JACKSONVILLE, Fla., April 25, 2018 (GLOBE NEWSWIRE) -- Landstar System, Inc. (NASDAQ:LSTR) reported record first quarter diluted earnings per share of $1.37 in the 2018 first quarter, on record first quarter revenue of $1.048 billion. Landstar reported diluted earnings per share of $0.77 on revenue of $781 million in the 2017 first quarter. Gross profit (defined as revenue less the cost of purchased transportation and commissions to agents) was $155.5 million, a record quarterly gross profit, in the 2018 first quarter compared to $121.6 million in the 2017 first quarter. Operating margin, representing operating income divided by gross profit, was 48.3 percent in the 2018 first quarter.

Truck transportation revenue hauled by independent business capacity owners ('BCOs') and truck brokerage carriers in the 2018 first quarter was $979.1 million, or 93 percent of revenue, compared to $726.8 million, or 93 percent of revenue, in the 2017 first quarter. Truckload transportation revenue hauled via van equipment in the 2018 first quarter was $656.1 million compared to $470.0 million in the 2017 first quarter. Truckload transportation revenue hauled via unsided/platform equipment in the 2018 first quarter was $299.4 million compared to $237.2 million in the 2017 first quarter. Revenue hauled by rail, air and ocean cargo carriers was $52.8 million, or 5 percent of revenue, in the 2018 first quarter compared to $42.4 million, or 5 percent of revenue, in the 2017 first quarter.

Trailing twelve-month return on average shareholders' equity was 32 percent and trailing twelve-month return on invested capital, representing net income divided by the sum of average equity plus average debt, was 27 percent. Currently, the Company is authorized to purchase up to approximately 2,986,000 shares of the Company's common stock under Landstar's previously announced share purchase programs. As of March 31, 2018, the Company had $260 million in cash and short term investments and $217 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 $0.15 per share payable on June 1, 2018, to stockholders of record as of the close of business on May 10, 2018. It is currently the intention of the Board to pay dividends on a quarterly basis going forward.

'I am extremely pleased with the execution of the Landstar model during the 2018 first quarter,' said Landstar's President and Chief Executive Officer Jim Gattoni. 'Diluted earnings per share was $1.37 in the 2018 first quarter, the highest first quarter diluted earnings per share in Landstar history. Revenue and the number of loads hauled via truck each set new all-time Landstar first quarter records. All-time quarterly records were set for both gross profit and operating income and the Company also set a new all-time record for trucks provided by BCOs with 9,868 as of the end of the quarter.'

Gattoni continued, 'The number of loads hauled via truck in the 2018 first quarter increased 12 percent over the 2017 first quarter, driven by a 13 percent increase in the number of loads hauled via van equipment, an 8 percent increase in the number of loads hauled via unsided/platform equipment and a 12 percent increase in less-than-truckload volume. The number of loads hauled via railroads, ocean cargo carriers and air cargo carriers was 20 percent higher in the 2018 first quarter compared to the 2017 first quarter, primarily due to a 25 percent increase in rail intermodal volume.'

Gattoni further commented, 'As expected, the pricing environment for our truckload services continued to be very strong in the 2018 first quarter, as industry-wide truck capacity continued to be very tight. Revenue per load on loads hauled via van equipment increased 24 percent over the 2017 first quarter and revenue per load on loads hauled via unsided/platform equipment increased 17 percent over the 2017 first quarter. As a result, revenue per load on loads hauled via truck was 21 percent higher than the 2017 first quarter.'

Gattoni continued, 'Through the first few weeks of April, load growth on a year-over-year basis in loads hauled via truck was consistent with the load growth experienced in the first quarter. I expect that trend to continue and, therefore, expect the number of loads hauled via truck in the 2018 second quarter to increase in a 10 to 12 percent range over the 2017 second quarter. My expectation is that pricing conditions for truck services in the 2018 second quarter will continue to be very strong with little change in the level of available truck capacity. Assuming those truck conditions remain, I expect 2018 second quarter truck revenue per load to be higher than the 2017 second quarter in a 19 to 22 percentage range. I anticipate revenue for the 2018 second quarter to be in a range of $1.115 billion to $1.165 billion. Assuming that range of estimated revenue and insurance and claims expense at 3.5 percent of BCO revenue, representing average insurance and claims costs as a percent of BCO revenue over the past five years, I would anticipate 2018 second quarter diluted earnings per share to be in a range of $1.48 to $1.54 per share compared to $0.89 per diluted share in the 2017 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 2018 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; U.S. foreign trade relationships; substantial industry competition; disruptions or failures in the Company's computer systems; cyber and other information security incidents; dependence on key vendors; changes in fuel taxes; status of independent contractors; regulatory and legislative changes; regulations focused on diesel emissions and other air quality matters; 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 2017 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 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.

(Tables follow)

Landstar System, Inc. and Subsidiary
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)
Thirteen Weeks Ended
March 31, April 1,
2018 2017
Revenue $ 1,047,926 $ 780,908
Investment income 861 414
Costs and expenses:
Purchased transportation 810,297 595,523
Commissions to agents 82,125 63,798
Other operating costs, net of gains on asset sales/dispositions 7,604 6,897
Insurance and claims 17,360 14,513
Selling, general and administrative 45,251 38,323
Depreciation and amortization 10,997 9,934
Total costs and expenses 973,634 728,988
Operating income 75,153 52,334
Interest and debt expense 800 1,083
Income before income taxes 74,353 51,251
Income taxes 16,880 18,868
Net income 57,473 32,383
Less: Net loss attributable to noncontrolling interest (44 ) -
Net income attributable to Landstar System,
Inc. and subsidiary $ 57,517 $ 32,383
Earnings per common share attributable to
Landstar System, Inc. and subsidiary $ 1.37 $ 0.77
Diluted earnings per share attributable to
Landstar System, Inc. and subsidiary $ 1.37 $ 0.77
Average number of shares outstanding:
Earnings per common share 42,038,000 41,879,000
Diluted earnings per share 42,098,000 41,998,000
Dividends per common share $ 0.15 $ 0.09
Landstar System, Inc. and Subsidiary
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
(Unaudited)
March 31, December 30,
2018 2017
ASSETS
Current assets:
Cash and cash equivalents $ 220,605 $ 242,416
Short-term investments 39,014 48,928
Trade accounts receivable, less allowance
of $6,496 and $6,131 631,828 631,164
Other receivables, including advances to independent
contractors, less allowance of $6,796 and $6,012 27,880 24,301
Other current assets 9,373 14,394
Total current assets 928,700 961,203
Operating property, less accumulated depreciation
and amortization of $224,042 and $218,700 265,540 276,011
Goodwill 39,363 39,065
Other assets 86,670 76,181
Total assets $ 1,320,273 $ 1,352,460
LIABILITIES AND EQUITY
Current liabilities:
Cash overdraft $ 36,320 $ 42,242
Accounts payable 282,480 285,132
Current maturities of long-term debt 39,931 42,051
Insurance claims 39,547 38,919
Dividends payable - 62,985
Accrued compensation 12,459 30,103
Other current liabilities 62,206 47,211
Total current liabilities 472,943 548,643
Long-term debt, excluding current maturities 73,350 83,062
Insurance claims 30,252 30,141
Deferred income taxes and other non-current liabilities 37,448 36,737
Equity
Landstar System, Inc. and subsidiary shareholders' equity
Common stock, $0.01 par value, authorized 160,000,000
shares, issued 67,836,164 and 67,740,380 shares 678 677
Additional paid-in capital 211,933 209,599
Retained earnings 1,663,140 1,611,158
Cost of 25,768,669 and 25,749,493 shares of common
stock in treasury (1,169,458 ) (1,167,600 )
Accumulated other comprehensive loss (3,551 ) (3,162 )
Total Landstar System, Inc. and subsidiary shareholders'
equity 702,742 650,672
Noncontrolling interest 3,538 3,205
Total equity 706,280 653,877
Total liabilities and equity $ 1,320,273 $ 1,352,460
Landstar System, Inc. and Subsidiary
Supplemental Information
(Unaudited)
Thirteen Weeks Ended
March 31, April 1,
2018 2017
Revenue generated through (in thousands):
Truck transportation
Truckload:
Van equipment $ 656,135 $ 469,783
Unsided/platform equipment 299,369 237,177
Less-than-truckload 23,584 19,857
Total truck transportation 979,088 726,817
Rail intermodal 29,292 22,842
Ocean and air cargo carriers 23,477 19,590
Other (1) 16,069 11,659
$ 1,047,926 $ 780,908
Revenue on loads hauled via BCO Independent Contractors (2)
included in total truck transportation $ 471,150 $ 364,908
Number of loads:
Truck transportation
Truckload:
Van equipment 336,919 298,066
Unsided/platform equipment 119,791 111,185
Less-than-truckload 33,420 29,919
Total truck transportation 490,130 439,170
Rail intermodal 13,280 10,650
Ocean and air cargo carriers 6,330 5,730
509,740 455,550
Loads hauled via BCO Independent Contractors (2)
included in total truck transportation 233,180 218,230
Revenue per load:
Truck transportation
Truckload:
Van equipment $ 1,947 $ 1,576
Unsided/platform equipment 2,499 2,133
Less-than-truckload 706 664
Total truck transportation 1,998 1,655
Rail intermodal 2,206 2,145
Ocean and air cargo carriers 3,709 3,419
Revenue per load on loads hauled via BCO Independent Contractors (2) $ 2,021 $ 1,672
Revenue by capacity type (as a % of total revenue);
Truck capacity providers:
BCO Independent Contractors (2) 45% 47%
Truck Brokerage Carriers 48% 46%
Rail intermodal 3% 3%
Ocean and air cargo carriers 2% 3%
Other 2% 1%
March 31, April 1,
2018 2017
Truck Capacity Providers
BCO Independent Contractors (2) 9,243 8,772
Truck Brokerage Carriers:
Approved and active (3) 34,659 31,566
Other approved 15,687 15,889
50,346 47,455
Total available truck capacity providers 59,589 56,227
Trucks provided by BCO Independent Contractors (2) 9,868 9,370
(1) Includes primarily reinsurance premium revenue generated by the insurance segment and, during the 2018 fiscal quarter, intra-Mexico transportation
services revenue generated by Landstar Metro.
(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 moved at least one load in the 180 days immediately preceding the fiscal quarter end. 
Contact:  Kevin StoutLandstar System, Inc.www.landstar.com
904-398-9400

Source: Landstar System, Inc.

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Landstar System Inc. published this content on 25 April 2018 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 25 April 2018 20:28:20 UTC