
Revenue $3,184,790 $2,664,780 $862,830 $691,975
Investment income 1,381 1,475 354 364
Costs and expenses:
Purchased transportation 2,461,143 2,046,927 668,583 534,250
Commissions to agents 250,780 211,355 69,584 54,978
Other operating costs, net of gains on asset
dispositions 25,771 21,568 6,421 6,172
Insurance and claims 46,280 50,438 8,548 13,531
Selling, general and administrative 150,250 131,710 41,683 36,743
Depreciation and amortization 27,575 27,667 7,156 6,924
Total costs and expenses 2,961,799 2,489,665 801,975 652,598
--------- --------- ------- -------
Operating income 224,372 176,590 61,209 39,741
Interest and debt expense 3,177 3,211 917 844
----- ----- --- ---
Income from continuing operations before income taxes 221,195 173,379 60,292 38,897
Income taxes 82,386 64,457 21,801 13,721
------ ------ ------ ------
Income from continuing operations 138,809 108,922 38,491 25,176
Discontinued operations:
Income from discontinued operations, net of income
taxes - 4,058 - 1,352
Gain on sale of discontinued operations, net of
income taxes - 33,029 - 33,029
Income from discontinued operations, net of
income taxes - 37,087 - 34,381
Net income $138,809 $146,009 $38,491 $59,557
======== ======== ======= =======
Earnings per common share:
Income from continuing operations $3.09 $2.37 $0.86 $0.55
Income from discontinued operations - 0.81 - 0.75
Earnings per common share 3.09 3.17 0.86 1.30
Diluted earnings per share:
Income from continuing operations $3.07 $2.36 $0.86 $0.55
Income from discontinued operations - 0.80 - 0.75
Diluted earnings per share 3.07 3.16 0.86 1.30
Average number of shares outstanding:
Earnings per common share 44,956,000 46,039,000 44,770,000 45,689,000
Diluted earnings per share 45,169,000 46,210,000 45,002,000 45,869,000
Dividends per common share $1.26 $0.35 $1.07 $0.35
===== ===== ===== =====
LANDSTAR SYSTEM/7
Landstar System, Inc. and Subsidiary
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
(Unaudited)
December 27, December 28,
2014 2013
---- ----
ASSETS
Current assets:
Cash and cash
equivalents $163,944 $180,302
Short-term
investments 37,007 34,939
Trade accounts
receivable, less
allowance
of $4,338 and
$3,773 492,642 378,732
Other receivables,
including advances to
independent
contractors, less
allowance of $4,189
and $4,253 15,132 73,903
Deferred income taxes
and other current
assets 23,603 14,592
Total current
assets 732,328 682,468
------- -------
Operating property, less accumulated depreciation
202,203 177,329
and amortization of
$160,681 and
$157,985
Goodwill 31,134 31,134
Other assets 78,547 79,765
Total assets $1,044,212 $970,696
========== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Cash
overdraft $34,629 $27,780
Accounts payable 220,077 157,796
Current maturities
of long-term debt 35,064 27,567
Insurance claims 24,233 92,280
Dividends payable 44,794 15,921
Other current
liabilities 51,654 54,316
Total current
liabilities 410,451 375,660
------- -------
Long-term debt, excluding current maturities 76,257 73,938
Insurance claims 21,769 24,171
Deferred income taxes and other non-current
liabilities 47,474 42,446
Shareholders' equity:
Common stock, $0.01 par
value, authorized
160,000,000
shares, issued
67,268,817 and
67,017,858 shares 673 670
Additional paid-
in capital 189,012 179,807
Retained earnings 1,255,374 1,173,044
Cost of 22,474,331 and
21,528,693 shares of
common
stock in
treasury (955,613) (899,028)
Accumulated other
comprehensive loss (1,185) (12)
Total
shareholders'
equity 488,261 454,481
------- -------
Total liabilities and shareholders' equity $1,044,212 $970,696
========== ========
LANDSTAR SYSTEM/8
Landstar System, Inc. and Subsidiary
Supplemental Information
(Unaudited)
Fiscal Year Ended Fiscal Quarter Ended
----------------- --------------------
December 27, December 28, December 27, December 28,
2014 2013 2014 2013
---- ---- ---- ----
Revenue generated through (in thousands):
-----------------------------------------
Truck transportation
Truckload:
Van equipment $1,814,195 $1,464,558 $499,651 $391,424
Unsided/platform equipment 1,093,999 932,176 289,627 233,366
Less-than-truckload 80,384 71,769 21,969 18,794
------ ------ ------ ------
Total truck transportation 2,988,578 2,468,503 811,247 643,584
Rail intermodal 81,220 73,820 22,263 18,370
Ocean and air cargo carriers 74,952 85,681 18,784 20,599
Other (1) 40,040 36,776 10,536 9,422
$3,184,790 $2,664,780 $862,830 $691,975
========== ========== ======== ========
Number of loads:
----------------
Truck transportation
Truckload:
Van equipment 1,038,517 935,530 270,875 241,837
Unsided/platform equipment 444,852 418,982 112,300 103,484
Less-than-truckload 96,541 101,498 26,835 24,249
------ ------- ------ ------
Total truck transportation 1,579,910 1,456,010 410,010 369,570
Rail intermodal 31,640 29,450 8,800 7,350
Ocean and air cargo carriers 16,260 16,660 4,150 4,290
1,627,810 1,502,120 422,960 381,210
========= ========= ======= =======
Revenue per load:
-----------------
Truck transportation
Truckload:
Van equipment $1,747 $1,565 $1,845 $1,619
Unsided/platform equipment 2,459 2,225 2,579 2,255
Less-than-truckload 833 707 819 775
Total truck transportation 1,892 1,695 1,979 1,741
Rail intermodal 2,567 2,507 2,530 2,499
Ocean and air cargo carriers 4,610 5,143 4,526 4,802
Revenue by capacity type (as a % of total revenue);
---------------------------------------------------
Truck capacity providers
BCO independent contractors (2) 48% 50% 45% 49%
Truck brokerage carriers 46% 43% 49% 44%
Rail intermodal 3% 3% 3% 3%
Ocean and air cargo carriers 2% 3% 2% 3%
Other 1% 1% 1% 1%
December 27, December 28,
2014 2013
---- ----
Truck Capacity Providers
------------------------
Business Capacity Owners (2) (3) 8,372 7,927
Truck Brokerage Carriers:
Approved and active (4) 26,222 21,183
Approved 12,135 10,933
38,357 32,116
------ ------
Total available truck capacity
providers 46,729 40,043
(1) Includes primarily premium revenue generated by the insurance segment.
(2) Business Capacity Owners are independent contractors who provide truck capacity to the Company under exclusive lease arrangements.
(3) Trucks provided by Business Capacity Owners were 8,932 and 8,432 at December 27, 2014 and December 28, 2013, respectively.
(4) Active refers to Truck Brokerage Carriers who have moved at least one load in the past 180 days.
LANDSTAR SYSTEM/9
Landstar System, Inc. and Subsidiary
Supplemental Information by Capacity Providers
(Unaudited)
Fiscal Year Ended Fiscal Quarter Ended
----------------- --------------------
December 27, December 28, December 27, December 28,
2014 2013 2014 2013
---- ---- ---- ----
Revenue generated through (in thousands):
-----------------------------------------
Business Capacity Owners (1) $1,514,254 $1,327,458 $388,041 $339,544
Truck Brokerage Carriers 1,474,324 1,141,045 423,206 304,040
Rail intermodal 81,220 73,820 22,263 18,370
Ocean and air cargo carriers 74,952 85,681 18,784 20,599
Other (2) 40,040 36,776 10,536 9,422
$3,184,790 $2,664,780 $862,830 $691,975
========== ========== ======== ========
Number of loads:
----------------
Business Capacity Owners (1) 818,480 790,690 203,680 199,490
Truck Brokerage Carriers 761,430 665,320 206,330 170,080
Rail intermodal 31,640 29,450 8,800 7,350
Ocean and air cargo carriers 16,260 16,660 4,150 4,290
1,627,810 1,502,120 422,960 381,210
========= ========= ======= =======
Revenue per load:
-----------------
Business Capacity Owners (1) $1,850 $1,679 $1,905 $1,702
Truck Brokerage Carriers 1,936 1,715 2,051 1,788
Rail intermodal 2,567 2,507 2,530 2,499
Ocean and air cargo carriers 4,610 5,143 4,526 4,802
December 27, December 28,
2014 2013
---- ----
Truck Capacity Providers
------------------------
Business Capacity Owners (1) (3) 8,372 7,927
Truck Brokerage Carriers:
Approved and active (4) 26,222 21,183
Approved 12,135 10,933
38,357 32,116
------ ------
Total available truck capacity providers 46,729 40,043
(1) Business Capacity Owners are independent contractors who provide truck capacity to the Company under exclusive lease arrangements.
(2) Includes primarily premium revenue generated by the insurance segment.
(3) Trucks provided by Business Capacity Owners were 8,932 and 8,432 at December 27, 2014 and December 28, 2013, respectively.
(4) Active refers to Truck Brokerage Carriers who have moved at least one load in the past 180 days.
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SOURCE Landstar System, Inc.
