September 25, 2000 Jacksonville, FL - Landstar System, Inc. (NASDAQ: LSTR) announced it believes earnings, excluding non-recurring charges for both the 2000 third quarter and full year, will be within the range of analyst's earnings estimates of $1.40 to $1.53 per diluted share for the 2000 third quarter and $5.21 to $5.38 per diluted share for the full year.
Revenue for the 2000 third quarter is expected to be slightly higher than the 1999 third quarter. 2000 third quarter revenue, when compared to 1999, will be negatively impacted by the loss of trucks at Landstar Ligon during the first six months of the year. However, the number of trucks operated by Landstar's business capacity owners increased to 8,607 in the 2000 third quarter, up from 8,563 at the end of the June quarter.
Landstar also announced that it had completed its previously authorized, 1 million share buyback program during the 2000 third quarter. As a result of the completion of this program, Landstar currently has 8,393,533 shares of common stock outstanding. Since 1997, the Company has repurchased 4,679,000 shares of its common stock at an average cost of $36.71 per share.
Landstar said it expected to record an after tax, non-recurring charge in the amount of $1,350,000, or $.16 per diluted share, in the 2000 third quarter, representing its estimated withdrawal liability from the Teamster's Central States Southeast and Southwest Areas Pension Fund (the "Fund"), effective October 1, 2000.
Under a prior collective bargaining agreement, Landstar Ranger, Inc. ("Landstar Ranger") was required to make contributions to various Teamster pension funds for 205 drivers regardless of the actual number of union drivers at Landstar Ranger. Effective April 1, 2000, a new collective bargaining agreement required Landstar Ranger to make pension contributions for only the actual number of union drivers. As a result of the elimination of Landstar Ranger's requirement to make contributions for more than the actual number of Landstar Ranger union drivers, the Trustees of the Fund have terminated Landstar Ranger's participation in the Fund effective October 1, 2000. Accordingly, Landstar's third quarter results of operations will reflect a non-recurring pre-tax charge of approximately $2.2 million for this estimated withdrawal liability. Management estimates the elimination of the requirement to make contributions for more than the actual number of Landstar Ranger union drivers will result in annual savings of approximately $800,000.
Landstar Chairman, President and Chief Executive Officer Jeff Crowe said, "The 2000 third quarter overall performance demonstrates the strengths of the Landstar business model. Despite increased fuel costs and a softening economy, Landstar's third quarter earnings per share before the one-time charge will be within street estimates and well above the prior years' third quarter amount. We are pleased to see our truck count increase from the end of the June 2000 quarter, as the bulk of the difficulties attributable to the restructuring of Landstar Ligon are now behind us."
This press release contains forward-looking statements, such as statements which 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's 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. Landstar's 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. Landstar System, Inc.'s common stock trades on the NASDAQ Stock Market® under the symbol LSTR.