JACKSONVILLE, Fla., Oct. 25, 2012 /PRNewswire/ -- Landstar System, Inc. (NASDAQ: LSTR) reported 2012 record third quarter diluted earnings per share of $0.71 from net income of $33.1 million, compared to net income of $30.2 million, or $0.64 per diluted share, for the 2011 third quarter. Operating margin, representing operating income divided by gross profit (gross profit defined as revenue less the cost of purchased transportation and commissions to agents) was 48.1 percent in the 2012 third quarter compared to 44.7 percent in the 2011 third quarter. Revenue for the 2012 third quarter was $717.2 million compared to $684.0 million in the 2011 third quarter.
Truck transportation revenue hauled by independent business capacity owners ("BCOs") and truck brokerage carriers in the 2012 third quarter was $663.5 million, or 93 percent of revenue, compared to $625.8 million, or 91 percent of revenue, in the 2011 third quarter. Revenue hauled by rail, air and ocean cargo carriers was $38.9 million, or five percent of revenue, in the 2012 third quarter compared to $44.5 million, or seven percent of revenue, in the 2011 third quarter.
Trailing twelve-month return on average shareholder's equity was 39 percent and trailing twelve-month return on invested capital, net income divided by the sum of average equity plus average debt, was 29 percent. Landstar also announced that its Board of Directors has declared a quarterly dividend of $0.06 per share. The dividend is payable on December 7, 2012 to stockholders of record at the close of business on November 13, 2012. During the 2012 third quarter, Landstar purchased 183,800 shares of its common stock at a total cost of $8.8 million bringing the total number of shares purchased during the first three quarters of 2012 to 499,400 at an aggregate cost of $24.6 million. Currently, there are 2,017,000 shares of the Company's common stock available for purchase under Landstar's authorized share purchase programs.
"Landstar produced solid operating results in the 2012 third quarter, despite inconsistent demand and a tougher quarter over prior year quarter revenue per load comparison," said Landstar Chairman, President and Chief Executive Officer Henry Gerkens. "Loads hauled via truck capacity in the 2012 third quarter increased a healthy seven percent over the 2011 third quarter. Average truck revenue per load in the 2012 third quarter remained relatively high at $1,756 per load compared to historical amounts but was slightly lower than the $1,768 revenue per load amount in the 2011 third quarter. After amounts paid for purchased transportation and agent commissions were deducted from revenue in the 2012 third quarter, the resulting gross profit amount was the second highest third quarter gross profit amount in Landstar history. Landstar continued to demonstrate its operating leverage as it passed the increase in gross profit through to operating income, resulting in an operating margin of 48.1 percent in the 2012 third quarter. Third quarter 2012 diluted earnings per share of $0.71 was a third quarter record."
Gerkens continued, "As I look at the 2012 fourth quarter, it is important to note that the 2012 fourth quarter is a thirteen week quarter whereas the 2011 fourth quarter was a fourteen week quarter. I estimate that the extra week in the 2011 fourth quarter contributed approximately $25 to $30 million in additional revenue. Using the 2011 fourth quarter gross profit margin of 15.8 percent, the increase in diluted earnings per share attributable to that additional revenue is estimated to be approximately $0.06 per diluted share. In addition, the 2011 fourth quarter included a favorable income tax benefit of approximately $0.03 per diluted share.
Although I am very confident in the long term outlook for Landstar, I am also somewhat cautious in the short term. I believe that until the uncertainty surrounding the current political environment and tax and budgetary issues are resolved, the economy will continue to grow, but at a sluggish pace. In the first few weeks of the 2012 fourth quarter, we have seen a slowing in demand beyond the choppiness experienced during the 2012 third quarter. Despite the slowing demand, revenue in the first several weeks of the 2012 fourth quarter continues to run above revenue of the first several weeks of the 2011 fourth quarter. Given the uncertain economic environment and current revenue trends, I anticipate earnings per diluted share for the 2012 fourth quarter to be in a range of $0.63 to $0.68 per share."
Landstar will hold 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 Third Quarter 2012 Earnings Release Conference Call." The webcast will be available on the Company's website through Thursday, November 1, 2012.
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, expectations and intentions. Terms such as "anticipates," "believes," "estimates," "intention," "plans," "predicts," "may," "should," "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 workers' compensation claims; unfavorable development of existing claims; dependence on independent sales agents; dependence on third-party capacity providers; disruptions or failures in our computer systems; a downturn in domestic or international economic growth or growth in the transportation sector; substantial industry competition; and other operational, financial or legal risks or uncertainties detailed in Landstar's Form 10K for the 2011 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 Landstar undertakes no obligation to publicly update or revise any forward-looking statements.
About Landstar:
Landstar System, Inc. is a non-asset based provider of integrated supply chain solutions. Landstar delivers safe, specialized transportation and logistics services to a broad range of customers worldwide 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 RC14001:2008 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)
Thirty Nine Weeks Ended
Thirteen Weeks Ended
September 29,
September 24,
September 29,
September 24,
2012
2011
2012
2011
Revenue
$ 2,102,164
$ 1,931,560
$ 717,168
$ 684,013
Investment income
1,185
1,294
393
373
Costs and expenses:
Purchased transportation
1,603,865
1,459,660
548,162
518,300
Commissions to agents
162,728
153,165
56,036
54,990
Other operating costs
17,635
22,050
6,447
6,427
Insurance and claims
28,411
34,096
8,010
9,381
Selling, general and administrative
113,916
112,252
37,455
39,206
Depreciation and amortization
20,476
19,336
7,072
6,549
Total costs and expenses
1,947,031
1,800,559
663,182
634,853
Operating income
156,318
132,295
54,379
49,533
Interest and debt expense
2,312
2,340
818
735
Income before income taxes
154,006
129,955
53,561
48,798
Income taxes
58,203
49,642
20,460
18,640
Net income
95,803
80,313
33,101
30,158
Less: Net loss attributable to noncontrolling interest
-
(62)
-
-
Net income attributable to Landstar System,
Inc. and subsidiary
$ 95,803
$ 80,375
$ 33,101
$ 30,158
Earnings per common share attributable to
Landstar System, Inc. and subsidiary
$ 2.05
$ 1.69
$ 0.71
$ 0.64
Diluted earnings per share attributable to
Landstar System, Inc. and subsidiary
$ 2.04
$ 1.68
$ 0.71
$ 0.64
Average number of shares outstanding:
Earnings per common share
46,775,000
47,670,000
46,614,000
47,358,000
Diluted earnings per share
46,964,000
47,735,000
46,732,000
47,387,000
Dividends paid per common share
$ 0.170
$ 0.155
$ 0.060
$ 0.055
Landstar System, Inc. and Subsidiary
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
(Unaudited)
Sept. 29,
Dec. 31,
2012
2011
ASSETS
Current assets:
Cash and cash equivalents
$ 79,961
$ 80,900
Short-term investments
38,112
27,944
Trade accounts receivable, less allowance
of $8,299 and $6,591
429,684
368,377
Other receivables, including advances to independent
contractors, less allowance of $4,951 and $5,384
51,766
53,263
Deferred income taxes and other current assets
20,202
21,308
Total current assets
619,725
551,792
Operating property, less accumulated depreciation
and amortization of $154,657 and $145,804
163,569
142,146
Goodwill
57,470
57,470
Other assets
68,618
57,041
Total assets
$ 909,382
$ 808,449
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Cash overdraft
$ 26,719
$ 25,905
Accounts payable
212,653
163,307
Current maturities of long-term debt
19,366
17,212
Insurance claims
68,410
76,624
Other current liabilities
45,526
48,065
Total current liabilities
372,674
331,113
Long-term debt, excluding current maturities
99,748
115,130
Insurance claims
25,386
27,494
Deferred income taxes and other non-current liabilities
40,141
34,135
Shareholders' equity:
Common stock, $0.01 par value, authorized 160,000,000
shares, issued 66,855,922 and 66,602,486 shares
669
666
Additional paid-in capital
172,455
165,712
Retained earnings
1,035,003
947,156
Cost of 20,386,462 and 19,882,289 shares of common
stock in treasury
(838,273)
(813,684)
Accumulated other comprehensive income
1,579
727
Total shareholders' equity
371,433
300,577
Total liabilities and shareholders' equity
$ 909,382
$ 808,449
Landstar System, Inc. and Subsidiary
Supplemental Information
(Unaudited)
Thirty Nine Weeks Ended
Thirteen Weeks Ended
September 29,
September 24,
September 29,
September 24,
2012
2011
2012
2011
Revenue generated through (in thousands):
Business Capacity Owners (1)
$ 1,057,109
$ 1,020,856
$ 355,861
$ 351,108
Truck Brokerage Carriers
886,532
747,122
307,600
274,731
Rail intermodal
55,002
53,991
18,782
19,159
Ocean and air cargo carriers
60,227
68,261
20,100
25,330
Other (2)
43,294
41,330
14,825
13,685
$ 2,102,164
$ 1,931,560
$ 717,168
$ 684,013
Number of loads:
Business Capacity Owners (1)
616,200
601,990
201,050
199,260
Truck Brokerage Carriers
510,360
441,930
176,760
154,720
Rail intermodal
22,290
22,750
7,470
7,920
Ocean and air cargo carriers
11,760
12,150
3,850
4,200
1,160,610
1,078,820
389,130
366,100
Revenue per load:
Business Capacity Owners (1)
$ 1,716
$ 1,696
$ 1,770
$ 1,762
Truck Brokerage Carriers
1,737
1,691
1,740
1,776
Rail intermodal
2,468
2,373
2,514
2,419
Ocean and air cargo carriers
5,121
5,618
5,221
6,031
September 29,
September 24,
2012
2011
Truck Capacity Providers
Business Capacity Owners (1) (3)
8,074
7,798
Truck Brokerage Carriers:
Approved and active (4)
20,474
18,402
Approved
9,315
9,088
29,789
27,490
Total available truck capacity providers
37,863
35,288
(1) Business Capacity Owners are independent contractors who provide truck capacity to the Company under exclusive
lease arrangements.
(2) Includes premium revenue generated by the insurance segment and warehousing and transportation management fee revenue
generated by the transportation logistics segment.
(3) Trucks provided by Business Capacity Owners were 8,596 and 8,314 at September 29, 2012 and September 24, 2011, respectively.
(4) Active refers to Truck Brokerage Carriers who have moved at least one load in the past 180 days.
SOURCE Landstar System, Inc.