July 17, 2003 Jacksonville, FL - Landstar System, Inc. (NASDAQ: LSTR) reported 2003 record second quarter net income of $13.6 million, or $.84 per diluted share, in line with analysts' estimates. Net income in the 2002 second quarter was $12.2 million, or $.72 per diluted share. Revenue was $390.1 million for the thirteen-week period ended June 28, 2003, compared with $391.2 million for the thirteen-week period ended June 29, 2002. Landstar's carrier group of companies generated $303.2 million of revenue in the 2003 second quarter compared with $310.0 million in the 2002 second quarter. In the 2003 and 2002 second quarters, the carrier group invoiced customers $10.0 million and $2.5 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 reported revenue of $79.9 million in the 2003 second quarter compared to $74.3 million in the 2002 second quarter. Operating margin was 5.8 percent in the 2003 second quarter up from 5.4 percent in the 2002 second quarter.
Net income for the twenty-six-week period ended June 28, 2003 was $23.7 million, or $1.45 per diluted share, compared to net income of $20.8 million, or $1.23 per diluted share, for the twenty-six-week period ended June 29, 2002. Revenue was $755.8 million in the 2003 first half, compared to revenue of $726.9 million in the 2002 first half. Landstar's carrier group of companies generated $593.3 million of revenue in the twenty-six-week period ended June 28, 2003 compared with $580.0 million in the twenty-six-week period ended June 29, 2002. In the 2003 and 2002 twenty-six-week periods, the carrier group invoiced customer $18.6 million and $3.2 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 $148.6 million of revenue in the 2003 twenty-six-week period compared with $133.1 million in the 2002 period. Operating margin for the 2003 twenty-six-week period was 5.2 percent compared with 5.0 percent in the 2002 comparable period.
"I am pleased with Landstar's 2003 second quarter performance," said Landstar Chairman and CEO Jeff Crowe. "Revenue in the 2003 second quarter was the second highest second quarter revenue amount in Landstar history. Despite lower revenue from the automotive and expedited sectors, revenue in the 2003 second quarter was approximately the same as revenue in the 2002 second quarter. Revenue generated through other third party truck capacity providers (brokerage) continued to be strong and increased more than 28 percent in the 2003 second quarter. In addition, Landstar improved its operating margin in the 2003 second quarter to 5.8 percent and increased earnings per diluted share 16 percent."
"Trailing twelve-month return on average equity remained high at 37 percent and return on invested capital, net income divided by the sum of average equity plus average debt, was 24 percent. During the 2003 first half, we purchased 775,051 shares of common stock at a total cost of $44,214,000, as we continued to use Landstar's superior cash flow to enhance shareholder value," Crowe said. "The Company has the ability to purchase an additional 670,070 shares of its common stock under its authorized share repurchase program."
"Based upon the current operating environment and anticipated revenue growth of 3 to 8 percent over the 2002 third quarter, I currently estimate 2003 third quarter earnings per diluted share to be within a range of $.80 to $.90 per diluted share," said Crowe.
Landstar will provide a live webcast of its quarterly earnings conference call this afternoon at 1:30 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's carrier group is comprised of Landstar Gemini, Inc., Landstar Inway, Inc., Landstar Ligon, Inc. and Landstar Ranger, Inc. and delivers excellence in complete over-the-road transportation services. Landstar's multimodal group is comprised of Landstar Express America, Inc. and Landstar Logistics, Inc., provides expedited, contract logistics and intermodal transportation services. All Landstar operating companies are certified to ISO 9001:2000 quality management system standards. Landstar System, Inc.'s common stock trades on The NASDAQ Stock Market® under the symbol LSTR.