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

May 10, 2012 | About:
10qk

10qk

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Landstar System Inc. (LSTR) filed Quarterly Report for the period ended 2012-03-31.

Landstar System has a market cap of $2.51 billion; its shares were traded at around $54.45 with a P/E ratio of 21.2 and P/S ratio of 1. The dividend yield of Landstar System stocks is 0.4%. Landstar System had an annual average earning growth of 9.4% over the past 10 years.

Highlight of Business Operations:

has the opportunity to market all of the services provided by the transportation logistics segment. Freight transportation services are typically charged to customers on a per shipment basis for the physical transportation of freight. Supply chain solution customers are generally charged fees for the services provided. Revenue recognized by the transportation logistics segment when providing capacity to customers to haul their freight is referred to herein as transportation services revenue and revenue for freight management services recognized on a fee-for-service basis is referred to herein as transportation management fees. During the thirteen weeks ended March 31, 2012, transportation services revenue hauled by BCO Independent Contractors, Truck Brokerage Carriers and railroads represented 51%, 42% and 3%, respectively, of the Companys transportation logistics segment revenue. Collectively, transportation services revenue hauled by air and ocean carriers represented 3% of the Companys transportation logistics segment revenue in the thirteen-week period ended March 31, 2012. Transportation management fees represented 1% of the Companys transportation logistics segment revenue in the thirteen-week period ended March 31, 2012.

Revenue for the 2012 thirteen-week period was $649,023,000, an increase of $77,037,000, or 13%, compared to the 2011 thirteen-week period. Revenue increased $76,785,000, or 14%, at the transportation logistics segment. The increase in revenue at the transportation logistics segment was primarily attributable to a 9% increase in the number of loads hauled and an increased revenue per load of approximately 5%. Included in the 2012 and 2011 thirteen-week periods was $4,896,000 and $4,823,000, respectively, of transportation management fee revenue. Revenue at the insurance segment, representing reinsurance premiums from third party insurance companies that provide insurance programs to BCO Independent Contractors where all or a portion of the risk of loss is borne by the Company, was $8,771,000 and $8,519,000 for the 2012 and 2011 thirteen-week periods, respectively.

Truck transportation revenue hauled by BCO Independent Contractors and Truck Brokerage Carriers (together the third-party truck capacity providers) for the thirteen-week period ended March 31, 2012, which represented 92% of total revenue, was $600,204,000, an increase of $79,587,000, or 15%, compared to the 2011 thirteen-week period. The number of loads hauled by third-party truck capacity providers in the 2012 thirteen-week period increased 9% compared to the 2011 thirteen-week period, and revenue per load for third-party truck capacity providers increased 6% compared to the 2011 thirteen-week period. The increase in the number of loads hauled by third-party truck capacity providers was primarily attributable to increased demand, primarily as it relates to truckload services utilizing unsided/platform trailing equipment. The increase in revenue per load on revenue hauled by third-party truck capacity providers was primarily attributable to an increase in the percentage of revenue hauled on unsided/platform equipment, which has a higher revenue per load, and an increased revenue per load on revenue hauled using unsided/platform equipment, due to tighter truck capacity. Fuel surcharges on Truck Brokerage Carrier revenue identified separately in billings to customers and included as a component of Truck Brokerage Carrier revenue were $25,441,000 and $19,308,000 in the 2012 and 2011 periods, respectively. Fuel surcharges billed to customers on revenue hauled by BCO Independent Contractors are excluded from revenue.

Transportation revenue hauled by railroad, air cargo and ocean cargo carriers (together the multimode capacity providers) for the thirteen-week period ended March 31, 2012, which represented 5% of total revenue, was $35,051,000, a decrease of $2,807,000, or 7%, compared to the 2011 thirteen-week period. The number of loads hauled by multimode capacity providers in the 2012 thirteen-week period increased 1% compared to the 2011 thirteen-week period, while revenue per load for the multimode capacity providers decreased 8% over the same period. The decrease in revenue per load on revenue hauled by multimode capacity providers is influenced by many factors including the mode of transportation used, length of haul, complexity of freight, density of freight lanes, fuel costs and availability of capacity.

Other operating costs were 6.1% and 8.2% of gross profit in the 2012 and 2011 thirteen-week periods, respectively. The decrease in other operating costs as a percentage of gross profit was primarily attributable to the effect of increased gross profit and decreased trailing equipment maintenance costs. Insurance and claims were 10.5% of gross profit in the 2012 period and 11.7% of gross profit in the 2011 period. The decrease in insurance and claims as a percentage of gross profit was primarily due to the effect of an increase in the percent of gross profit contributed from revenue hauled by Truck Brokerage Carriers in the 2012 period, which has a lower claims risk profile.

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