Landstar System Reports All-Time Quarterly Record Diluted Earnings Per Share of $2.01 in the 2021 First Quarter
04/21/2021 - 04:15 PM
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 $1.28 8 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 t o $1.65 . Actual 2021 first quarter revenue was $1.28 8 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 t o $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. 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.
