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Landstar System Reports Fourth Quarter Revenue of $1.209B and Earnings Per Share of $1.31

1. LSTR reported Q4 2024 EPS of $1.31, revenue at $1.209 billion. 2. Year-over-year revenue growth noted for the first time since Q3 2022. 3. Truck revenue per load rose 3.1%, indicating pricing power amidst challenges. 4. Insurance and claims costs spiked to 6.7%, above historical averages. 5. Landstar continues stock repurchase and dividends, reflecting strong balance sheet.

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Annual growth in revenue and managed costs suggest recovery potential. Previous instances of revenue growth have positively affected stock performance.

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LSTR
JACKSONVILLE, Fla., Jan. 29, 2025 (GLOBE NEWSWIRE) -- Landstar System, Inc. (NASDAQ: LSTR) (“Landstar” or the “Company”) today reported basic and diluted earnings per share (“EPS”) of $1.31 in the 2024 fourth quarter on revenue of $1.209 billion. “The Landstar team of independent business owners and employees continued to perform admirably, despite the continuation of a challenging freight backdrop,” said Landstar President and Chief Executive Officer Frank Lonegro. “I was encouraged to see year-over-year quarterly revenue growth for the first time since the 2022 third quarter. The year-over-year revenue growth was achieved via a sequential increase in overall truck pricing as compared to the 2024 third quarter and a strong revenue performance specific to our unsided/platform service offering. We look to build on this revenue per load momentum as we begin the 2025 fiscal year. Our network of Landstar BCOs, agents and employees are optimistic for an improved freight transportation environment and will continue to strive each day to improve our safety performance and deliver great service to our customers.” Landstar continues to return capital to stockholders through the Company’s stock purchase program and dividends. During the 2024 fiscal year, Landstar purchased approximately 452,000 shares of its common stock at an aggregate cost of $82.1 million and paid $120.5 million to stockholders in the form of cash dividends. The Company is currently authorized to purchase up to an additional 2,547,981 shares of the Company’s common stock under its longstanding share purchase program.  Landstar also announced today that its Board of Directors declared a quarterly dividend of $0.36 per share payable on March 11, 2025, to stockholders of record as of the close of business on February 18, 2025.  4Q 2024 4Q 2023 Revenue$1,209,330  $1,204,445 Gross profit$109,423  $124,594 Variable contribution$166,523  $178,146 Operating income$57,771  $74,567 Basic and diluted earnings per share$1.31  $1.62  (1) Dollars above in thousands, except per share amounts.(2) Please refer to the Consolidated Statements of Income and Reconciliation of Gross Profit to Variable Contribution included below.  Total revenue was $1,209 million in the 2024 fourth quarter, compared to $1,204 million in the 2023 fourth quarter. Truck transportation revenue hauled by independent business capacity owners (“BCOs”) and truck brokerage carriers in the 2024 fourth quarter was $1,081 million, or 89% of revenue, compared to $1,085 million, or 90% of revenue, in the 2023 fourth quarter. Truckload transportation revenue hauled via van equipment in the 2024 fourth quarter was $597 million, compared to $619 million in the 2023 fourth quarter. Truckload transportation revenue hauled via unsided/platform equipment in the 2024 fourth quarter was $362 million, compared to $340 million in the 2023 fourth quarter. Revenue from other truck transportation, which is largely related to power-only services, in each of the 2024 and 2023 fourth quarters was $100 million. Revenue hauled by rail, air and ocean cargo carriers was $107 million, or 9% of revenue, in the 2024 fourth quarter, compared to $89 million, or 7% of revenue, in the 2023 fourth quarter. The number of loads hauled via truck declined 3.4% in the 2024 fourth quarter as compared to the 2023 fourth quarter. This performance was slightly better than the low-end of the Company’s guidance included in its 2024 third quarter earnings release slide presentation, dated October 29, 2024. Truck revenue per load increased 3.1% in the 2024 fourth quarter as compared to the 2023 fourth quarter, in the upper half of the range of the Company’s previously provided guidance. While actual fourth quarter revenue exceeded the mid-point of the Company’s previously issued guidance, basic and diluted earnings per share fell below the mid-point of the guidance, primarily attributable to a lower than anticipated variable contribution margin and elevated insurance and claim costs, partially offset by a lower than anticipated effective income tax rate. Insurance and claims costs were 6.7% of BCO revenue during the 2024 fourth quarter, well above the Company’s average historical experience from the 2019 fiscal year through the 2023 fiscal year of 4.7%, primarily driven by both increased cargo claim costs related to fraud and theft in the supply chain and increased auto liability claim costs. Gross profit in the 2024 fourth quarter was $109 million and variable contribution (defined as revenue less the cost of purchased transportation and commissions to agents) in the 2024 fourth quarter was $167 million. Gross profit in the 2023 fourth quarter was $125 million and variable contribution in the 2023 fourth quarter was $178 million. Reconciliations of gross profit to variable contribution and gross profit margin to variable contribution margin for the 2024 and 2023 fourth quarters and year-to-date periods are provided in the Company’s accompanying financial disclosures. The Company’s balance sheet continues to be very strong, with cash and short-term investments of approximately $567 million as of December 28, 2024. Trailing twelve-month return on average shareholders’ equity was 20%, and return on invested capital, representing net income divided by the sum of average equity plus average debt, was 18%. Landstar will provide a live webcast of its quarterly earnings conference call this evening at 4:30 p.m. ET. To access the webcast, visit www.investor.landstar.com; click on “Webcasts,” then click on “Landstar’s Fourth Quarter 2024 Earnings Release Conference Call.” A slide presentation to accompany the webcast presentation is also available on Landstar’s investor relations website at https://investor.landstar.com/. About Landstar:Landstar System, Inc., is a 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. 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 non-GAAP financial measures: 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: 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; 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 2023 fiscal year; 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; regulations requiring the purchase and use of zero-emission vehicles; intellectual property; and other operational, financial or legal risks or uncertainties detailed in Landstar’s Form 10-K for the 2023 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, Inc. and SubsidiaryConsolidated Statements of Income(Dollars in thousands, except per share amounts)(Unaudited)                       Fiscal Years Ended Fiscal Quarters Ended   December 28, December 30, December 28, December 30,   2024 2023 2024 2023          Revenue$4,819,245  $5,303,322  $1,209,330  $1,204,445 Investment income 14,810   10,141   3,822   3,267           Costs and expenses:        Purchased transportation 3,745,241   4,068,262   945,857   927,028  Commissions to agents 392,751   462,668   96,950   99,271  Other operating costs, net of gains on asset sales/dispositions 58,781   54,191   14,643   13,193  Insurance and claims 113,929   114,241   30,099   27,270  Selling, general and administrative 217,708   211,799   55,095   52,728  Depreciation and amortization 56,738   58,153   12,737   13,655             Total costs and expenses 4,585,148   4,969,314   1,155,381   1,133,145           Operating income 248,907   344,149   57,771   74,567 Interest and debt (income) expense (5,419)  (3,946)  (964)  (1,867)          Income before income taxes 254,326   348,095   58,735   76,434 Income taxes 58,380   83,701   12,542   18,447           Net income$195,946  $264,394  $46,193  $57,987           Basic and diluted earnings per share$5.51  $7.36  $1.31  $1.62           Average basic and diluted shares outstanding 35,538,000   35,920,000   35,328,000   35,804,000           Dividends per common share$3.38  $3.26  $2.36  $2.33                   Landstar System, Inc. and SubsidiaryConsolidated Balance Sheets(Dollars in thousands, except per share amounts)(Unaudited)                  December 28, December 30,    2024 2023ASSETS   Current assets:    Cash and cash equivalents$515,018  $481,043  Short-term investments 51,619   59,661  Trade accounts receivable, less allowance     of $12,904 and $11,738 683,841   743,762  Other receivables, including advances to independent     contractors, less allowance of $17,812 and $14,010 47,160   43,339  Other current assets 22,229   24,936   Total current assets 1,319,867   1,352,741        Operating property, less accumulated depreciation      and amortization of $456,547 and $436,682 311,345   284,300 Goodwill 40,933   42,275 Other assets 141,166   122,530 Total assets$1,813,311  $1,801,846        LIABILITIES AND SHAREHOLDERS' EQUITY   Current liabilities:    Cash overdraft$61,033  $61,541  Accounts payable 383,625   395,980  Current maturities of long-term debt 33,116   27,876  Insurance claims 40,511   41,825  Dividends payable 70,632   71,433  Other current liabilities 84,237   76,569   Total current liabilities 673,154   675,224        Long-term debt, excluding current maturities 69,191   43,264 Insurance claims 62,842   58,922 Deferred income taxes and other non-current liabilities 35,685   40,513        Shareholders' equity:    Common stock, $0.01 par value, authorized 160,000,000     shares, issued 68,559,269 and 68,497,324 686   685  Additional paid-in capital 255,260   254,642  Retained earnings 2,859,916   2,783,645  Cost of 33,243,196 and 32,780,651 shares of common     stock in treasury (2,131,413)  (2,048,184) Accumulated other comprehensive loss (12,010)  (6,865)  Total shareholders' equity 972,439   983,923 Total liabilities and shareholders' equity$1,813,311  $1,801,846                            Landstar System, Inc. and SubsidiarySupplemental Information(Unaudited)                          Fiscal Years Ended Fiscal Quarters Ended    December 28, December 30, December 28, December 30,    2024 2023 2024 2023Revenue generated through (in thousands):                   Truck transportation         Truckload:          Van equipment$2,447,810  $2,742,281  $596,573  $618,588    Unsided/platform equipment 1,455,663   1,490,393   361,910   339,910   Less-than-truckload 99,828   117,683   21,926   26,913   Other truck transportation (1) 343,253   479,173   100,400   99,702    Total truck transportation 4,346,554   4,829,530   1,080,809   1,085,113  Rail intermodal 84,328   98,297   18,347   24,344  Ocean and air cargo carriers 289,902   266,638   88,173   64,280  Other (2) 98,461   108,857   22,001   30,708     $4,819,245  $5,303,322  $1,209,330  $1,204,445             Revenue on loads hauled via BCO Independent Contractors (3)         included in total truck transportation$1,821,989  $1,998,408  $447,074  $454,774            Number of loads:                   Truck transportation         Truckload:          Van equipment 1,170,772   1,259,578   282,877   292,711    Unsided/platform equipment 476,815   504,765   114,188   115,294   Less-than-truckload 153,253   175,650   33,907   41,070   Other truck transportation (1) 160,120   201,407   45,568   44,295    Total truck transportation 1,960,960   2,141,400   476,540   493,370  Rail intermodal 27,970   29,620   6,550   7,470  Ocean and air cargo carriers 34,440   32,820   8,320   7,440      2,023,370   2,203,840   491,410   508,280             Loads hauled via BCO Independent Contractors (3)         included in total truck transportation 814,150   898,610   193,510   209,350            Revenue per load:                   Truck transportation         Truckload:          Van equipment$2,091  $2,177  $2,109  $2,113    Unsided/platform equipment 3,053   2,953   3,169   2,948   Less-than-truckload 651   670   647   655   Other truck transportation (1) 2,144   2,379   2,203   2,251    Total truck transportation 2,217   2,255   2,268   2,199  Rail intermodal 3,015   3,319   2,801   3,259  Ocean and air cargo carriers 8,418   8,124   10,598   8,640             Revenue per load on loads hauled via BCO Independent Contractors (3)$2,238  $2,224  $2,310  $2,172            Revenue by capacity type (as a % of total revenue):                   Truck capacity providers:         BCO Independent Contractors (3) 38%  38%  37%  38%  Truck Brokerage Carriers 52%  53%  52%  52% Rail intermodal 2%  2%  2%  2% Ocean and air cargo carriers 6%  5%  7%  5% Other 2%  2%  2%  3%                              December 28, December 30,        2024 2023Truck Capacity Providers                   BCO Independent Contractors (3)     8,082   9,024  Truck Brokerage Carriers:         Approved and active (4)     43,718   49,111   Other approved     26,527   27,524          70,245   76,635  Total available truck capacity providers     78,327   85,659             Trucks provided by BCO Independent Contractors (3)     8,843   9,809                       (1)Includes power-only, expedited, straight truck, cargo van, and miscellaneous other truck transportation revenue 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 transportation services revenue generated by Landstar Metro.           (3)BCO Independent Contractors are independent contractors who provide truck capacity to the Company under exclusive lease arrangements.           (4)Active refers to Truck Brokerage Carriers who moved at least one load in the 180 days immediately preceding the fiscal quarter end.                      Landstar System, Inc. and SubsidiaryReconciliation of Gross Profit to Variable Contribution(Dollars in thousands)(Unaudited)                       Fiscal Years Ended Fiscal Quarters Ended   December 28, December 30, December 28, December 30,   2024 2023 2024 2023          Revenue$4,819,245  $5,303,322  $1,209,330  $1,204,445           Costs of revenue:         Purchased transportation 3,745,241   4,068,262   945,857   927,028   Commissions to agents 392,751   462,668   96,950   99,271            Variable costs of revenue 4,137,992   4,530,930   1,042,807   1,026,299             Trailing equipment depreciation 27,950   31,319   7,186   7,079   Information technology costs (1) 22,744   25,486   4,629   5,695   Insurance-related costs (2) 115,764   116,069   30,642   27,585   Other operating costs 58,781   54,191   14,643   13,193            Other costs of revenue 225,239   227,065   57,100   53,552            Total costs of revenue 4,363,231   4,757,995   1,099,907   1,079,851           Gross profit$456,014  $545,327  $109,423  $124,594           Gross profit margin 9.5%  10.3%  9.0%  10.3%           Plus: other costs of revenue 225,239   227,065   57,100   53,552           Variable contribution$681,253  $772,392  $166,523  $178,146           Variable contribution margin 14.1%  14.6%  13.8%  14.8%          (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 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 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 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.          

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