April 17, 2003 Jacksonville, FL - Landstar System, Inc. (NASDAQ: LSTR) reported 2003 record first quarter net income of $10.2 million, or $.62 per diluted share, compared with net income of $8.5 million, or $.51 per diluted share, in the 2002 first quarter. Revenue was a record $366 million for the thirteen-week period ended March 29, 2003, compared with revenue of $336 million in the comparable 2002 period. Operating margin was 4.7 percent in the 2003 first quarter compared with 4.5 percent in the 2002 first quarter.
Landstar's carrier group of companies generated $290 million of revenue in the 2003 first quarter compared with revenue of $270 million in the 2002 first quarter. In the 2003 and 2002 first quarters, the carrier group invoiced customers $8.6 million and $.8 million, respectively, of fuel surcharges that were passed on 100 percent to business capacity owners and excluded from revenue. Landstar's multimodal services group of companies generated $69 million of revenue in the 2003 first quarter compared with $59 million of revenue in the 2002 first quarter.
"I am very pleased with Landstar's 2003 first quarter performance," said Landstar Chairman and CEO Jeff Crowe. "Earnings per diluted share increased 22 percent quarter over quarter. Consolidated revenue increased by nearly 9 percent to the highest first quarter revenue in Landstar history. Compared to the 2002 first quarter, revenue generated through other third party truck capacity providers (brokerage) increased more than 37 percent, revenue generated through rail and air carriers increased nearly 18 percent and revenue hauled by Landstar BCOs increased more than 2 percent. In addition, revenue from the U.S. Government increased approximately $21 million compared to the 2002 first quarter. In the 2003 first quarter, we continued to increase revenue by providing our customers with the most efficient form of safe capacity available while improving our operating margin," Crowe said.
"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 23 percent. During the 2003 first quarter, we purchased 159,851 shares of common stock at a total cost of $8,467,000 and reduced debt by more than $15 million. Shareholder's equity represented 72 percent of total capitalization, up from 66 percent at the end of 2002," Crowe said. "The Company has the ability to purchase an additional 285,270 shares of its common stock under its authorized share repurchase program."
"As reported by FIRST CALL, the current range of analysts' earnings estimates for the second quarter of 2003 is $.78 to $.88 per diluted share. Currently, I anticipate results to be within that range. The current range of analysts' earnings estimates for the 2003 fiscal year is $3.15 to $3.45. I am currently more comfortable with the middle of that range," said Crowe.
Landstar will provide a live webcast of its quarterly earnings conference call this afternoon at 2 pm ET. To access the webcast, visit the company's website at www.landstar.com. Click on Investors and then the webcast icon.
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," "plans," "predicts," "may," "should," "will," the negative thereof and similar expressions, including any such expressions with respect to our level of comfort with analyst estimates, are intended to identify forward-looking statements. Such statements are by nature subject to uncertainties and risks, including but not limited to: an increase in the frequency or severity of accidents or workers' compensation claims; unfavorable development of existing accident claims; dependence on independent sales agents; dependence on third party capacity providers; disruptions or failures in our computer systems; a downturn in domestic economic growth or growth in the transportation sector; and substantial industry competition. 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 Landstar undertakes no obligation to publicly update or revise any forward-looking statements.
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 safe and complete over-the-road transportation services. The Landstar multimodal group comprised of Landstar Express America, Inc. and Landstar Logistics, Inc. delivers excellence in safe, expedited, contract logistics and intermodal transportation services. All Landstar operating companies are certified to ISO 9001:2000 quality management system standards.