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Landstar System Reports Third Quarter Revenue Of $788 Million And Diluted Earnings Per Share Of $0.86

Mittwoch, 19.10.2016 22:20 von

PR Newswire

JACKSONVILLE, Fla., Oct. 19, 2016 /PRNewswire/ -- Landstar System, Inc. (NASDAQ: LSTR) reported third quarter diluted earnings per share of $0.86 on revenue of $788 million in the 2016 third quarter.  Landstar reported diluted earnings per share of $0.90 on revenue of $842 million in the 2015 third quarter. Gross profit (defined as revenue less the cost of purchased transportation and commissions to agents) was $121.8 million in the 2016 third quarter compared to $126.8 million in the 2015 third quarter.  Operating margin, representing operating income divided by gross profit, was 48.0 percent in the 2016 third quarter.

Truck transportation revenue hauled by independent business capacity owners ("BCOs") and truck brokerage carriers in the 2016 third quarter was $732.9 million, or 93 percent of revenue, compared to $779.8 million, or 93 percent of revenue, in the 2015 third quarter.  Truckload transportation revenue hauled via van equipment in the 2016 third quarter was $465.8 million compared to $466.2 million in the 2015 third quarter.  Truckload transportation revenue hauled via unsided/platform equipment in the 2016 third quarter was $248.9 million compared to $293.3 million in the 2015 third quarter. Revenue hauled by rail, air and ocean cargo carriers was $43.4 million, or 6 percent of revenue, in the 2016 third quarter compared to $50.5 million, or 6 percent of revenue, in the 2015 third quarter.

Trailing twelve-month return on average shareholders' equity was 28 percent and trailing twelve-month return on invested capital, net income divided by the sum of average equity plus average debt, was 22 percent. During the 2016 third quarter, Landstar purchased 350,000 shares of its common stock at an aggregate cost of $24.0 million bringing the total number of common shares purchased during the thirty-nine weeks ended September 24, 2016 to 773,000 shares at an aggregate cost of $50.5 million.  Currently, there are approximately 1,036,000 shares of the Company's common stock available for purchase under Landstar's authorized share purchase program.  As of September 24, 2016, the Company had $227 million in cash and short term investments and $214 million available for borrowings under the Company's senior credit facility.

In addition, Landstar announced today that its Board of Directors has declared a quarterly dividend of $0.09 per share payable on December 2, 2016, to stockholders of record as of the close of business on November 8, 2016.  It is currently the intention of the Board to pay dividends on a quarterly basis going forward.

Commenting on Landstar's 2016 third quarter, Landstar's President and CEO Jim Gattoni said, "Diluted earnings per share was $0.86 in the 2016 third quarter, the second highest third quarter diluted earnings per share in Landstar history, second only to 2015 third quarter record diluted earnings per share of $0.90. Revenue was $788 million with gross profit of $121.8 million in the 2016 third quarter, the second highest third quarter gross profit in Landstar history, second only to 2015 third quarter record gross profit of $126.8 million. 2015 third quarter revenue was a record $842 million and included $35 million of revenue from a project on behalf of a customer in the automotive sector. That project was completed at the end of 2015. Overall, we continued to have difficult year-over-year comparisons to 2015 driven mostly by tougher overall industry conditions in 2016 and revenue from the previously referenced automotive project in 2015."

Gattoni continued, "Landstar executed well when considering the softness in U.S. manufacturing and more readily available truck capacity in 2016. Given this environment, Landstar managed a 4 percent increase in the number of loads hauled via truck in the 2016 third quarter over the 2015 third quarter, when excluding approximately 20,000 truckloads hauled via unsided/platform equipment for the automotive project in the 2015 third quarter.

Overall, the number of loads hauled via truck in the 2016 third quarter decreased 1 percent from the 2015 third quarter.  This overall decrease in volume was driven by a 6 percent increase in the number of loads hauled via van equipment, offset by a 14 percent decrease in the number of loads hauled via unsided/platform equipment. Excluding the loadings related to the automotive project, Landstar experienced a 1 percent increase in the number of loads hauled via unsided/platform equipment. Landstar also achieved a 4 percent increase in the number of loads hauled via railroads, ocean cargo carriers and air cargo carriers in the 2016 third quarter over the 2015 third quarter."

Gattoni further continued, "Revenue per load on loads hauled via truck in the 2016 third quarter was 5 percent below the 2015 third quarter. This represents a sequential improvement, however, as revenue per load on loads hauled via truck in the 2016 first quarter compared to the 2015 first quarter and in the 2016 second quarter compared to the 2015 second quarter decreased 10 percent and 9 percent, respectively. The reduction in the percentage shortfall in revenue per load on loads hauled via truck in the 2016 third quarter was due to an increase in revenue per load in the 2016 third quarter compared to the 2016 second quarter that was slightly ahead of recent second quarter to third quarter trends, coupled with weaker revenue per load in the 2015 third quarter as compared to the first half of 2015. Additionally, the average cost of a gallon of diesel fuel was approximately 10 percent lower during the 2016 third quarter compared to the 2015 third quarter putting additional pressure on pricing, especially as it related to loads hauled via truck brokerage carriers. The softer pricing environment contributed to the decline in the 2016 third quarter operating margin, which was 48.0 percent, compared to 50.4 percent in the 2015 third quarter."

Commenting on Landstar's 2016 fourth quarter, Gattoni stated, "I expect the slow growth environment we have experienced during the first three quarters of 2016 to continue through the 2016 fourth quarter.  As was the case in our 2016 second and third quarters, fourth quarter 2016 over fourth quarter 2015 revenue comparisons will include the effects of revenue derived from the automotive project previously referenced. The Company's 2015 fourth quarter included approximately $38 million in revenue from approximately 19,000 loads hauled via truck related to that project. Through the first few weeks of October, we have experienced the normal seasonal pattern for revenue per load on loads hauled via truck and, therefore, I anticipate revenue per load on loads hauled via truck to be below prior year's fourth quarter in a mid-single digit range, consistent with the 2016 third quarter compared to the 2015 third quarter. Landstar's fiscal year ends on the last Saturday of the calendar year, which this year is December 31, 2016, resulting in fiscal year 2016 representing a 53 week period. As such, the Company's 2016 fourth quarter includes an extra week of operations. The number of loads hauled via truck during the first few weeks of October is trending slightly ahead of the historical third quarter to fourth quarter trend. Assuming that trend continues, and given the extra week in the 2016 fourth quarter, I would expect the number of loads hauled via truck in the 2016 fourth quarter to exceed the 2015 fourth quarter in a low-single digit range. As such, I expect 2016 fourth quarter revenue to be in a range of $800 million to $850 million. Assuming insurance and claims costs in the 2016 fourth quarter are approximately 3.2 percent of BCO revenue, representing average insurance and claims costs as a percent of BCO revenue over the past 5 years, I would expect diluted earnings per share to be in a range of $0.85 to $0.90 in the 2016 fourth quarter."

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 Third Quarter 2016 Earnings Release Conference Call."

This earnings announcement, as well as an accompanying slide presentation, is available through the Company's website at http://investor.landstar.com under "Presentations" and on a Form 8-K filed with the Securities and Exchange Commission.

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; 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; catastrophic loss of a Company facility; intellectual property; unclaimed property; regulations focused on diesel emissions and other air quality matters; and other operational, financial or legal risks or uncertainties detailed in Landstar's Form 10K for the 2015 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 logistics services to a broad range of customers utilizing a network of agents, third-party capacity providers and employees.  All Landstar transportation services companies are certified to ISO 9001:2008 quality management system standards and RC14001:2013 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 logo

 (Tables follow)

 

Landstar System, Inc. and Subsidiary

Consolidated Statements of Income

(Dollars in thousands, except per share amounts)

(Unaudited)

































Thirty Nine Weeks Ended


Thirteen Weeks Ended







September 24,


September 26,


September 24,


September 26,







2016


2015


2016


2015














Revenue




$        2,274,805


$         2,472,489


$          787,938


$       841,726

Investment income



1,100


1,043


357


350














Costs and expenses:











Purchased transportation


1,730,745


1,900,313


601,002


645,583


Commissions to agents


189,075


199,113


65,144


69,297


Other operating costs, net of gains on asset sales/dispositions


21,484


24,388


7,492


8,718


Insurance and claims



42,795


37,610


12,488


10,502


Selling, general and administrative


106,211


111,797


34,692


36,811


Depreciation and amortization


26,109


21,253


9,016


7,185
















Total costs and expenses


2,116,419


2,294,474


729,834


778,096














Operating income



159,486


179,058


58,461


63,980

Interest and debt expense



2,725


2,208


948


714














Income before income taxes


156,761


176,850


57,513


63,266

Income taxes 




58,985


67,016


21,235


23,918














Net income




$            97,776


$           109,834


$           36,278


$         39,348



























Earnings per common share


$                2.32


$                 2.50


$               0.86


$             0.91














Diluted earnings per share



$                2.31


$                 2.49


$               0.86


$             0.90














Average number of shares outstanding:










Earnings per common share  


42,223,000


43,975,000


42,039,000


43,446,000


Diluted earnings per share


42,341,000


44,134,000


42,170,000


43,607,000














Dividends per common share


$                0.25


$                 0.22


$               0.09


$             0.08

 

 

Landstar System, Inc. and Subsidiary

Consolidated Balance Sheets

(Dollars in thousands, except per share amounts)

(Unaudited)




























September 24,


December 26,








2016


2015

ASSETS







Current assets:








Cash and cash equivalents



$      170,805


$      114,520


Short-term investments



56,679


48,823


Trade accounts receivable, less allowance






of $4,881 and $4,327



409,047


462,699


Other receivables, including advances to independent






contractors, less allowance of $4,871 and $4,143

17,091


18,472


Other current assets



15,188


11,604



Total current assets



668,810


656,118











Operating property, less accumulated depreciation







and amortization of $187,566 and $182,591

261,943


225,927

Goodwill





31,134


31,134

Other assets




65,871


78,339

Total assets




$   1,027,758


$      991,518











LIABILITIES AND SHAREHOLDERS' EQUITY




Current liabilities:








Cash overdraft




$        27,725


$        35,609


Accounts payable



201,872


223,709


Current maturities of long-term debt


44,784


42,499


Insurance claims



27,941


19,757


Other current liabilities



48,027


47,963



Total current liabilities



350,349


369,537











Long-term debt, excluding current maturities

90,817


81,793

Insurance claims




23,765


21,477

Deferred income taxes and other non-current liabilities

56,097


52,474











Shareholders' equity:







Common stock, $0.01 par value, authorized 160,000,000 






shares, issued 67,522,281 and 67,391,616 shares

675


674


Additional paid-in capital



198,736


195,841


Retained earnings



1,477,179


1,389,975


Cost of 25,747,002 and 24,972,079 shares of common






stock in treasury



(1,167,391)


(1,116,765)


Accumulated other comprehensive loss

(2,469)


(3,488)



Total shareholders' equity



506,730


466,237

Total liabilities and shareholders' equity 

$   1,027,758


$      991,518

 

 



Landstar System, Inc. and Subsidiary


Supplemental Information


(Unaudited)
































Thirty Nine Weeks Ended



Thirteen Weeks Ended






September 24,


September 26,



September 24,


September 26,






2016


2015



2016


2015

Revenue generated through (in thousands):
























Truck transportation












Truckload:













Van equipment


$  1,351,980


$  1,412,824



$     465,785


$      466,226




Unsided/platform equipment


700,369


823,767



248,939


293,252



Less-than-truckload


54,066


61,297



18,139


20,341




Total truck transportation


2,106,415


2,297,888



732,863


779,819


Rail intermodal


76,987


76,688



24,650


27,166


Ocean and air cargo carriers


56,500


64,725



18,790


23,315


Other (1)   


34,903


33,188



11,635


11,426






$  2,274,805


$  2,472,489



$     787,938


$      841,726















Revenue on loads hauled via BCO Independent Contractors (2)












included in total truck transportation


$  1,086,848


$  1,140,870



$     379,196


$      388,840














Number of loads:
























Truck transportation












Truckload:













Van equipment


847,208


820,223



291,089


275,509




Unsided/platform equipment


331,226


359,769



112,192


130,317



Less-than-truckload


84,316


83,838



28,589


28,934




Total truck transportation


1,262,750


1,263,830



431,870


434,760


Rail intermodal


36,120


32,350



11,940


11,670


Ocean and air cargo carriers


14,910


13,320



5,130


4,700






1,313,780


1,309,500



448,940


451,130















Loads hauled via BCO Independent Contractors (2)












included in total truck transportation


630,880


616,410



216,220


210,180














Revenue per load:
























Truck transportation












Truckload:













Van equipment


$          1,596


$          1,722



$         1,600


$          1,692




Unsided/platform equipment


2,114


2,290



2,219


2,250



Less-than-truckload


641


731



634


703




Total truck transportation


1,668


1,818



1,697


1,794


Rail intermodal


2,131


2,371



2,064


2,328


Ocean and air cargo carriers


3,789


4,859



3,663


4,961















Revenue per load on loads hauled via BCO Independent Contractors (2)


$          1,723


$          1,851



$         1,754


$          1,850














Revenue by capacity type (as a % of total revenue);
























Truck capacity providers:












BCO Independent Contractors (2)


48%


46%



48%


46%



Truck Brokerage Carriers


45%


47%



45%


46%


Rail intermodal


3%


3%



3%


3%


Ocean and air cargo carriers


2%


3%



2%


3%


Other



2%


1%



1%


1%





































September 24,


September 26,











2016


2015

Truck Capacity Providers
























BCO Independent Contractors (2)







8,889


8,869


Truck Brokerage Carriers:











     Approved and active (3)







30,860


29,127


     Other approved







15,691


13,813











46,551


42,940


Total available truck capacity providers







55,440


51,809















Trucks provided by BCO Independent Contractors (2)







9,510


9,441



























(1) Includes primarily premium revenue generated by the insurance segment.




















(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 have moved at least one load in the 180 days immediately preceeding the fiscal quarter end.

 

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SOURCE Landstar System, Inc.