July 19, 2001 Jacksonville, FL - Landstar System, Inc. (NASDAQ: LSTR) reported 2001 second quarter net income of $10.9 million, or $1.26 per diluted share, compared to net income of $9.4 million, or $1.04 per diluted share, in the 2000 second quarter. The 2000 second quarter included a $3.0 million pre-tax non-recurring charge for the relocation and restructuring of the operations of Landstar Ligon, Inc. which reduced net income by $.20 per diluted share. Operating margin was 5.4 percent in the 2001 second quarter compared to an operating margin, excluding the non-recurring charge, of 5.8 percent in the 2000 second quarter. Revenue was $358.0 million for the thirteen-week period ended June 30, 2001, compared with $358.6 million for the thirteen-week period ended June 24, 2000. Landstar's carrier group of companies generated $280.2 million of revenue in the 2001 second quarter compared with $282.7 million in the 2000 quarter. In the 2001 and 2000 second quarters, the carrier group invoiced customers $9.5 million and $7.8 million, respectively, in fuel surcharges that were passed 100 percent to its business capacity owners and excluded from revenue. Landstar's multimodal services group of companies reported revenue of $72.2 million in the 2001 second quarter compared to $69.6 million in the 2000 quarter.
Net income for the twenty-six-week period ended June 30, 2001 was $19.3 million, or $2.21 per diluted share, compared to net income of $17.8 million, or $1.92 per diluted share, for the twenty-six-week period ended June 24, 2000. The 2000 twenty-six-week period included the $3.0 million pre-tax non-recurring charge which reduced net income by $.20 per diluted share. Operating margin for the 2001 twenty-six-week period was 5.1 percent compared with 5.3 percent, excluding the non-recurring charge, in the comparable 2000 period. Revenue was $689.3 million in the 2001 first half, compared to revenue of $685.6 million in the 2000 first half. Landstar's carrier group of companies generated $543.6 million of revenue in the twenty-six-week period ended June 30, 2001 compared with $538.5 million in the twenty-six-week period ended June 24, 2000. In the 2001 and 2000 first halves, the carrier group invoiced customers $21.0 million and $11.6 million, respectively, in fuel surcharges that were passed 100 percent to its business capacity owners and excluded from revenue. Landstar's multimodal services group of companies generated $134.0 million of revenue in the 2001 twenty-six-week period compared with $134.8 in the 2000 period.
Landstar Chairman and CEO Jeff Crowe commenting on the results said, "While the entire trucking industry is experiencing a difficult operating environment as evidenced by the record level of trucking company failures, Landstar was able to achieve results in the 2001 second quarter that clearly demonstrate the power of the Landstar business model."
"At the end of the second quarter there were 8,480 trucks in the Landstar system. This represents a decrease of only 100 trucks since the end of the 2001 first quarter. Since May 19, 2001, Landstar has increased its truck capacity by 69 power units. Landstar is on track to achieve its goal of replacing all of its truck capacity lost during the first four and one half months of the year. I remain confident in our ability to rebuild truck count to its 2000 year-end level."
"Revenue in the 2001 quarter was approximately the same as the 2000 quarter, despite the difficult operating environment. The operating margin in the 2001 second quarter was lower than the operating margin in the 2000 second quarter excluding the non-recurring charge, primarily due to a change in our revenue mix."
"During the second quarter Landstar purchased 116,300 shares of its common stock at a total cost of $7,875,000. The trailing 12 months return on average equity for the period ended June 30, 2001 remained high at 44 percent."
"As Landstar enters the back half of 2001, I anticipate revenue to be slightly higher than that of the 2000 final six months. I expect full year diluted earnings per share to be within a range equal to last year's diluted earnings per share exclusive of the non-recurring charges, or $5.38 per diluted share, up to the current First Call consensus of analysts estimates of $5.61 per diluted share and am more comfortable in the middle of that range. Landstar continues to perform well, demonstrating its ability to produce solid earnings per share in a difficult environment."
Landstar will provide a live webcast of its quarterly earnings conference call this afternoon at 2 p.m. EDT. To access the webcast visit the company's website at www.landstar.com. Click on Investor Relations and then on the microphone at the top of the page. StreetEvents.com and StreetFusion.com will also carry the broadcast live.
This press release contains forward-looking statements, such as statements that relate to Landstar's business objectives, plans, strategies and expectations. The words "believe”, "anticipate”, "expect”, "should”, and similar expressions identify forward-looking statements. While made in good faith and with a reasonable basis based on information currently available to Landstar's management, there is no assurance that such opinions, beliefs or expectations will be achieved or accomplished. Various factors could cause actual results and events to vary significantly from those expressed in any forward-looking statement. Such types of statements are intended to be forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. The Company is under no obligation to update any forward-looking statement to the extent it becomes aware that it will not be achieved for any reason.
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Landstar System, Inc. is headquartered in Jacksonville, Florida. The Landstar carrier group, comprised of Landstar Gemini, Inc., Landstar Inway, Inc., Landstar Ligon, Inc. and Landstar Ranger, Inc., delivers excellence in complete over-the-road transportation services. The Landstar multimodal group, comprised of Landstar Express America, Inc. and Landstar Logistics, Inc., delivers excellence in expedited, contract logistics and intermodal transportation services. All Landstar operating companies are certified to ISO 9001:2000 quality management system standards. Landstar System, Inc.'s common stock trades on The NASDAQ Stock Market® under the symbol LSTR.