Landstar System (LSTR) 8-K Landstar System Reports 36 Percent Increase In Revenue and a 67 Percent Increase In Diluted Earnings Per Share

Exhibit 99.1

For Immediate Release	Contact:	Bob LaRose
		Landstar System, Inc.
		www.landstar.com
January 27, 2005		904-398-9400

LANDSTAR SYSTEM REPORTS 36 PERCENT INCREASE IN REVENUE AND A
67 PERCENT INCREASE IN DILUTED EARNINGS PER SHARE

Jacksonville, FL — Landstar System, Inc. (NASDAQ: LSTR) reported a 36 percent increase in revenue to a record $590 million in the 2004 fourth quarter, up from $434 million in the 2003 fourth quarter. Net income for the 2004 fourth quarter was a record $24.6 million, or $.40 per diluted share, compared to net income of $15.1 million, or $.24 per diluted share, for the 2003 fourth quarter. Included in the 2004 fourth quarter revenue was $35.9 million of revenue related to disaster relief efforts for the storms that impacted the southeastern United States during the third and fourth quarters. These emergency transportation services were provided primarily under a contract between Landstar Express America, Inc. and the United States Federal Aviation Administration (the “FAA”). The revenue recognized under this contract generated $6.8 million of operating income which, net of related income taxes, increased net income by $4.2 million, or $.07 per diluted share, in the 2004 fourth quarter.

Landstar’s carrier group of companies generated $401 million of revenue in the 2004 fourth quarter, compared with revenue of $326 million in the 2003 fourth quarter. In the 2004 and 2003 fourth quarters, the carrier group invoiced customers $23.2 million and $8.7 million, respectively, in fuel surcharges that were passed on 100 percent to business capacity owners and excluded from revenue. Landstar’s multimodal services group of companies generated $181 million of revenue, including the $35.9 million related to emergency transportation services, in the 2004 fourth quarter compared with $101 million of revenue in the 2003 fourth quarter. Operating margin in the 2004 fourth quarter was 6.9 percent compared with 5.8 percent in the 2003 fourth quarter. The $35.9 million of revenue attributable to emergency transportation services increased operating margin in the 2004 fourth quarter approximately .8 percent.

Net income for the 2004 fiscal year was $71.9 million, or $1.16 per diluted share, compared to net income of $50.7 million, or $.79 per diluted share, for the 2003 fiscal year. Included in the 2004 fiscal year was $7.6 million of costs to settle one previously disclosed severe accident. This charge, net of related income tax benefits, reduced net income by $4.9 million, or $.08 per diluted share. Also, included in net income for the 2004 fiscal year is $11.8 million of operating income related to $63.8 million of revenue from emergency transportation services provided primarily under the FAA contract. This $11.8 million of operating income, net of related income taxes, increased net income $7.3 million, or $.12 per diluted share. The 2003 fiscal year included $4.2 million of costs to defend and settle the Gulf Bridge lawsuit. These costs, net of related income tax benefits, reduced net income in the 2003 fiscal year by $2.7 million, or $.04 per diluted share. Excluding the costs related to that litigation, net income was $53.4 million, or $.84 per diluted share in the 2003 fiscal year. Revenue was a record $2.020 billion in the 2004 fiscal year, compared to revenue of $1.597 billion in the 2003 fiscal year. Landstar’s carrier group of companies generated $1.455 billion of revenue in the 2004 fiscal year compared with $1.227 billion in the 2003 fiscal year. In the 2004 and 2003 years, the carrier group invoiced customers $60.5 million and $35.1 million, respectively, of fuel surcharges that were passed on 100 percent to business capacity owners and excluded from revenue. Landstar’s multimodal services group of companies generated $535 million of revenue, including $63.8 million related to emergency transportation services, in the 2004 fiscal year compared with $341 million in the 2003 fiscal year.

“Landstar’s 2004 fourth quarter and full year performance was outstanding,” said Landstar President and CEO Henry Gerkens. “Consolidated revenue increased by 36 percent, compared to the 2003 fourth quarter, to the highest quarterly revenue in Landstar history. For the full 2004 year, revenue grew 27 percent to over $2 billion. Overall, the increased revenue in 2004 resulted in a 47 percent increase in diluted earnings per share over the 2003 fiscal year.”

“Throughout the year, Landstar continued to increase available capacity in order to meet its customers’ transportation needs. During the quarter, we increased the total number of approved capacity providers by more than 1,000. Revenue generated through other third party truck capacity providers (truck brokerage) increased 94 percent and revenue hauled by Landstar BCOs increased 18 percent compared to the 2003 fourth quarter. Trailing twelve-month return on average equity remained high at 40 percent and return on invested capital, net income divided by the sum of average equity plus average debt, was 27 percent. During the 2004 fiscal year, we purchased 681,000 (not adjusted for the two-for-one stock split) shares of common stock at a total cost of $27,001,000 and ended the period with $84 million in cash and short-term investments,” Gerkens said. “The Company has the ability to purchase an additional 1,398,280 shares of its common stock under its authorized share repurchase program.”

Continuing Gerkens said, “From a revenue standpoint, we are off to a good start in 2005 and, based upon the current level of business activity, I anticipate revenue growth for the 2005 first quarter as compared to the 2004 first quarter to be within a range of 12 to 20 percent and in the range of 10 to 18 percent for the full 2005 fiscal year. Given the current operating environment, the above revenue outlook and before any impact from the adoption of Statement of Financial Accounting Standard No. 123 (revised 2004), Share-Based Payment, I anticipate Landstar’s earnings for the 2005 first quarter to be within a range of $.22 to $.26 per diluted share and earnings for the full 2005 fiscal year to be within a range of $1.25 to $1.45 per diluted share.

Landstar will provide a live webcast of its quarterly earnings conference call this afternoon at 2 pm ET. To access the webcast, visit the company’s website at www.landstar.com. Click on Investors and then the webcast icon.

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,” “plans,” “predicts,” “may,” “should,” “will,” the negative thereof and similar expressions, including any such expressions with respect to the level of comfort with analyst estimates, 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 accident claims; dependence on independent sales agents; dependence on third party capacity providers; disruptions or failures in our computer systems; a downturn in domestic 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 2003 fiscal year, described in the section Factors That May Affect Future Results and/or Forward-Looking Statements, and 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.

Landstar System, Inc. is headquartered in Jacksonville, Florida. The Landstar carrier group comprised of Landstar Gemini, Inc., Landstar Inway, Inc., Landstar Ligon, Inc., Landstar Ranger, Inc. and Landstar Carrier Services, Inc. delivers excellence in safe and complete over-the-road transportation services. The Landstar multimodal group comprised of Landstar Express America, Inc. and Landstar Logistics, Inc. delivers excellence in safe, expedited, contract logistics, intermodal and ocean transportation services. All Landstar operating companies are certified to ISO 9001:2000 quality management system standards. Landstar System, Inc.’s common stock trades on the NASDAQ Stock Market ^® under the symbol LSTR.

(Tables follow)

LANDSTAR SYSTEM, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share amounts)
(Unaudited)

	Fiscal Year Ended				Thirteen Weeks Ended
	December 25,		December 27,		December 25,		December 27,
	2004		2003		2004		2003
Revenue	$	2,019,936	$	1,596,571	$	589,724	$	433,997
Investment income		1,346		1,220		467		260
Costs and expenses:
Purchased transportation		1,510,963		1,185,043		444,224		322,672
Commissions to agents		161,011		125,997		47,597		34,773
Other operating costs		37,130		37,681		9,817		10,110
Insurance and claims		60,339		45,690		13,588		13,503
Selling, general and administrative (1)		118,461		105,849		30,630		24,845
Depreciation and amortization		13,959		12,736		3,739		3,178
Total costs and expenses		1,901,863		1,512,996		549,595		409,081
Operating income (1)		119,419		84,795		40,596		25,176
Interest and debt expense		3,025		3,240		812		840
Income before income taxes (1)		116,394		81,555		39,784		24,336
Income taxes		44,522		30,855		15,218		9,188
Net income (1)	$	71,872	$	50,700	$	24,566	$	15,148
Earnings per common share (1) (2)	$	1.19	$	0.82	$	0.41	$	0.25
Diluted earnings per share (1) (2)	$	1.16	$	0.79	$	0.40	$	0.24
Average number of shares outstanding:
Earnings per common share (1) (2)		60,154,000		61,458,000		60,609,000		59,819,000
Diluted earnings per share (1) (2)		61,800,000		63,840,000		62,141,000		62,152,000

(1)	The fiscal year ended 2003 includes $4,150 of costs to defend and settle the Gulf Bridge lawsuit. Net of related income tax benefits, these costs reduced net income by $2,650, or $0.04 per common share ($0.04 per diluted share).
(2)	All earnings per share amounts and average number of shares outstanding have been restated to give retroactive effect to a two-for-one stock split effected in the form of a 100% stock dividend declared December 9, 2004.

LANDSTAR SYSTEM, INC.
SELECTED SEGMENT INFORMATION
(Dollars in thousands)
(Unaudited)

	Fiscal Year Ended						Thirteen Weeks Ended
	December 25,			December 27,			December 25,			December 27,
	2004			2003			2004			2003
External Revenue
Carrier segment	$	1,454,862		$	1,227,171		$	400,846		$	326,130
Multimodal segment		534,922			341,241			181,128			100,690
Insurance segment		30,152			28,159			7,750			7,177
External revenue	$	2,019,936		$	1,596,571		$	589,724		$	433,997
Operating Income
Carrier segment	$	128,400		$	94,303		$	36,769		$	27,905
Multimodal segment (1)		26,211			6,403			11,921			3,647
Insurance segment		12,456			21,227			5,292			3,397
Other		(47,648	)		(37,138	)		(13,386	)		(9,773	)
Operating income (1)	$	119,419		$	84,795		$	40,596		$	25,176

(1) The fiscal year ended 2003 includes $4,150 of costs to defend and settle the Gulf Bridge lawsuit.

LANDSTAR SYSTEM, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)
(Unaudited)

	December 25,			December 27,
	2004			2003
ASSETS
Current assets:
Cash and cash equivalents	$	61,684		$	42,640
Short-term investments		21,942			30,890
Trade accounts receivable, less allowance of $4,021 and $3,410		338,774			219,039
Other receivables, including advances to independent contractors, less allowance of $4,245 and $4,077		13,929			13,196
Deferred income taxes and other current assets		13,503			14,936
Total current assets		449,832			320,701
Operating property, less accumulated depreciation and amortization of $65,315 and $58,480		76,834			67,639
Goodwill		31,134			31,134
Other assets		26,712			18,983
Total assets	$	584,512		$	438,457
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Cash overdraft	$	23,547		$	20,523
Accounts payable		120,197			71,713
Current maturities of long-term debt		8,797			9,434
Insurance claims		32,612			26,293
Accrued compensation		14,609			6,903
Other current liabilities		40,317			38,320
Total current liabilities		240,079			173,186
Long-term debt, excluding current maturities		83,293			82,022
Insurance claims		32,430			27,282
Deferred income taxes		15,871			13,452
Shareholders’ equity:
Common stock, $.01 par value, authorized 80,000,000 and 50,000,000 shares, issued 63,154,190 and 31,816,860 shares		632			318
Additional paid-in capital		43,845			18,382
Retained earnings		295,936			224,368
Cost of 2,490,930 and 1,809,930 shares of common stock in treasury		(127,151	)		(100,150	)
Accumulated other comprehensive income		47			182
Notes receivable arising from exercises of stock options		(470	)		(585	)
Total shareholders’ equity		212,839			142,515
Total liabilities and shareholders’ equity	$	584,512		$	438,457

LANDSTAR SYSTEM, INC.
SUPPLEMENTAL INFORMATION
(UNAUDITED)

	Fiscal Year Ended				Thirteen Weeks Ended
	December 25,		December 27,		December 25,		December 27,
	2004		2003		2004		2003
Carrier Segment
External revenue generated through (in thousands):
Business Capacity Owners (1)	$	1,191,605	$	1,052,346	$	311,875	$	276,650
Other third party truck capacity providers		263,257		174,825		88,971		49,480
	$	1,454,862	$	1,227,171	$	400,846	$	326,130
Revenue per revenue mile	$	1.79	$	1.72	$	1.85	$	1.72
Revenue per load	$	1,391	$	1,219	$	1,507	$	1,279
Average length of haul (miles)		779		707		815		742
Number of loads (2)		1,046,000		1,007,000		266,000		255,000
Multimodal Segment
External revenue generated through (in thousands):
Business Capacity Owners (1) (3)	$	105,815	$	53,766	$	33,749	$	16,092
Other third party truck capacity providers		308,106		182,333		106,224		51,178
Rail, Air, and Ocean Carriers		121,001		105,142		41,155		33,420
	$	534,922	$	341,241	$	181,128	$	100,690
Revenue per load (6)	$	1,454	$	1,332	$	1,597	$	1,399
Number of loads (6)		324,000		256,000		91,000		72,000

	As of		As of
	December 25,		December 27,
	2004		2003
Capacity
Business Capacity Owners (1) (4)		7,800		7,584
Other third party truck capacity providers:
Approved and active(5)		11,077		9,296
Approved		7,144		6,240
		18,221		15,536
Total available truck capacity providers		26,021		23,120

(1)	Business Capacity Owners are independent contractors who provide truck capacity to the Company under exclusive lease arrangements.
(2)	Effective with the 2004 second quarter, the Company modified its methodology for reporting loads. The application of this new methodology to the 2003 fiscal year and thirteen week period ended December 27, 2003, resulted in an increase of 3,000 and a decrease of 4,000 loads, respectively. This change in load recognition has no impact on reported revenue in any period.
(3)	Includes revenue generated through Carrier Segment Business Capacity Owners.
(4)	Trucks provided by business capacity owners were 8,677 and 8,573, respectively.
(5)	Active refers to other third party truck capacity providers who have moved at least one load in the past 180 days.
(6)	Number of loads and revenue per load for the 2004 fiscal year and thirteen week periods exclude the effect of revenue derived from emergency transportation services provided under the FAA contract.