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Landstar System Inc. Reports Operating Results (10-Q)

October 28, 2011 | About:
10qk

10qk

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Landstar System Inc. (LSTR) filed Quarterly Report for the period ended 2011-09-24.

Landstar System Inc. has a market cap of $2.18 billion; its shares were traded at around $45.73 with a P/E ratio of 22.5 and P/S ratio of 0.9. The dividend yield of Landstar System Inc. stocks is 0.5%. Landstar System Inc. had an annual average earning growth of 9.5% over the past 10 years.

Highlight of Business Operations:

Revenue for the 2011 thirty-nine-week period was $1,931,560,000, an increase of $118,925,000, or 7%, compared to the 2010 thirty-nine-week period. Revenue increased $118,930,000, or 7%, at the transportation logistics segment. The increase in revenue at the transportation logistics segment was primarily attributable to a higher revenue per load of approximately 10%, partially offset by a 3% decrease in the number of loads hauled. Included in the 2011 and 2010 thirty-nine-week periods were transportation management fees of $15,417,000 and $13,246,000, respectively.

Truck transportation revenue hauled by BCO Independent Contractors and Truck Brokerage Carriers (together the third-party truck capacity providers) for the thirty-nine-week period ended September 24, 2011, which represented 92% of total revenue, was $1,767,978,000, an increase of $96,568,000, or 6%, compared to the 2010 thirty-nine-week period. The number of loads hauled by third-party truck capacity providers in the 2011 thirty-nine-week period decreased 3% compared to the 2010 thirty-nine-week period, while revenue per load increased 10% over the same period. The decrease in the number of loads hauled by third-party truck capacity providers was primarily attributable to the 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 $55,254,000 and $196,159,000 in the 2011 and 2010 thirty-nine-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 domestic market during the thirty nine weeks ended September 24, 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 $71,129,000 and $62,304,000 in the 2011 and 2010 periods, respectively. Fuel surcharges billed to customers on revenue hauled by BCO Independent Contractors are excluded from revenue.

Revenue for the 2011 thirteen-week period was $684,013,000, an increase of $61,187,000, or 10%, compared to the 2010 thirteen-week period. Revenue increased $61,143,000, or 10%, at the transportation logistics segment. The increase in revenue at the transportation logistics segment was primarily attributable to a higher revenue per load of approximately 9% and a 1% increase in the number of loads hauled. Included in the 2011 and 2010 thirteen-week periods were transportation management fees of $4,998,000 and $4,254,000, respectively.

Truck transportation revenue hauled by third-party truck capacity providers for the thirteen-week period ended September 24, 2011, which represented 91% of total revenue, was $625,839,000, an increase of $52,328,000, or 9%, compared to the 2010 thirteen-week period. During the 2011 and 2010 thirteen week periods, less-than-truckload substitute line haul revenue was $17,111,000 and $48,408,000, respectively. The number of loads hauled by third-party truck capacity providers in the 2011 thirteen-week period increased 1% compared to the 2010 thirteen-week period and revenue per load increased 8% over the same period. The increase in revenue per load on revenue hauled by third-party truck capacity providers was primarily attributable to tighter truck capacity in the domestic market during the thirteen weeks ended September 24, 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 $25,903,000 and $20,289,000 in the 2011 and 2010 periods, respectively. Fuel surcharges billed to customers on revenue hauled by BCO Independent Contractors are excluded from revenue.

Other operating costs were 5.8% and 6.4% of gross profit in the 2011 and 2010 periods, respectively. The decrease in other operating costs as a percentage of gross profit was primarily attributable to the effect of increased gross profit. Insurance and claims were 8.5% of gross profit in the 2011 period and 11.4% of gross profit in the 2010 period. The decrease in insurance and claims as a percentage of gross profit was primarily due to an increase in the percent of gross profit contributed from revenue hauled by Truck Brokerage Carriers, which has a lower claims risk profile, favorable development of prior year claims in the 2011 period and unfavorable development of prior year claims in the 2010 period, partially offset by an increased cost of cargo claims. Selling, general and administrative costs were 35.4% of gross profit in the 2011 period and 40.7% of gross profit in the 2010 period. The decrease in selling, general and administrative costs as a percentage of gross profit was primarily attributable to the effect of increased gross profit and a one-time charge recorded in the 2010 period of $3,800,000 related to the buyout by the Company of its remaining contingent payment obligations from an acquisition completed in 2009. Depreciation and amortization was 5.9% of gross profit in the 2011 period compared with 6.4% in the 2010 period. The decrease in depreciation and amortization as a percentage of gross profit was primarily due to the effect of increased gross profit.

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