8-K
LANDSTAR SYSTEM INC (LSTR)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 26, 2023
LANDSTAR SYSTEM, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 021238 | 06-1313069 |
|---|---|---|
| (State or other jurisdiction<br> <br>of incorporation) | (Commission<br> <br>File Number) | (I.R.S. Employer<br> <br>Identification No.) |
| 13410 Sutton Park Drive South, Jacksonville, Florida | 32224 | |
| --- | --- | |
| (Address of principal executive offices) | (Zip Code) |
(904) 398-9400
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br>Symbol(s) | Name of each exchange<br> <br>on which registered |
|---|---|---|
| Common Stock | LSTR | NASDAQ |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition
On April 26, 2023, Landstar System, Inc. (“Landstar” or the “Company”) issued a press release announcing results for the first quarter of fiscal 2023. A copy of the press release is attached hereto as Exhibit 99.1.
The information contained in Item 7.01 concerning the presentation to Landstar investors is hereby incorporated into this Item 2.02 by reference.
The information furnished under Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.
Item 7.01 Regulation FD Disclosure
A slide presentation, dated April 26, 2023, is attached hereto as Exhibit 99.2 and is incorporated herein by reference. The slide presentation provides information that may be referred to by the Company on its conference call with investors scheduled to occur on April 27, 2023 in connection with the Company’s release of results for the first quarter of fiscal 2023.
The information furnished under Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.2 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.
Item 9.01 Financial Statements and Exhibits
| Exhibits | |
|---|---|
| 99.1 | Press Release, dated April 26, 2023, of Landstar System, Inc. |
| 99.2 | Slide Presentation, dated April 26, 2023, of Landstar System, Inc. |
| 104 | Inline XBRL for the cover page of this Current Report on Form 8-K |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| LANDSTAR SYSTEM, INC. | |||
|---|---|---|---|
| Date: April 26, 2023 | By: | /s/ James P. Todd | |
| Name: | James P. Todd | ||
| Title: | Vice President, Chief Financial Officer and Assistant Secretary |
EX-99.1
Exhibit 99.1
| For Immediate Release | Contact: Jim Todd (CFO) |
|---|---|
| Landstar System, Inc. | |
| www.landstar.com | |
| April 26, 2023 | 904-398-9400 |
LANDSTAR SYSTEM REPORTS
FIRST QUARTER REVENUE OF $1.436B AND
FIRST QUARTER DILUTED EARNINGS PER SHARE OF $2.17
Jacksonville, FL - Landstar System, Inc. (NASDAQ: LSTR) (“Landstar” or the “Company”) reported diluted earnings per share (“DEPS”) of $2.17 in the 2023 first quarter on revenue of $1.436 billion. Landstar reported DEPS of $3.34 on revenue of $1.971 billion in the 2022 first quarter.
Gross profit in the 2023 first quarter was $152.9 million and variable contribution (defined as revenue less the cost of purchased transportation and commissions to agents) in the 2023 first quarter was $208.7 million. Gross profit in the 2022 first quarter was $214.6 million and variable contribution in the 2022 first quarter was $270.5 million. Reconciliations of gross profit to variable contribution and gross profit margin to variable contribution margin for the 2023 and 2022 first quarters are provided in the Company’s accompanying financial disclosures.
Trailing twelve month return on average shareholders’ equity was 44 percent and return on invested capital, representing net income divided by the sum of average equity plus average debt, was 38 percent. During the 2023 first quarter, Landstar purchased approximately 90,000 shares of its common stock at an aggregate cost of $15.4 million. The Company is currently authorized to purchase up to 2,910,339 shares of the Company’s common stock under its previously announced share purchase programs. Landstar announced today that its Board of Directors has declared a quarterly dividend of $0.30 per share payable on May 26, 2023, to stockholders of record as of the close of business on May 4, 2023. It is currently the intention of the Board to pay dividends on a quarterly basis going forward.
LANDSTAR SYSTEM/2
Truck transportation revenue hauled by independent business capacity owners (“BCOs”) and truck brokerage carriers in the 2023 first quarter was $1,323.7 million, or 92 percent of revenue, compared to $1,751.3 million, or 89 percent of revenue, in the 2022 first quarter. Truckload transportation revenue hauled via van equipment in the 2023 first quarter was $755.1 million, compared to $1,081.2 million in the 2022 first quarter. Truckload transportation revenue hauled via unsided/platform equipment in the 2023 first quarter was $377.6 million, compared to $408.8 million in the 2022 first quarter. Revenue from other truck transportation, which is largely related to power-only services, in the 2023 first quarter was $159.5 million, compared to $227.6 million in the 2022 first quarter. Revenue hauled by rail, air and ocean cargo carriers was $86.8 million, or 6 percent of revenue, in the 2023 first quarter, compared to $194.7 million, or 10 percent of revenue, in the 2022 first quarter.
“Given a challenging freight environment to begin our 2023 fiscal year, I am pleased with Landstar’s first quarter financial performance,” said Landstar President and Chief Executive Officer Jim Gattoni. “As we expected, our record 2022 first quarter also made for difficult comparisons during our 2023 first quarter. As compared to the 2022 first quarter, revenue generated via unsided/platform equipment held up considerably better than revenue generated via van equipment and other truck transportation services, which tend to be more correlated to U.S. consumer demand. Our truck services, which primarily operate in the U.S. spot market, experienced pricing pressure throughout the 2023 first quarter as industry-wide truck capacity was significantly more readily available as compared to the 2022 first quarter, during which pandemic-related supply chain disruption was at a high point. As a result, revenue per load on loads hauled via truck decreased 14% in the 2023 first quarter compared to the 2022 first quarter. However, it should be noted that revenue per load on loads hauled via truck only decreased 3.5% in the 2023 first quarter compared to the 2022 fourth quarter. This performance was reasonably in-line with sequential historical patterns experienced during pre-pandemic periods (with 2018 being an exception due to the impact of the December 2017 federal mandate requiring use of electronic logging devices). Truck load volumes also decreased quarter-over-prior-year-quarter, with the number of loads hauled via truck in the 2023 first quarter below the 2022 first quarter by 12%.”
LANDSTAR SYSTEM/3
Gattoni further commented, “Through the first several weeks of April, truck revenue per load has thus far sequentially trended slightly below first quarter to the beginning of second quarter pre-pandemic, historical patterns, while the number of loads hauled via truck through the first several weeks of the 2023 second quarter has sequentially trended a bit further below these historical patterns. After several years where past trends were less applicable in light of the impact of the pandemic, I anticipate that as we move into May, we will begin to experience truck revenue per load and truck load volume sequential trends closer to pre-pandemic, historical patterns. Assuming that truck revenue per load and truck load volume sequential trends are in fact closer to pre-pandemic, historical patterns, I expect revenue per load on loads hauled via truck to be in a range of 12% to 14% below the 2022 second quarter and the number of loads hauled via truck to be in a range of 14% to 16% below the 2022 second quarter. As such, I anticipate revenue for the 2023 second quarter to be in a range of $1.40 billion to $1.45 billion.”
Gattoni concluded, “Based on the range of revenue estimated for the 2023 second quarter, I would anticipate DEPS to be in a range of $1.90 to $2.00. During the 2023 first quarter, DEPS was favorably impacted by a lower effective income tax rate and increased net interest income, partially offset by insurance and claims expense at 5.3% of BCO revenue. The anticipated range of DEPS for the 2023 second quarter includes insurance and claims expense estimated to be similar to the insurance and claims expense reported in the 2023 first quarter and an effective income tax rate of 24.4%.”
Landstar will provide a live webcast of its quarterly earnings conference call tomorrow morning at 8:00 a.m. ET. To access the webcast, visit the Company’s website at www.landstar.com; click on “Investor Relations” and “Webcasts,” then click on “Landstar’s First Quarter 2023 Earnings Release Conference Call.”
About Landstar:
Landstar System, Inc., a Fortune 500 company, is a worldwide, technology-enabled, asset-light provider of integrated transportation management solutions delivering safe,
LANDSTAR SYSTEM/4
specialized transportation services to a broad range of customers utilizing a network of agents, third-party capacity providers and employees. Landstar transportation services companies are certified to ISO 9001:2015 quality management system standards and RC14001:2015 environmental, health, safety and security management system standards. Landstar System, Inc. is headquartered in Jacksonville, Florida. Its common stock trades on The NASDAQ Stock Market® under the symbol LSTR.
Non-GAAP Financial Measures*:*
In this earnings release and accompanying financial disclosures, the Company provides the following information that may be deemed a non-GAAP financial measure: variable contribution and variable contribution margin. The Company believes variable contribution and variable contribution margin are useful measures of the variable costs that we incur at a shipment-by-shipment level attributable to our transportation network of third-party capacity providers and independent agents in order to provide services to our customers. The Company also believes that it is appropriate to present each of the financial measures that may be deemed a non-GAAP financial measure, as referred to above, for the following reasons: (1) disclosure of these matters will allow investors to better understand the underlying trends in the Company’s financial condition and results of operations; (2) this information will facilitate comparisons by investors of the Company’s results as compared to the results of peer companies; and (3) management considers this financial information in its decision making.
Forward Looking Statements Disclaimer:
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,” “intention,” “expects,” “plans,” “predicts,” “may,” “should,” “could,” “will,” the negative thereof and similar expressions are intended to identify forward-looking statements. Such statements are by nature subject to uncertainties and risks, including but not limited to: the impact of the Russian conflict with Ukraine on the operations of certain independent commission sales agents, including the Company’s largest such agent by revenue in the
LANDSTAR SYSTEM/5
2022 fiscal year; the impact of the coronavirus (COVID-19) pandemic; an increase in the frequency or severity of accidents or other claims; unfavorable development of existing accident claims; dependence on third party insurance companies; dependence on independent commission sales agents; dependence on third party capacity providers; decreased demand for transportation services; U.S. trade relationships; substantial industry competition; disruptions or failures in the Company’s computer systems; cyber and other information security incidents; dependence on key vendors; potential changes in taxes; status of independent contractors; regulatory and legislative changes; regulations focused on diesel emissions and other air quality matters; intellectual property; and other operational, financial or legal risks or uncertainties detailed in Landstar’s Form 10-K for the 2022 fiscal year, described in Item 1A Risk Factors, and in other SEC filings from time to time. 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 the Company undertakes no obligation to publicly update or revise any forward-looking statements.
LANDSTAR SYSTEM/6
Landstar System, Inc. and Subsidiary
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)
| Thirteen Weeks Ended | |||||
|---|---|---|---|---|---|
| April 1,<br>2023 | March 26,<br>2022 | ||||
| Revenue | $ | 1,435,675 | $ | 1,970,599 | |
| Investment income | 1,368 | 721 | |||
| Costs and expenses: | |||||
| Purchased transportation | 1,101,294 | 1,550,330 | |||
| Commissions to agents | 125,675 | 149,778 | |||
| Other operating costs, net of gains on asset sales/dispositions | 12,378 | 11,141 | |||
| Insurance and claims | 27,647 | 30,768 | |||
| Selling, general and administrative | 53,567 | 52,713 | |||
| Depreciation and amortization | 15,198 | 13,757 | |||
| Total costs and expenses | 1,335,759 | 1,808,487 | |||
| Operating income | 101,284 | 162,833 | |||
| Interest and debt (income) expense | (726 | ) | 1,123 | ||
| Income before income taxes | 102,010 | 161,710 | |||
| Income taxes | 23,815 | 36,871 | |||
| Net income | $ | 78,195 | $ | 124,839 | |
| Diluted earnings per share | $ | 2.17 | $ | 3.34 | |
| Average diluted shares outstanding | 35,982,000 | 37,418,000 | |||
| Dividends per common share | $ | 0.30 | $ | 0.25 |
LANDSTAR SYSTEM/7
Landstar System, Inc. and Subsidiary
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
(Unaudited)
| December 31,<br>2022 | |||||
|---|---|---|---|---|---|
| ASSETS | |||||
| Current assets: | |||||
| Cash and cash equivalents | 340,987 | $ | 339,581 | ||
| Short-term investments | 47,168 | 53,955 | |||
| Trade accounts receivable, less allowance of 12,577 and 12,121 | 899,811 | 967,793 | |||
| Other receivables, including advances to independent contractors, less allowance of 11,758 and<br>10,579 | 53,242 | 56,235 | |||
| Other current assets | 12,684 | 21,826 | |||
| Total current assets | 1,353,892 | 1,439,390 | |||
| Operating property, less accumulated depreciation and amortization of 406,648 and<br>393,274 | 306,224 | 314,990 | |||
| Goodwill | 41,726 | 41,220 | |||
| Other assets | 136,018 | 136,279 | |||
| Total assets | 1,837,860 | $ | 1,931,879 | ||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||
| Current liabilities: | |||||
| Cash overdraft | 66,195 | $ | 92,953 | ||
| Accounts payable | 490,304 | 527,372 | |||
| Current maturities of long-term debt | 33,801 | 36,175 | |||
| Insurance claims | 50,064 | 50,836 | |||
| Dividends payable | — | 71,854 | |||
| Other current liabilities | 100,980 | 98,945 | |||
| Total current liabilities | 741,344 | 878,135 | |||
| Long-term debt, excluding current maturities | 60,191 | 67,225 | |||
| Insurance claims | 57,974 | 58,268 | |||
| Deferred income taxes and other non-current<br>liabilities | 42,699 | 41,030 | |||
| Shareholders’ equity: | |||||
| Common stock, 0.01 par value, authorized 160,000,000 shares, issued 68,483,963 and<br>68,382,310 | 685 | 684 | |||
| Additional paid-in capital | 253,138 | 258,487 | |||
| Retained earnings | 2,703,349 | 2,635,960 | |||
| Cost of 32,550,852 and 32,455,300 shares of common stock in treasury | (2,009,327 | ) | (1,992,886 | ) | |
| Accumulated other comprehensive loss | (12,193 | ) | (15,024 | ) | |
| Total shareholders’ equity | 935,652 | 887,221 | |||
| Total liabilities and shareholders’ equity | 1,837,860 | $ | 1,931,879 |
All values are in US Dollars.
LANDSTAR SYSTEM/8
Landstar System, Inc. and Subsidiary
Supplemental Information
(Unaudited)
| Thirteen Weeks Ended | ||||||
|---|---|---|---|---|---|---|
| April 1,<br>2023 | March 26,<br>2022 | |||||
| Revenue generated through (in thousands): | ||||||
| Truck transportation | ||||||
| Truckload: | ||||||
| Van equipment | $ | 755,083 | $ | 1,081,206 | ||
| Unsided/platform equipment | 377,564 | 408,757 | ||||
| Less-than-truckload | 31,558 | 33,720 | ||||
| Other truck transportation ^(1)^ | 159,503 | 227,601 | ||||
| Total truck transportation | 1,323,708 | 1,751,284 | ||||
| Rail intermodal | 25,657 | 42,688 | ||||
| Ocean and air cargo carriers | 61,093 | 152,057 | ||||
| Other ^(2)^ | 25,217 | 24,570 | ||||
| $ | 1,435,675 | $ | 1,970,599 | |||
| Revenue on loads hauled via BCO Independent Contractors ^(3)^included in total truck transportation | $ | 519,526 | $ | 727,574 | ||
| Number of loads: | ||||||
| Truck transportation | ||||||
| Truckload: | ||||||
| Van equipment | 331,954 | 376,268 | ||||
| Unsided/platform equipment | 127,572 | 131,829 | ||||
| Less-than-truckload | 46,192 | 47,843 | ||||
| Other truck transportation ^(1)^ | 58,062 | 85,930 | ||||
| Total truck transportation | 563,780 | 641,870 | ||||
| Rail intermodal | 7,760 | 12,630 | ||||
| Ocean and air cargo carriers | 8,440 | 11,560 | ||||
| 579,980 | 666,060 | |||||
| Loads hauled via BCO Independent Contractors ^(3)^included in total truck transportation | 232,550 | 262,240 | ||||
| Revenue per load: | ||||||
| Truck transportation | ||||||
| Truckload: | ||||||
| Van equipment | $ | 2,275 | $ | 2,873 | ||
| Unsided/platform equipment | 2,960 | 3,101 | ||||
| Less-than-truckload | 683 | 705 | ||||
| Other truck transportation ^(1)^ | 2,747 | 2,649 | ||||
| Total truck transportation | 2,348 | 2,728 | ||||
| Rail intermodal | 3,306 | 3,380 | ||||
| Ocean and air cargo carriers | 7,239 | 13,154 | ||||
| Revenue per load on loads hauled via BCO Independent Contractors ^(3)^ | $ | 2,234 | $ | 2,774 | ||
| Revenue by capacity type (as a % of total revenue): | ||||||
| Truck capacity providers: | ||||||
| BCO Independent Contractors ^(3)^ | 36 | % | 37 | % | ||
| Truck Brokerage Carriers | 56 | % | 52 | % | ||
| Rail intermodal | 2 | % | 2 | % | ||
| Ocean and air cargo carriers | 4 | % | 8 | % | ||
| Other | 2 | % | 1 | % | ||
| April 1,<br>2023 | March 26,<br>2022 | |||||
| Truck Capacity Providers | ||||||
| BCO Independent Contractors ^(3)^ | 9,996 | 11,089 | ||||
| Truck Brokerage Carriers: | ||||||
| Approved and active ^(4)^ | 61,771 | 68,859 | ||||
| Other approved | 30,893 | 28,094 | ||||
| 92,664 | 96,953 | |||||
| Total available truck capacity providers | 102,660 | 108,042 | ||||
| Trucks provided by BCO Independent Contractors<br>^(3)^ | 10,809 | 11,935 | ||||
| (1) | Includes power-only, expedited, straight truck, cargo van, and miscellaneous other truck transportation revenue<br>generated by the transportation logistics segment. Power-only refers to shipments where the Company furnishes a power unit and an operator but not trailing equipment, which is typically provided by the shipper or consignee. | |||||
| --- | --- | |||||
| (2) | Includes primarily reinsurance premium revenue generated by the insurance segment and intra-Mexico<br>transportation services revenue generated by Landstar Metro. | |||||
| --- | --- | |||||
| (3) | BCO Independent Contractors are independent contractors who provide truck capacity to the Company under<br>exclusive lease arrangements. | |||||
| --- | --- | |||||
| (4) | Active refers to Truck Brokerage Carriers who moved at least one load in the 180 days immediately preceding the<br>fiscal quarter end. | |||||
| --- | --- |
LANDSTAR SYSTEM/9
Landstar System, Inc. and Subsidiary
Reconciliation of Gross Profit to Variable Contribution
(Dollars in thousands)
(Unaudited)
| Thirteen Weeks Ended | ||||||
|---|---|---|---|---|---|---|
| April 1,<br>2023 | March 26,<br>2022 | |||||
| Revenue | $ | 1,435,675 | $ | 1,970,599 | ||
| Costs of revenue: | ||||||
| Purchased transportation | 1,101,294 | 1,550,330 | ||||
| Commissions to agents | 125,675 | 149,778 | ||||
| Variable costs of revenue | 1,226,969 | 1,700,108 | ||||
| Trailing equipment depreciation | 8,369 | 9,083 | ||||
| Information technology costs (1) | 6,751 | 4,046 | ||||
| Insurance-related costs (2) | 28,260 | 31,655 | ||||
| Other operating costs | 12,378 | 11,141 | ||||
| Other costs of revenue | 55,758 | 55,925 | ||||
| Total costs of revenue | 1,282,727 | 1,756,033 | ||||
| Gross profit | $ | 152,948 | $ | 214,566 | ||
| Gross profit margin | 10.7 | % | 10.9 | % | ||
| Plus: other costs of revenue | 55,758 | 55,925 | ||||
| Variable contribution | $ | 208,706 | $ | 270,491 | ||
| Variable contribution margin | 14.5 | % | 13.7 | % | ||
| (1) | Includes costs of revenue incurred related to internally developed software including ASC 350-40 amortization, implementation costs, hosting costs and other support costs utilized to support the Company’s independent commission sales agents, third party capacity providers, and customers, included as<br>a portion of depreciation and amortization and of selling, general and administrative in the Company’s Consolidated Statements of Income. | |||||
| --- | --- | |||||
| (2) | Primarily includes (i) insurance premiums paid for commercial auto liability, general liability, cargo and<br>other lines of coverage related to the transportation of freight; (ii) the related cost of claims incurred under those programs; and (iii) brokerage commissions and other fees incurred relating to the administration of insurance programs<br>available to BCO Independent Contractors that are reinsured by the Company, which are included in selling, general and administrative in the Company’s Consolidated Statements of Income. | |||||
| --- | --- |
EX-99.2
April 1, 2023 Landstar System, Inc. Earnings Conference Call First Quarter 2023 Date Published: 04/26/2023 Exhibit 99.2
Forward-Looking Statements Disclaimer: The following is a “safe harbor” statement under the Private Securities Litigation Reform Act of 1995. Statements made in this slide presentation that are not based on historical facts are “forward-looking statements.” This presentation may make certain statements containing forward-looking statements, such as statements which relate to Landstar’s business objectives, plans, strategies and expectations. Such statements are by nature subject to uncertainties and risks, including but not limited to: the operational, financial or legal risks or uncertainties detailed in Landstar’s Form 10-K for the 2022 fiscal year, described in the section Risk Factors, and other SEC filings from time to time. 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 the Company undertakes no obligation to publicly update or revise any forward-looking statements. Date Published: 04/26/2023
Non-GAAP Financial Measures: In this slide presentation, the Company provides the following information that may be deemed a non-GAAP financial measure: variable contribution, variable contribution margin and operating income as a percentage of variable contribution. Management believes variable contribution and variable contribution margin are useful measures of the variable costs that we incur at a shipment-by-shipment level attributable to our transportation network of third-party capacity providers and independent agents in order to provide services to our customers. Management believes that operating income as a percentage of variable contribution is a useful measure as: (i) variable costs of revenue for a significant portion of the Company’s business are highly influenced by short-term market-based trends in the freight transportation industry, whereas other costs, including other costs of revenue, are much less impacted by short-term freight market trends; and (ii) this measure is meaningful to investors’ evaluations of the Company’s management of costs attributable to operations other than the purely variable costs associated with purchased transportation and commissions to agents that the Company incurs to provide services to our customers. Management also believes that it is appropriate to present each of the financial measures that may be deemed a non-GAAP financial measure, as referred to above, for the following reasons: (1) disclosure of these matters will allow investors to better understand the underlying trends in the Company’s financial condition and results of operations; (2) this information will facilitate comparisons by investors of the Company’s results as compared to the results of peer companies; and (3) management considers this financial information in its decision making. A tabulation of the expenses identified as costs of revenue as well as a reconciliation of gross profit to variable contribution and gross profit margin to variable contribution margin for the 2023 and 2022 first quarters is included in this slide presentation as Appendix A. Date Published: 04/26/2023
Who We Are Landstar, a Fortune 500 company, is a worldwide, technology-enabled, asset-light provider of integrated transportation management solutions delivering safe, specialized transportation services to a broad range of customers utilizing a network of agents, third party capacity providers and employees. Date Published: 04/26/2023
Our Network Landstar Employees Approx. 1,400 Agents Approx. 1,200 Customers 25,000+ Capacity 102,000+ Date Published: 04/26/2023 April 1, 2023 Results $1.44 billion in YTD revenue 580 thousand loadings 625 million dollar agents (based on 2022 fiscal year) 10,809 BCO trucks 92,664 Carriers 18,500+ Trailers
Percentage of Revenue 1Q22 1Q23 Truck Transportation Truckload Van equipment 55% 53% Unsided/platform equipment 21% 26% Less-than-truckload 2% 2% Other truck transportation 12% 11% Rail intermodal 2% 2% Ocean and air cargo 8% 4% Transportation Management Services Date Published: 04/26/2023
Percentage change in rate is calculated on a revenue per load basis. Percentage change in volume is calculated on the number of loads hauled. Revenue ($’s in thousands) Date Published: 04/26/2023 Quarter Quarter
Van Equipment Unsided/Platform Equipment Truckload Loadings and Revenue per Truckload Trends Date Published: 04/26/2023
As a Percentage of Revenue 1Q22 1Q23 Quarter over Prior Year Quarter Change in Revenue Consumer Durables 31.4 28.6 -34% Machinery 10.1 13.1 -6% Automotive 10.2 10.9 -22% AA&E, Hazmat 8.0 8.3 -25% Building Products 7.6 7.7 -26% Metals 4.6 4.8 -24% Foodstuffs 3.7 3.1 -40% Substitute Line Haul 4.5 2.6 -57% Other 19.9 20.9 -24% Transportation Revenue 100.0 100.0 -27% Industries Served Date Published: 04/26/2023
Gross profit equals revenue less the cost of purchased transportation, commissions to agents and other costs of revenue. Gross profit margin equals gross profit divided by revenue. Gross Profit(1) and Gross Profit Margin (2) ($’s in thousands) Date Published: 04/26/2023 Quarter 10.9% 10.7%
13.7% 14.5% Variable contribution equals revenue less the cost of purchased transportation and commissions to agents. Variable contribution margin equals variable contribution divided by revenue. Revenue on transactions where the Company’s variable contribution margin was based on a contractually pre-determined percentage of revenue accounted for 41% of revenue in both the 2022 and 2023 first quarters. Variable Contribution(1) and Variable Contribution Margin (2) ($’s in thousands) Date Published: 04/26/2023 Quarter Quarter
Operating Income as a % of Gross Profit ($’s in thousands) Date Published: 04/26/2023 Quarter 75.9% 66.2% 12
Operating Income as a % of Variable Contribution ($’s in thousands) Date Published: 04/26/2023 Quarter 60.2% 48.5% 13
Date Published: 04/26/2023 Truck Capacity Data (All information is provided as of the end of the applicable period)
Net cash is defined as cash and cash equivalents plus short term investments less outstanding debt. Date Published: 04/26/2023 Key Balance Sheet and Cash Flow Statistics ($’s in thousands)
Free Cash Flow (1) , Stock Purchases and Dividends Date Published: 04/26/2023 (In Thousands) (1) Free cash flow is defined as cash flow from operations less capital expenditures, each set forth on the prior slide.
Appendix A Reconciliation of Gross Profit to Variable Contribution ($’s in thousands) Date Published: 04/26/2023 17
Date Published: 04/26/2023