Landstar System Reports All-Time Quarterly Record Diluted Earnings Per Share of $2.01 in the 2021 First Quarter

April 21, 2021 4:15 PM EDT

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JACKSONVILLE, Fla., April 21, 2021 (GLOBE NEWSWIRE) -- Landstar System, Inc. (NASDAQ: LSTR) reported all-time quarterly record net income of $77.2 million, or $2.01 per diluted share, in the 2021 first quarter, on record first quarter revenue of $1.288 billion. In the 2020 first quarter, net income was $40.9 million, or $1.04 per diluted share, on $927.6 million of revenue. 2021 first quarter revenue, net income and diluted earnings per share increased 39 percent, 89 percent and 93 percent, respectively, over the 2020 first quarter. Gross profit (defined as revenue less the cost of purchased transportation and commissions to agents) was an all-time quarterly record $189.2 million in the 2021 first quarter, 32 percent above 2020 first quarter gross profit of $142.9 million. Note that the adverse impact of the COVID-19 pandemic on the U.S. economy in early 2020 did not have a significant impact on Landstar’s first quarter 2020 results, but did have a significant impact on the Company’s 2020 second quarter results.

Truck transportation revenue hauled by independent business capacity owners (“BCOs”) and truck brokerage carriers in the 2021 first quarter was $1,193.5 million, or 93 percent of revenue, compared to $854.6 million, or 92 percent of revenue, in the 2020 first quarter. Truckload transportation revenue hauled via van equipment in the 2021 first quarter was $827.2 million compared to $545.3 million in the 2020 first quarter. Truckload transportation revenue hauled via unsided/platform equipment in the 2021 first quarter was $340.6 million compared to $286.3 million in the 2020 first quarter. Revenue hauled by rail, air and ocean cargo carriers was $79.3 million, or 6 percent of revenue, in the 2021 first quarter compared to $54.7 million, or 6 percent of revenue, in the 2020 first quarter.

Trailing twelve month return on average shareholders’ equity was 33 percent and return on invested capital, representing net income divided by the sum of average equity plus average debt, was 29 percent. The Company is currently authorized to purchase up to 1,821,030 shares of the Company’s common stock under its previously announced share purchase program. Landstar announced today that its Board of Directors has declared a quarterly dividend of $0.21 per share payable on May 28, 2021, to stockholders of record as of the close of business on May 6, 2021. It is currently the intention of the Board to pay dividends on a quarterly basis going forward.

“Landstar’s 2021 first quarter set a new standard as the best first quarter financial performance in our history. Revenue was the second highest quarterly revenue in Landstar’s history, second only to the 2020 fourth quarter. And, 2021 first quarter gross profit, net income and diluted earnings per share were each all-time quarterly records. First quarter 2021 operating margin, representing operating income divided by gross profit, was 54.6 percent, also an all-time quarterly record,” said Landstar President and CEO Jim Gattoni. “Typically, truckload volumes in the first quarter of any year are softer than in the second, third and fourth quarters due to seasonality. Given the exceptional performance by Landstar in the 2021 first quarter, I believe the stage has now been set for what should be a record-setting year.”

“Revenue from truck loads hauled via van equipment exceeded the 2020 first quarter by 52 percent, and revenue from truck loads hauled via unsided/platform equipment exceeded the 2020 first quarter by 19 percent. Consumer demand for durables, building products and e-commerce drove record quarterly van revenue, while growth in the U.S. metals and machinery sectors continued to drive improvement in unsided/platform equipment performance. For revenue generated via van equipment in the 2021 first quarter compared to the 2020 first quarter, the number of loads increased 17 percent and revenue per load increased 30 percent. Revenue from truck loads hauled via unsided/platform equipment continued to improve from the softer conditions that existed throughout most of 2020. The number of loads and revenue per load on loads hauled via unsided/platform equipment in the 2021 first quarter exceeded the 2020 first quarter by 5 percent and 14 percent, respectively.”  

Gattoni continued, “In our 2020 year-end earnings release on January 27, 2021, we provided first quarter revenue guidance of $1.10 billion to $1.15 billion and first quarter diluted earnings per share guidance of $1.55 to $1.65. Actual 2021 first quarter revenue was $1.288 billion and diluted earnings per share was $2.01, both significantly above the high end of our previously issued guidance. Our 2021 first quarter guidance reflected our expectation that revenue per load on loads hauled via truck would exceed the 2020 first quarter in a mid-teen percentage range and the number of loads hauled via truck in the 2021 first quarter would exceed the 2020 first quarter in a high single digit percentage range. Actual performance in the 2021 first quarter significantly exceeded our expectations, as summarized in the following chart:

 % growth over prior year
 Actual Guidance Actual 
 Q4 2020 Q1 2021 Q1 2021 
       
Truck revenue per load17% 14% - 16% 24% 
Number of truck loads13% 7% - 9% 13% 

As noted above, revenue per load and the number of loads hauled via truck in the 2021 first quarter exceeded the 2020 first quarter by 24 percent and 13 percent, respectively, as our assumption of decelerating year-over-year volume growth in February and March on softening consumer demand did not transpire. The winter storms that impacted much of the central portion of the country during the last week of Landstar’s fiscal February had a significant impact on freight volumes during that week. We believe these storms temporarily delayed many loads that otherwise would have been hauled in February to instead be hauled in March. After taking this short-term impact into consideration, load volume and revenue per load on loads hauled via truck remained strong through the entirety of the 2021 first quarter and were generally in-line with historical seasonal month-to-month trends, with the exception of truck revenue per load in fiscal March. Revenue per load on loads hauled via truck in March 2021 exceeded March 2020 by an impressive 31 percent, far above the 18 percent and 19 percent month-over-prior-year-month growth experienced in January and February 2021, respectively. Revenue per load on loads hauled via van and unsided/platform equipment both experienced unusually large percentage increases from February to March.”

Gattoni continued, “Second quarter year-over-prior-year revenue and diluted earnings per share comparisons are not meaningful due to the adverse impact the COVID-19 pandemic had on the Company’s 2020 second quarter financial results. On a sequential basis, I expect the strong finish to the 2021 first quarter to continue through the 2021 second quarter. As a result, I expect both revenue per load and the number of loads hauled via truck to be in a mid-single digit percentage range above the 2021 first quarter. As such, I anticipate revenue for the 2021 second quarter to be in a range of $1.40 billion to $1.45 billion.”

Gattoni concluded, “Based on the range of revenue estimated for the 2021 second quarter, I would anticipate diluted earnings per share to be in a range of $2.20 to $2.30. This range of diluted earnings per share includes insurance and claims expense estimated at 4.3 percent of BCO revenue.”

Landstar will provide a live webcast of its quarterly earnings conference call tomorrow morning at 8:00 a.m. 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 First Quarter 2021 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 and expectations. Terms such as “anticipates,” “believes,” “estimates,” “intention,” “expects,” “plans,” “predicts,” “may,” “should,” “could,” “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: the impact of the coronavirus (COVID-19) pandemic; an increase in the frequency or severity of accidents or other claims; unfavorable development of existing accident claims; dependence on third party insurance companies; dependence on independent commission sales agents; dependence on third party capacity providers; decreased demand for transportation services; substantial industry competition; disruptions or failures in the Company’s computer systems; cyber and other information security incidents; dependence on key vendors; changes in fuel taxes; status of independent contractors; regulatory and legislative changes; regulations focused on diesel emissions and other air quality matters; catastrophic loss of a Company facility; intellectual property; unclaimed property; and other operational, financial or legal risks or uncertainties detailed in Landstar’s Form 10K for the 2020 fiscal year, described in Item 1A Risk Factors, and in 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 the Company undertakes no obligation to publicly update or revise any forward-looking statements.

About Landstar:Landstar System, Inc. is a worldwide, asset-light provider of integrated transportation management solutions delivering safe, specialized transportation services to a broad range of customers utilizing a network of agents, third-party capacity providers and employees. Landstar transportation services companies are certified to ISO 9001:2015 quality management system standards and RC14001:2015 environmental, health, safety and security management system standards. Landstar System, Inc. is headquartered in Jacksonville, Florida. Its common stock trades on The NASDAQ Stock Market® under the symbol LSTR.

      
Landstar System, Inc. and Subsidiary
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)
      
      
   Thirteen Weeks Ended
   March 27, March 28,
   2021 2020
      
Revenue$1,287,534  $927,566 
Investment income 684   1,167 
      
Costs and expenses:   
 Purchased transportation 998,285   709,257 
 Commissions to agents 100,009   75,376 
 Other operating costs, net of gains on asset sales/dispositions 7,642   8,306 
 Insurance and claims 21,505   24,957 
 Selling, general and administrative 45,408   45,327 
 Depreciation and amortization 12,101   11,505 
      
  Total costs and expenses 1,184,950   874,728 
      
Operating income 103,268   54,005 
Interest and debt expense 1,042   952 
      
Income before income taxes 102,226   53,053 
Income taxes 24,986   12,158 
      
Net income$77,240  $40,895 
      
Diluted earnings per share$2.01  $1.04 
      
Average diluted shares outstanding 38,404,000   39,254,000 
      
Dividends per common share$0.210  $0.185 
      

      
Landstar System, Inc. and Subsidiary
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
(Unaudited)
      
      
   March 27, December 26,
   2021 2020
ASSETS   
Current assets:   
 Cash and cash equivalents$219,389  $249,354 
 Short-term investments 41,407   41,375 
 Trade accounts receivable, less allowance   
  of $7,095 and $8,670 824,872   764,169 
 Other receivables, including advances to independent   
  contractors, less allowance of $6,711 and $7,239 40,067   134,757 
 Other current assets 11,584   18,520 
  Total current assets 1,137,319   1,208,175 
      
Operating property, less accumulated depreciation   
 and amortization of $309,464 and $299,407 288,041   296,996 
Goodwill 40,732   40,949 
Other assets 108,373   107,679 
Total assets$1,574,465  $1,653,799 
      
LIABILITIES AND SHAREHOLDERS' EQUITY   
Current liabilities:   
 Cash overdraft$74,754  $74,748 
 Accounts payable 414,440   380,505 
 Current maturities of long-term debt 32,800   35,415 
 Insurance claims 39,229   149,774 
 Dividends payable -   76,770 
 Other current liabilities 101,442   88,925 
  Total current liabilities 662,665   806,137 
      
Long-term debt, excluding current maturities 58,196   65,359 
Insurance claims 39,850   38,867 
Deferred income taxes and other non-current liabilities 50,835   51,601 
      
Shareholders' equity:   
 Common stock, $0.01 par value, authorized 160,000,000   
  shares, issued 68,212,296 and 68,183,702 682   682 
 Additional paid-in capital 232,597   228,875 
 Retained earnings 2,115,411   2,046,238 
 Cost of 29,803,726 and 29,797,639 shares of common   
  stock in treasury (1,582,818)  (1,581,961)
 Accumulated other comprehensive loss (2,953)  (1,999)
  Total shareholders' equity 762,919   691,835 
Total liabilities and shareholders' equity$1,574,465  $1,653,799 
      

    
 Landstar System, Inc. and Subsidiary
 Supplemental Information
 (Unaudited)
       
    Thirteen Weeks Ended
    March 27, March 28,
    2021 2020
Revenue generated through (in thousands):   
       
 Truck transportation   
  Truckload:   
   Van equipment$827,187  $545,307 
   Unsided/platform equipment 340,632   286,328 
  Less-than-truckload 25,670   22,941 
   Total truck transportation 1,193,489   854,576 
 Rail intermodal 31,708   28,129 
 Ocean and air cargo carriers 47,600   26,587 
 Other (1) 14,737   18,274 
    $1,287,534  $927,566 
       
 Revenue on loads hauled via BCO Independent Contractors (2)   
  included in total truck transportation$560,114  $431,279 
       
Number of loads:   
       
 Truck transportation   
  Truckload:   
   Van equipment 368,873   315,345 
   Unsided/platform equipment 126,265   120,589 
  Less-than-truckload 40,692   38,356 
   Total truck transportation 535,830   474,290 
 Rail intermodal 11,700   11,540 
 Ocean and air cargo carriers 9,230   7,070 
     556,760   492,900 
       
 Loads hauled via BCO Independent Contractors (2)   
  included in total truck transportation 245,950   233,400 
       
Revenue per load:   
       
 Truck transportation   
  Truckload:   
   Van equipment$2,242  $1,729 
   Unsided/platform equipment 2,698   2,374 
  Less-than-truckload 631   598 
   Total truck transportation 2,227   1,802 
 Rail intermodal 2,710   2,438 
 Ocean and air cargo carriers 5,157   3,761 
       
 Revenue per load on loads hauled via BCO Independent Contractors (2)$2,277  $1,848 
       
Revenue by capacity type (as a % of total revenue);   
       
 Truck capacity providers:   
  BCO Independent Contractors (2) 44%  46%
  Truck Brokerage Carriers 49%  46%
 Rail intermodal 2%  3%
 Ocean and air cargo carriers 4%  3%
 Other 1%  2%
       
    March 27, March 28,
    2021 2020
Truck Capacity Providers   
       
 BCO Independent Contractors (2) 10,498   9,444 
 Truck Brokerage Carriers:   
  Approved and active (3) 49,538   38,879 
  Other approved 23,246   16,657 
     72,784   55,536 
 Total available truck capacity providers 83,282   64,980 
       
 Trucks provided by BCO Independent Contractors (2) 11,268   10,112 
       
(1) Includes primarily reinsurance premium revenue generated by the insurance segment and intra-Mexico transportation services revenue generated by Landstar Metro.
       
(2) BCO Independent Contractors are independent contractors who provide truck capacity to the Company under exclusive lease arrangements.
       
(3) Active refers to Truck Brokerage Carriers who moved at least one load in the 180 days immediately preceding the fiscal quarter end.
       

 

Contact: Jim Gattoni
Landstar System, Inc.
www.landstar.com
904-398-9400

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Source: Landstar System, Inc.


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