Landstar System, Inc.

JACKSONVILLE, Fla., May 13, 2025 (GLOBE NEWSWIRE) -- Landstar System, Inc. (NASDAQ: LSTR) (“Landstar” or the “Company”) today reported basic and diluted earnings per share (“EPS”) of $0.85 in the 2025 first quarter on revenue of $1.153 billion. “The Landstar team of independent business owners and employees continued to perform admirably, despite a highly unpredictable macro-economic backdrop,” said Landstar President and Chief Executive Officer Frank Lonegro. “I was encouraged by the number of loads hauled via truck in the quarter. Importantly, this was the first time in fifteen years that the number of loads hauled via truck during the first quarter exceeded the immediately preceding fourth quarter. Our network of Landstar BCOs, agents and employees are laser-focused on safety, security and delivering great service to our customers in an extremely fluid freight transportation environment.”

1Q 2025 1Q 2024 Revenue $ 1,152,502 $ 1,171,043  Gross profit $ 98,305 $ 113,902  Variable contribution $ 161,310 $ 168,240  Operating income $ 39,419 $ 59,961  Basic and diluted earnings per share $ 0.85 $ 1.32

(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.

As previously disclosed in Current Reports on Form 8-K filed with the U.S. Securities and Exchange Commission on April 2, 2025 (the “April 2nd 8-K”), and subsequently on April 25, 2025 (the “April 25th 8-K”), during the last week of the Company’s 2025 first quarter, Landstar identified a supply chain fraud relating to the Company’s international freight forwarding operations that does not involve its core North American truckload services. While investigation, remediation and collection efforts continue, the 2025 first quarter results include a $4.8 million pre-tax charge, or $0.10 per share, relating to this matter. This charge currently reflects the total anticipated adverse financial impact to Landstar relating to the fraud, net of certain actual and anticipated recoveries and before taking into account the cost of legal and other professional fees as well as additional potential recoveries in the future. This charge is reflected in selling, general & administrative costs.

Landstar continues to return capital to stockholders through the Company’s stock purchase program and dividends. During the 2025 first quarter, Landstar purchased approximately 386,000 shares of its common stock at an aggregate cost of $60.9 million and paid $83.3 million to stockholders in the form of cash dividends. The Company is currently authorized to purchase up to an additional 2,161,663 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 $0.40 per share payable on June 24, 2025, to stockholders of record as of the close of business on June 5, 2025. This quarterly dividend includes a $0.04 per share increase, or 11% over the amount of the Company’s regular quarterly dividend declared following each of the prior three quarters.

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Total revenue was $1,153 million in the 2025 first quarter, compared to $1,171 million in the 2024 first quarter. Truck transportation revenue hauled by independent business capacity owners (“BCOs”) and truck brokerage carriers in the 2025 first quarter was $1,050 million, or 91% of revenue, compared to $1,069 million, or 91% of revenue, in the 2024 first quarter. Truckload transportation revenue hauled via van equipment in the 2025 first quarter was $595 million, compared to $628 million in the 2024 first quarter. Truckload transportation revenue hauled via unsided/platform equipment in the 2025 first quarter was $340 million, compared to $343 million in the 2024 first quarter. Revenue from other truck transportation, which is largely related to power-only services, in the 2025 first quarter was $92 million, compared to $72 million in the 2024 first quarter. Revenue hauled by rail, air and ocean cargo carriers was $83 million, or 7% of revenue, in the 2025 first quarter, compared to $77 million, or 7% of revenue, in the 2024 first quarter.

The number of loads hauled via truck declined 1.2% in the 2025 first quarter as compared to the 2024 first quarter. This performance was slightly better than the high-end of the Company’s guidance range of 7% below to 2% below prior year included in its 2024 fourth quarter earnings release slide presentation, dated January 29, 2025 (the “2025 First Quarter Guidance”). Truck revenue per load decreased 0.6% in the 2025 first quarter as compared to the 2024 first quarter, below the mid-point of the guidance range of 2% below to 3% above prior year provided in the 2025 First Quarter Guidance. As a result, first quarter revenue exceeded the mid-point of the range included in the Company’s 2025 First Quarter Guidance.

The April 25th 8-K announced that 2025 first quarter EPS was $0.95, prior to giving effect to any potential adverse impact from the supply chain fraud matter referenced above. As also noted in the April 25th 8-K, the adverse financial impact to Landstar, before taking into account the cost of legal and other professional fees or any potential insurance and other recoveries, was not expected to exceed $0.43 per share on an after-tax basis. As previously stated, 2025 first quarter EPS was $0.85, inclusive of $0.10 per share relating to the supply chain fraud matter. As previewed by the April 2nd 8-K, 2025 first quarter EPS also reflected highly elevated insurance and claim costs of 9.3% of BCO revenue, well above the Company’s average historical experience from the 2019 fiscal year through the 2024 fiscal year of 4.9%, primarily due to cargo theft and truck accident adverse prior year claim development.

Gross profit in the 2025 first quarter was $98 million and variable contribution (defined as revenue less the cost of purchased transportation and commissions to agents) in the 2025 first quarter was $161 million. Gross profit in the 2024 first quarter was $114 million and variable contribution in the 2024 first quarter was $168 million. Reconciliations of gross profit to variable contribution and gross profit margin to variable contribution margin for the 2025 and 2024 first quarters 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 $473 million as of March 29, 2025. Trailing twelve-month return on average shareholders’ equity was 18%, and return on invested capital, representing net income divided by the sum of average equity plus average debt, was 17%.

Landstar will provide a live webcast of its quarterly earnings conference call this morning at 8:30 a.m. ET. To access the webcast, visit www.investor.landstar.com; click on “Webcasts,” then click on “Landstar’s First Quarter 2025 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: U.S. trade relationships; 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 2024 fiscal year; decreased demand for transportation services; 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 2024 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 Subsidiary Consolidated Statements of Income (Dollars in thousands, except per share amounts) (Unaudited)  Thirteen Weeks Ended March 29,  March 30, 2025    2024   Revenue    $ 1,152,502   $ 1,171,043  Investment income    3,598    3,412   Costs and expenses:  Purchased transportation   897,878    905,521  Commissions to agents   93,314    97,282  Other operating costs, net of gains on asset sales/dispositions   11,829    14,859  Insurance and claims    39,852    26,268  Selling, general and administrative   61,582    56,422  Depreciation and amortization   12,226    14,142   Total costs and expenses   1,116,681    1,114,494   Operating income    39,419    59,961  Interest and debt (income) expense   (159 )   (1,611 )  Income before income taxes   39,578    61,572  Income taxes     9,772    14,476   Net income    $ 29,806   $ 47,096   Basic and diluted earnings per share  $ 0.85   $ 1.32   Average basic and diluted shares outstanding   35,203,000    35,750,000   Dividends per common share  $ 0.36   $ 0.33

Landstar System, Inc. and Subsidiary Consolidated Balance Sheets (Dollars in thousands, except per share amounts) (Unaudited)  March 29,  December 28, 2025    2024  ASSETS  Current assets:  Cash and cash equivalents   $ 417,420   $ 515,018  Short-term investments    56,016    51,619  Trade accounts receivable, less allowance  of $16,316 and $12,904    703,181    683,841  Other receivables, including advances to independent  contractors, less allowance of $16,998 and $17,812  48,433    47,160  Other current assets    16,571    22,229  Total current assets    1,241,621    1,319,867   Operating property, less accumulated depreciation  and amortization of $456,072 and $456,547  297,517    311,345  Goodwill      40,881    40,933  Other assets     136,159    141,166  Total assets    $ 1,716,178   $ 1,813,311   LIABILITIES AND SHAREHOLDERS' EQUITY  Current liabilities:  Cash overdraft   $ 59,359   $ 61,033  Accounts payable    389,592    383,625  Current maturities of long-term debt  32,024    33,116  Insurance claims    37,638    40,511  Dividends payable    -    70,632  Other current liabilities    93,701    84,237  Total current liabilities    612,314    673,154   Long-term debt, excluding current maturities  61,944    69,191  Insurance claims    75,436    62,842  Deferred income taxes and other non-current liabilities  35,729    35,685   Shareholders' equity:  Common stock, $0.01 par value, authorized 160,000,000  shares, issued 68,581,772 and 68,559,269  686    686  Additional paid-in capital    257,296    255,260  Retained earnings    2,877,034    2,859,916  Cost of 33,635,595 and 33,243,196 shares of common  stock in treasury    (2,193,265 )   (2,131,413 ) Accumulated other comprehensive loss  (10,996 )   (12,010 ) Total shareholders' equity    930,755    972,439  Total liabilities and shareholders' equity $ 1,716,178   $ 1,813,311

Landstar System, Inc. and Subsidiary Supplemental Information (Unaudited)  Thirteen Weeks Ended March 29,  March 30, 2025    2024  Revenue generated through (in thousands):   Truck transportation  Truckload:  Van equipment  $ 594,795   $ 628,304  Unsided/platform equipment   340,408    343,045  Less-than-truckload   22,436    25,617  Other truck transportation (1)   92,079    71,966  Total truck transportation   1,049,718    1,068,932  Rail intermodal   17,487    22,695  Ocean and air cargo carriers   65,637    54,074  Other (2)   19,660    25,342  $ 1,152,502   $ 1,171,043   Revenue on loads hauled via BCO Independent Contractors (3)  included in total truck transportation  $ 427,057   $ 452,561   Number of loads:   Truck transportation  Truckload:  Van equipment   288,063    299,014  Unsided/platform equipment   117,245    117,947  Less-than-truckload   35,580    40,233  Other truck transportation (1)   44,012    33,526  Total truck transportation   484,900    490,720  Rail intermodal   6,150    7,150  Ocean and air cargo carriers   9,120    8,720  500,170    506,590   Loads hauled via BCO Independent Contractors (3)  included in total truck transportation   194,070    208,740   Revenue per load:   Truck transportation  Truckload:  Van equipment  $ 2,065   $ 2,101  Unsided/platform equipment   2,903    2,908  Less-than-truckload   631    637  Other truck transportation (1)   2,092    2,147  Total truck transportation   2,165    2,178  Rail intermodal   2,843    3,174  Ocean and air cargo carriers   7,197    6,201   Revenue per load on loads hauled via BCO Independent Contractors (3)  $ 2,201   $ 2,168   Revenue by capacity type (as a % of total revenue):   Truck capacity providers:  BCO Independent Contractors (3)   37 %   39 % Truck Brokerage Carriers   54 %   53 % Rail intermodal   2 %   2 % Ocean and air cargo carriers   6 %   5 % Other    2 %   2 %   March 29,  March 30, 2025    2024  Truck Capacity Providers   BCO Independent Contractors (3)   7,871    8,619  Truck Brokerage Carriers:  Approved and active (4)   47,323    45,919  Other approved   33,275    26,320  80,598    72,239  Total available truck capacity providers   88,469    80,858   Trucks provided by BCO Independent Contractors (3)   8,620    9,410    (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 Subsidiary Reconciliation of Gross Profit to Variable Contribution (Dollars in thousands) (Unaudited)  Thirteen Weeks Ended March 29,  March 30, 2025    2024   Revenue    $ 1,152,502   $ 1,171,043   Costs of revenue:  Purchased transportation   897,878    905,521  Commissions to agents   93,314    97,282   Variable costs of revenue   991,192    1,002,803   Trailing equipment depreciation   6,977    6,897  Information technology costs (1)   3,675    5,804  Insurance-related costs (2)   40,524    26,778  Other operating costs   11,829    14,859   Other costs of revenue   63,005    54,338   Total costs of revenue   1,054,197    1,057,141   Gross profit    $ 98,305   $ 113,902   Gross profit margin    8.5 %   9.7 %  Plus: other costs of revenue   63,005    54,338   Variable contribution   $ 161,310   $ 168,240   Variable contribution margin   14.0 %   14.4 %   (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.

CONTACT: Contact: Jim Todd Chief Financial Officer 904-398-9400

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