Landstar System, Inc. (NASDAQ: LSTR) reported all-time quarterly
record net income of $77.2 million, or $2.01 per diluted share, in
the 2021 first quarter, on record first quarter revenue of $1.288
billion. In the 2020 first quarter, net income was $40.9 million,
or $1.04 per diluted share, on $927.6 million of revenue. 2021
first quarter revenue, net income and diluted earnings per share
increased 39 percent, 89 percent and 93 percent, respectively, over
the 2020 first quarter. Gross profit (defined as revenue less the
cost of purchased transportation and commissions to agents) was an
all-time quarterly record $189.2 million in the 2021 first quarter,
32 percent above 2020 first quarter gross profit of $142.9 million.
Note that the adverse impact of the COVID-19 pandemic on the U.S.
economy in early 2020 did not have a significant impact on
Landstar’s first quarter 2020 results, but did have a significant
impact on the Company’s 2020 second quarter results.
Truck transportation revenue hauled by
independent business capacity owners (“BCOs”) and truck brokerage
carriers in the 2021 first quarter was $1,193.5 million, or 93
percent of revenue, compared to $854.6 million, or 92 percent of
revenue, in the 2020 first quarter. Truckload transportation
revenue hauled via van equipment in the 2021 first quarter was
$827.2 million compared to $545.3 million in the 2020 first
quarter. Truckload transportation revenue hauled via
unsided/platform equipment in the 2021 first quarter was $340.6
million compared to $286.3 million in the 2020 first quarter.
Revenue hauled by rail, air and ocean cargo carriers was $79.3
million, or 6 percent of revenue, in the 2021 first quarter
compared to $54.7 million, or 6 percent of revenue, in the 2020
first quarter.
Trailing twelve month return on average
shareholders’ equity was 33 percent and return on invested capital,
representing net income divided by the sum of average equity plus
average debt, was 29 percent. The Company is currently authorized
to purchase up to 1,821,030 shares of the Company’s common stock
under its previously announced share purchase program. Landstar
announced today that its Board of Directors has declared a
quarterly dividend of $0.21 per share payable on May 28, 2021, to
stockholders of record as of the close of business on May 6, 2021.
It is currently the intention of the Board to pay dividends on a
quarterly basis going forward.
“Landstar’s 2021 first quarter set a new
standard as the best first quarter financial performance in our
history. Revenue was the second highest quarterly revenue in
Landstar’s history, second only to the 2020 fourth quarter. And,
2021 first quarter gross profit, net income and diluted earnings
per share were each all-time quarterly records. First quarter 2021
operating margin, representing operating income divided by gross
profit, was 54.6 percent, also an all-time quarterly record,” said
Landstar President and CEO Jim Gattoni. “Typically, truckload
volumes in the first quarter of any year are softer than in the
second, third and fourth quarters due to seasonality. Given the
exceptional performance by Landstar in the 2021 first quarter, I
believe the stage has now been set for what should be a
record-setting year.”
“Revenue from truck loads hauled via van
equipment exceeded the 2020 first quarter by 52 percent, and
revenue from truck loads hauled via unsided/platform equipment
exceeded the 2020 first quarter by 19 percent. Consumer demand for
durables, building products and e-commerce drove record quarterly
van revenue, while growth in the U.S. metals and machinery sectors
continued to drive improvement in unsided/platform equipment
performance. For revenue generated via van equipment in the 2021
first quarter compared to the 2020 first quarter, the number of
loads increased 17 percent and revenue per load increased 30
percent. Revenue from truck loads hauled via unsided/platform
equipment continued to improve from the softer conditions that
existed throughout most of 2020. The number of loads and revenue
per load on loads hauled via unsided/platform equipment in the 2021
first quarter exceeded the 2020 first quarter by 5 percent and 14
percent, respectively.”
Gattoni continued, “In our 2020 year-end
earnings release on January 27, 2021, we provided first quarter
revenue guidance of $1.10 billion to $1.15 billion and first
quarter diluted earnings per share guidance of $1.55 to $1.65.
Actual 2021 first quarter revenue was $1.288 billion and diluted
earnings per share was $2.01, both significantly above the high end
of our previously issued guidance. Our 2021 first quarter guidance
reflected our expectation that revenue per load on loads hauled via
truck would exceed the 2020 first quarter in a mid-teen percentage
range and the number of loads hauled via truck in the 2021 first
quarter would exceed the 2020 first quarter in a high single digit
percentage range. Actual performance in the 2021 first quarter
significantly exceeded our expectations, as summarized in the
following chart:
|
% growth over prior year |
|
Actual |
|
Guidance |
|
Actual |
|
|
Q4 2020 |
|
Q1 2021 |
|
Q1 2021 |
|
|
|
|
|
|
|
|
Truck revenue per
load |
17% |
|
14% - 16% |
|
24% |
|
Number of truck
loads |
13% |
|
7% - 9% |
|
13% |
|
As noted above, revenue per load and the number
of loads hauled via truck in the 2021 first quarter exceeded the
2020 first quarter by 24 percent and 13 percent, respectively, as
our assumption of decelerating year-over-year volume growth in
February and March on softening consumer demand did not transpire.
The winter storms that impacted much of the central portion of the
country during the last week of Landstar’s fiscal February had a
significant impact on freight volumes during that week. We believe
these storms temporarily delayed many loads that otherwise would
have been hauled in February to instead be hauled in March. After
taking this short-term impact into consideration, load volume and
revenue per load on loads hauled via truck remained strong through
the entirety of the 2021 first quarter and were generally in-line
with historical seasonal month-to-month trends, with the exception
of truck revenue per load in fiscal March. Revenue per load on
loads hauled via truck in March 2021 exceeded March 2020 by an
impressive 31 percent, far above the 18 percent and 19 percent
month-over-prior-year-month growth experienced in January and
February 2021, respectively. Revenue per load on loads hauled via
van and unsided/platform equipment both experienced unusually large
percentage increases from February to March.”
Gattoni continued, “Second quarter
year-over-prior-year revenue and diluted earnings per share
comparisons are not meaningful due to the adverse impact the
COVID-19 pandemic had on the Company’s 2020 second quarter
financial results. On a sequential basis, I expect the strong
finish to the 2021 first quarter to continue through the 2021
second quarter. As a result, I expect both revenue per load and the
number of loads hauled via truck to be in a mid-single digit
percentage range above the 2021 first quarter. As such, I
anticipate revenue for the 2021 second quarter to be in a range of
$1.40 billion to $1.45 billion.”
Gattoni concluded, “Based on the range of
revenue estimated for the 2021 second quarter, I would anticipate
diluted earnings per share to be in a range of $2.20 to $2.30. This
range of diluted earnings per share includes insurance and claims
expense estimated at 4.3 percent of BCO revenue.”
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 2021 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:
the impact of the coronavirus (COVID-19) pandemic; 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 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 2020
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.
Landstar transportation services companies are certified to ISO
9001:2015 quality management system standards and RC14001:2015
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.
|
|
|
|
|
|
Landstar
System, Inc. and Subsidiary |
Consolidated
Statements of Income |
(Dollars in
thousands, except per share amounts) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended |
|
|
|
March 27, |
|
March 28, |
|
|
|
2021 |
|
2020 |
|
|
|
|
|
|
Revenue |
$ |
1,287,534 |
|
|
$ |
927,566 |
|
Investment income |
|
684 |
|
|
|
1,167 |
|
|
|
|
|
|
|
Costs and expenses: |
|
|
|
|
Purchased transportation |
|
998,285 |
|
|
|
709,257 |
|
|
Commissions to agents |
|
100,009 |
|
|
|
75,376 |
|
|
Other operating costs, net of gains on asset
sales/dispositions |
|
7,642 |
|
|
|
8,306 |
|
|
Insurance and claims |
|
21,505 |
|
|
|
24,957 |
|
|
Selling, general and administrative |
|
45,408 |
|
|
|
45,327 |
|
|
Depreciation and amortization |
|
12,101 |
|
|
|
11,505 |
|
|
|
|
|
|
|
|
|
Total costs and expenses |
|
1,184,950 |
|
|
|
874,728 |
|
|
|
|
|
|
|
Operating income |
|
103,268 |
|
|
|
54,005 |
|
Interest and debt expense |
|
1,042 |
|
|
|
952 |
|
|
|
|
|
|
|
Income before income taxes |
|
102,226 |
|
|
|
53,053 |
|
Income taxes |
|
24,986 |
|
|
|
12,158 |
|
|
|
|
|
|
|
Net income |
$ |
77,240 |
|
|
$ |
40,895 |
|
|
|
|
|
|
|
Diluted earnings per share |
$ |
2.01 |
|
|
$ |
1.04 |
|
|
|
|
|
|
|
Average diluted shares outstanding |
|
38,404,000 |
|
|
|
39,254,000 |
|
|
|
|
|
|
|
Dividends per common share |
$ |
0.210 |
|
|
$ |
0.185 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Landstar
System, Inc. and Subsidiary |
Consolidated
Balance Sheets |
(Dollars in
thousands, except per share amounts) |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 27, |
|
December 26, |
|
|
|
2021 |
|
2020 |
ASSETS |
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
$ |
219,389 |
|
|
$ |
249,354 |
|
|
Short-term investments |
|
41,407 |
|
|
|
41,375 |
|
|
Trade accounts receivable, less allowance |
|
|
|
|
|
of $7,095 and $8,670 |
|
824,872 |
|
|
|
764,169 |
|
|
Other receivables, including advances to independent |
|
|
|
|
|
contractors,
less allowance of $6,711 and $7,239 |
|
40,067 |
|
|
|
134,757 |
|
|
Other current assets |
|
11,584 |
|
|
|
18,520 |
|
|
|
Total
current assets |
|
1,137,319 |
|
|
|
1,208,175 |
|
|
|
|
|
|
|
Operating property, less accumulated depreciation |
|
|
|
|
and amortization of $309,464 and $299,407 |
|
288,041 |
|
|
|
296,996 |
|
Goodwill |
|
40,732 |
|
|
|
40,949 |
|
Other assets |
|
108,373 |
|
|
|
107,679 |
|
Total assets |
$ |
1,574,465 |
|
|
$ |
1,653,799 |
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
Current liabilities: |
|
|
|
|
Cash overdraft |
$ |
74,754 |
|
|
$ |
74,748 |
|
|
Accounts payable |
|
414,440 |
|
|
|
380,505 |
|
|
Current maturities of long-term debt |
|
32,800 |
|
|
|
35,415 |
|
|
Insurance claims |
|
39,229 |
|
|
|
149,774 |
|
|
Dividends payable |
|
- |
|
|
|
76,770 |
|
|
Other current liabilities |
|
101,442 |
|
|
|
88,925 |
|
|
|
Total
current liabilities |
|
662,665 |
|
|
|
806,137 |
|
|
|
|
|
|
|
Long-term debt, excluding current maturities |
|
58,196 |
|
|
|
65,359 |
|
Insurance claims |
|
39,850 |
|
|
|
38,867 |
|
Deferred income taxes and other non-current liabilities |
|
50,835 |
|
|
|
51,601 |
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
Common stock, $0.01 par value, authorized 160,000,000 |
|
|
|
|
|
shares,
issued 68,212,296 and 68,183,702 |
|
682 |
|
|
|
682 |
|
|
Additional paid-in capital |
|
232,597 |
|
|
|
228,875 |
|
|
Retained earnings |
|
2,115,411 |
|
|
|
2,046,238 |
|
|
Cost of 29,803,726 and 29,797,639 shares of common |
|
|
|
|
|
stock in
treasury |
|
(1,582,818 |
) |
|
|
(1,581,961 |
) |
|
Accumulated other comprehensive loss |
|
(2,953 |
) |
|
|
(1,999 |
) |
|
|
Total
shareholders' equity |
|
762,919 |
|
|
|
691,835 |
|
Total liabilities and shareholders' equity |
$ |
1,574,465 |
|
|
$ |
1,653,799 |
|
|
|
|
|
|
|
|
|
|
|
|
Landstar
System, Inc. and Subsidiary |
|
Supplemental
Information |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Thirteen Weeks Ended |
|
|
|
|
March 27, |
|
March 28, |
|
|
|
|
2021 |
|
2020 |
Revenue generated through (in thousands): |
|
|
|
|
|
|
|
|
|
|
|
Truck transportation |
|
|
|
|
|
Truckload: |
|
|
|
|
|
|
Van equipment |
$ |
827,187 |
|
|
$ |
545,307 |
|
|
|
|
Unsided/platform equipment |
|
340,632 |
|
|
|
286,328 |
|
|
|
Less-than-truckload |
|
25,670 |
|
|
|
22,941 |
|
|
|
|
Total truck
transportation |
|
1,193,489 |
|
|
|
854,576 |
|
|
Rail intermodal |
|
31,708 |
|
|
|
28,129 |
|
|
Ocean and air cargo carriers |
|
47,600 |
|
|
|
26,587 |
|
|
Other (1) |
|
14,737 |
|
|
|
18,274 |
|
|
|
|
|
$ |
1,287,534 |
|
|
$ |
927,566 |
|
|
|
|
|
|
|
|
|
Revenue on loads hauled via BCO Independent
Contractors (2) |
|
|
|
|
|
included in total truck transportation |
$ |
560,114 |
|
|
$ |
431,279 |
|
|
|
|
|
|
|
|
Number of loads: |
|
|
|
|
|
|
|
|
|
|
|
Truck transportation |
|
|
|
|
|
Truckload: |
|
|
|
|
|
|
Van
equipment |
|
368,873 |
|
|
|
315,345 |
|
|
|
|
Unsided/platform equipment |
|
126,265 |
|
|
|
120,589 |
|
|
|
Less-than-truckload |
|
40,692 |
|
|
|
38,356 |
|
|
|
|
Total truck
transportation |
|
535,830 |
|
|
|
474,290 |
|
|
Rail intermodal |
|
11,700 |
|
|
|
11,540 |
|
|
Ocean and air cargo carriers |
|
9,230 |
|
|
|
7,070 |
|
|
|
|
|
|
556,760 |
|
|
|
492,900 |
|
|
|
|
|
|
|
|
|
Loads hauled via BCO Independent Contractors
(2) |
|
|
|
|
|
included in total truck transportation |
|
245,950 |
|
|
|
233,400 |
|
|
|
|
|
|
|
|
Revenue per load: |
|
|
|
|
|
|
|
|
|
|
|
Truck transportation |
|
|
|
|
|
Truckload: |
|
|
|
|
|
|
Van
equipment |
$ |
2,242 |
|
|
$ |
1,729 |
|
|
|
|
Unsided/platform equipment |
|
2,698 |
|
|
|
2,374 |
|
|
|
Less-than-truckload |
|
631 |
|
|
|
598 |
|
|
|
|
Total truck
transportation |
|
2,227 |
|
|
|
1,802 |
|
|
Rail intermodal |
|
2,710 |
|
|
|
2,438 |
|
|
Ocean and air cargo carriers |
|
5,157 |
|
|
|
3,761 |
|
|
|
|
|
|
|
|
|
Revenue per load on loads hauled via BCO
Independent Contractors (2) |
$ |
2,277 |
|
|
$ |
1,848 |
|
|
|
|
|
|
|
|
Revenue by capacity type (as a % of total revenue); |
|
|
|
|
|
|
|
|
|
|
|
Truck capacity providers: |
|
|
|
|
|
BCO Independent Contractors (2) |
|
44 |
% |
|
|
46 |
% |
|
|
Truck Brokerage Carriers |
|
49 |
% |
|
|
46 |
% |
|
Rail intermodal |
|
2 |
% |
|
|
3 |
% |
|
Ocean and air cargo carriers |
|
4 |
% |
|
|
3 |
% |
|
Other |
|
1 |
% |
|
|
2 |
% |
|
|
|
|
|
|
|
|
|
|
|
March 27, |
|
March 28, |
|
|
|
|
2021 |
|
2020 |
Truck Capacity Providers |
|
|
|
|
|
|
|
|
|
|
|
BCO Independent Contractors (2) |
|
10,498 |
|
|
|
9,444 |
|
|
Truck Brokerage Carriers: |
|
|
|
|
|
Approved and active (3) |
|
49,538 |
|
|
|
38,879 |
|
|
|
Other approved |
|
23,246 |
|
|
|
16,657 |
|
|
|
|
|
|
72,784 |
|
|
|
55,536 |
|
|
Total available truck capacity providers |
|
83,282 |
|
|
|
64,980 |
|
|
|
|
|
|
|
|
|
Trucks provided by BCO Independent Contractors
(2) |
|
11,268 |
|
|
|
10,112 |
|
|
|
|
|
|
|
|
(1) Includes primarily
reinsurance premium revenue generated by the insurance segment and
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: Jim Gattoni
Landstar System, Inc.
www.landstar.com
904-398-9400
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