JACKSONVILLE, Fla., April 25, 2018 (GLOBE NEWSWIRE) -- Landstar System, Inc. (NASDAQ:LSTR) reported record first quarter diluted earnings per share of $1.37 in the 2018 first quarter, on record first quarter revenue of $1.048 billion. Landstar reported diluted earnings per share of $0.77 on revenue of $781 million in the 2017 first quarter. Gross profit (defined as revenue less the cost of purchased transportation and commissions to agents) was $155.5 million, a record quarterly gross profit, in the 2018 first quarter compared to $121.6 million in the 2017 first quarter. Operating margin, representing operating income divided by gross profit, was 48.3 percent in the 2018 first quarter.
Truck transportation revenue hauled by independent business capacity owners (“BCOs”) and truck brokerage carriers in the 2018 first quarter was $979.1 million, or 93 percent of revenue, compared to $726.8 million, or 93 percent of revenue, in the 2017 first quarter. Truckload transportation revenue hauled via van equipment in the 2018 first quarter was $656.1 million compared to $470.0 million in the 2017 first quarter. Truckload transportation revenue hauled via unsided/platform equipment in the 2018 first quarter was $299.4 million compared to $237.2 million in the 2017 first quarter. Revenue hauled by rail, air and ocean cargo carriers was $52.8 million, or 5 percent of revenue, in the 2018 first quarter compared to $42.4 million, or 5 percent of revenue, in the 2017 first quarter.
Trailing twelve-month return on average shareholders’ equity was 32 percent and trailing twelve-month return on invested capital, representing net income divided by the sum of average equity plus average debt, was 27 percent. Currently, the Company is authorized to purchase up to approximately 2,986,000 shares of the Company’s common stock under Landstar’s previously announced share purchase programs. As of March 31, 2018, the Company had $260 million in cash and short term investments and $217 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 $0.15 per share payable on June 1, 2018, to stockholders of record as of the close of business on May 10, 2018. It is currently the intention of the Board to pay dividends on a quarterly basis going forward.
“I am extremely pleased with the execution of the Landstar model during the 2018 first quarter,” said Landstar’s President and Chief Executive Officer Jim Gattoni. “Diluted earnings per share was $1.37 in the 2018 first quarter, the highest first quarter diluted earnings per share in Landstar history. Revenue and the number of loads hauled via truck each set new all-time Landstar first quarter records. All-time quarterly records were set for both gross profit and operating income and the Company also set a new all-time record for trucks provided by BCOs with 9,868 as of the end of the quarter.”
Gattoni continued, “The number of loads hauled via truck in the 2018 first quarter increased 12 percent over the 2017 first quarter, driven by a 13 percent increase in the number of loads hauled via van equipment, an 8 percent increase in the number of loads hauled via unsided/platform equipment and a 12 percent increase in less-than-truckload volume. The number of loads hauled via railroads, ocean cargo carriers and air cargo carriers was 20 percent higher in the 2018 first quarter compared to the 2017 first quarter, primarily due to a 25 percent increase in rail intermodal volume.”
Gattoni further commented, “As expected, the pricing environment for our truckload services continued to be very strong in the 2018 first quarter, as industry-wide truck capacity continued to be very tight. Revenue per load on loads hauled via van equipment increased 24 percent over the 2017 first quarter and revenue per load on loads hauled via unsided/platform equipment increased 17 percent over the 2017 first quarter. As a result, revenue per load on loads hauled via truck was 21 percent higher than the 2017 first quarter.”
Gattoni continued, “Through the first few weeks of April, load growth on a year-over-year basis in loads hauled via truck was consistent with the load growth experienced in the first quarter. I expect that trend to continue and, therefore, expect the number of loads hauled via truck in the 2018 second quarter to increase in a 10 to 12 percent range over the 2017 second quarter. My expectation is that pricing conditions for truck services in the 2018 second quarter will continue to be very strong with little change in the level of available truck capacity. Assuming those truck conditions remain, I expect 2018 second quarter truck revenue per load to be higher than the 2017 second quarter in a 19 to 22 percentage range. I anticipate revenue for the 2018 second quarter to be in a range of $1.115 billion to $1.165 billion. Assuming that range of estimated revenue and insurance and claims expense at 3.5 percent of BCO revenue, representing average insurance and claims costs as a percent of BCO revenue over the past five years, I would anticipate 2018 second quarter diluted earnings per share to be in a range of $1.48 to $1.54 per share compared to $0.89 per diluted share in the 2017 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 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.
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. 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 Market® under the symbol LSTR.
(Tables follow)
| Landstar System, Inc. and Subsidiary | |||||||||||
| Consolidated Statements of Income | |||||||||||
| (Dollars in thousands, except per share amounts) | |||||||||||
| (Unaudited) | |||||||||||
| Thirteen Weeks Ended | |||||||||||
| March 31, | April 1, | ||||||||||
| 2018 | 2017 | ||||||||||
| Revenue | $ | 1,047,926 | $ | 780,908 | |||||||
| Investment income | 861 | 414 | |||||||||
| Costs and expenses: | |||||||||||
| Purchased transportation | 810,297 | 595,523 | |||||||||
| Commissions to agents | 82,125 | 63,798 | |||||||||
| Other operating costs, net of gains on asset sales/dispositions | 7,604 | 6,897 | |||||||||
| Insurance and claims | 17,360 | 14,513 | |||||||||
| Selling, general and administrative | 45,251 | 38,323 | |||||||||
| Depreciation and amortization | 10,997 | 9,934 | |||||||||
| Total costs and expenses | 973,634 | 728,988 | |||||||||
| Operating income | 75,153 | 52,334 | |||||||||
| Interest and debt expense | 800 | 1,083 | |||||||||
| Income before income taxes | 74,353 | 51,251 | |||||||||
| Income taxes | 16,880 | 18,868 | |||||||||
| Net income | 57,473 | 32,383 | |||||||||
| Less: Net loss attributable to noncontrolling interest | (44 | ) | - | ||||||||
| Net income attributable to Landstar System, | |||||||||||
| Inc. and subsidiary | $ | 57,517 | $ | 32,383 | |||||||
| Earnings per common share attributable to | |||||||||||
| Landstar System, Inc. and subsidiary | $ | 1.37 | $ | 0.77 | |||||||
| Diluted earnings per share attributable to | |||||||||||
| Landstar System, Inc. and subsidiary | $ | 1.37 | $ | 0.77 | |||||||
| Average number of shares outstanding: | |||||||||||
| Earnings per common share | 42,038,000 | 41,879,000 | |||||||||
| Diluted earnings per share | 42,098,000 | 41,998,000 | |||||||||
| Dividends per common share | $ | 0.15 | $ | 0.09 | |||||||
| Landstar System, Inc. and Subsidiary | |||||||||||||
| Consolidated Balance Sheets | |||||||||||||
| (Dollars in thousands, except per share amounts) | |||||||||||||
| (Unaudited) | |||||||||||||
| March 31, | December 30, | ||||||||||||
| 2018 | 2017 | ||||||||||||
| ASSETS | |||||||||||||
| Current assets: | |||||||||||||
| Cash and cash equivalents | $ | 220,605 | $ | 242,416 | |||||||||
| Short-term investments | 39,014 | 48,928 | |||||||||||
| Trade accounts receivable, less allowance | |||||||||||||
| of $6,496 and $6,131 | 631,828 | 631,164 | |||||||||||
| Other receivables, including advances to independent | |||||||||||||
| contractors, less allowance of $6,796 and $6,012 | 27,880 | 24,301 | |||||||||||
| Other current assets | 9,373 | 14,394 | |||||||||||
| Total current assets | 928,700 | 961,203 | |||||||||||
| Operating property, less accumulated depreciation | |||||||||||||
| and amortization of $224,042 and $218,700 | 265,540 | 276,011 | |||||||||||
| Goodwill | 39,363 | 39,065 | |||||||||||
| Other assets | 86,670 | 76,181 | |||||||||||
| Total assets | $ | 1,320,273 | $ | 1,352,460 | |||||||||
| LIABILITIES AND EQUITY | |||||||||||||
| Current liabilities: | |||||||||||||
| Cash overdraft | $ | 36,320 | $ | 42,242 | |||||||||
| Accounts payable | 282,480 | 285,132 | |||||||||||
| Current maturities of long-term debt | 39,931 | 42,051 | |||||||||||
| Insurance claims | 39,547 | 38,919 | |||||||||||
| Dividends payable | - | 62,985 | |||||||||||
| Accrued compensation | 12,459 | 30,103 | |||||||||||
| Other current liabilities | 62,206 | 47,211 | |||||||||||
| Total current liabilities | 472,943 | 548,643 | |||||||||||
| Long-term debt, excluding current maturities | 73,350 | 83,062 | |||||||||||
| Insurance claims | 30,252 | 30,141 | |||||||||||
| Deferred income taxes and other non-current liabilities | 37,448 | 36,737 | |||||||||||
| Equity | |||||||||||||
| Landstar System, Inc. and subsidiary shareholders' equity | |||||||||||||
| Common stock, $0.01 par value, authorized 160,000,000 | |||||||||||||
| shares, issued 67,836,164 and 67,740,380 shares | 678 | 677 | |||||||||||
| Additional paid-in capital | 211,933 | 209,599 | |||||||||||
| Retained earnings | 1,663,140 | 1,611,158 | |||||||||||
| Cost of 25,768,669 and 25,749,493 shares of common | |||||||||||||
| stock in treasury | (1,169,458 | ) | (1,167,600 | ) | |||||||||
| Accumulated other comprehensive loss | (3,551 | ) | (3,162 | ) | |||||||||
| Total Landstar System, Inc. and subsidiary shareholders' | |||||||||||||
| equity | 702,742 | 650,672 | |||||||||||
| Noncontrolling interest | 3,538 | 3,205 | |||||||||||
| Total equity | 706,280 | 653,877 | |||||||||||
| Total liabilities and equity | $ | 1,320,273 | $ | 1,352,460 | |||||||||
| Landstar System, Inc. and Subsidiary | ||||||||||||
| Supplemental Information | ||||||||||||
| (Unaudited) | ||||||||||||
| Thirteen Weeks Ended | ||||||||||||
| March 31, | April 1, | |||||||||||
| 2018 | 2017 | |||||||||||
| Revenue generated through (in thousands): | ||||||||||||
| Truck transportation | ||||||||||||
| Truckload: | ||||||||||||
| Van equipment | $ | 656,135 | $ | 469,783 | ||||||||
| Unsided/platform equipment | 299,369 | 237,177 | ||||||||||
| Less-than-truckload | 23,584 | 19,857 | ||||||||||
| Total truck transportation | 979,088 | 726,817 | ||||||||||
| Rail intermodal | 29,292 | 22,842 | ||||||||||
| Ocean and air cargo carriers | 23,477 | 19,590 | ||||||||||
| Other (1) | 16,069 | 11,659 | ||||||||||
| $ | 1,047,926 | $ | 780,908 | |||||||||
| Revenue on loads hauled via BCO Independent Contractors (2) | ||||||||||||
| included in total truck transportation | $ | 471,150 | $ | 364,908 | ||||||||
| Number of loads: | ||||||||||||
| Truck transportation | ||||||||||||
| Truckload: | ||||||||||||
| Van equipment | 336,919 | 298,066 | ||||||||||
| Unsided/platform equipment | 119,791 | 111,185 | ||||||||||
| Less-than-truckload | 33,420 | 29,919 | ||||||||||
| Total truck transportation | 490,130 | 439,170 | ||||||||||
| Rail intermodal | 13,280 | 10,650 | ||||||||||
| Ocean and air cargo carriers | 6,330 | 5,730 | ||||||||||
| 509,740 | 455,550 | |||||||||||
| Loads hauled via BCO Independent Contractors (2) | ||||||||||||
| included in total truck transportation | 233,180 | 218,230 | ||||||||||
| Revenue per load: | ||||||||||||
| Truck transportation | ||||||||||||
| Truckload: | ||||||||||||
| Van equipment | $ | 1,947 | $ | 1,576 | ||||||||
| Unsided/platform equipment | 2,499 | 2,133 | ||||||||||
| Less-than-truckload | 706 | 664 | ||||||||||
| Total truck transportation | 1,998 | 1,655 | ||||||||||
| Rail intermodal | 2,206 | 2,145 | ||||||||||
| Ocean and air cargo carriers | 3,709 | 3,419 | ||||||||||
| Revenue per load on loads hauled via BCO Independent Contractors (2) | $ | 2,021 | $ | 1,672 | ||||||||
| Revenue by capacity type (as a % of total revenue); | ||||||||||||
| Truck capacity providers: | ||||||||||||
| BCO Independent Contractors (2) | 45% | 47% | ||||||||||
| Truck Brokerage Carriers | 48% | 46% | ||||||||||
| Rail intermodal | 3% | 3% | ||||||||||
| Ocean and air cargo carriers | 2% | 3% | ||||||||||
| Other | 2% | 1% | ||||||||||
| March 31, | April 1, | |||||||||||
| 2018 | 2017 | |||||||||||
| Truck Capacity Providers | ||||||||||||
| BCO Independent Contractors (2) | 9,243 | 8,772 | ||||||||||
| Truck Brokerage Carriers: | ||||||||||||
| Approved and active (3) | 34,659 | 31,566 | ||||||||||
| Other approved | 15,687 | 15,889 | ||||||||||
| 50,346 | 47,455 | |||||||||||
| Total available truck capacity providers | 59,589 | 56,227 | ||||||||||
| Trucks provided by BCO Independent Contractors (2) | 9,868 | 9,370 | ||||||||||
| (1) Includes primarily reinsurance premium revenue generated by the insurance segment and, during the 2018 fiscal quarter, 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. | ||||||||||||