Landstar System (LSTR) 8-K Landstar System Reports Third Quarter Earnings Per Diluted Share of $0.54

Exhibit 99.1

For Immediate Release	Contact: Jim Gattoni
	Landstar System, Inc.
	www.landstar.com
October 18, 2007	904-398-9400

LANDSTAR SYSTEM REPORTS THIRD QUARTER
EARNINGS PER DILUTED SHARE OF $0.54

Jacksonville, FL — Landstar System, Inc. (NASDAQ: LSTR) reported net income for the thirteen-week period ended September 29, 2007 of $29.3 million, or $0.54 per diluted share, compared to net income of $30.6 million, or $0.53 per diluted share, for the 2006 third quarter. Net income included $400 thousand, or $0.01 per diluted share in the 2007 third quarter compared to $2.8 million, or $0.05 per diluted share in the 2006 third quarter, from revenue of $2.8 million and $29.7 million in the 2007 and 2006 third quarters, respectively, for services provided under the contract between Landstar Express America, Inc. and the United States Department of Transportation/Federal Aviation Administration (the “FAA”). Operating income in the 2007 third quarter included $600 thousand of income related to FAA revenue compared to $4.5 million in the 2006 third quarter. Excluding the revenue and operating income related to the FAA revenue, operating margin was 7.8 percent in the 2007 third quarter compared to 7.6 percent in the 2006 third quarter. Overall, consolidated revenue, including FAA revenue, for the third quarter of 2007 was $635 million compared to $649 million for the 2006 third quarter. Excluding the FAA revenue from both periods, consolidated revenue increased approximately 2 percent.

Landstar’s carrier group of companies generated $461 million of revenue in both the 2007 and 2006 thirteen-week periods. In the 2007 and 2006 thirteen-week periods, the carrier group invoiced customers $44.1 million and $48.9 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 $165 million of

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revenue in the 2007 thirteen-week period, which included $2.8 million related to transportation services provided under the FAA contract, compared with $180 million of revenue, which included $29.7 million related to transportation services provided under the FAA contract, in the 2006 thirteen-week period.

Net income for the thirty-nine-week period ended September 29, 2007 was $80.6 million, or $1.45 per diluted share, compared to net income of $84.4 million, or $1.43 per diluted share, in the 2006 thirty-nine-week period. Net income included $1.0 million, or $0.02 per diluted share in the 2007 thirty-nine-week period compared to $7.5 million, or $0.13 per diluted share in the 2006 thirty-nine-week period, from revenue of $6.2 million and $86.0 million in the 2007 and 2006 thirty-nine-week periods, respectively, for services provided under the FAA contract. Operating income in the 2007 thirty-nine-week period included $1.6 million of income related to FAA revenue compared to $12.2 million in the 2006 thirty-nine-week period. Excluding the revenue and operating income related to the services provided under the FAA contract, operating margin was 7.3 percent in the 2007 thirty-nine-week period compared to 7.2 percent in the 2006 thirty-nine-week period. Overall, consolidated revenue, including FAA revenue, for the thirty-nine-week period of 2007 was $1.844 billion compared to $1.902 billion for the 2006 thirty-nine-week period.

Landstar’s carrier group of companies generated $1.355 billion of revenue in the thirty-nine-week period ended September 29, 2007, compared with $1.357 billion in the thirty-nine-week period ended September 30, 2006. In the 2007 and 2006 thirty-nine-week periods, the carrier group invoiced customers $121.5 million and $129.4 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 $462 million of revenue, which included $6.2 million related to transportation services under the FAA contract, in the 2007 thirty-nine-week period compared with $520 million of revenue, which included $86.0 million related to the transportation services provided under the FAA contract, in the 2006 thirty-nine-week period.

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Landstar System, Inc. announced that its Board of Directors has declared a quarterly dividend of $0.0375 per share. The dividend is payable on November 30, 2007 to stockholders of record at the close of business on November 12, 2007. It is the intention of the Board of Directors to continue to pay a quarterly dividend.

Commenting on Landstar’s 2007 third quarter performance, Landstar’s President and CEO Henry Gerkens said, “Despite a continued unpredictable and sluggish freight environment, Landstar delivered another solid quarterly performance. Excluding the FAA revenue and related net income from both the 2007 and 2006 third quarters, Landstar’s revenue increased 2 percent quarter over quarter, diluted earnings per share increased 10 percent quarter over quarter and operating margin increased by 14 basis points quarter over quarter.”

“Landstar continues to generate outstanding returns. Trailing twelve month return on average shareholders’ equity remained high at 48 percent and return on invested capital, net income divided by the sum of average equity plus average debt, was 32 percent. During the 2007 third quarter, Landstar purchased 1,320,786 shares of its common stock at a total cost of $58,394,000 bringing the total number of common shares purchased during the thirty-nine weeks ended September 29, 2007 to 2,827,501 at a total cost of $126,148,000. The Company may purchase an additional 2,000,000 shares of its common stock under its authorized share purchase program.”

Gerkens continued, “The fourth quarter of 2006 included $15 million in revenue generated under the FAA contract. We estimate in the 2007 fourth quarter approximately $2 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 fourth quarter, I anticipate revenue to increase in the low to mid single digit range quarter over quarter. Diluted earnings per share in the 2006 fourth quarter was $0.50, which included $0.03 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 fourth quarter of 2007 to be within a range of $0.47 to $0.52 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 “Investor Relations” and “Webcasts”, then click on “Landstar’s Third Quarter 2007 Earnings Release Conference Call”.

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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.

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)

	Thirty Nine Weeks Ended				Thirteen Weeks Ended
	Sept 29,		Sept 30,		Sept 29,		Sept 30,
	2007		2006		2007		2006
Revenue	$	1,844,412	$	1,902,477	$	634,811	$	649,197
Investment income		4,103		2,589		1,106		1,337
Costs and expenses:
Purchased transportation		1,394,781		1,430,411		481,946		486,102
Commissions to agents		148,574		149,694		51,170		52,173
Other operating costs		21,208		37,125		7,986		14,837
Insurance and claims		38,878		30,230		9,319		9,656
Selling, general and administrative		95,002		102,809		31,082		31,885
Depreciation and amortization		14,045		12,230		4,766		4,180
Total costs and expenses		1,712,488		1,762,499		586,269		598,833
Operating income		136,027		142,567		49,648		51,701
Interest and debt expense		4,464		4,950		1,764		1,808
Income before income taxes		131,563		137,617		47,884		49,893
Income taxes		50,941		53,222		18,536		19,313
Net income	$	80,622	$	84,395	$	29,348	$	30,580
Earnings per common share	$	1.46	$	1.45	$	0.54	$	0.53
Diluted earnings per share	$	1.45	$	1.43	$	0.54	$	0.53
Average number of shares outstanding:
Earnings per common share		55,221,000		58,229,000		54,189,000		57,287,000
Diluted earnings per share		55,740,000		59,155,000		54,608,000		57,948,000
Dividends paid per common share	$	0.0975	$	0.0800	$	0.0375	$	0.0300

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

	Thirty Nine Weeks Ended						Thirteen Weeks Ended
	Sept 29,			Sept 30,			Sept 29,			Sept 30,
	2007			2006			2007			2006
External Revenue
Carrier segment	$	1,354,855		$	1,356,780		$	460,894		$	460,847
Global Logistics segment		461,896			520,080			164,687			179,613
Insurance segment		27,661			25,617			9,230			8,737
External revenue	$	1,844,412		$	1,902,477		$	634,811		$	649,197
Operating Income
Carrier segment	$	135,542		$	137,398		$	45,664		$	49,334
Global Logistics segment		12,874			25,353			4,858			8,331
Insurance segment		25,586			24,056			11,577			8,967
Other		(37,975	)		(44,240	)		(12,451	)		(14,931	)
Operating income	$	136,027		$	142,567		$	49,648		$	51,701

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

	Sept 29,			Dec 30,
	2007			2006
ASSETS
Current assets:
Cash and cash equivalents	$	59,047		$	91,491
Short-term investments		20,948			21,548
Trade accounts receivable, less allowance of $5,326 and $4,834		310,110			318,983
Other receivables, including advances to independent contractors, less allowance of $4,744 and $4,512		11,398			14,198
Deferred income taxes and other current assets		34,984			25,142
Total current assets		436,487			471,362
Operating property, less accumulated depreciation and amortization of $83,696 and $77,938		128,203			110,957
Goodwill		31,134			31,134
Other assets		36,355			33,198
Total assets	$	632,179		$	646,651
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Cash overdraft	$	32,201		$	25,435
Accounts payable		125,068			122,313
Current maturities of long-term debt		21,848			18,730
Insurance claims		26,099			25,238
Other current liabilities		57,096			58,478
Total current liabilities		262,312			250,194
Long-term debt, excluding current maturities		106,187			110,591
Insurance claims		40,042			36,232
Deferred income taxes		22,178			19,360
Shareholders’ equity:
Common stock, $.01 par value, authorized 160,000,000 shares, issued 65,613,866 and 64,993,143 shares		656			650
Additional paid-in capital		130,116			108,020
Retained earnings		574,505			499,273
Cost of 11,855,510 and 9,028,009 shares of common stock in treasury		(503,810	)		(377,662	)
Accumulated other comprehensive loss		(7	)		(7	)
Total shareholders’ equity		201,460			230,274
Total liabilities and shareholders’ equity	$	632,179		$	646,651

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Landstar System, Inc.
Supplemental Information
(Unaudited)

	Thirty Nine Weeks Ended				Thirteen Weeks Ended
	Sept 29,		Sept 30,		Sept 29,		Sept 30,
	2007		2006		2007		2006
Carrier Segment
External revenue generated through (in thousands):
Business Capacity Owners(1)	$	970,432	$	964,260	$	330,776	$	323,664
Other third party truck capacity providers		384,423		392,520		130,118		137,183
	$	1,354,855	$	1,356,780	$	460,894		460,847
Revenue per revenue mile	$	2.02	$	2.02	$	2.06	$	2.05
Revenue per load	$	1,608	$	1,613	$	1,645	$	1,651
Average length of haul (miles)		795		800		798		806
Number of loads		842,500		841,200		280,200		279,200
Global Logistics Segment
External revenue generated through (in thousands):
Business Capacity Owners(1) (2)	$	76,175	$	78,308	$	23,990	$	31,145
Other third party truck capacity providers		261,344		302,746		95,449		104,445
Rail, Air, Ocean and Bus Carriers(3)		124,377		139,026		45,248		44,023
	$	461,896	$	520,080	$	164,687	$	179,613
Revenue per load(4) (5)	$	1,514	$	1,510	$	1,530	$	1,520
Number of loads (4) (5)		301,000		287,400		105,800		98,600
	As of		As of
	Sept 29,		Sept 30,
	2007		2006
Capacity
Business Capacity Owners(1) (6)		8,452		8,463
Other third party truck capacity providers:
Approved and active(7)		15,765		14,604
Approved		9,224		8,009
		24,989		22,613
Total available truck capacity providers		33,441		31,076
Agent Locations		1,414		1,291

(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 thirty nine week periods was $481,000 and $23,032,000, respectively, of revenue attributable to buses provided under the FAA contract. Included in the 2006 thirteen week period was $3,594,000 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)	The number of loads in the thirty nine and thirteen week periods ended 2006 were restated. This change had no impact on reported revenue in either period.
(6)	Trucks provided by business capacity owners were 9,056 and 9,164, respectively.
(7)	Active refers to other third party truck capacity providers who have moved at least one load in the past 180 days.