JACKSONVILLE, Fla., July 30, 2024 (GLOBE NEWSWIRE) -- Landstar System, Inc. (NASDAQ: LSTR) (“Landstar” or the “Company”) today reported basic and diluted earnings per share (“EPS”) of $1.48 in the 2024 second quarter on revenue of $1.225 billion. “The Landstar network of independent business owners performed admirably in a challenging freight transportation environment,” said Landstar President and Chief Executive Officer Frank Lonegro. “During the second quarter, we were encouraged to see our first sequential quarter-to-quarter revenue increase since the 2022 second quarter. Revenue in the 2024 second quarter grew 5% sequentially following seven quarters of sequential revenue declines. As we look to build on that momentum, we continue to invest in leading-edge technology and new trailing equipment. We are particularly proud of the efforts of the thousands of BCOs, agents and employees in our network, who work each day to improve our safety performance and deliver great service to our customers.”
Landstar continues to return meaningful amounts of capital to stockholders through the Company’s stock purchase program and dividends. During the 2024 second quarter, Landstar purchased approximately 316,000 shares of its common stock at an aggregate cost of $57.0 million. The Company is currently authorized to purchase up to an additional 2,684,000 shares of the Company’s common stock under its longstanding share purchase program. Landstar also announced today that its Board of Directors declared a quarterly dividend of $0.36 per share payable on September 10, 2024, to stockholders of record as of the close of business on August 20, 2024. This quarterly dividend includes a $0.03 per share increase, or 9%, over the amount of the Company’s regular quarterly dividend declared following each of the prior four quarters.
2Q 2024
2Q 2023
Revenue
$
1,225,005
$
1,373,857
Gross profit
$
119,996
$
139,706
Variable contribution
$
175,131
$
198,182
Operating income
$
68,059
$
87,950
Basic and diluted earnings per share
$
1.48
$
1.85
(1) Dollars above in thousands, except per share amounts
(2) Please refer to the Consolidated Statements of Income and Reconciliation of Gross Profit to Variable Contribution included below
Total revenue was $1,225 million in the 2024 second quarter, compared to $1,374 million in the 2023 second quarter. Truck transportation revenue hauled by independent business capacity owners (“BCOs”) and truck brokerage carriers in the 2024 second quarter was $1,106 million, or 90% of revenue, compared to $1,247 million, or 91% of revenue, in the 2023 second quarter. Truckload transportation revenue hauled via van equipment in the 2024 second quarter was $619 million, compared to $703 million in the 2023 second quarter. Truckload transportation revenue hauled via unsided/platform equipment in the 2024 second quarter was $381 million, compared to $395 million in the 2023 second quarter. Revenue from other truck transportation, which is largely related to power-only services, in the 2024 second quarter was $78 million, compared to $118 million in the 2023 second quarter. Revenue hauled by rail, air and ocean cargo carriers was $94 million, or 8% of revenue, in the 2024 second quarter, compared to $101 million, or 7% of revenue, in the 2023 second quarter.
The number of loads hauled via truck declined 8.9% in the 2024 second quarter as compared to the 2023 second quarter, at the low end of the Company’s guidance included in its 2024 first quarter earnings release slide presentation, dated April 25, 2024. Truck revenue per load declined 2.6% in the 2024 second quarter as compared to the 2023 second quarter, slightly below the mid-point of the Company’s previously provided guidance.
Gross profit in the 2024 second quarter was $120 million and variable contribution (defined as revenue less the cost of purchased transportation and commissions to agents) in the 2024 second quarter was $175 million. Gross profit in the 2023 second quarter was $140 million and variable contribution in the 2023 second quarter was $198 million. Reconciliations of gross profit to variable contribution and gross profit margin to variable contribution margin for the 2024 and 2023 second quarters and year-to-date periods are provided in the Company’s accompanying financial disclosures.
The Company’s balance sheet continues to be very strong, with cash and short-term investments of approximately $504 million as of June 29, 2024. Trailing twelve-month return on average shareholders’ equity was 22%, and return on invested capital, representing net income divided by the sum of average equity plus average debt, was 20%.
Landstar will provide a live webcast of its quarterly earnings conference call this evening at 5:00 p.m. ET. To access the webcast, visit www.investor.landstar.com; click on “Webcasts,” then click on “Landstar’s Second Quarter 2024 Earnings Release Conference Call.” A slide presentation to accompany the webcast presentation is also available on Landstar’s investor relations website at https://investor.landstar.com/.
About Landstar: Landstar System, Inc., is a technology-enabled, 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.
Non-GAAP Financial Measures: In this earnings release and accompanying financial disclosures, the Company provides the following information that may be deemed a non-GAAP financial measure: variable contribution and variable contribution margin. The Company believes variable contribution and variable contribution margin are useful measures of the variable costs that we incur at a shipment-by-shipment level attributable to our transportation network of third-party capacity providers and independent agents in order to provide services to our customers. The Company also believes that it is appropriate to present each of the financial measures that may be deemed a non-GAAP financial measure, as referred to above, for the following reasons: (1) disclosure of these matters will allow investors to better understand the underlying trends in the Company’s financial condition and results of operations; (2) this information will facilitate comparisons by investors of the Company’s results as compared to the results of peer companies; and (3) management considers this financial information in its decision making.
Forward Looking Statements Disclaimer: 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: 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; the impact of the Russian conflict with Ukraine on the operations of certain independent commission sales agents, including the Company’s largest such agent by revenue in the 2023 fiscal year; decreased demand for transportation services; U.S. trade relationships; substantial industry competition; disruptions or failures in the Company’s computer systems; cyber and other information security incidents; dependence on key vendors; potential changes in taxes; status of independent contractors; regulatory and legislative changes; regulations focused on diesel emissions and other air quality matters; regulations requiring the purchase and use of zero-emission vehicles; intellectual property; and other operational, financial or legal risks or uncertainties detailed in Landstar’s Form 10-K for the 2023 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.
Landstar System, Inc. and Subsidiary
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)
Twenty-Six Weeks Ended
Thirteen Weeks Ended
June 29,
July 1,
June 29,
July 1,
2024
2023
2024
2023
Revenue
$
2,396,048
$
2,809,532
$
1,225,005
$
1,373,857
Investment income
7,066
3,852
3,654
2,484
Costs and expenses:
Purchased transportation
1,855,579
2,154,491
950,058
1,053,197
Commissions to agents
197,098
248,153
99,816
122,478
Other operating costs, net of gains on asset sales/dispositions
28,994
25,840
14,135
13,462
Insurance and claims
53,432
57,431
27,164
29,784
Selling, general and administrative
111,361
108,096
54,939
54,529
Depreciation and amortization
28,630
30,139
14,488
14,941
Total costs and expenses
2,275,094
2,624,150
1,160,600
1,288,391
Operating income
128,020
189,234
68,059
87,950
Interest and debt (income) expense
(3,286
)
(1,033
)
(1,675
)
(307
)
Income before income taxes
131,306
190,267
69,734
88,257
Income taxes
31,586
45,513
17,110
21,698
Net income
$
99,720
$
144,754
$
52,624
$
66,559
Basic and diluted earnings per share
$
2.79
$
4.03
$
1.48
$
1.85
Average basic and diluted shares outstanding
35,702,000
35,962,000
35,654,000
35,941,000
Dividends per common share
$
0.66
$
0.60
$
0.33
$
0.30
Landstar System, Inc. and Subsidiary
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
(Unaudited)
June 29,
December 30,
2024
2023
ASSETS
Current assets:
Cash and cash equivalents
$
438,062
$
481,043
Short-term investments
65,959
59,661
Trade accounts receivable, less allowance
of $11,697 and $11,738
724,479
743,762
Other receivables, including advances to independent
contractors, less allowance of $15,974 and $14,010
42,117
43,339
Other current assets
44,568
24,936
Total current assets
1,315,185
1,352,741
Operating property, less accumulated depreciation
and amortization of $449,364 and $436,682
285,995
284,300
Goodwill
41,607
42,275
Other assets
112,417
122,530
Total assets
$
1,755,204
$
1,801,846
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Cash overdraft
$
58,358
$
61,541
Accounts payable
401,535
395,980
Current maturities of long-term debt
27,980
27,876
Insurance claims
42,677
41,825
Dividends payable
-
71,433
Other current liabilities
75,168
76,569
Total current liabilities
605,718
675,224
Long-term debt, excluding current maturities
45,397
43,264
Insurance claims
59,862
58,922
Deferred income taxes and other non-current liabilities
43,415
40,513
Shareholders' equity:
Common stock, $0.01 par value, authorized 160,000,000
shares, issued 68,553,927 and 68,497,324
686
685
Additional paid-in capital
256,084
254,642
Retained earnings
2,859,786
2,783,645
Cost of 33,102,276 and 32,780,651 shares of common
stock in treasury
(2,106,266
)
(2,048,184
)
Accumulated other comprehensive loss
(9,478
)
(6,865
)
Total shareholders' equity
1,000,812
983,923
Total liabilities and shareholders' equity
$
1,755,204
$
1,801,846
Landstar System, Inc. and Subsidiary
Supplemental Information
(Unaudited)
Twenty-Six Weeks Ended
Thirteen Weeks Ended
June 29,
July 1,
June 29,
July 1,
2024
2023
2024
2023
Revenue generated through (in thousands):
Truck transportation
Truckload:
Van equipment
$
1,247,244
$
1,458,124
$
618,940
$
703,041
Unsided/platform equipment
723,995
772,336
380,950
394,772
Less-than-truckload
53,707
62,673
28,090
31,115
Other truck transportation(1)
149,675
277,520
77,709
118,017
Total truck transportation
2,174,621
2,570,653
1,105,689
1,246,945
Rail intermodal
45,002
50,889
22,307
25,232
Ocean and air cargo carriers
125,380
136,534
71,306
75,441
Other(2)
51,045
51,456
25,703
26,239
$
2,396,048
$
2,809,532
$
1,225,005
$
1,373,857
Revenue on loads hauled via BCO Independent Contractors(3)
included in total truck transportation
$
918,071
$
1,034,881
$
465,510
$
515,355
Number of loads:
Truck transportation
Truckload:
Van equipment
599,973
655,036
300,959
323,082
Unsided/platform equipment
244,407
263,185
126,460
135,613
Less-than-truckload
82,850
93,066
42,617
46,874
Other truck transportation(1)
71,440
110,373
37,914
52,311
Total truck transportation
998,670
1,121,660
507,950
557,880
Rail intermodal
14,380
15,390
7,230
7,630
Ocean and air cargo carriers
17,240
16,750
8,520
8,310
1,030,290
1,153,800
523,700
573,820
Loads hauled via BCO Independent Contractors(3)
included in total truck transportation
422,300
463,910
213,560
231,360
Revenue per load:
Truck transportation
Truckload:
Van equipment
$
2,079
$
2,226
$
2,057
$
2,176
Unsided/platform equipment
2,962
2,935
3,012
2,911
Less-than-truckload
648
673
659
664
Other truck transportation(1)
2,095
2,514
2,050
2,256
Total truck transportation
2,178
2,292
2,177
2,235
Rail intermodal
3,129
3,307
3,085
3,307
Ocean and air cargo carriers
7,273
8,151
8,369
9,078
Revenue per load on loads hauled via BCO Independent Contractors(3)
$
2,174
$
2,231
$
2,180
$
2,228
Revenue by capacity type (as a % of total revenue):
Truck capacity providers:
BCO Independent Contractors(3)
38
%
37
%
38
%
38
%
Truck Brokerage Carriers
52
%
55
%
52
%
53
%
Rail intermodal
2
%
2
%
2
%
2
%
Ocean and air cargo carriers
5
%
5
%
6
%
5
%
Other
2
%
2
%
2
%
2
%
June 29,
July 1,
2024
2023
Truck Capacity Providers
BCO Independent Contractors(3)
8,385
9,748
Truck Brokerage Carriers:
Approved and active(4)
45,382
58,303
Other approved
25,450
29,503
70,832
87,806
Total available truck capacity providers
79,217
97,554
Trucks provided by BCO Independent Contractors(3)
9,180
10,548
(1) Includes power-only, expedited, straight truck, cargo van, and miscellaneous other truck transportation revenue generated by the transportation logistics segment. Power-only refers to shipments where the Company furnishes a power unit and an operator but not trailing equipment, which is typically provided by the shipper or consignee.
(2) Includes primarily reinsurance premium revenue generated by the insurance segment and intra-Mexico transportation services revenue generated by Landstar Metro.
(3) BCO Independent Contractors are independent contractors who provide truck capacity to the Company under exclusive lease arrangements.
(4) Active refers to Truck Brokerage Carriers who moved at least one load in the 180 days immediately preceding the fiscal quarter end.
Landstar System, Inc. and Subsidiary
Reconciliation of Gross Profit to Variable Contribution
