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 load	17%	14% - 16%	24%
Number of truck loads	13%	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

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