October 16, 2003 Jacksonville, FL - Landstar System, Inc. (NASDAQ: LSTR) reported 2003 third quarter net income of $11.8 million, or $.76 per diluted share. As previously disclosed, the 2003 third quarter included $3.2 million of costs to defend and settle the Gulf Bridge lawsuit. These costs, net of related income tax benefits, reduced net income in the 2003 period by $2.0 million, or $.13 per diluted share. Excluding the costs related to this litigation, net income was $13.9 million, or $.89 per diluted share. Net income in the 2002 third quarter was $13.9 million, or $.83 per diluted share. Revenue was a record $406.8 million for the thirteen-week period ended September 27, 2003, compared with $385.7 million for the thirteen-week period ended September 28, 2002. Landstar's carrier group of companies generated $307.8 million of revenue in the 2003 third quarter compared with $298.9 million in the 2002 third quarter. In the 2003 and 2002 third quarters, the carrier group invoiced customers $7.8 million and $3.0 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 revenue of $91.9 million in the 2003 third quarter compared with $80.0 million in the 2002 third quarter.
Net income for the thirty-nine-week period ended September 27, 2003 was $35.6 million, or $2.21 per diluted share. The 2003 thirty-nine-week period included $4.2 million of costs to defend and settle the Gulf Bridge lawsuit. These costs, net of related income tax benefits, reduced net income in the 2003 thirty-nine-week period by $2.7 million, or $.16 per diluted share. Excluding the costs related to this litigation, net income was $38.2 million, or $2.37 per diluted share, compared to $34.7 million, or $2.06 per diluted share in the 2002 thirty-nine-week period.
Revenue was $1,163 million in the 2003 thirty-nine-week period, compared to revenue of $1,113 million in the 2002 period. Landstar's carrier group of companies generated $901.0 million of revenue in the thirty-nine-week period ended September 27, 2003 compared with $878.8 million in the thirty-nine-week period ended September 28, 2002. In the 2003 and 2002 thirty-nine-week periods, the carrier group invoiced customers $26.4 million and $6.2 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 $240.6 million of revenue in the 2003 thirty-nine-week period compared with $213.0 million in the comparable 2002 period.
Landstar also announced that its Board of Directors has declared a two-for-one stock split to be effected in the form of a 100% stock dividend. Stockholders will receive one additional share for every share held on the record date for the stock-split, which is November 3, 2003. Additional shares will be mailed or delivered on or about November 13, 2003 by the Company's Transfer Agent, The Bank of New York.
"I am pleased with Landstar's 2003 third quarter performance," said Landstar Chairman and CEO, Jeff Crowe. "Revenue in the 2003 third quarter was the highest third quarter revenue amount in Landstar history. Overall, revenue increased 5.5 percent over the 2002 third quarter. Revenue generated through other third party truck capacity providers (brokerage) continued to be strong and increased more than 23 percent over the 2002 third quarter. In addition, 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 third quarter, we purchased 480,000 shares of common stock at a total cost of $29,630,000," Crowe said.
"Based upon the current operating environment, I currently believe Landstar will earn between $.85 to $.95 per diluted share for the fourth quarter."
Landstar will provide a live webcast of its quarterly earnings conference call this afternoon at 2 p.m. 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., providing 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.
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