April 13, 2000 JACKSONVILLE, FL - Landstar System, Inc. (NASDAQ: LSTR) reported record first quarter net income of $8.3 million, or $.89 per diluted share, compared with $7.5 million, or $.71 per diluted share, in the 1999 first quarter. Consolidated operating income in the 2000 first quarter was $15.5 million and represented an operating margin of 4.7 percent compared with consolidated operating income of $13.3 million and an operating margin of 4.3 percent in the 1999 first quarter. Both 2000 operating income and operating margin were the highest first quarter results in Landstar history. Revenue was $327 million for the thirteen weeks ended March 25, 2000, compared with revenue of $311 million for the same time period in 1999.
"The 2000 first quarter operating environment was difficult for our business capacity owners due to increased fuel costs," said Landstar Chairman, President and CEO Jeff Crowe. "Despite this significant challenge, Landstar ended the 2000 first quarter with 8,791 power units, 32 more than at the end of the 1999 first quarter. Fewer power units at Landstar Ligon, which terminated a large fleet in the 1999 fourth quarter due to regulatory compliance issues, and fewer power units at Landstar Gemini, largely offset power unit gains at all other Landstar subsidiaries."
"Overall, Landstar revenue in the 2000 first quarter increased 5 percent over the 1999 first quarter," said Crowe, "slightly better than the prior year's first quarter increase and in line with recent seasonal trends. We are especially encouraged by the 2000 first quarter revenue increase at the multimodal group, which represented a robust 22 percent increase over the prior year first quarter. Landstar operating income rose 16.4 percent in the quarter, as operating income and margins again improved at all of Landstar's operating segments."
As part of a previously announced one million share repurchase program, Landstar bought 206 thousand shares of its common stock at a cost of $11.6 million, or an average cost of $56.19 per share during the 2000 first quarter. At March 25, 2000, Landstar had 658 thousand shares of its common stock remaining to be repurchased under its current authorization.
In the 2000 first quarter, Landstar made the decision to realign the operations of Landstar Gemini, its power only operation, with those of the carrier group. This decision was made to allow Landstar Logistics to better focus on its core business.
Also in the 2000 first quarter, Landstar launched eFr8.com, a freight online information service which enables users to pre-program a system of alerts to bring them results of their customized searches, even when they're not online. "We are pleased with the progress eFr8.com has made so far," said Crowe. "At the end of the first quarter, 2,405 user accounts have been set up and more than 170,000 searches or postings were transacted."
"We are very excited about the future, as the June 2000 relocation of Landstar Ligon from Madisonville, Kentucky to Jacksonville, Florida should result in additional future operating margin expansion," said Crowe. "In addition, the development of wireless data solutions for our business capacity owners, as recently announced, should improve future productivity when operational."
This press release contains forward-looking statements, such as statements that relate to Landstar's business objectives, plans, strategies and expectations. The words "believe", "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 9002 quality management system standards.
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