October 17, 2002 Jacksonville, FL - Landstar System, Inc. (NASDAQ: LSTR) reported 2002 record third quarter net income of $13.9 million, or $.83 per diluted share, compared to net income of $11.9 million, or $.70 per diluted share, in the 2001 third quarter. The 2001 period included $302,000 of goodwill amortization, excluding this charge net income would have been $12.2 million, or $.72 per diluted share. Revenue was a record $385.7 million for the thirteen-week period ended September 28, 2002, compared with $355.7 million for the thirteen-week period ended September 29, 2001. Landstar's carrier group of companies generated $298.9 million of revenue in the 2002 third quarter compared with $276.5 million in the 2001 third quarter. Landstar's multimodal services group of companies generated revenue of $80.0 million in the 2002 third quarter compared with $73.2 million in the 2001 third quarter. Operating margin was 6.1 percent in the 2002 third quarter compared with 5.9 percent, 6.0 percent exclusive of goodwill amortization, in the 2001 third quarter.
Net income for the thirty-nine-week period ended September 28, 2002 was $34.7 million, or $2.06 per diluted share, compared to net income of $31.2 million, or $1.81 per diluted share, for the thirty-nine-week period ended September 29, 2001. The 2001 period included $911,000 of goodwill amortization, excluding this charge net income would have been $32.1 million, or $1.86 per diluted share. Revenue was $1,113 million in the 2002 thirty-nine-week period, compared to revenue of $1,045 million in the comparable 2001 period. Landstar's carrier group of companies generated $878.8 million of revenue in the thirty-nine-week period ended September 28, 2002 compared with $820.1 million in the thirty-nine-week period ended September 29, 2001. Landstar's multimodal services group of companies generated $213.0 million of revenue in the 2002 thirty-nine-week period compared with $207.2 million in the comparable 2001 period.
"I am pleased with Landstar's 2002 third quarter performance," said Landstar Chairman and CEO, Jeff Crowe. "Consolidated revenue increased by more than 8 percent to the highest third quarter revenue in Landstar history. Brokerage revenue at the Carrier Group increased almost 15 percent as we continued to expand our utilization of broker carrier capacity. Truck capacity provided by business capacity owners on the other hand decreased to 8,380, which reflected a difficult recruiting environment. We will continue to use a combination of capacity to service our customers."
"Trailing twelve-month return on average equity remained high at 36 percent and return on invested capital, net income divided by the sum of average equity plus average debt, was above 21 percent. We have reduced debt by more than $29 million since year-end 2001 and ended the quarter with over $67 million in cash and short-term investments. Shareholder's equity represented 68 percent of capitalization, up from 54 percent at year-end," Crowe said. "Landstar's financial condition and strong cash flow continue to provide us with competitive advantages."
"During the third quarter, Landstar purchased 112,879 shares, adjusted for the two for one stock split, of its common stock at a total cost of $5,435,000." Crowe said, "We continue to use the Company's strong cash flow to enhance shareholder value. The Company has the ability to purchase an additional 887,121 shares of its common stock under its authorized share repurchase program."
"As reported by FIRST CALL, the range of analysts' earnings estimates for the 2002 fourth quarter is $.77 to $.92 per diluted share," said Crowe. "Based upon the level of business activity experienced throughout the third quarter, I expect revenue in the 2002 fourth quarter to be approximately 10 percent to 12 percent higher than the revenue in the fourth quarter of 2001 and anticipate earnings for the fourth quarter of 2002 to be in the middle of the current range of analysts' estimates."
Landstar will provide a live webcast of its quarterly earnings conference call this afternoon at 2 p.m. EDT. To access the webcast visit the company's website at www.landstar.com. Click on Investor Relations and then on the microphone at the top of the page. StreetEvents.com will also carry the broadcast live.
This press release contains forward-looking statements, such as statements that relate to Landstar's business objectives, plans, strategies and expectations. The words "believe", "expect", "anticipate", "should" and similar expressions identify forward-looking statements. While made in good faith and with a reasonable basis based on information currently available to Landstar's management, there is no assurance that such opinions, beliefs or expectations will be achieved or accomplished. Various factors could cause actual results and events to vary significantly from those expressed in any forward-looking statement. Such types of statements are intended to be forward- looking statements for purposes of the Private Securities Litigation Reform Act of 1995.
The Company is under no obligation to update any forward-looking statement to the extent it becomes aware that it will not be achieved for any reason.
Landstar System, Inc. is headquartered in Jacksonville, Florida. The Landstar carrier group comprised of Landstar Gemini, Inc., Landstar Inway, Inc., Landstar Ligon, Inc. and Landstar Ranger, Inc. delivers excellence in complete over-the-road transportation services. The Landstar multimodal group comprised of Landstar Express America, Inc. and Landstar Logistics, Inc. delivers excellence in expedited, contract logistics and intermodal transportation services. All Landstar operating companies are certified to ISO 9001:2000 quality management system standards.