Landstar System Reports Third Quarter Revenue of $1.214B and Earnings Per Share of $1.41
JACKSONVILLE, Fla., Oct. 29, 2024 (GLOBE NEWSWIRE) -- Landstar System, Inc. (NASDAQ:LSTR) ("Landstar" or the "Company") today reported basic and diluted earnings per share ("EPS") of $1.41 in the 2024 third quarter on revenue of $1.214 billion. "Consistent with the first half of 2024, the freight environment during the third quarter remained challenging. The Landstar team of independent business owners and employees continued to perform admirably given this backdrop," said Landstar President and Chief Executive Officer Frank Lonegro. "I was encouraged that Landstar achieved a 3.2% sequential increase in truck revenue per load compared to the 2024 second quarter, outperforming typical seasonality. This result was driven by a strong month-over-month truck revenue per load increase in July, but tapered off as we moved through August and September, in part due to tougher prior month comparisons. Regardless of the freight environment, the thousands of Landstar BCOs, agents and employees in our network continue to strive each day to improve our safety performance and deliver great service to our customers."
Landstar continues to return capital to stockholders through the Company's stock purchase program and dividends. During the 2024 third quarter, Landstar purchased approximately 121,000 shares of its common stock at an aggregate cost of $22.4 million. The Company is currently authorized to purchase up to an additional 2,563,081 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 December 10, 2024, to stockholders of record as of the close of business on November 19, 2024.
3Q 2024
3Q 2023
Revenue
$
1,213,867
$
1,289,345
Gross profit
$
112,693
$
128,079
Variable contribution
$
171,359
$
187,358
Operating income
$
63,116
$
80,348
Basic and diluted earnings per share
$
1.41
$
1.71
(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 $1,214 million in the 2024 third quarter, compared to $1,289 million in the 2023 third quarter. Truck transportation revenue hauled by independent business capacity owners ("BCOs") and truck brokerage carriers in the 2024 third quarter was $1,091 million, or 90% of revenue, compared to $1,174 million, or 91% of revenue, in the 2023 third quarter. Truckload transportation revenue hauled via van equipment in the 2024 third quarter was $604 million, compared to $666 million in the 2023 third quarter. Truckload transportation revenue hauled via unsided/platform equipment in the 2024 third quarter was $370 million, compared to $378 million in the 2023 third quarter. Revenue from other truck transportation, which is largely related to power-only services, in the 2024 third quarter was $93 million, compared to $102 million in the 2023 third quarter. Revenue hauled by rail, air and ocean cargo carriers was $97 million, or 8% of revenue, in the 2024 third quarter, compared to $89 million, or 7% of revenue, in the 2023 third quarter.
The number of loads hauled via truck declined 7.7% in the 2024 third quarter as compared to the 2023 third quarter, slightly ahead of the mid-point of the Company's guidance included in its 2024 second quarter earnings release slide presentation, dated July 30, 2024. Truck revenue per load increased 0.7% in the 2024 third quarter as compared to the 2023 third quarter, within the lower half of the range of the Company's previously provided guidance.
Gross profit in the 2024 third quarter was $113 million and variable contribution (defined as revenue less the cost of purchased transportation and commissions to agents) in the 2024 third quarter was $171 million. Gross profit in the 2023 third quarter was $128 million and variable contribution in the 2023 third quarter was $187 million. Reconciliations of gross profit to variable contribution and gross profit margin to variable contribution margin for the 2024 and 2023 third 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 $531 million as of September 28, 2024. Trailing twelve-month return on average shareholders' equity was 21%, and return on invested capital, representing net income divided by the sum of average equity plus average debt, was 19%.
Landstar will provide a live webcast of its quarterly earnings conference call this evening at 4:30 p.m. ET. To access the webcast, visit www.investor.landstar.com; click on "Webcasts," then click on "Landstar's Third 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)
Thirty-Nine Weeks Ended
Thirteen Weeks Ended
September 28,
September 30,
September 28,
September 30,
2024
2023
2024
2023
Revenue
$
3,609,915
$
4,098,877
$
1,213,867
$
1,289,345
Investment income
10,988
6,874
3,922
3,022
Costs and expenses:
Purchased transportation
2,799,384
3,141,234
943,805
986,743
Commissions to agents
295,801
363,397
98,703
115,244
Other operating costs, net of gains on asset sales/dispositions
44,138
40,998
15,144
15,158
Insurance and claims
83,830
86,971
30,398
29,540
Selling, general and administrative
162,613
159,071
51,252
50,975
Depreciation and amortization
44,001
44,498
15,371
14,359
Total costs and expenses
3,429,767
3,836,169
1,154,673
1,212,019
Operating income
191,136
269,582
63,116
80,348
Interest and debt (income) expense
(4,455
)
(2,079
)
(1,169
)
(1,046
)
Income before income taxes
195,591
271,661
64,285
81,394
Income taxes
45,838
65,254
14,252
19,741
Net income
$
149,753
$
206,407
$
50,033
$
61,653
Basic and diluted earnings per share
$
4.21
$
5.74
$
1.41
$
1.71
Average basic and diluted shares outstanding
35,608,000
35,958,000
35,420,000
35,951,000
Dividends per common share
$
1.02
$
0.93
$
0.36
$
0.33
Landstar System, Inc. and Subsidiary
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
(Unaudited)
September 28,
December 30,
2024
2023
ASSETS
Current assets:
Cash and cash equivalents
$
468,830
$
481,043
Short-term investments
62,451
59,661
Trade accounts receivable, less allowance
of $12,134 and $11,738
694,633
743,762
Other receivables, including advances to independent
contractors, less allowance of $16,759 and $14,010
51,533
43,339
Other current assets
33,947
24,936
Total current assets
1,311,394
1,352,741
Operating property, less accumulated depreciation
and amortization of $456,770 and $436,682
289,248
284,300
Goodwill
41,122
42,275
Other assets
