JACKSONVILLE, Fla.,
July 20, 2016 /PRNewswire/ --
Landstar System, Inc. (NASDAQ: LSTR) reported second quarter
diluted earnings per share of $0.76
on revenue of $775 million in the
2016 second quarter. Net income was negatively impacted by
elevated insurance and claims costs, driven mostly by the severity
of claims, in the 2016 second quarter, the highest quarterly
insurance and claims cost over the past 6 years. Landstar
reported diluted earnings per share of $0.92 on revenue of $868
million in the 2015 second quarter. Gross profit (defined as
revenue less the cost of purchased transportation and commissions
to agents) was $121.0 million in the
2016 second quarter compared to $130.8
million in the 2015 second quarter. Operating margin,
representing operating income divided by gross profit, was 43.9
percent in the 2016 second quarter.
Truck transportation revenue hauled by independent business
capacity owners ("BCOs") and truck brokerage carriers in the 2016
second quarter was $718.5 million, or
93 percent of revenue, compared to $809.2
million, or 93 percent of revenue, in the 2015 second
quarter. Truckload transportation revenue hauled via van
equipment in the 2016 second quarter was $458.0 million compared to $496.9 million in the 2015 second quarter.
Truckload transportation revenue hauled via unsided/platform
equipment in the 2016 second quarter was $242.0 million compared to $291.0 million in the 2015 second quarter.
Revenue hauled by rail, air and ocean cargo carriers was
$45.1 million, or 6 percent of
revenue, in the 2016 second quarter compared to $48.1 million, or 6 percent of revenue, in the
2015 second quarter.
Trailing twelve-month return on average shareholders' equity was
29 percent and trailing twelve-month return on invested capital,
net income divided by the sum of average equity plus average debt,
was 23 percent. Landstar purchased approximately 423,000
shares of its common stock during the first half of 2016 at an
aggregate cost of $26.5
million. Currently, there are approximately 1,386,000
shares of the Company's common stock available for purchase under
Landstar's authorized share purchase program. As of
June 25, 2016, the Company had
$215 million in cash and short term
investments and $214 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 $0.09 per share payable on August 26, 2016, to stockholders of record as of
the close of business on August 8,
2016. This quarterly dividend includes a 12.5 percent
increase to the amount of the Company's quarterly dividend declared
following each of the prior four quarters. It is currently the
intention of the Board to pay dividends on a quarterly basis going
forward.
Commenting on Landstar's 2016 second quarter, Landstar's
President and CEO Jim Gattoni said,
"On April 20th, we
provided second quarter revenue guidance of $770 million to $820 million and second quarter
diluted earnings per share guidance of $0.80
to $0.85. On June
8th, I updated both our revenue and diluted
earnings per share guidance by indicating at a webcast investor
conference available to the public that I was more comfortable at
the lower end of both the revenue and diluted earnings per share
guidance. Revenue of $775 million for
the second quarter was in-line with our updated guidance. Diluted
earnings per share of $0.76 for the
second quarter was below the low end of the updated guidance due to
an increase in estimated insurance and claims costs, as a result of
a severe accident that occurred at the end of the second
quarter."
Gattoni continued, "Overall, from a revenue standpoint, I
believe we executed well considering the sluggish freight
environment. During the 2015 second quarter, we hauled over 13,000
truckloads via unsided/platform equipment for a project on behalf
of a customer in the automotive sector, generating $27 million of revenue in the 2015 second
quarter. Excluding the loadings related to that project we
experienced a slight increase in loads hauled via truck over the
2015 second quarter. However, Landstar's truckload services
continued to experience significant pricing pressure throughout the
2016 second quarter, as industry-wide truck capacity was more
readily available as compared to the 2015 second quarter and demand
continued to be soft. Although we experienced a somewhat normal
seasonal uptick in revenue per load from May to June, the pricing
pressure continued in the U.S. spot market, in which the Company
operates much of its business. Additionally, the average cost of a
gallon of diesel fuel was approximately 20 percent lower during the
2016 second quarter compared to the 2015 second 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 9 percent lower in the 2016 second
quarter compared to the 2015 second quarter."
Gattoni further commented, "The number of loads hauled via truck
in the 2016 second quarter decreased 2 percent from the 2015 second
quarter, driven by a 9 percent decrease in the number of loads
hauled via unsided/platform equipment, entirely due to the 2015
automotive sector project, partially offset by a 1 percent increase
in the number of loads hauled via van equipment. Landstar
achieved an 11 percent increase in the number of loads hauled via
railroads, ocean cargo carriers and air cargo carriers in the 2016
second quarter over the 2015 second quarter. The softer pricing
environment and increased insurance and claims expense drove the
2016 second quarter operating margin down to 43.9 percent, from
50.5 percent in the 2015 second quarter."
Gattoni continued, "Third quarter 2016 over third quarter 2015
revenue comparisons will include the effects of revenue derived
from the automotive project previously referenced. The Company's
2015 third quarter included approximately $35 million in revenue from approximately 20,000
loads hauled via truck related to that project. The project was
completed at the end of 2015. Historically, revenue in the
Company's third fiscal quarter has been relatively consistent with
revenue generated in the Company's second fiscal quarter. Revenue
per load on loads hauled via truck in the Company's third quarter
has been slightly ahead of the second quarter while the number of
loads hauled via truck in the third quarter is typically slightly
below the second quarter. Through the first few weeks of July, we
have experienced the normal seasonal uptick in revenue per load on
loads hauled via truck. Also, the number of loads hauled via truck
during the first few weeks of July is trending with the historical
second quarter to third quarter pattern. As such, I expect 2016
third quarter revenue to be similar to the Company's 2016 second
quarter revenue. Assuming insurance and claims costs in the 2016
third quarter are approximately 3.2 percent of BCO revenue,
representing average insurance and claims costs as a percent of BCO
revenue over the past 5 years, I would expect diluted earnings per
share to be in a range of $0.79 to
$0.84 in the 2016 third 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 Second Quarter 2016 Earnings
Release Conference Call."
This earnings announcement, as well as an accompanying slide
presentation, is available through the Company's website at
http://investor.landstar.com under "Presentations" and on a Form
8-K filed with the Securities and Exchange Commission.
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 MarketĀ® under the symbol LSTR.
(Tables follow)
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 25,
|
|
June 27,
|
|
June 25,
|
|
June 27,
|
|
|
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
$
1,486,867
|
|
$
1,630,763
|
|
$
775,223
|
|
$
868,383
|
Investment
income
|
|
|
743
|
|
693
|
|
363
|
|
339
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
Purchased
transportation
|
|
1,129,743
|
|
1,254,730
|
|
589,415
|
|
667,577
|
|
Commissions to
agents
|
|
123,931
|
|
129,816
|
|
64,839
|
|
70,032
|
|
Other operating
costs, net of gains on asset sales/dispositions
|
|
13,992
|
|
15,670
|
|
6,585
|
|
7,981
|
|
Insurance and
claims
|
|
|
30,307
|
|
27,108
|
|
16,094
|
|
12,312
|
|
Selling, general and
administrative
|
|
71,519
|
|
74,986
|
|
36,905
|
|
37,738
|
|
Depreciation and
amortization
|
|
17,093
|
|
14,068
|
|
8,655
|
|
7,049
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total costs and
expenses
|
|
1,386,585
|
|
1,516,378
|
|
722,493
|
|
802,689
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
|
101,025
|
|
115,078
|
|
53,093
|
|
66,033
|
Interest and debt
expense
|
|
|
1,777
|
|
1,494
|
|
888
|
|
713
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
99,248
|
|
113,584
|
|
52,205
|
|
65,320
|
Income
taxes
|
|
|
|
37,750
|
|
43,098
|
|
19,891
|
|
24,849
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
61,498
|
|
$
70,486
|
|
$
32,314
|
|
$
40,471
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common
share
|
|
$
1.45
|
|
$
1.59
|
|
$
0.77
|
|
$
0.92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
|
|
$
1.45
|
|
$
1.59
|
|
$
0.76
|
|
$
0.92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of
shares outstanding:
|
|
|
|
|
|
|
|
|
|
Earnings per common
share
|
|
42,315,000
|
|
44,240,000
|
|
42,235,000
|
|
43,892,000
|
|
Diluted earnings per
share
|
|
42,424,000
|
|
44,397,000
|
|
42,357,000
|
|
44,033,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per common
share
|
|
$
0.16
|
|
$
0.14
|
|
$
0.08
|
|
$
0.07
|
Landstar System,
Inc. and Subsidiary
|
Consolidated
Balance Sheets
|
(Dollars in
thousands, except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 25,
|
|
December
26,
|
|
|
|
|
|
|
|
2016
|
|
2015
|
ASSETS
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
$
153,370
|
|
$
114,520
|
|
Short-term
investments
|
|
|
61,528
|
|
48,823
|
|
Trade accounts
receivable, less allowance
|
|
|
|
|
|
of $5,092 and
$4,327
|
|
|
402,362
|
|
462,699
|
|
Other receivables,
including advances to independent
|
|
|
|
|
|
contractors, less
allowance of $4,755 and $4,143
|
18,584
|
|
18,472
|
|
Other current
assets
|
|
|
20,608
|
|
11,604
|
|
|
Total current
assets
|
|
|
656,452
|
|
656,118
|
|
|
|
|
|
|
|
|
|
|
Operating property,
less accumulated depreciation
|
|
|
|
|
|
|
and amortization of
$187,774 and $182,591
|
236,177
|
|
225,927
|
Goodwill
|
|
|
|
|
31,134
|
|
31,134
|
Other
assets
|
|
|
|
60,994
|
|
78,339
|
Total
assets
|
|
|
|
$
984,757
|
|
$
991,518
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Cash
overdraft
|
|
|
|
$
30,355
|
|
$
35,609
|
|
Accounts
payable
|
|
|
191,247
|
|
223,709
|
|
Current maturities of
long-term debt
|
|
42,209
|
|
42,499
|
|
Insurance
claims
|
|
|
26,135
|
|
19,757
|
|
Other current
liabilities
|
|
|
44,642
|
|
47,963
|
|
|
Total current
liabilities
|
|
|
334,588
|
|
369,537
|
|
|
|
|
|
|
|
|
|
|
Long-term debt,
excluding current maturities
|
76,724
|
|
81,793
|
Insurance
claims
|
|
|
|
23,042
|
|
21,477
|
Deferred income taxes
and other non-current liabilities
|
53,148
|
|
52,474
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
Common stock, $0.01
par value, authorized 160,000,000
|
|
|
|
|
|
shares, issued
67,504,785 and 67,391,616 shares
|
675
|
|
674
|
|
Additional paid-in
capital
|
|
|
197,503
|
|
195,841
|
|
Retained
earnings
|
|
|
1,444,691
|
|
1,389,975
|
|
Cost of 25,397,002
and 24,972,079 shares of common
|
|
|
|
|
|
stock in
treasury
|
|
|
(1,143,360)
|
|
(1,116,765)
|
|
Accumulated other
comprehensive loss
|
(2,254)
|
|
(3,488)
|
|
|
Total shareholders'
equity
|
|
|
497,255
|
|
466,237
|
Total liabilities and
shareholders' equity
|
$
984,757
|
|
$
991,518
|
|
Landstar System,
Inc. and Subsidiary
|
|
Supplemental
Information
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twenty Six Weeks
Ended
|
|
|
Thirteen Weeks
Ended
|
|
|
|
|
|
June 25,
|
|
June 27,
|
|
|
June 25,
|
|
June 27,
|
|
|
|
|
|
2016
|
|
2015
|
|
|
2016
|
|
2015
|
Revenue generated
through (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Truck
transportation
|
|
|
|
|
|
|
|
|
|
|
|
Truckload:
|
|
|
|
|
|
|
|
|
|
|
|
|
Van
equipment
|
|
$
886,195
|
|
$
946,598
|
|
|
$
458,002
|
|
$
496,910
|
|
|
|
Unsided/platform
equipment
|
|
451,430
|
|
530,515
|
|
|
242,008
|
|
291,032
|
|
|
Less-than-truckload
|
|
35,927
|
|
40,956
|
|
|
18,450
|
|
21,258
|
|
|
|
Total truck
transportation
|
|
1,373,552
|
|
1,518,069
|
|
|
718,460
|
|
809,200
|
|
Rail
intermodal
|
|
52,337
|
|
49,522
|
|
|
26,229
|
|
26,341
|
|
Ocean and air cargo
carriers
|
|
37,710
|
|
41,410
|
|
|
18,902
|
|
21,778
|
|
Other
(1)
|
|
23,268
|
|
21,762
|
|
|
11,632
|
|
11,064
|
|
|
|
|
|
$
1,486,867
|
|
$
1,630,763
|
|
|
$
775,223
|
|
$
868,383
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue on loads
hauled via BCO Independent Contractors (2)
|
|
|
|
|
|
|
|
|
|
|
|
included in total
truck transportation
|
|
$
707,652
|
|
$
752,030
|
|
|
$
373,374
|
|
$
401,705
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
loads:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Truck
transportation
|
|
|
|
|
|
|
|
|
|
|
|
Truckload:
|
|
|
|
|
|
|
|
|
|
|
|
|
Van
equipment
|
|
556,119
|
|
544,714
|
|
|
287,079
|
|
285,762
|
|
|
|
Unsided/platform
equipment
|
|
219,034
|
|
229,452
|
|
|
116,292
|
|
127,286
|
|
|
Less-than-truckload
|
|
55,727
|
|
54,904
|
|
|
28,829
|
|
28,912
|
|
|
|
Total truck
transportation
|
|
830,880
|
|
829,070
|
|
|
432,200
|
|
441,960
|
|
Rail
intermodal
|
|
24,180
|
|
20,680
|
|
|
12,150
|
|
11,200
|
|
Ocean and air cargo
carriers
|
|
9,780
|
|
8,620
|
|
|
5,220
|
|
4,490
|
|
|
|
|
|
864,840
|
|
858,370
|
|
|
449,570
|
|
457,650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loads hauled via BCO
Independent Contractors (2)
|
|
|
|
|
|
|
|
|
|
|
|
included in total
truck transportation
|
|
414,660
|
|
406,230
|
|
|
216,990
|
|
214,930
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue per
load:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Truck
transportation
|
|
|
|
|
|
|
|
|
|
|
|
Truckload:
|
|
|
|
|
|
|
|
|
|
|
|
|
Van
equipment
|
|
$
1,594
|
|
$
1,738
|
|
|
$
1,595
|
|
$
1,739
|
|
|
|
Unsided/platform
equipment
|
|
2,061
|
|
2,312
|
|
|
2,081
|
|
2,286
|
|
|
Less-than-truckload
|
|
645
|
|
746
|
|
|
640
|
|
735
|
|
|
|
Total truck
transportation
|
|
1,653
|
|
1,831
|
|
|
1,662
|
|
1,831
|
|
Rail
intermodal
|
|
2,164
|
|
2,395
|
|
|
2,159
|
|
2,352
|
|
Ocean and air cargo
carriers
|
|
3,856
|
|
4,804
|
|
|
3,621
|
|
4,850
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue per load on
loads hauled via BCO Independent Contractors
(2)
|
|
$
1,707
|
|
$
1,851
|
|
|
$
1,721
|
|
$
1,869
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue by capacity
type (as a % of total revenue);
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Truck capacity
providers:
|
|
|
|
|
|
|
|
|
|
|
|
BCO Independent
Contractors (2)
|
|
48%
|
|
46%
|
|
|
48%
|
|
46%
|
|
|
Truck Brokerage
Carriers
|
|
45%
|
|
47%
|
|
|
45%
|
|
47%
|
|
Rail
intermodal
|
|
4%
|
|
3%
|
|
|
3%
|
|
3%
|
|
Ocean and air cargo
carriers
|
|
3%
|
|
3%
|
|
|
2%
|
|
3%
|
|
Other
|
|
|
2%
|
|
1%
|
|
|
2%
|
|
1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 25,
|
|
June 27,
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
2015
|
Truck Capacity
Providers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BCO Independent
Contractors (2)
|
|
|
|
|
|
|
8,856
|
|
8,726
|
|
Truck Brokerage
Carriers:
|
|
|
|
|
|
|
|
|
|
|
Approved and active
(3)
|
|
|
|
|
|
|
30,137
|
|
28,387
|
|
Other approved
|
|
|
|
|
|
|
15,594
|
|
13,126
|
|
|
|
|
|
|
|
|
|
|
45,731
|
|
41,513
|
|
Total available truck
capacity providers
|
|
|
|
|
|
|
54,587
|
|
50,239
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trucks provided by
BCO Independent Contractors (2)
|
|
|
|
|
|
|
9,462
|
|
9,308
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
Logo - http://photos.prnewswire.com/prnh/20150522/218112LOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/landstar-system-reports-second-quarter-revenue-of-775-million-and-diluted-earnings-per-share-of-076-300301457.html
SOURCE Landstar System, Inc.