Exhibit 99.1

 

LOGO

 

For Immediate Release       Contact: Kevin Stout
      Landstar System, Inc.
      www.landstar.com
January 30, 2019       904-398-9400

LANDSTAR SYSTEM REPORTS RECORD FOURTH QUARTER

REVENUE OF $1.182 BILLION AND ALL-TIME QUARTERLY RECORD

DILUTED EARNINGS PER SHARE OF $1.68

Jacksonville, FL – Landstar System, Inc. (NASDAQ: LSTR) reported record fourth quarter revenue of $1.182 billion in the 2018 fourth quarter, a 12 percent increase over revenue of $1.052 billion reported in the 2017 fourth quarter. Gross profit (defined as revenue less the cost of purchased transportation and commissions to agents) in the 2018 fourth quarter was $168.9 million, 13 percent above the 2017 fourth quarter, while 2018 fourth quarter operating income was $86.1 million, 23 percent above the 2017 fourth quarter. Operating income and gross profit in the 2018 fourth quarter were also each fourth quarter records.

Income before income taxes of $85.2 million was a fourth quarter record and increased approximately 23 percent over the 2017 fourth quarter. Diluted earnings per share in the 2018 fourth quarter was $1.68, an all-time quarterly record, compared to $1.54 in the 2017 fourth quarter. Quarter over prior year quarter comparisons of net income and diluted earnings per share for the 2018 and 2017 fourth quarters as reported are not meaningful, mostly due to the effect of the enactment of the Tax Cuts and Jobs Act in December 2017. Net income and diluted earnings per share in the 2018 and 2017 fourth quarters were both favorably impacted by the Tax Cuts and Jobs Act, which reduced the corporate tax rate from 35 percent to 21 percent effective for fiscal 2018, and various other tax items. The Company had previously estimated that its annual effective income tax rate would be 24.5 percent in fiscal year 2018 and 37.8 percent in fiscal year 2017. However, the Company’s actual effective income tax rates in the 2018 and 2017 fourth quarters were 19.8 percent and 6.9 percent, respectively. Of most significance in driving this decrease, were one-time tax benefits of approximately $19.5 million included in net income in the 2017 fourth quarter, or $0.46 per diluted share, related to the Company’s reasonable estimate of the change in future tax rates on net deferred tax liabilities as a result of the enactment of the Tax Cuts and Jobs Act in December 2017.


LANDSTAR SYSTEM/2

 

Truck transportation revenue hauled by independent business capacity owners (“BCOs”) and truck brokerage carriers in the 2018 fourth quarter was $1.078 billion, or 91 percent of revenue, compared to $967.5 million, or 92 percent of revenue, in the 2017 fourth quarter. Truckload transportation revenue hauled via van equipment in the 2018 fourth quarter was $705.0 million compared to $634.4 million in the 2017 fourth quarter. Truckload transportation revenue hauled via unsided/platform equipment in the 2018 fourth quarter was $346.6 million compared to $309.5 million in the 2017 fourth quarter. Revenue hauled by rail, air and ocean cargo carriers was $84.8 million, or 7 percent of revenue, in the 2018 fourth quarter compared to $68.0 million, or 6 percent of revenue, in the 2017 fourth quarter.

Landstar purchased 1,000,000 shares of its common stock during the 2018 fourth quarter at an aggregate cost of approximately $102.6 million. Landstar purchased 2,000,000 shares of its common stock during fiscal year 2018 at an aggregate cost of approximately $208.1 million. On January 23, 2019, the Board of Directors authorized the Company to purchase up to 1,000,000 additional shares of its common stock, par value $0.01 per share, from time to time in the open market and in privately negotiated transactions under its existing share purchase program. Currently, Landstar is authorized to purchase up to a total of 2,000,000 shares of the Company’s common stock under its share purchase program. In addition, Landstar announced today that its Board of Directors has declared a quarterly dividend of $0.165 per share payable on March 15, 2019, to stockholders of record as of the close of business on February 18, 2019. It is currently the intention of the Board to pay dividends on a quarterly basis going forward. As of December 29, 2018, the Company had $240 million in cash and short term investments and $216 million available for borrowings under the Company’s senior credit facility.


LANDSTAR SYSTEM/3

 

“I am very pleased with Landstar’s financial performance during the 2018 fourth quarter,” said Landstar’s President and Chief Executive Officer Jim Gattoni. “The 2018 fourth quarter established fourth quarter records for revenue, gross profit and operating income, while diluted earnings per share was an all-time quarterly record. The Company also set a new all-time Landstar record for trucks provided by BCOs with 10,599 as of the end of the quarter.”

Gattoni continued, “Demand for our services continued to be strong in the 2018 fourth quarter. The number of loads hauled via truck was a fourth quarter record and increased 4 percent over a very robust 2017 fourth quarter, driven by a 4 percent increase in the number of loads hauled via van equipment, a 3 percent increase in the number of loads hauled via unsided/platform equipment and a 13 percent increase in less-than-truckload volume. The deceleration in the year-over-year percentage growth rate in truck volumes for the 2018 fourth quarter compared to that experienced in the first three quarters of 2018 was mostly due to seasonal softness in the fourth quarter of 2018, as sequential growth was below recent historical trends.”

Gattoni further commented, “As expected, the pricing environment for our truckload services continued to be strong during the 2018 fourth quarter. Similar to truck volumes, however, we experienced a decelerating percentage growth rate in revenue per load on a year-over-year basis compared to the growth rates experienced in the first three quarters of 2018. The price deceleration was due to a much tougher year-over-year comparison applicable to the 2018 fourth quarter and seasonal softness that began at the end of the 2018 third quarter. Revenue per load on loads hauled via van equipment increased 7 percent over the 2017 fourth quarter and revenue per load on loads hauled via unsided/platform equipment increased 9 percent over the 2017 fourth quarter. As a result, revenue per load on loads hauled via truck was 7 percent higher than the 2017 fourth quarter.”

Gattoni continued, “Landstar’s financial performance in fiscal year 2018 was by far the best in the Company’s history. Landstar set many annual financial and operational high water marks in 2018, including revenue, gross profit, operating income, net income, diluted earnings per share, truck loads and year end truck count provided by BCOs. Revenue in fiscal 2018 was approximately $4.6 billion, an annual record, and was approximately $969 million higher than the previous record set in 2017.


LANDSTAR SYSTEM/4

 

Gross profit in 2018 was $667 million, also an annual record. Record revenue and gross profit in 2018 was provided on the strength of approximately 2,060,000 loads hauled via truck capacity, the highest number of loads hauled via truck in any year in Landstar history. Operating income in 2018 was an annual record of $332 million and represented year-over-year growth of 36 percent. Diluted earnings per share in 2018 was an annual record of $6.18. These 2018 achievements speak to the strength and depth of the Landstar network and our ability to execute. I am extremely pleased by our continued organic load volume growth and our ability to attract productive agents and capacity to the network.”

Gattoni further commented, “With respect to near term performance, during the first four weeks of 2019, year-over-year growth in the number of loads hauled via truck is trending slightly higher than the comparable period of 2018. As such, I expect loads hauled via truck in the 2019 first quarter to grow in a low single-digit percentage range over the 2018 first quarter. As it pertains to revenue per load on loads hauled via truck, the 2018 first quarter was one of very few first quarters in Landstar history that experienced an increase in truck revenue per load from the preceding fourth quarter. In the four years prior to 2018, truck revenue per load decreased seasonally on average 7 percent from the fourth quarter to the immediately following first quarter. We expect a more normal seasonal trend in the 2019 first quarter as rates appear to have stabilized through the first four weeks of January. As such, I expect revenue per load on loads hauled via truck in the 2019 first quarter to decrease in a low single-digit percentage range from the 2018 first quarter. Assuming the current environment continues throughout the 2019 first quarter, I anticipate revenue for the 2019 first quarter to be in a range of $1.025 billion to $1.075 billion. Assuming that range of estimated revenue, I would anticipate 2019 first quarter diluted earnings per share to be in a range of $1.51 to $1.57 per share. This estimated range of diluted earnings per share assumes insurance and claims costs at 3.6 percent of BCO revenue, representing the historical annual average of insurance and claims costs to BCO revenue over the preceding five years, and an effective income tax rate of approximately 21.1 percent, which represents the Company’s annual estimated effective income tax rate of 24.2 percent, net of a discrete item related to equity compensation specific to the 2019 first quarter.”


LANDSTAR SYSTEM/5

 

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 Fourth 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.


LANDSTAR SYSTEM/6

 

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.

(Tables follow)


LANDSTAR SYSTEM/7

 

Landstar System, Inc. and Subsidiary

Consolidated Statements of Income

(Dollars in thousands, except per share amounts)

(Unaudited)

 

     Fiscal Years Ended     Fiscal Quarters Ended  
     December 29,
2018
    December 30,
2017
    December 29,
2018
     December 30,
2017
 

Revenue

   $ 4,615,144     $ 3,646,364     $ 1,182,351      $ 1,051,592  

Investment income

     3,816       2,498       1,062        765  

Costs and expenses:

         

Purchased transportation

     3,569,961       2,805,109       911,251        815,171  

Commissions to agents

     378,002       297,410       102,174        86,732  

Other operating costs, net of gains/losses on asset sales/dispositions

     31,803       28,687       7,627        6,190  

Insurance and claims

     75,677       62,545       17,959        16,212  

Selling, general and administrative

     188,212       170,583       47,264        47,404  

Depreciation and amortization

     43,570       40,560       11,050        10,599  
  

 

 

   

 

 

   

 

 

    

 

 

 

Total costs and expenses

     4,287,225       3,404,894       1,097,325        982,308  
  

 

 

   

 

 

   

 

 

    

 

 

 

Operating income

     331,735       243,968       86,088        70,049  

Interest and debt expense

     3,354       3,166       899        607  
  

 

 

   

 

 

   

 

 

    

 

 

 

Income before income taxes

     328,381       240,802       85,189        69,442  

Income taxes

     73,168       63,806       16,889        4,759  
  

 

 

   

 

 

   

 

 

    

 

 

 

Net income

     255,213       176,996       68,300        64,683  

Less: Net loss/income attributable to noncontrolling interest

     (68     (92     44        (69
  

 

 

   

 

 

   

 

 

    

 

 

 

Net income attributable to Landstar System, Inc. and subsidiary

   $ 255,281     $ 177,088     $ 68,256      $ 64,752  
  

 

 

   

 

 

   

 

 

    

 

 

 

Earnings per common share attributable to Landstar System, Inc. and subsidiary

   $ 6.19     $ 4.22     $ 1.69      $ 1.54  
  

 

 

   

 

 

   

 

 

    

 

 

 

Diluted earnings per share attributable to Landstar System, Inc. and subsidiary

   $ 6.18     $ 4.21     $ 1.68      $ 1.54  
  

 

 

   

 

 

   

 

 

    

 

 

 

Average number of shares outstanding:

         

Earnings per common share

     41,273,000       41,938,000       40,501,000        41,981,000  
  

 

 

   

 

 

   

 

 

    

 

 

 

Diluted earnings per share

     41,310,000       42,024,000       40,514,000        42,054,000  
  

 

 

   

 

 

   

 

 

    

 

 

 

Dividends per common share

   $ 0.630     $ 1.880     $ 0.165      $ 1.600  
  

 

 

   

 

 

   

 

 

    

 

 

 


LANDSTAR SYSTEM/8

 

Landstar System, Inc. and Subsidiary

Consolidated Balance Sheets

(Dollars in thousands, except per share amounts)

(Unaudited)

 

     December 29,
2018
    December 30,
2017
 

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 199,736     $ 242,416  

Short-term investments

     40,058       48,928  

Trade accounts receivable, less allowance of $6,413 and $6,131

     691,604       631,164  

Other receivables, including advances to independent contractors, less allowance of $6,216 and $6,012

     23,744       24,301  

Other current assets

     16,287       14,394  
  

 

 

   

 

 

 

Total current assets

     971,429       961,203  
  

 

 

   

 

 

 

Operating property, less accumulated depreciation and amortization of $250,153 and $218,700

     284,032       276,011  

Goodwill

     38,232       39,065  

Other assets

     86,871       76,181  
  

 

 

   

 

 

 

Total assets

   $ 1,380,564     $ 1,352,460  
  

 

 

   

 

 

 

LIABILITIES AND EQUITY

    

Current liabilities:

    

Cash overdraft

   $ 55,339     $ 42,242  

Accounts payable

     314,134       285,132  

Current maturities of long-term debt

     43,561       42,051  

Insurance claims

     40,176       38,919  

Dividends payable

     —         62,985  

Accrued compensation

     29,489       30,103  

Other current liabilities

     53,119       47,211  
  

 

 

   

 

 

 

Total current liabilities

     535,818       548,643  
  

 

 

   

 

 

 

Long-term debt, excluding current maturities

     84,864       83,062  

Insurance claims

     30,429       30,141  

Deferred income taxes and other non-current liabilities

     40,320       36,737  

Equity

    

Landstar System, Inc. and subsidiary shareholders’ equity

    

Common stock, $0.01 par value, authorized 160,000,000 shares, issued 67,870,962 and 67,740,380 shares

     679       677  

Additional paid-in capital

     226,852       209,599  

Retained earnings

     1,841,279       1,611,158  

Cost of 27,755,001 and 25,749,493 shares of common stock in treasury

     (1,376,111     (1,167,600

Accumulated other comprehensive loss

     (5,875     (3,162
  

 

 

   

 

 

 

Total Landstar System, Inc. and subsidiary shareholders’ equity

     686,824       650,672  
  

 

 

   

 

 

 

Noncontrolling interest

     2,309       3,205  
  

 

 

   

 

 

 

Total equity

     689,133       653,877  
  

 

 

   

 

 

 

Total liabilities and equity

   $ 1,380,564     $ 1,352,460  
  

 

 

   

 

 

 


LANDSTAR SYSTEM/9

 

Landstar System, Inc. and Subsidiary

Supplemental Information

(Unaudited)

 

     Fiscal Years Ended     Fiscal Quarters Ended  
     December 29,
2018
    December 30,
2017
    December 29,
2018
    December 30,
2017
 

Revenue generated through (in thousands):

        

Truck transportation

        

Truckload:

        

Van equipment

   $ 2,791,494     $ 2,163,832     $ 704,971     $ 634,430  

Unsided/platform equipment

     1,386,387       1,134,660       346,603       309,466  

Less-than-truckload

     102,531       89,041       26,083       23,644  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total truck transportation

     4,280,412       3,387,533       1,077,657       967,540  

Rail intermodal

     128,976       96,416       32,950       27,846  

Ocean and air cargo carriers

     134,577       110,898       51,858       40,190  

Other (1)

     71,179       51,517       19,886       16,016  
  

 

 

   

 

 

   

 

 

   

 

 

 
   $ 4,615,144     $ 3,646,364     $ 1,182,351     $ 1,051,592  
  

 

 

   

 

 

   

 

 

   

 

 

 

Revenue on loads hauled via BCO Independent Contractors (2) included in total truck transportation

   $ 2,001,665     $ 1,655,026     $ 482,321     $ 443,462  

Number of loads:

        

Truck transportation

        

Truckload:

        

Van equipment

     1,398,388       1,282,632       353,066       339,738  

Unsided/platform equipment

     516,613       487,652       127,854       124,716  

Less-than-truckload

     145,269       132,776       38,630       34,036  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total truck transportation

     2,060,270       1,903,060       519,550       498,490  

Rail intermodal

     53,030       45,000       12,770       12,960  

Ocean and air cargo carriers

     28,970       25,420       7,720       7,270  
  

 

 

   

 

 

   

 

 

   

 

 

 
     2,142,270       1,973,480       540,040       518,720  
  

 

 

   

 

 

   

 

 

   

 

 

 

Loads hauled via BCO Independent Contractors (2) included in total truck transportation

     949,330       916,190       231,860       229,360  

Revenue per load:

        

Truck transportation

        

Truckload:

        

Van equipment

   $ 1,996     $ 1,687     $ 1,997     $ 1,867  

Unsided/platform equipment

     2,684       2,327       2,711       2,481  

Less-than-truckload

     706       671       675       695  

Total truck transportation

     2,078       1,780       2,074       1,941  

Rail intermodal

     2,432       2,143       2,580       2,149  

Ocean and air cargo carriers

     4,645       4,363       6,717       5,528  

Revenue per load on loads hauled via BCO Independent Contractors (2)

   $ 2,109     $ 1,806     $ 2,080     $ 1,933  

Revenue by capacity type (as a % of total revenue);

        

Truck capacity providers:

        

BCO Independent Contractors (2)

     43     45     41     42

Truck Brokerage Carriers

     49     48     50     50

Rail intermodal

     3     3     3     3

Ocean and air cargo carriers

     3     3     4     4

Other

     2     1     2     2
                 December 29,
2018
    December 30,
2017
 

Truck Capacity Providers

        

BCO Independent Contractors (2)

         9,884       9,087  
      

 

 

   

 

 

 

Truck Brokerage Carriers:

        

Approved and active (3)

         41,069       34,243  

Other approved

         17,985       15,691  
      

 

 

   

 

 

 
         59,054       49,934  
      

 

 

   

 

 

 

Total available truck capacity providers

         68,938       59,021  
      

 

 

   

 

 

 

Trucks provided by BCO Independent Contractors (2)

         10,599       9,696  

 

(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.

View differences made from one to another to evaluate Landstar System Inc's financial trajectory

Compare SEC Filings Year-over-Year (YoY) and Quarter-over-Quarter (QoQ)
Sample 10-K Year-over-Year (YoY) Comparison

Compare this 8-K Corporate News to its predecessor by reading our highlights to see what text and tables were  removed  ,   added    and   changed   by Landstar System Inc.

Continue

Never Miss A New SEC Filing Again


Real-Time SEC Filing Notifications
Screenshot taken from Gmail for a new 10-K Annual Report
Last10K.com Member Feature

Receive an e-mail as soon as a company files an Annual Report, Quarterly Report or has new 8-K corporate news.

Continue

We Highlighted This SEC Filing For You


SEC Filing Sentiment Analysis - Bullish, Bearish, Neutral
Screenshot taken from Wynn's 2018 10-K Annual Report
Last10K.com Member Feature

Read positive and negative remarks made by management in their entirety without having to find them in a 10-K/Q.

Continue

Widen Your SEC Filing Reading Experience


Increased Reading Area for SEC Filings
Screenshot taken from Adobe Inc.'s 10-Q Quarterly Report
Last10K.com Member Feature

Remove data columns and navigations in order to see much more filing content and tables in one view

Continue

Uncover Actionable Information Inside SEC Filings


SEC Filing Disclosures
Screenshot taken from Lumber Liquidators 10-K Annual Report
Last10K.com Member Feature

Read both hidden opportunities and early signs of potential problems without having to find them in a 10-K/Q

Continue

Adobe PDF, Microsoft Word and Excel Downloads


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshots of actual 10-K and 10-Q SEC Filings in PDF, Word and Excel formats
Last10K.com Member Feature

Export Annual and Quarterly Reports to Adobe PDF, Microsoft Word and Excel for offline viewing, annotations and analysis

Continue

FREE Financial Statements


Download Annual and Quarterly Reports as PDF, Word and Excel Documents
Screenshot of actual balance sheet from company 10-K Annual Report
Last10K.com Member Feature

Get one-click access to balance sheets, income, operations and cash flow statements without having to find them in Annual and Quarterly Reports

Continue for FREE

Log in with your credentials

or    

Forgot your details?

Create Account