PRESS RELEASE, EXHIBIT 99.1
dated April 17, 2003
For Immediate Release Contact: Henry H. Gerkens
Landstar System, Inc.
www.landstar.com
904-398-9400
April 17, 2003
LANDSTAR SYSTEM REPORTS RECORD FIRST QUARTER REVENUE, NET INCOME AND EARNINGS
PER DILUTED SHARE OF $.62
Jacksonville, Florida - Landstar System, Inc. (NASDAQ: LSTR) reported 2003
record first quarter net income of $10.2 million, or $.62 per diluted share,
compared with net income of $8.5 million, or $.51 per diluted share, in the
2002 first quarter. Revenue was a record $366 million for the thirteen-week
period ended March 29, 2003, compared with revenue of $336 million in the
comparable 2002 period. Operating margin was 4.7 percent in the 2003 first
quarter compared with 4.5 percent in the 2002 first quarter.
Landstar's carrier group of companies generated $290 million of revenue in the
2003 first quarter compared with revenue of $270 million in the 2002 first
quarter. In the 2003 and 2002 first quarters, the carrier group invoiced
customers $8.6 million and $.8 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 $69
million of revenue in the 2003 first quarter compared with $59 million of
revenue in the 2002 first quarter.
"I am very pleased with Landstar's 2003 first quarter performance," said
Landstar Chairman and CEO Jeff Crowe. "Earnings per diluted share increased
22 percent quarter over quarter. Consolidated revenue increased by nearly 9
percent to the highest first quarter revenue in Landstar history. Compared to
the 2002 first quarter,
revenue generated through other third party truck capacity providers
(brokerage) increased more than 37 percent, revenue generated through rail
and air carriers increased nearly 18 percent and revenue hauled by Landstar
BCOs increased more than 2 percent. In addition, revenue from the U.S.
Government increased approximately $21 million compared to the 2002 first
quarter. In the 2003 first quarter, we continued to increase revenue
by providing our customers with the most efficient form of safe capacity
available while improving our operating margin", Crowe said.
"Trailing twelve-month return on average equity remained high at 36 percent
and return on invested capital, net income divided by the sum of average
equity plus average debt, was 23 percent. During the 2003 first quarter, we
purchased 159,851 shares of common stock at a total cost of $8,467,000 and
reduced debt by more that $15 million. Shareholder's equity represented 72
percent of total capitalization, up from 66 percent at the end of 2002," Crowe
said. "The company has the ability to purchase an additional 285,270 shares of
its common stock under its authorized share repurchase program."
"As reported by FIRST CALL, the current range of analysts' earnings estimates
for the second quarter of 2003 is $.78 to $.88 per diluted share. Currently, I
anticipate results to be within that range. The current range of analysts'
earnings estimates for the 2003 fiscal year is $3.15 to $3.45. I am currently
more comfortable with the middle of that range," said Crowe.
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 our 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; and substantial industry competition. 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 compromised of Landstar Gemini, Inc., Landstar Inway, Inc.,
Landstar Ligon, Inc. and Landstar Ranger, Inc. delivers excellence in safe and
complete over-the-road transportation services. The Landstar multimodal group
compromised of Landstar Express America, Inc. and Landstar Logistics, Inc.
delivers excellence in safe, expedited, contract logistics and intermodal
transportation services. All Landstar operating companies are certified to
ISO 9001:2000 quality management system standards.
LANDSTAR SYSTEM/4
LANDSTAR SYSTEM, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share amounts)
(Unaudited)
Thirteen Weeks Ended
-----------------------
March 29, March 30,
2003 2002
---------- ----------
Revenue $ 365,718 $ 335,693
Investment income 324 563
Costs and expenses:
Purchased transportation 271,462 247,188
Commissions to agents 28,084 26,088
Other operating costs 9,231 8,106
Insurance and claims 10,628 10,907
Selling, general and administrative 26,381 26,048
Depreciation and amortization 3,166 2,879
---------- ----------
Total costs and expenses 348,952 321,216
---------- ----------
Operating income 17,090 15,040
Interest and debt expense 770 1,308
---------- ----------
Income before income taxes 16,320 13,732
Income taxes 6,161 5,218
---------- ----------
Net income $ 10,159 $ 8,514
========== ==========
Earnings per common share (1) $ 0.64 $ 0.53
========== ==========
Diluted earnings per share (1) $ 0.62 $ 0.51
========== ==========
Average number of shares outstanding:
Earnings per common share (1) 15,774,000 16,193,000
========== ==========
Diluted earnings per share (1) 16,426,000 16,727,000
========== ==========
(1) 2002 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 July 17, 2002.
LANDSTAR SYSTEM/5
LANDSTAR SYSTEM, INC.
SELECTED SEGMENT INFORMATION
(Dollars in thousands)
(Unaudited)
Thirteen Weeks Ended
------------------------
March 29, March 30,
2003 2002
--------- ---------
External Revenue
----------------
Carrier segment $ 290,045 $ 269,963
Multimodal segment 68,709 58,719
Insurance segment 6,964 7,011
--------- ---------
External revenue $ 365,718 $ 335,693
========= =========
Operating Income
----------------
Carrier segment $ 18,496 $ 16,856
Multimodal segment 1,924 1,140
Insurance segment 5,435 5,322
Other (8,765) (8,278)
--------- ---------
Operating income $ 17,090 $ 15,040
========= =========
LANDSTAR SYSTEM/6
LANDSTAR SYSTEM, INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)
(Unaudited)
March 29, Dec. 28,
2003 2002
---------- ------------
ASSETS
Current assets:
Cash $ 68,136 $ 65,447
Short-term investments 2,724 3,130
Trade accounts receivable, less allowance of $3,932
and $3,953 182,746 190,052
Other receivables, including advances to independent
contractors, less allowance of $5,469 and $5,331 21,347 12,640
Prepaid expenses and other current assets 3,227 3,338
---------- -----------
Total current assets 278,180 274,607
---------- -----------
Operating property, less accumulated depreciation
and amortization of $55,226 and $52,841 74,198 76,774
Goodwill 31,134 31,134
Other assets 15,247 18,233
---------- -----------
Total assets $ 398,759 $ 400,748
========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Cash overdraft $ 18,410 $ 16,545
Accounts payable 61,248 60,297
Current maturities of long-term debt 11,434 12,123
Insurance claims 25,859 24,419
Other current liabilities 40,699 40,593
---------- -----------
Total current liabilities 157,650 153,977
---------- -----------
Long-term debt, excluding current maturities 50,569 65,237
Insurance claims 27,342 25,276
Deferred income taxes 7,524 7,165
Shareholders' equity:
Common stock, $.01 par value, authorized 20,000,000
shares, issued 16,540,507 and 16,337,506 shares 165 163
Additional paid-in capital 7,248 2,609
Retained earnings 183,976 173,817
Cost of 714,730 and 554,879 shares of common stock in
treasury (34,773) (26,306)
Notes receivable arising from exercise of stock options (942) (1,190)
---------- -----------
Total shareholders' equity 155,674 149,093
---------- -----------
Total liabilities and shareholders' equity $ 398,759 $ 400,748
========== ===========
LANDSTAR SYSTEM/7
LANDSTAR SYSTEM, INC.
SUPPLEMENTAL INFORMATION
March 29, 2003
(Unaudited)
March 29, March 30,
2003 2002
---------- ------------
Carrier Segment
External revenue generated through (in thousands):
Business Capacity Owners (1) $ 249,524 $ 241,704
Other third party truck capacity providers 40,521 28,259
---------- -----------
$ 290,045 $ 269,963
---------- -----------
Revenue per revenue mile $ 1.74 $ 1.68
---------- -----------
Revenue per load $ 1,199 $ 1,125
---------- -----------
Average length of haul (miles) 690 671
---------- -----------
Number of loads 241,999 240,013
---------- -----------
Multimodal Segment
External revenue generated through (in thousands):
Business Capacity Owners (1) $ 10,758 (2) $ 12,888 (2)
Other third party truck capacity providers 36,949 27,998
Rail and Air Carriers 21,002 17,833
---------- -----------
$ 68,709 $ 58,719
---------- -----------
Revenue per load $ 1,250 $ 1,058
---------- -----------
Number of loads 54,982 55,503
---------- -----------
As of As of
March 29, Dec. 28,
2003 2002
---------- -----------
Capacity
Business Capacity Owners (1) 7,272 (3) 7,365 (3)
---------- -----------
Other third party truck capacity providers:
Approved and active (4) 8,669 8,610
Approved 5,840 5,310
---------- -----------
14,509 13,920
---------- -----------
Total available truck capacity providers 21,781 21,285
========== ===========
(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) Trucks provided by business capacity owners were 8,267 and 8,402,
respectively.
(4) Active refers to other third party truck capacity providers who have moved
at least one load in the past 180 days.