Landstar System Reports First Quarter Revenue Of $1.436B And First Quarter Diluted Earnings Per Share Of $2.17

JACKSONVILLE, Fla., April 26, 2023 (GLOBE NEWSWIRE) -- Landstar System, Inc. (NASDAQ: LSTR) (“Landstar” or the “Company”) reported diluted earnings per share (“DEPS”) of $2.17 in the 2023 first quarter on revenue of $1.436 billion. Landstar reported DEPS of $3.34 on revenue of $1.971 billion in the 2022 first quarter.

Gross profit in the 2023 first quarter was $152.9 million and variable contribution (defined as revenue less the cost of purchased transportation and commissions to agents) in the 2023 first quarter was $208.7 million. Gross profit in the 2022 first quarter was $214.6 million and variable contribution in the 2022 first quarter was $270.5 million. Reconciliations of gross profit to variable contribution and gross profit margin to variable contribution margin for the 2023 and 2022 first quarters are provided in the Company’s accompanying financial disclosures.

Trailing twelve month return on average shareholders’ equity was 44 percent and return on invested capital, representing net income divided by the sum of average equity plus average debt, was 38 percent. During the 2023 first quarter, Landstar purchased approximately 90,000 shares of its common stock at an aggregate cost of $15.4 million. The Company is currently authorized to purchase up to 2,910,339 shares of the Company’s common stock under its previously announced share purchase programs. Landstar announced today that its Board of Directors has declared a quarterly dividend of $0.30 per share payable on May 26, 2023, to stockholders of record as of the close of business on May 4, 2023. It is currently the intention of the Board to pay dividends on a quarterly basis going forward.  

Truck transportation revenue hauled by independent business capacity owners (“BCOs”) and truck brokerage carriers in the 2023 first quarter was $1,323.7 million, or 92 percent of revenue, compared to $1,751.3 million, or 89 percent of revenue, in the 2022 first quarter. Truckload transportation revenue hauled via van equipment in the 2023 first quarter was $755.1 million, compared to $1,081.2 million in the 2022 first quarter. Truckload transportation revenue hauled via unsided/platform equipment in the 2023 first quarter was $377.6 million, compared to $408.8 million in the 2022 first quarter. Revenue from other truck transportation, which is largely related to power-only services, in the 2023 first quarter was $159.5 million, compared to $227.6 million in the 2022 first quarter. Revenue hauled by rail, air and ocean cargo carriers was $86.8 million, or 6 percent of revenue, in the 2023 first quarter, compared to $194.7 million, or 10 percent of revenue, in the 2022 first quarter.

“Given a challenging freight environment to begin our 2023 fiscal year, I am pleased with Landstar’s first quarter financial performance,” said Landstar President and Chief Executive Officer Jim Gattoni. “As we expected, our record 2022 first quarter also made for difficult comparisons during our 2023 first quarter. As compared to the 2022 first quarter, revenue generated via unsided/platform equipment held up considerably better than revenue generated via van equipment and other truck transportation services, which tend to be more correlated to U.S. consumer demand. Our truck services, which primarily operate in the U.S. spot market, experienced pricing pressure throughout the 2023 first quarter as industry-wide truck capacity was significantly more readily available as compared to the 2022 first quarter, during which pandemic-related supply chain disruption was at a high point. As a result, revenue per load on loads hauled via truck decreased 14% in the 2023 first quarter compared to the 2022 first quarter. However, it should be noted that revenue per load on loads hauled via truck only decreased 3.5% in the 2023 first quarter compared to the 2022 fourth quarter. This performance was reasonably in-line with sequential historical patterns experienced during pre-pandemic periods (with 2018 being an exception due to the impact of the December 2017 federal mandate requiring use of electronic logging devices). Truck load volumes also decreased quarter-over-prior-year-quarter, with the number of loads hauled via truck in the 2023 first quarter below the 2022 first quarter by 12%.”

Gattoni further commented, “Through the first several weeks of April, truck revenue per load has thus far sequentially trended slightly below first quarter to the beginning of second quarter pre-pandemic, historical patterns, while the number of loads hauled via truck through the first several weeks of the 2023 second quarter has sequentially trended a bit further below these historical patterns. After several years where past trends were less applicable in light of the impact of the pandemic, I anticipate that as we move into May, we will begin to experience truck revenue per load and truck load volume sequential trends closer to pre-pandemic, historical patterns. Assuming that truck revenue per load and truck load volume sequential trends are in fact closer to pre-pandemic, historical patterns, I expect revenue per load on loads hauled via truck to be in a range of 12% to 14% below the 2022 second quarter and the number of loads hauled via truck to be in a range of 14% to 16% below the 2022 second quarter. As such, I anticipate revenue for the 2023 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 2023 second quarter, I would anticipate DEPS to be in a range of $1.90 to $2.00. During the 2023 first quarter, DEPS was favorably impacted by a lower effective income tax rate and increased net interest income, partially offset by insurance and claims expense at 5.3% of BCO revenue. The anticipated range of DEPS for the 2023 second quarter includes insurance and claims expense estimated to be similar to the insurance and claims expense reported in the 2023 first quarter and an effective income tax rate of 24.4%.”

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 2023 Earnings Release Conference Call.”

About Landstar:
Landstar System, Inc., a Fortune 500 company, is a worldwide, 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: 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 2022 fiscal year; 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; 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; intellectual property; and other operational, financial or legal risks or uncertainties detailed in Landstar’s Form 10-K for the 2022 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.