JACKSONVILLE, Fla., -- Landstar System, Inc. reported record third quarter revenue of $733 million and record third quarter diluted earnings per share of $0.62 in the 2008 third quarter, compared to revenue of $635 million and diluted earnings per share of $0.54 in the 2007 third quarter. Net income was $32.8 million in the 2008 third quarter compared to net income of $29.3 million in the 2007 third quarter.

Revenue hauled by BCO Independent Contractors in the third quarter of 2008 was $371 million, or 51 percent of revenue, compared to $351 million, or 55 percent of revenue, in the 2007 third quarter. In the 2008 and 2007 third quarters, the Company invoiced customers $92 million and $45 million, respectively, in fuel surcharges that were passed on 100 percent to BCO Independent Contractors and excluded from revenue. Revenue hauled by third- party truck brokerage carriers was $276 million, or 38 percent of revenue, in the 2008 third quarter compared to $225 million, or 35 percent of revenue, in the 2007 third quarter. Revenue hauled by rail, air, and ocean cargo carriers was $49 million, or 7 percent of revenue, in the 2008 third quarter compared to $46 million, or 7 percent of revenue, in the 2007 third quarter.

Revenue in the thirty-nine-week period ended September 27, 2008 increased approximately 11 percent to $2.039 billion compared to $1.844 billion in the 2007 thirty-nine-week period. Net income for the 2008 thirty-nine-week period was $86.3 million, or $1.62 per diluted share, compared to net income of $80.6 million, or $1.45 per diluted share, for the 2007 thirty-nine-week period.

Revenue hauled by BCO Independent Contractors in the 2008 thirty-nine-week period was $1.071 billion, or 53 percent of revenue, compared to $1.036 billion, or 56 percent of revenue, in the 2007 thirty-nine-week period. In the 2008 and 2007 thirty-nine-week periods, the Company invoiced customers $241 million and $125 million, respectively, in fuel surcharges that were passed on 100 percent to BCO Independent Contractors and excluded from revenue. Revenue hauled by third-party truck brokerage carriers was $766 million, or 38 percent of revenue, in the 2008 thirty-nine-week period compared to $648 million, or 35 percent of revenue, in the 2007 thirty-nine- week period. Revenue hauled by rail, air, and ocean cargo carriers was $146 million, or 7 percent of revenue, in the 2008 thirty-nine-week period compared to $126 million, or 7 percent of revenue, in the 2007 thirty-nine-week period.

Revenue, net income, and diluted earnings per share in the 2008 thirteen and thirty-nine week periods included $27.6 million, $1.7 million, and $0.03 diluted earnings per share, respectively, for bus capacity provided in connection with evacuation assistance related to the storms that recently impacted the Gulf Coast.

Landstar System, Inc. announced that its Board of Directors has declared a quarterly dividend of $0.04 per share. The dividend is payable on November 28, 2008 to stockholders of record at the close of business on November 3, 2008. It is the intention of the Board of Directors to continue to pay a quarterly dividend. During the 2008 third quarter, Landstar purchased approximately 580,000 shares of its common stock at a total cost of $28.5 million. As of September 27, 2008, there were approximately 2,155,000 shares of the Company's common stock available for purchase under Landstar's authorized share purchase programs.

"Landstar's 2008 third quarter performance was remarkable," said Landstar President and Chief Executive Officer Henry Gerkens. "Revenue and diluted earnings per share in the 2008 third quarter were the highest third quarter revenue and diluted earnings per share in the Company's history. Landstar delivered a 15% increase in revenue over the 2007 third quarter and experienced strong revenue increases across multiple service offerings. Excluding the revenue from bus evacuation services, revenue increased 11% quarter over quarter. Landstar's 2008 third quarter diluted earnings per share increased 15% over its 2007 third quarter diluted earnings per share." Gerkens continued, "The 2008 third quarter included approximately $0.03 per diluted share of costs related to employee bonus accruals not included in the 2007 third quarter and approximately $0.03 per diluted share of income from bus evacuation services. As anticipated, operating margin was slightly impacted by a change in revenue mix, and was 7.5 percent in the 2008 third quarter, compared to 7.8 percent in the 2007 third quarter."

"The resiliency of Landstar's variable cost business model continues to generate outstanding returns and to provide the Company with a strong balance sheet. Trailing twelve month return on average shareholders' equity remained high at 53 percent and trailing twelve month return on invested capital, net income divided by the sum of average equity plus average debt, was 31 percent. As of September 27, 2008, the Company had $103 million in cash and short-term investments and $87 million in outstanding borrowings under its senior credit facility, primarily resulting from borrowings to finance the purchase of its common stock under its authorized share purchase programs. As of September 27, 2008, there was $110 million available for borrowings under the Company's senior credit facility."

Gerkens continued, "Notwithstanding Landstar's impressive third quarter results, the Company experienced reduced freight demand during the latter part of the 2008 third quarter. This trend has continued into early October and based upon the current uncertain economic outlook, I don't foresee that trend reversing in the 2008 fourth quarter. I do anticipate increased revenue in the 2008 fourth quarter when compared to the 2007 fourth quarter. However, that rate of growth will not be at the level experienced in the first nine months of 2008 versus the first nine months of the prior year. I anticipate diluted earnings per share for the 2008 fourth quarter to be similar to that reported in the 2007 fourth quarter."

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