Landstar System (LSTR) 8-K Landstar System Reports a 15 Percent Increase In Third Quarter Revenue and Diluted Earnings Per Share

Exhibit 99.1

For Immediate Release	Contact: Jim Gattoni
	Landstar System, Inc.
	www.landstar.com
October 15, 2008	904-398-9400

LANDSTAR SYSTEM REPORTS A 15 PERCENT INCREASE IN
THIRD QUARTER REVENUE AND DILUTED EARNINGS PER SHARE

Jacksonville, FL — Landstar System, Inc. (NASDAQ: LSTR) reported record third quarter revenue of $733 million and record third quarter diluted earnings per share of $0.62 in the 2008 third quarter, compared to revenue of $635 million and diluted earnings per share of $0.54 in the 2007 third quarter. Net income was $32.8 million in the 2008 third quarter compared to net income of $29.3 million in the 2007 third quarter.

Revenue hauled by BCO Independent Contractors in the third quarter of 2008 was $371 million, or 51 percent of revenue, compared to $351 million, or 55 percent of revenue, in the 2007 third quarter. In the 2008 and 2007 third quarters, the Company invoiced customers $92 million and $45 million, respectively, in fuel surcharges that were passed on 100 percent to BCO Independent Contractors and excluded from revenue. Revenue hauled by third-party truck brokerage carriers was $276 million, or 38 percent of revenue, in the 2008 third quarter compared to $225 million, or 35 percent of revenue, in the 2007 third quarter. Revenue hauled by rail, air, and ocean cargo carriers was $49 million, or 7 percent of revenue, in the 2008 third quarter compared to $46 million, or 7 percent of revenue, in the 2007 third quarter.

LANDSTAR SYSTEM/2

Revenue in the thirty-nine-week period ended September 27, 2008 increased approximately 11 percent to $2.039 billion compared to $1.844 billion in the 2007 thirty-nine-week period. Net income for the 2008 thirty-nine-week period was $86.3 million, or $1.62 per diluted share, compared to net income of $80.6 million, or $1.45 per diluted share, for the 2007 thirty-nine-week period.

Revenue hauled by BCO Independent Contractors in the 2008 thirty-nine-week period was $1.071 billion, or 53 percent of revenue, compared to $1.036 billion, or 56 percent of revenue, in the 2007 thirty-nine-week period. In the 2008 and 2007 thirty-nine-week periods, the Company invoiced customers $241 million and $125 million, respectively, in fuel surcharges that were passed on 100 percent to BCO Independent Contractors and excluded from revenue. Revenue hauled by third-party truck brokerage carriers was $766 million, or 38 percent of revenue, in the 2008 thirty-nine-week period compared to $648 million, or 35 percent of revenue, in the 2007 thirty-nine-week period. Revenue hauled by rail, air, and ocean cargo carriers was $146 million, or 7 percent of revenue, in the 2008 thirty-nine-week period compared to $126 million, or 7 percent of revenue, in the 2007 thirty-nine-week period.

Revenue, net income, and diluted earnings per share in the 2008 thirteen and thirty-nine week periods included $27.6 million, $1.7 million, and $0.03 diluted earnings per share, respectively, for bus capacity provided in connection with evacuation assistance related to the storms that recently impacted the Gulf Coast.

Landstar System, Inc. announced that its Board of Directors has declared a quarterly dividend of $0.04 per share. The dividend is payable on November 28, 2008 to stockholders of record at the close of business on November 3, 2008. It is the intention of the Board of Directors to continue to pay a quarterly dividend. During the 2008 third quarter, Landstar purchased approximately 580,000 shares of its common stock at a total cost of $28.5 million. As of September 27, 2008, there were approximately 2,155,000 shares of the Company’s common stock available for purchase under Landstar’s authorized share purchase programs.

LANDSTAR SYSTEM/3

“Landstar’s 2008 third quarter performance was remarkable,” said Landstar President and Chief Executive Officer Henry Gerkens. “Revenue and diluted earnings per share in the 2008 third quarter were the highest third quarter revenue and diluted earnings per share in the Company’s history. Landstar delivered a 15% increase in revenue over the 2007 third quarter and experienced strong revenue increases across multiple service offerings. Excluding the revenue from bus evacuation services, revenue increased 11% quarter over quarter. Landstar’s 2008 third quarter diluted earnings per share increased 15% over its 2007 third quarter diluted earnings per share.” Gerkens continued, “The 2008 third quarter included approximately $0.03 per diluted share of costs related to employee bonus accruals not included in the 2007 third quarter and approximately $0.03 per diluted share of income from bus evacuation services. As anticipated, operating margin was slightly impacted by a change in revenue mix, and was 7.5 percent in the 2008 third quarter, compared to 7.8 percent in the 2007 third quarter.”

“The resiliency of Landstar’s variable cost business model continues to generate outstanding returns and to provide the Company with a strong balance sheet. Trailing twelve month return on average shareholders’ equity remained high at 53 percent and trailing twelve month return on invested capital, net income divided by the sum of average equity plus average debt, was 31 percent. As of September 27, 2008, the Company had $103 million in cash and short-term investments and $87 million in outstanding borrowings under its senior credit facility, primarily resulting from borrowings to finance the purchase of its common stock under its authorized share purchase programs. As of September 27, 2008, there was $110 million available for borrowings under the Company’s senior credit facility.”

Gerkens continued, “Notwithstanding Landstar’s impressive third quarter results, the Company experienced reduced freight demand during the latter part of the 2008 third quarter. This trend has continued into early October and based upon the current uncertain economic outlook, I don’t foresee that trend reversing in the 2008 fourth quarter. I do anticipate increased revenue in the 2008 fourth quarter when compared to the 2007 fourth quarter. However, that rate of growth will not be at the level experienced in the first nine months of 2008 versus the first nine months of the prior year. I anticipate diluted earnings per share for the 2008 fourth quarter to be similar to that reported in the 2007 fourth quarter.”

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Landstar will provide a live webcast of its quarterly earnings conference call this afternoon at 5 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 2008 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 2007 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 and logistics 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 and logistics capacity providers. Through its operating subsidiaries, Landstar delivers excellence in complete transportation logistics services and solutions. 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)

LANDSTAR SYSTEM/6

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

	Thirty Nine Weeks Ended				Thirteen Weeks Ended
	Sept. 27,		Sept. 29,		Sept. 27,		Sept. 29,
	2008		2007		2008		2007
Revenue	$	2,039,232	$	1,844,412	$	732,753	$	634,811
Investment income		2,686		4,103		817		1,106
Costs and expenses:
Purchased transportation		1,573,209		1,394,781		569,864		481,946
Commissions to agents		153,857		148,574		54,267		51,170
Other operating costs		20,814		21,208		6,874		7,986
Insurance and claims		27,159		38,878		8,125		9,319
Selling, general and administrative		105,457		95,002		34,499		31,082
Depreciation and amortization		15,558		14,045		5,251		4,766
Total costs and expenses		1,896,054		1,712,488		678,880		586,269
Operating income		145,864		136,027		54,690		49,648
Interest and debt expense		5,635		4,464		1,757		1,764
Income before income taxes		140,229		131,563		52,933		47,884
Income taxes		53,904		50,941		20,116		18,536
Net income	$	86,325	$	80,622	$	32,817	$	29,348
Earnings per common share	$	1.64	$	1.46	$	0.62	$	0.54
Diluted earnings per share	$	1.62	$	1.45	$	0.62	$	0.54
Average number of shares outstanding:
Earnings per common share		52,680,000		55,221,000		52,586,000		54,189,000
Diluted earnings per share		53,142,000		55,740,000		53,028,000		54,608,000
Dividends paid per common share	$	0.1150	$	0.0975	$	0.0400	$	0.0375

LANDSTAR SYSTEM/7

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

	Thirty Nine Weeks Ended				Thirteen Weeks Ended
	Sept. 27,		Sept. 29,		Sept. 27,		Sept. 29,
	2008		2007		2008		2007
Revenue
Transportation logistics segment	$	2,011,766	$	1,816,751	$	723,535	$	625,581
Insurance segment		27,466		27,661		9,218		9,230
Revenue	$	2,039,232	$	1,844,412	$	732,753	$	634,811
Operating Income
Transportation logistics segment	$	118,171	$	110,441	$	44,611	$	38,071
Insurance segment		27,693		25,586		10,079		11,577
Operating income	$	145,864	$	136,027	$	54,690	$	49,648

LANDSTAR SYSTEM/8

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

	Sept. 27,			Dec 29,
	2008			2007
ASSETS
Current assets:
Cash and cash equivalents	$	77,604		$	60,750
Short-term investments		25,727			22,921
Trade accounts receivable, less allowance of $5,316 and $4,469		391,873			310,258
Other receivables, including advances to independent contractors, less allowance of $4,151 and $4,792		9,398			11,170
Deferred income taxes and other current assets		32,251			28,554
Total current assets		536,853			433,653
Operating property, less accumulated depreciation and amortization of $102,008 and $88,284		124,283			132,369
Goodwill		31,134			31,134
Other assets		37,310			31,845
Total assets	$	729,580		$	629,001
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Cash overdraft	$	32,906		$	25,769
Accounts payable		144,730			117,122
Current maturities of long-term debt		24,084			23,155
Insurance claims		25,086			28,163
Accrued income taxes		14,461			14,865
Other current liabilities		41,662			40,501
Total current liabilities		282,929			249,575
Long-term debt, excluding current maturities		132,997			141,598
Insurance claims		36,222			37,631
Deferred income taxes		25,339			19,411
Shareholders’ equity:
Common stock, $0.01 par value, authorized 160,000,000 shares, issued 66,109,547 and 65,630,383 shares		661			656
Additional paid-in capital		152,845			132,788
Retained earnings		681,806			601,537
Cost of 13,700,931 and 13,121,109 shares of common stock in treasury		(582,771	)		(554,252	)
Accumulated other comprehensive income/(loss)		(448	)		57
Total shareholders’ equity		252,093			180,786
Total liabilities and shareholders’ equity	$	729,580		$	629,001

LANDSTAR SYSTEM/9

Landstar System, Inc.
Supplemental Information
(Unaudited)

	Thirty Nine Weeks Ended				Thirteen Weeks Ended
	Sept. 27,		Sept. 29,		Sept. 27,		Sept. 29,
	2008		2007		2008		2007
Revenue generated through (in thousands):
Business Capacity Owners(1)	$	1,070,982	$	1,036,155	$	370,787	$	351,451
Truck Brokerage Carriers		766,262		648,267		275,928		225,300
Rail intermodal		106,936		91,931		35,338		34,254
Ocean cargo carriers		29,329		18,691		11,109		7,152
Air cargo carriers		10,135		15,412		2,686		4,606
Other(2)		55,588		33,956		36,905		12,048
	$	2,039,232	$	1,844,412	$	732,753	$	634,811
Number of loads:
Business Capacity Owners(1)		638,330		646,720		209,250		213,350
Truck Brokerage Carriers		435,250		441,010		146,280		152,160
Rail intermodal		45,610		43,240		14,610		16,480
Ocean cargo carriers		3,990		3,330		1,400		1,230
Air cargo carriers		5,520		9,260		1,650		2,820
		1,128,700		1,143,560		373,190		386,040
Revenue per load:
Business Capacity Owners(1)	$	1,678	$	1,602	$	1,772	$	1,647
Truck Brokerage Carriers		1,761		1,470		1,886		1,481
Rail intermodal		2,345		2,126		2,419		2,079
Ocean cargo carriers		7,351		5,613		7,935		5,815
Air cargo carriers		1,836		1,664		1,628		1,633

	Sept. 27,		Sept. 29,
	2008		2007
Truck Capacity
Business Capacity Owners(1) (3)		8,363		8,452
Truck Brokerage Carriers:
Approved and active(4)		16,400		15,765
Approved		9,120		9,224
		25,520		24,989
Total available truck capacity providers		33,883		33,441
Agent Locations		1,403		1,414

(1)	Business Capacity Owners are independent contractors who provide truck capacity to the Company under exclusive lease arrangements.
(2)	Includes premium revenue generated by the insurance segment and warehousing revenue generated by the Transportation Logistics segment. Also, included in the 2008 thirty-nine-week and thirteen-week periods was $27,638 of revenue for bus capacity provided for evacuation assistance related to the storms that impacted the Gulf Coast. Included in the 2007 thirty-nine-week and thirteen-week periods was $6,209 and $2,764, respectively, of revenue derived from transportation services provided in support of disaster relief efforts provided under a contract between Landstar Express America, Inc. and the United States Department of Transportation/Federal Aviation Administration.
(3)	Trucks provided by Business Capacity Owners were 8,949 and 9,056 at September 27, 2008 and September 29, 2007, respectively.
(4)	Active refers to Truck Brokerage Carriers who have moved at least one load in the past 180 days.