Landstar System Inc. Reports Operating Results (10-Q)
Landstar System Inc. has a market cap of $2.29 billion; its shares were traded at around $47.88 with a P/E ratio of 25.1 and P/S ratio of 0.9. The dividend yield of Landstar System Inc. stocks is 0.4%. Landstar System Inc. had an annual average earning growth of 9.5% over the past 10 years.
Highlight of Business Operations: Potential liability associated with accidents in the trucking industry is severe and occurrences are unpredictable. For commercial trucking claims, Landstar retains liability up to $5,000,000 per occurrence. The Company also retains liability for each general liability claim up to $1,000,000, $250,000 for each workers compensation claim and up to $250,000 for each cargo claim. The Companys exposure to liability associated with accidents incurred by Truck Brokerage Carriers, rail intermodal capacity providers and air cargo and ocean cargo carriers who transport freight on behalf of the Company is reduced by various factors including the extent to which they maintain their own insurance coverage. A material increase in the frequency or severity of accidents, cargo claims or workers compensation claims or the unfavorable development of existing claims could be expected to materially adversely affect Landstars results of operations.
Revenue for the 2011 thirteen-week period was $571,986,000, an increase of $23,898,000, or 4%, compared to the 2010 thirteen-week period. Revenue increased $23,852,000, or 4%, at the transportation logistics segment. Included in the 2011 and 2010 thirteen-week periods was $4,823,000 and $4,064,000, respectively, of transportation management fees. The increase in revenue at the transportation logistics segment was primarily attributable to a higher revenue per load of approximately 10%, partly offset by a 5% decrease in the number of loads hauled.
Truck transportation revenue hauled by BCO Independent Contractors and Truck Brokerage Carriers (together the third-party truck capacity providers), which represented 91% of total revenue for the thirteen-week period ended March 26, 2011, was $520,617,000, an increase of $14,721,000, or 3%, compared to the 2010 thirteen-week period. The number of loads hauled by third-party truck capacity providers in the 2011 thirteen-week period decreased 6% compared to the 2010 thirteen-week period, while revenue per load increased 9% over the same period. The decrease in the number of loads hauled by third-party truck capacity providers was primarily attributable to an anticipated reduction of freight hauled on behalf of one customer in the Companys less-than-truckload substitute line haul service offering. Less-than-truckload substitute line haul revenue was $19,350,000 and $77,220,000 in the 2011 and 2010 thirteen-week periods, respectively. The increase in revenue per load on revenue hauled by third-party truck capacity providers was primarily attributable to tighter truck capacity in the U.S market during the thirteen weeks ended March 26, 2011. Fuel surcharges on Truck Brokerage Carrier revenue identified separately in billings to customers and included as a component of Truck Brokerage Carrier revenue were $19,308,000 and $18,959,000 in the 2011 and 2010 periods, respectively. Fuel surcharges billed to customers on revenue hauled by BCO Independent Contractors are excluded from revenue.
Net income attributable to the Company was $20,619,000, or $0.43 per common share ($0.43 per diluted share), in the 2011 thirteen-week period. Net income attributable to the Company was $17,176,000, or $0.34 per common share ($0.34 per diluted share), in the 2010 thirteen-week period.
The Company paid $0.05 per share, or $2,394,000, in cash dividends during the thirteen-week period ended March 26, 2011. It is the intention of the Board of Directors to continue to pay a quarterly dividend. As of March 26, 2011, the Company may purchase up to an additional 722,662 shares of its common stock under its authorized stock purchase program. Long-term debt, including current maturities, was $115,588,000 at March 26, 2011, $6,023,000 lower than at December 25, 2010.
At March 26, 2011, the Company had $80,000,000 in borrowings outstanding and $33,699,000 of letters of credit outstanding under the Credit Agreement. At March 26, 2011, there was $111,301,000 available for future borrowings under the Credit Agreement. In addition, the Company has $45,165,000 in letters of credit outstanding as collateral for insurance claims that are secured by investments
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