Exhibit 99.1

 

LOGO

 

For Immediate Release    Contact: Kevin Stout
   Landstar System, Inc.
   www.landstar.com
April 24, 2019    904-398-9400

LANDSTAR SYSTEM REPORTS FIRST QUARTER

REVENUE OF $1.033 BILLION AND RECORD FIRST QUARTER DILUTED

EARNINGS PER SHARE OF $1.58

Jacksonville, FL – Landstar System, Inc. (NASDAQ: LSTR) reported record first quarter diluted earnings per share of $1.58 in the 2019 first quarter, on first quarter revenue of $1.033 billion. Landstar reported diluted earnings per share of $1.37 on revenue of $1.048 billion in the 2018 first quarter. Gross profit (defined as revenue less the cost of purchased transportation and commissions to agents) was $155.6 million, a record first quarter gross profit, in the 2019 first quarter compared to $155.5 million in the 2018 first quarter. Operating margin, representing operating income divided by gross profit, was 52.0 percent in the 2019 first quarter.

Truck transportation revenue hauled by independent business capacity owners (“BCOs”) and truck brokerage carriers in the 2019 first quarter was $953.1 million, or 92 percent of revenue, compared to $979.1 million, or 93 percent of revenue, in the 2018 first quarter. Truckload transportation revenue hauled via van equipment in the 2019 first quarter was $619.0 million compared to $656.1 million in the 2018 first quarter. Truckload transportation revenue hauled via unsided/platform equipment in the 2019 first quarter was $310.7 million compared to $299.4 million in the 2018 first quarter. Revenue hauled by rail, air and ocean cargo carriers was $60.7 million, or 6 percent of revenue, in the 2019 first quarter compared to $52.8 million, or 5 percent of revenue, in the 2018 first quarter.

Trailing twelve-month return on average shareholders’ equity was 37 percent and trailing twelve-month return on invested capital, representing net income divided by the


LANDSTAR SYSTEM/ 2

 

sum of average equity plus average debt, was 32 percent. Landstar purchased 124,481 shares of its common stock during the 2019 first quarter at an aggregate cost of approximately $13.0 million. Currently, the Company is authorized to purchase up to approximately 1,876,000 shares of the Company’s common stock under Landstar’s previously announced share purchase programs. As of March 30, 2019, the Company had $305 million in cash and short term investments and $216 million available for borrowings under the Company’s senior credit facility. Landstar also announced today that its Board of Directors has declared a quarterly dividend of $0.165 per share payable on May 31, 2019, to stockholders of record as of the close of business on May 9, 2019. It is currently the intention of the Board to pay dividends on a quarterly basis going forward.

“I am pleased with Landstar’s financial performance during the 2019 first quarter,” said Landstar’s President and Chief Executive Officer Jim Gattoni. “We began the quarter facing very difficult year over year comparisons plus decelerating rates of growth in both truck revenue per load and truck loadings that began in late 2018. Truck capacity became more readily available at the end of 2018 and that market condition carried through the 2019 first quarter putting additional pressure on rates. Landstar performed very well during the 2019 first quarter given the softening environment. Diluted earnings per share was $1.58 in the 2019 first quarter, the highest first quarter diluted earnings per share in Landstar history. Gross profit, operating income and the number of loads hauled via truck each also set new all-time Landstar first quarter records. The Company set a new all-time record for trucks provided by BCOs with 10,637 as of the end of the quarter.”

Gattoni continued, “The number of loads hauled via truck was higher than any first quarter in Landstar history. Given the freight environment during the quarter, I am pleased with the increase in truckload volumes. The number of loads hauled via truck in the 2019 first quarter increased 2 percent over the 2018 first quarter, driven by a 1 percent increase in the number of loads hauled via van equipment, a 4 percent increase in the number of loads hauled via unsided/platform equipment and a 6 percent increase in less-than-truckload volume. The number of loads hauled via railroads, ocean cargo carriers and air cargo carriers was 2 percent higher in the 2019 first quarter compared to the 2018 first quarter.”


LANDSTAR SYSTEM/ 3

 

Gattoni further commented, “As expected, the pricing environment for our truck services softened in the 2019 first quarter, as industry-wide truck capacity was more readily available than during the 2018 first quarter. The Company’s guidance issued on January 30, 2019 called for a decrease in revenue per load on loads hauled via truck in a low single-digit percentage range from the 2018 first quarter. Revenue per load on loads hauled via van equipment decreased 7 percent from the 2018 first quarter and revenue per load on loads hauled via unsided/platform equipment decreased 1 percent from the 2018 first quarter. As a result, revenue per load on loads hauled via truck was 5 percent lower than the 2018 first quarter.”

Gattoni continued, “Through the first few weeks of April, the number of loads hauled via truck was consistent with the volumes experienced in the corresponding period of 2018. I expect that trend to continue during the remainder of the 2019 second quarter. Accordingly, I expect the number of loads hauled via truck in the 2019 second quarter to approximate the number of loads hauled by truck in the 2018 second quarter. My expectation is that pricing conditions for truck services in the 2019 second quarter will continue to come under pressure with little change in the level of truck capacity available in the marketplace. Assuming those capacity market conditions continue throughout the rest of the second quarter, I expect 2019 second quarter truck revenue per load to be lower than the 2018 second quarter in a high single-digit percentage range. I anticipate revenue for the 2019 second quarter to be in a range of $1.075 billion to $1.125 billion. Assuming that range of estimated revenue and insurance and claims expense at 3.6 percent of BCO revenue, representing average insurance and claims costs as a percent of BCO revenue over the past five years, I would anticipate 2019 second quarter diluted earnings per share to be in a range of $1.56 to $1.62 per share compared to $1.51 per diluted share in the 2018 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 2019 Earnings Release Conference Call.”


LANDSTAR SYSTEM/ 4

 

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 2018 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.

(Tables follow)


LANDSTAR SYSTEM/ 5

 

Landstar System, Inc. and Subsidiary

Consolidated Statements of Income

(Dollars in thousands, except per share amounts)

(Unaudited)

 

     Thirteen Weeks Ended  
     March 30,
2019
    March 31,
2018
 

Revenue

   $ 1,033,000     $ 1,047,926  

Investment income

     1,138       861  

Costs and expenses:

    

Purchased transportation

     791,755       810,297  

Commissions to agents

     85,671       82,125  

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

     8,239       7,604  

Insurance and claims

     14,993       17,360  

Selling, general and administrative

     41,268       45,251  

Depreciation and amortization

     11,316       10,997  
  

 

 

   

 

 

 

Total costs and expenses

     953,242       973,634  
  

 

 

   

 

 

 

Operating income

     80,896       75,153  

Interest and debt expense

     805       800  
  

 

 

   

 

 

 

Income before income taxes

     80,091       74,353  

Income taxes

     16,791       16,880  
  

 

 

   

 

 

 

Net income

     63,300       57,473  

Less: Net loss attributable to noncontrolling interest

     (17     (44
  

 

 

   

 

 

 

Net income attributable to Landstar System, Inc. and subsidiary

   $ 63,317     $ 57,517  
  

 

 

   

 

 

 

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

   $ 1.58     $ 1.37  
  

 

 

   

 

 

 

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

   $ 1.58     $ 1.37  
  

 

 

   

 

 

 

Average number of shares outstanding:

    

Earnings per common share

     40,161,000       42,038,000  
  

 

 

   

 

 

 

Diluted earnings per share

     40,166,000       42,098,000  
  

 

 

   

 

 

 

Dividends per common share

   $ 0.165     $ 0.150  
  

 

 

   

 

 

 


LANDSTAR SYSTEM/ 6

 

Landstar System, Inc. and Subsidiary

Consolidated Balance Sheets

(Dollars in thousands, except per share amounts)

(Unaudited)

 

     March 30,
2019
    December 29,
2018
 

ASSETS

    

Current assets:

    

Cash and cash equivalents

   $ 264,625     $ 199,736  

Short-term investments

     39,958       40,058  

Trade accounts receivable, less allowance of $7,144 and $6,413

     601,128       691,604  

Other receivables, including advances to independent contractors, less allowance of $6,907 and $6,216

     27,565       23,744  

Other current assets

     10,919       16,287  
  

 

 

   

 

 

 

Total current assets

     944,195       971,429  
  

 

 

   

 

 

 

Operating property, less accumulated depreciation and amortization of $256,707 and $250,153

     276,193       284,032  

Goodwill

     38,343       38,232  

Other assets

     92,208       86,871  
  

 

 

   

 

 

 

Total assets

   $ 1,350,939     $ 1,380,564  
  

 

 

   

 

 

 

LIABILITIES AND EQUITY

    

Current liabilities:

    

Cash overdraft

   $ 41,519     $ 55,339  

Accounts payable

     273,181       314,134  

Current maturities of long-term debt

     41,184       43,561  

Insurance claims

     40,270       40,176  

Accrued compensation

     9,647       29,489  

Contractor escrow

     25,383       25,202  

Other current liabilities

     42,060       27,917  
  

 

 

   

 

 

 

Total current liabilities

     473,244       535,818  
  

 

 

   

 

 

 

Long-term debt, excluding current maturities

     75,246       84,864  

Insurance claims

     29,776       30,429  

Deferred income taxes and other non-current liabilities

     44,413       40,320  

Equity

    

Landstar System, Inc. and subsidiary shareholders’ equity Common stock, $0.01 par value, authorized 160,000,000 shares, issued 68,047,041 and 67,870,962 shares

     680       679  

Additional paid-in capital

     223,551       226,852  

Retained earnings

     1,897,967       1,841,279  

Cost of 27,884,681 and 27,755,001 shares of common stock in treasury

     (1,389,612     (1,376,111

Accumulated other comprehensive loss

     (4,326     (5,875
  

 

 

   

 

 

 

Total Landstar System, Inc. and subsidiary shareholders’ equity

     728,260       686,824  
  

 

 

   

 

 

 

Noncontrolling interest

     —         2,309  
  

 

 

   

 

 

 

Total equity

     728,260       689,133  
  

 

 

   

 

 

 

Total liabilities and equity

   $ 1,350,939     $ 1,380,564  
  

 

 

   

 

 

 


LANDSTAR SYSTEM/ 7

 

Landstar System, Inc. and Subsidiary

Supplemental Information

(Unaudited)

 

     Thirteen Weeks Ended  
     March 30,
2019
    March 31,
2018
 

Revenue generated through (in thousands):

    

Truck transportation

    

Truckload:

    

Van equipment

   $ 619,014     $ 656,135  

Unsided/platform equipment

     310,721       299,369  

Less-than-truckload

     23,376       23,584  
  

 

 

   

 

 

 

Total truck transportation

     953,111       979,088  

Rail intermodal

     30,015       29,292  

Ocean and air cargo carriers

     30,669       23,477  

Other (1)

     19,205       16,069  
  

 

 

   

 

 

 
   $ 1,033,000     $ 1,047,926  
  

 

 

   

 

 

 

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

   $ 449,308     $ 471,150  

Number of loads:

    

Truck transportation

    

Truckload:

    

Van equipment

     341,821       336,919  

Unsided/platform equipment

     125,170       119,791  

Less-than-truckload

     35,309       33,420  
  

 

 

   

 

 

 

Total truck transportation

     502,300       490,130  

Rail intermodal

     12,460       13,280  

Ocean and air cargo carriers

     7,510       6,330  
  

 

 

   

 

 

 
     522,270       509,740  
  

 

 

   

 

 

 

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

     234,850       233,180  

Revenue per load:

    

Truck transportation

    

Truckload:

    

Van equipment

   $ 1,811     $ 1,947  

Unsided/platform equipment

     2,482       2,499  

Less-than-truckload

     662       706  

Total truck transportation

     1,897       1,998  

Rail intermodal

     2,409       2,206  

Ocean and air cargo carriers

     4,084       3,709  

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

   $ 1,913     $ 2,021  

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

    

Truck capacity providers:

    

BCO Independent Contractors (2)

     43     45

Truck Brokerage Carriers

     49     48

Rail intermodal

     3     3

Ocean and air cargo carriers

     3     2

Other

     2     2
     March 30,
2019
    March 31,
2018
 

Truck Capacity Providers

    

BCO Independent Contractors (2)

     9,911       9,243  
  

 

 

   

 

 

 

Truck Brokerage Carriers:

    

Approved and active (3)

     40,404       34,659  

Other approved

     18,659       15,687  
  

 

 

   

 

 

 
     59,063       50,346  
  

 

 

   

 

 

 

Total available truck capacity providers

     68,974       59,589  
  

 

 

   

 

 

 

Trucks provided by BCO Independent Contractors (2)

     10,637       9,868  

 

(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