Landstar System (LSTR) 8-K Landstar System Reports Record Second Quarter Earnings Per Diluted Share of $0.53 and Raises Its Quarterly Dividend 25 Percent

EXHIBIT 99.1

For Immediate Release	Contact: Jim Gattoni
	Landstar System, Inc.
	www.landstar.com
July 19, 2007	904-398-9400

LANDSTAR SYSTEM REPORTS RECORD SECOND QUARTER EARNINGS PER
DILUTED SHARE OF $0.53 AND RAISES ITS QUARTERLY DIVIDEND 25 PERCENT

Jacksonville, FL — Landstar System, Inc. (NASDAQ: LSTR) reported net income for the thirteen-week period ended June 30, 2007 of $29.7 million, or $0.53 per diluted share, compared to net income of $29.5 million, or $0.50 per diluted share, for the 2006 second quarter. Revenue for the second quarter of 2007 was $633 million compared to $643 million for the 2006 second quarter. Included in the 2006 second quarter was $21 million of revenue for transportation services provided under the contract between Landstar Express America and the United States Department of Transportation/Federal Aviation Administration (the “FAA”). There was no revenue generated under the FAA contract in the 2007 second quarter. Revenue under the FAA contract in the 2006 second quarter generated $2.6 million of operating income which, net of related income taxes, increased net income by $1.6 million or, $0.03 per diluted share. Operating margin in the 2007 second quarter was 7.8 percent, compared to 7.7 percent in the 2006 second quarter. The revenue generated under the FAA contract increased operating margin by 16 basis points in the 2006 second quarter.

Landstar’s carrier group of companies generated $470 million of revenue in the thirteen-week period ended June 30, 2007, compared with revenue of $468 million in the thirteen-week period ended July 1, 2006. In the 2007 and 2006 second quarters, the carrier group invoiced customers $43.7 million and $46.7 million, respectively, in fuel surcharges that were passed on 100 percent to business capacity owners and excluded from revenue. Landstar’s global logistics group of companies generated $153 million of revenue in the 2007 thirteen-week period compared with $167 million of revenue, which

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included $21 million related to transportation services provided primarily under the FAA contract, in the 2006 thirteen-week period.

Net income for the twenty-six-week period ended June 30, 2007 was $51.3 million, or $0.91 per diluted share, on revenue of $1.210 billion compared to net income of $53.8 million, or $0.90 per diluted share, on revenue of $1.253 billion in the 2006 twenty-six-week period. Included in the 2007 and 2006 twenty-six-week periods were $3 million and $56 million, respectively, of revenue for transportation services provided primarily under the FAA contract. The revenue recognized under the FAA contract generated $1.0 million and $7.6 million of operating income in the 2007 and 2006 twenty-six weeks, respectively, which net of related income taxes, increased net income in the 2007 twenty-six-week period by $0.6 million, or $0.01 per diluted share, and increased net income by $4.7 million, or $0.08 per diluted share, in the 2006 twenty-six-week period. In addition, operating income in the 2007 twenty-six week period included a $5.0 million charge for the estimated cost of one severe accident that occurred during the first quarter of 2007. This charge, net of related income tax benefits, reduced net income in the 2007 twenty-six-week period by $3.1 million, or $0.05 per diluted share.

Landstar’s carrier group of companies generated $894 million of revenue in the twenty-six week period ended June 30, 2007, compared with $896 million in the twenty-six week period ended July 1, 2006. In the 2007 and 2006 twenty-six week periods, the carrier group invoiced customers $77.4 and $80.5 million, respectively, in fuel surcharges that were passed on 100 percent to business capacity owners and excluded from revenue. Landstar’s global logistics group of companies generated $297 million of revenue, which included $3 million related to transportation services primarily under the FAA contract, in the 2007 twenty-six week period compared with $340 million of revenue, which included $56 million related to the transportation services provided primarily under the FAA contract, in the 2006 twenty-six week period.

Landstar System, Inc. announced that its Board of Directors has declared a quarterly dividend of $0.0375 per share. This represents a 25 percent increase in the Company’s quarterly dividend. The dividend is payable on August 31, 2007 to stockholders of

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record at the close of business on August 10, 2007. It is the intention of the Board of Directors to continue to pay a quarterly dividend.

Landstar System, Inc. also announced that its Board of Directors appointed Mr. Michael A. Henning as a new member of the Board of Directors. Mr. Henning spent most of his career at the accounting firm of Ernst & Young in various capacities, including as Chief Executive Officer at Ernst & Young International and Deputy Chairman of the Firm.

“I am pleased with the performance of the Landstar business model in the 2007 second quarter,” said Landstar President and Chief Executive Officer Henry Gerkens. “Operating margin increased 16 basis points over the 2006 second quarter, and an additional 16 basis points, excluding the effect of revenue and operating income generated under the FAA contract in 2006. Diluted earnings per share increased to $0.53, and represented an increase of approximately 13 percent over the 2006 second quarter, excluding the effect of the revenue generated under the FAA contract in 2006. Revenue, excluding the $21 million of revenue generated under the FAA contract in the 2006 second quarter, increased approximately 2 percent over prior year despite an inconsistent freight environment.”

“Landstar continues to generate outstanding returns. Trailing twelve month return on average shareholders’ equity remained high at 46 percent and return on invested capital, net income divided by the sum of average equity plus average debt, was 32 percent. During the 2007 second quarter, Landstar purchased 950,763 shares of its common stock at a total cost of $44,169,000 bringing the total number of common shares purchased in the first half of 2007 to 1,506,715 at a total cost of $67,754,000. The Company may purchase an additional 1,320,786 shares of its common stock under its authorized share purchase program.”

Gerkens continued, “The third quarter of 2006 included $30 million in revenue generated under the FAA contract. We estimate in the 2007 third quarter approximately $1.0 million of such revenue. Based upon current business levels, no change in the current freight environment, and excluding FAA revenue from both the 2007 and 2006 third quarter, I anticipate revenue to increase in a mid single digit range quarter over quarter. Diluted earnings per share in the 2006 third quarter was $0.53, which included

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$0.05 per diluted share from the revenue recognized under the FAA contract. Based upon our current revenue forecast, I anticipate diluted earnings per share for the third quarter of 2007 to be within a range of $0.50 to $0.55 per diluted share.”

Commenting on the appointment of Michael Henning to Landstar’s Board of Directors, Gerkens said “We are pleased to have Michael join us as an independent director. His international experience will be of great benefit as we continue to look at opportunities for global expansion.”

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 “Investor Relations” and “Webcasts”, then click on “Landstar’s Second Quarter 2007 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, 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 2006 fiscal year, described in Item 1A Risk Factors, 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.

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About Landstar:

Landstar System, Inc. delivers safe, specialized transportation services to a broad range of customers worldwide. The Company identifies and fulfills shippers’ needs through the coordination of individual businesses comprised of independent sales agents and third-party transportation capacity providers. Landstar’s carrier group, which is comprised of Landstar Gemini, Inc., Landstar Inway, Inc., Landstar Ligon, Inc., Landstar Ranger, Inc. and Landstar Carrier Services, Inc., delivers excellence in complete over-the-road transportation services. Landstar’s global logistics group, which is comprised of Landstar Global Logistics, Inc. and its subsidiary Landstar Express America, Inc., provides international and domestic multimodal (over-the-road, air, ocean and rail) transportation, expedited, contract logistics and warehousing services. All Landstar operating companies are certified to ISO 9001:2000 quality 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)

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Landstar System, Inc.
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)

	Twenty Six Weeks Ended				Thirteen Weeks Ended
	June 30,		July 1,		June 30,		July 1,
	2007		2006		2007		2006
Revenue	$	1,209,601	$	1,253,280	$	632,952	$	643,238
Investment income		2,997		1,252		1,257		873
Costs and expenses:
Purchased transportation		912,835		944,309		478,777		486,059
Commissions to agents		97,404		97,521		50,772		50,510
Other operating costs		13,222		22,288		7,716		10,220
Insurance and claims		29,559		20,574		12,019		9,022
Selling, general and administrative		63,920		70,924		30,755		35,088
Depreciation and amortization		9,279		8,050		4,662		3,957
Total costs and expenses		1,126,219		1,163,666		584,701		594,856
Operating income		86,379		90,866		49,508		49,255
Interest and debt expense		2,700		3,142		1,108		1,292
Income before income taxes		83,679		87,724		48,400		47,963
Income taxes		32,405		33,909		18,730		18,498
Net income	$	51,274	$	53,815	$	29,670	$	29,465
Earnings per common share	$	0.92	$	0.92	$	0.53	$	0.50
Diluted earnings per share	$	0.91	$	0.90	$	0.53	$	0.50
Average number of shares outstanding:
Earnings per common share		55,761,000		58,700,000		55,597,000		58,499,000
Diluted earnings per share		56,328,000		59,665,000		56,191,000		59,287,000
Dividends paid per common share	$	0.060	$	0.050	$	0.030	$	0.025

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Landstar System, Inc.
Selected Segment Information
(Dollars in thousands)
(Unaudited)

	Twenty Six Weeks Ended						Thirteen Weeks Ended
	June 30,			July 1,			June 30,			July 1,
	2007			2006			2007			2006
External Revenue
Carrier segment	$	893,961		$	895,933		$	470,387		$	467,620
Global Logistics segment		297,209			340,467			153,344			167,042
Insurance segment		18,431			16,880			9,221			8,576
External revenue	$	1,209,601		$	1,253,280		$	632,952		$	643,238
Operating Income
Carrier segment	$	89,878		$	88,064		$	48,469		$	47,493
Global Logistics segment		8,016			17,022			3,328			8,295
Insurance segment		14,009			15,089			10,650			8,413
Other		(25,524	)		(29,309	)		(12,939	)		(14,946	)
Operating income	$	86,379		$	90,866		$	49,508		$	49,255

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Landstar System, Inc.
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
(Unaudited)

	June 30,			Dec 30,
	2007			2006
ASSETS
Current assets:
Cash and cash equivalents	$	56,162		$	91,491
Short-term investments		20,741			21,548
Trade accounts receivable, less allowance of $4,939 and $4,834		311,125			318,983
Other receivables, including advances to independent contractors, less allowance of $4,694 and $4,512		13,919			14,198
Deferred income taxes and other current assets		31,840			25,142
Total current assets		433,787			471,362
Operating property, less accumulated depreciation and amortization of $80,274 and $77,938		118,067			110,957
Goodwill		31,134			31,134
Other assets		36,395			33,198
Total assets	$	619,383		$	646,651
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Cash overdraft	$	28,067		$	25,435
Accounts payable		128,611			122,313
Current maturities of long-term debt		20,097			18,730
Insurance claims		27,364			25,238
Other current liabilities		49,967			58,478
Total current liabilities		254,106			250,194
Long-term debt, excluding current maturities		76,535			110,591
Insurance claims		41,790			36,232
Deferred income taxes		21,154			19,360
Shareholders’ equity:
Common stock, $.01 par value, authorized 160,000,000 shares, issued 65,410,393 and 64,993,143 shares		654			650
Additional paid-in capital		123,360			108,020
Retained earnings		547,192			499,273
Cost of 10,534,724 and 9,028,009 shares of common stock in treasury		(445,416	)		(377,662	)
Accumulated other comprehensive income (loss)		8			(7	)
Total shareholders’ equity		225,798			230,274
Total liabilities and shareholders’ equity	$	619,383		$	646,651

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Landstar System, Inc.
Supplemental Information
(Unaudited)

	Twenty Six Weeks Ended				Thirteen Weeks Ended
	June 30,		July 1,		June 30,		July 1,
	2007		2006		2007		2006
Carrier Segment
External revenue generated through (in thousands):
Business Capacity Owners(1)	$	639,656	$	640,596	$	340,258	$	336,803
Other third party truck capacity providers		254,305		255,337		130,129		130,817
	$	893,961	$	895,933	$	470,387	$	467,620
Revenue per revenue mile	$	2.00	$	2.00	$	2.02	$	2.01
Revenue per load	$	1,591	$	1,594	$	1,611	$	1,607
Average length of haul (miles)		794		797		796		800
Number of loads		562,000		562,000		292,000		291,000
Global Logistics Segment
External revenue generated through (in thousands):
Business Capacity Owners(1) (2)	$	52,185	$	47,163	$	25,344	$	22,331
Other third party truck capacity providers		165,895		198,301		85,942		97,674
Rail, Air, Ocean and Bus Carriers(3)		79,129		95,003		42,058		47,037
	$	297,209	$	340,467	$	153,344	$	167,042
Revenue per load(4)	$	1,506	$	1,504	$	1,460	$	1,507
Number of loads(4)		195,000		189,000		105,000		97,000

	As of		As of
	June 30,		July 1,
	2007		2006
Capacity
Business Capacity Owners(1) (5)		8,431		8,347
Other third party truck capacity providers:
Approved and active(6)		15,100		14,034
Approved		8,700		7,977
		23,800		22,011
Total available truck capacity providers		32,231		30,358
Agent Locations		1,381		1,249

(1)	Business Capacity Owners are independent contractors who provide truck capacity to the Company under exclusive lease arrangements.
(2)	Includes revenue generated through Carrier Segment Business Capacity Owners.
(3)	Included in the 2007 and 2006 twenty six week periods was $481,000 and $19,438,000, respectively, of revenue attributable to buses provided under the FAA contract. Included in the 2006 thirteen week period was $8,582,000 of revenue attributable to buses provided under the FAA contract.
(4)	Number of loads and revenue per load exclude the effect of revenue derived from transportation services provided under the FAA contract.
(5)	Trucks provided by business capacity owners were 9,036 and 9,047, respectively.
(6)	Active refers to other third party truck capacity providers who have moved at least one load in the past 180 days.