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) July 20, 2016
LANDSTAR SYSTEM, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 021238 | 06-1313069 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(I.R.S. Employer 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)) |
| Item 2.02 | Results of Operations and Financial Condition |
On July 20, 2016, Landstar System, Inc. issued a press release announcing results for the second quarter of fiscal 2016. 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 July 20, 2016, 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 July 21, 2016 in connection with the Company’s release of results for the second quarter of fiscal 2016.
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 | News Release dated July 20, 2016 of Landstar System, Inc. | |
| 99.2 | Slide Presentation dated July 20, 2016 of Landstar System, Inc. | |
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: July 20, 2016 | By: | /s/ L. Kevin Stout | ||||
| Name: | L. Kevin Stout | |||||
| Title: | Vice President and Chief Financial Officer | |||||
Exhibit 99.1
| For Immediate Release | Contact: Kevin Stout | |
| Landstar System, Inc. | ||
| www.landstar.com | ||
| July 20, 2016 | 904-398-9400 |
LANDSTAR SYSTEM REPORTS SECOND QUARTER REVENUE OF $775 MILLION
AND DILUTED EARNINGS PER SHARE OF $0.76
Jacksonville, FL – Landstar System, Inc. (NASDAQ: LSTR) reported second quarter diluted earnings per share of $0.76 on revenue of $775 million in the 2016 second quarter. Net income was negatively impacted by elevated insurance and claims costs, driven mostly by the severity of claims, in the 2016 second quarter, the highest quarterly insurance and claims cost over the past 6 years. Landstar reported diluted earnings per share of $0.92 on revenue of $868 million in the 2015 second quarter. Gross profit (defined as revenue less the cost of purchased transportation and commissions to agents) was $121.0 million in the 2016 second quarter compared to $130.8 million in the 2015 second quarter. Operating margin, representing operating income divided by gross profit, was 43.9 percent in the 2016 second quarter.
Truck transportation revenue hauled by independent business capacity owners (“BCOs”) and truck brokerage carriers in the 2016 second quarter was $718.5 million, or 93 percent of revenue, compared to $809.2 million, or 93 percent of revenue, in the 2015 second quarter. Truckload transportation revenue hauled via van equipment in the 2016 second quarter was $458.0 million compared to $496.9 million in the 2015 second quarter. Truckload transportation revenue hauled via unsided/platform equipment in the 2016 second quarter was $242.0 million compared to $291.0 million in the 2015 second quarter. Revenue hauled by rail, air and ocean cargo carriers was $45.1 million, or 6 percent of revenue, in the 2016 second quarter compared to $48.1 million, or 6 percent of revenue, in the 2015 second quarter.
LANDSTAR SYSTEM/ 2
Trailing twelve-month return on average shareholders’ equity was 29 percent and trailing twelve-month return on invested capital, net income divided by the sum of average equity plus average debt, was 23 percent. Landstar purchased approximately 423,000 shares of its common stock during the first half of 2016 at an aggregate cost of $26.5 million. Currently, there are approximately 1,386,000 shares of the Company’s common stock available for purchase under Landstar’s authorized share purchase program. As of June 25, 2016, the Company had $215 million in cash and short term investments and $214 million available for borrowings under the Company’s senior credit facility.
In addition, Landstar announced today that its Board of Directors has declared a quarterly dividend of $0.09 per share payable on August 26, 2016, to stockholders of record as of the close of business on August 8, 2016. This quarterly dividend includes a 12.5 percent increase to the amount of the Company’s quarterly dividend declared following each of the prior four quarters. It is currently the intention of the Board to pay dividends on a quarterly basis going forward.
Commenting on Landstar’s 2016 second quarter, Landstar’s President and CEO Jim Gattoni said, “On April 20th, we provided second quarter revenue guidance of $770 million to $820 million and second quarter diluted earnings per share guidance of $0.80 to $0.85. On June 8th, I updated both our revenue and diluted earnings per share guidance by indicating at a webcast investor conference available to the public that I was more comfortable at the lower end of both the revenue and diluted earnings per share guidance. Revenue of $775 million for the second quarter was in-line with our updated guidance. Diluted earnings per share of $0.76 for the second quarter was below the low end of the updated guidance due to an increase in estimated insurance and claims costs, as a result of a severe accident that occurred at the end of the second quarter.”
Gattoni continued, “Overall, from a revenue standpoint, I believe we executed well considering the sluggish freight environment. During the 2015 second quarter, we hauled over 13,000 truckloads via unsided/platform equipment for a project on behalf of a customer in the automotive sector, generating $27 million of revenue in the 2015
LANDSTAR SYSTEM/ 3
second quarter. Excluding the loadings related to that project we experienced a slight increase in loads hauled via truck over the 2015 second quarter. However, Landstar’s truckload services continued to experience significant pricing pressure throughout the 2016 second quarter, as industry-wide truck capacity was more readily available as compared to the 2015 second quarter and demand continued to be soft. Although we experienced a somewhat normal seasonal uptick in revenue per load from May to June, the pricing pressure continued in the U.S. spot market, in which the Company operates much of its business. Additionally, the average cost of a gallon of diesel fuel was approximately 20 percent lower during the 2016 second quarter compared to the 2015 second quarter putting additional pressure on pricing, especially as it relates to loads hauled via truck brokerage carriers. As such, revenue per load on loads hauled via truck was 9 percent lower in the 2016 second quarter compared to the 2015 second quarter.”
Gattoni further commented, “The number of loads hauled via truck in the 2016 second quarter decreased 2 percent from the 2015 second quarter, driven by a 9 percent decrease in the number of loads hauled via unsided/platform equipment, entirely due to the 2015 automotive sector project, partially offset by a 1 percent increase in the number of loads hauled via van equipment. Landstar achieved an 11 percent increase in the number of loads hauled via railroads, ocean cargo carriers and air cargo carriers in the 2016 second quarter over the 2015 second quarter. The softer pricing environment and increased insurance and claims expense drove the 2016 second quarter operating margin down to 43.9 percent, from 50.5 percent in the 2015 second quarter.”
Gattoni continued, “Third quarter 2016 over third quarter 2015 revenue comparisons will include the effects of revenue derived from the automotive project previously referenced. The Company’s 2015 third quarter included approximately $35 million in revenue from approximately 20,000 loads hauled via truck related to that project. The project was completed at the end of 2015. Historically, revenue in the Company’s third fiscal quarter has been relatively consistent with revenue generated in the Company’s second fiscal quarter. Revenue per load on loads hauled via truck in the Company’s third quarter has been slightly ahead of the second quarter while the number of loads hauled via truck in the third quarter is typically slightly below the second quarter.
LANDSTAR SYSTEM/ 4
Through the first few weeks of July, we have experienced the normal seasonal uptick in revenue per load on loads hauled via truck. Also, the number of loads hauled via truck during the first few weeks of July is trending with the historical second quarter to third quarter pattern. As such, I expect 2016 third quarter revenue to be similar to the Company’s 2016 second quarter revenue. Assuming insurance and claims costs in the 2016 third quarter are approximately 3.2 percent of BCO revenue, representing average insurance and claims costs as a percent of BCO revenue over the past 5 years, I would expect diluted earnings per share to be in a range of $0.79 to $0.84 in the 2016 third quarter.”
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 Second Quarter 2016 Earnings Release Conference Call.”
This earnings announcement, as well as an accompanying slide presentation, is available through the Company’s website at http://investor.landstar.com under “Presentations” and on a Form 8-K filed with the Securities and Exchange Commission.
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; decreased demand for transportation services; substantial industry competition; disruptions or failures in the Company’s computer systems; cyber incidents; dependence on key vendors; changes in fuel taxes;
LANDSTAR SYSTEM/ 5
status of independent contractors; regulatory and legislative changes; catastrophic loss of a Company facility; intellectual property; unclaimed property; and other operational, financial or legal risks or uncertainties detailed in Landstar’s Form 10K for the 2015 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.
About Landstar:
Landstar System, Inc. is a worldwide, asset-light provider of integrated transportation management solutions delivering safe, specialized transportation logistics services to a broad range of customers utilizing a network of agents, third-party capacity providers and employees. All Landstar transportation services companies are certified to ISO 9001:2008 quality management system standards and RC14001:2013 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.
(Tables follow)
LANDSTAR SYSTEM/ 6
Landstar System, Inc. and Subsidiary
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)
| Twenty Six Weeks Ended | Thirteen Weeks Ended | |||||||||||||||
| June 25, 2016 |
June 27, 2015 |
June 25, 2016 |
June 27, 2015 |
|||||||||||||
| Revenue |
$ | 1,486,867 | $ | 1,630,763 | $ | 775,223 | $ | 868,383 | ||||||||
| Investment income |
743 | 693 | 363 | 339 | ||||||||||||
| Costs and expenses: |
||||||||||||||||
| Purchased transportation |
1,129,743 | 1,254,730 | 589,415 | 667,577 | ||||||||||||
| Commissions to agents |
123,931 | 129,816 | 64,839 | 70,032 | ||||||||||||
| Other operating costs, net of gains on asset sales/dispositions |
13,992 | 15,670 | 6,585 | 7,981 | ||||||||||||
| Insurance and claims |
30,307 | 27,108 | 16,094 | 12,312 | ||||||||||||
| Selling, general and administrative |
71,519 | 74,986 | 36,905 | 37,738 | ||||||||||||
| Depreciation and amortization |
17,093 | 14,068 | 8,655 | 7,049 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total costs and expenses |
1,386,585 | 1,516,378 | 722,493 | 802,689 | ||||||||||||
| Operating income |
101,025 | 115,078 | 53,093 | 66,033 | ||||||||||||
|
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|
|||||||||
| Interest and debt expense |
1,777 | 1,494 | 888 | 713 | ||||||||||||
|
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|
|||||||||
| Income before income taxes |
99,248 | 113,584 | 52,205 | 65,320 | ||||||||||||
| Income taxes |
37,750 | 43,098 | 19,891 | 24,849 | ||||||||||||
|
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|
|||||||||
| Net income |
$ | 61,498 | $ | 70,486 | $ | 32,314 | $ | 40,471 | ||||||||
|
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|
|
|||||||||
| Earnings per common share |
$ | 1.45 | $ | 1.59 | $ | 0.77 | $ | 0.92 | ||||||||
|
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|||||||||
| Diluted earnings per share |
$ | 1.45 | $ | 1.59 | $ | 0.76 | $ | 0.92 | ||||||||
|
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|
|
|
|||||||||
| Average number of shares outstanding: |
||||||||||||||||
| Earnings per common share |
42,315,000 | 44,240,000 | 42,235,000 | 43,892,000 | ||||||||||||
|
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|
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|
|
|
|||||||||
| Diluted earnings per share |
42,424,000 | 44,397,000 | 42,357,000 | 44,033,000 | ||||||||||||
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|
|||||||||
| Dividends per common share |
$ | 0.16 | $ | 0.14 | $ | 0.08 | $ | 0.07 | ||||||||
|
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|||||||||
LANDSTAR SYSTEM/ 7
Landstar System, Inc. and Subsidiary
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
(Unaudited)
| June 25, 2016 |
December 26, 2015 |
|||||||
| ASSETS |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 153,370 | $ | 114,520 | ||||
| Short-term investments |
61,528 | 48,823 | ||||||
| Trade accounts receivable, less allowance of $5,092 and $4,327 |
402,362 | 462,699 | ||||||
| Other receivables, including advances to independent contractors, less allowance of $4,755 and $4,143 |
18,584 | 18,472 | ||||||
| Other current assets |
20,608 | 11,604 | ||||||
|
|
|
|
|
|||||
| Total current assets |
656,452 | 656,118 | ||||||
|
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|
|||||
| Operating property, less accumulated depreciation and amortization of $187,774 and $182,591 |
236,177 | 225,927 | ||||||
| Goodwill |
31,134 | 31,134 | ||||||
| Other assets |
60,994 | 78,339 | ||||||
|
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|
|
|||||
| Total assets |
$ | 984,757 | $ | 991,518 | ||||
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|||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||
| Current liabilities: |
||||||||
| Cash overdraft |
$ | 30,355 | $ | 35,609 | ||||
| Accounts payable |
191,247 | 223,709 | ||||||
| Current maturities of long-term debt |
42,209 | 42,499 | ||||||
| Insurance claims |
26,135 | 19,757 | ||||||
| Other current liabilities |
44,642 | 47,963 | ||||||
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|
|||||
| Total current liabilities |
334,588 | 369,537 | ||||||
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|
|||||
| Long-term debt, excluding current maturities |
76,724 | 81,793 | ||||||
| Insurance claims |
23,042 | 21,477 | ||||||
| Deferred income taxes and other non-current liabilities |
53,148 | 52,474 | ||||||
| Shareholders’ equity: |
||||||||
| Common stock, $0.01 par value, authorized 160,000,000 shares, issued 67,504,785 and 67,391,616 shares |
675 | 674 | ||||||
| Additional paid-in capital |
197,503 | 195,841 | ||||||
| Retained earnings |
1,444,691 | 1,389,975 | ||||||
| Cost of 25,397,002 and 24,972,079 shares of common stock in treasury |
(1,143,360 | ) | (1,116,765 | ) | ||||
| Accumulated other comprehensive loss |
(2,254 | ) | (3,488 | ) | ||||
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|||||
| Total shareholders’ equity |
497,255 | 466,237 | ||||||
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| Total liabilities and shareholders’ equity |
$ | 984,757 | $ | 991,518 | ||||
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LANDSTAR SYSTEM/ 8
Landstar System, Inc. and Subsidiary
Supplemental Information
(Unaudited)
| Twenty Six Weeks Ended | Thirteen Weeks Ended | |||||||||||||||
| June 25, 2016 |
June 27, 2015 |
June 25, 2016 |
June 27, 2015 |
|||||||||||||
| Revenue generated through (in thousands): |
||||||||||||||||
| Truck transportation |
||||||||||||||||
| Truckload: |
||||||||||||||||
| Van equipment |
$ | 886,195 | $ | 946,598 | $ | 458,002 | $ | 496,910 | ||||||||
| Unsided/platform equipment |
451,430 | 530,515 | 242,008 | 291,032 | ||||||||||||
| Less-than-truckload |
35,927 | 40,956 | 18,450 | 21,258 | ||||||||||||
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| Total truck transportation |
1,373,552 | 1,518,069 | 718,460 | 809,200 | ||||||||||||
| Rail intermodal |
52,337 | 49,522 | 26,229 | 26,341 | ||||||||||||
| Ocean and air cargo carriers |
37,710 | 41,410 | 18,902 | 21,778 | ||||||||||||
| Other (1) |
23,268 | 21,762 | 11,632 | 11,064 | ||||||||||||
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| $ | 1,486,867 | $ | 1,630,763 | $ | 775,223 | $ | 868,383 | |||||||||
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| Revenue on loads hauled via BCO Independent Contractors (2) included in total truck transportation |
$ | 707,652 | $ | 752,030 | $ | 373,374 | $ | 401,705 | ||||||||
| Number of loads: |
||||||||||||||||
| Truck transportation |
||||||||||||||||
| Truckload: |
||||||||||||||||
| Van equipment |
556,119 | 544,714 | 287,079 | 285,762 | ||||||||||||
| Unsided/platform equipment |
219,034 | 229,452 | 116,292 | 127,286 | ||||||||||||
| Less-than-truckload |
55,727 | 54,904 | 28,829 | 28,912 | ||||||||||||
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|||||||||
| Total truck transportation |
830,880 | 829,070 | 432,200 | 441,960 | ||||||||||||
| Rail intermodal |
24,180 | 20,680 | 12,150 | 11,200 | ||||||||||||
| Ocean and air cargo carriers |
9,780 | 8,620 | 5,220 | 4,490 | ||||||||||||
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| 864,840 | 858,370 | 449,570 | 457,650 | |||||||||||||
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| Loads hauled via BCO Independent Contractors (2) included in total truck transportation |
414,660 | 406,230 | 216,990 | 214,930 | ||||||||||||
| Revenue per load: |
||||||||||||||||
| Truck transportation |
||||||||||||||||
| Truckload: |
||||||||||||||||
| Van equipment |
$ | 1,594 | $ | 1,738 | $ | 1,595 | $ | 1,739 | ||||||||
| Unsided/platform equipment |
2,061 | 2,312 | 2,081 | 2,286 | ||||||||||||
| Less-than-truckload |
645 | 746 | 640 | 735 | ||||||||||||
| Total truck transportation |
1,653 | 1,831 | 1,662 | 1,831 | ||||||||||||
| Rail intermodal |
2,164 | 2,395 | 2,159 | 2,352 | ||||||||||||
| Ocean and air cargo carriers |
3,856 | 4,804 | 3,621 | 4,850 | ||||||||||||
| Revenue per load on loads hauled via BCO Independent Contractors (2) |
$ | 1,707 | $ | 1,851 | $ | 1,721 | $ | 1,869 | ||||||||
| Revenue by capacity type (as a % of total revenue); |
||||||||||||||||
| Truck capacity providers: |
||||||||||||||||
| BCO Independent Contractors (2) |
48 | % | 46 | % | 48 | % | 46 | % | ||||||||
| Truck Brokerage Carriers |
45 | % | 47 | % | 45 | % | 47 | % | ||||||||
| Rail intermodal |
4 | % | 3 | % | 3 | % | 3 | % | ||||||||
| Ocean and air cargo carriers |
3 | % | 3 | % | 2 | % | 3 | % | ||||||||
| Other |
2 | % | 1 | % | 2 | % | 1 | % | ||||||||
| June 25, 2016 |
June 27, 2015 |
|||||||||||||||
| Truck Capacity Providers |
||||||||||||||||
| BCO Independent Contractors (2) |
8,856 | 8,726 | ||||||||||||||
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| Truck Brokerage Carriers: |
||||||||||||||||
| Approved and active (3) |
30,137 | 28,387 | ||||||||||||||
| Other approved |
15,594 | 13,126 | ||||||||||||||
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|||||||||||||
| 45,731 | 41,513 | |||||||||||||||
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|||||||||||||
| Total available truck capacity providers |
54,587 | 50,239 | ||||||||||||||
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|||||||||||||
| Trucks provided by BCO Independent Contractors (2) |
9,462 | 9,308 | ||||||||||||||
| (1) | Includes primarily premium revenue generated by the insurance segment. |
| (2) | BCO Independent Contractors are independent contractors who provide truck capacity to the Company under exclusive lease arrangements. |
| (3) | Active refers to Truck Brokerage Carriers who have moved at least one load in the 180 days immediately preceeding the fiscal quarter end. |
July 20, 2016 Landstar System, Inc. Earnings Conference Call Second Quarter 2016 Date Published: 07/20/2016 Exhibit 99.2
The following is a “safe harbor” statement under the Private Securities Litigation Reform Act of 1995. Statements made during this presentation that are not based on historical facts are “forward looking statements.” During this presentation, I 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 and legal risks detailed in Landstar’s Form 10-K for the 2015 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 Landstar undertakes no obligation to publicly update or revise any forward-looking statements. Date Published: 07/20/2016
Model Definition Landstar is a worldwide, 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: 07/20/2016
The Network Date Published: 07/20/2016 2015 Results $3.3 billion in revenue 1.8 million loadings 512 million dollar agents 9,500 BCO trucks (2015 year-end) 44,000 Carriers (2015 year-end) 14,000 Trailers (2015 year-end)
Transportation Management Services Percentage of Revenue 2Q15 2Q16 Truck Transportation Truckload Van equipment 57% 59% Unsided/platform equipment 34% 31% Less-than-truckload 2% 2% Rail intermodal 3% 3% Ocean and air cargo 3% 2% Date Published: 07/20/2016
Percentage change in rate is calculated on a revenue per load basis. Percentage change in volume is calculated on the number of loads hauled. Date Published: 07/20/2016 Revenue ($’s in thousands) Quarter to Date Year to Date Qtr over Prior Year Qtr Rate (1) Volume (2) Change Truck Revenue -9.2% -2.2% -0.112 Rail Intermodal Revenue -8.2% 8.5% -0.4% Ocean/Air Revenue -0.253 0.16300000000000001 -0.13200000000000001 Insurance Premiums NA NA 5.5% Total Revenue -0.107 Year over Prior Year Rate (1) Volume (2) Change Truck Revenue -9.7% 2.2% -9.5% Rail Intermodal Revenue -9.6% 0.16900000000000001 5.7% Ocean/Air Revenue -0.19700000000000001 0.13500000000000001 -8.9% Insurance Premiums NA NA 7.2% Total Revenue -8.8%
Van Equipment Unsided/Platform Equipment Date Published: 07/20/2016 Truckload Loadings and Revenue per Load (Excludes LTL)
Industries Served As a Percentage of Revenue Q2 Q2 2015 2016 Quarter over Prior Year Quarter Growth Consumer Durables 18.6 20.4 -2% Machinery 14.8 14.6 -12% Automotive 11.8 9.1 -31% Building Products 8.6 9.6 0% Metals 6.8 7.0 -8% AA&E, Hazmat 7.5 8.0 -5% Foodstuffs 5.2 5.1 -13% Energy 4.0 3.0 -34% Other 22.7 23.2 -9% Total 100.0 100.0 -11% Date Published: 07/20/2016
15.1% 15.6% Gross profit equals revenue less the cost of purchased transportation and commissions to agents. Gross profit margin equals gross profit divided by revenue. Revenue on transactions with a fixed gross profit margin was 55% and 56% of revenue in the 2015 and 2016 year-to-date periods, respectively, and 55% of revenue in both the 2015 and 2016 second quarters. Date Published: 07/20/2016 Gross Profit (1) and Gross Profit Margin (2) ($’s in thousands) Quarter to Date Year to Date 15.1% 15.6% 15.1% 15.7% 2nd Qtr (3) Changes in gross profit margin % 2015 Period 15.1 Revenue - fixed gp margin 0.2 Revenue - variable gp margin 0.2 Change in mix and other 0.1 2016 Period 15.6 2nd Qtr YTD (3) Changes in gross profit margin % 2015 Period 15.1 Revenue - fixed gp margin 0.2 Revenue - variable gp margin 0.3 Change in mix and other 0.1 2016 Period 15.7
50.5% 43.9% Operating margin equals operating income divided by gross profit. Date Published: 07/20/2016 Operating Income and Operating Margin (1) ($’s in thousands) Quarter to Date Year to Date 50.5% 43.9% 46.7% 43.3% 2nd Qtr Changes in operating margin % 2015 Period 50.5 Other operating costs 0.7 Insurance and claims -3.9 SG&A -1.6 Depreciation and amortization -1.8 2016 Period 43.9 2nd Qtr YTD Changes in operating margin % 2015 Period 46.7 Other operating costs 0.4 Insurance and claims -2 SG&A -0.2 Depreciation and amortization -1.6 2016 Period 43.3
Date Published: 07/20/2016 Truck Capacity Data (All information other than fuel surcharges is provided as of the end of the period) QTR YTD QTR Jun 27, Dec 26, Jun 25, 2015 2015 2016 BCO Independent Contractors 8,726 8,907 8,856 Truck Brokerage Carriers: Approved and Active (1) 28,387 29,728 30,137 Other Approved 13,126 14,715 15,594 41,513 44,443 45,731 Total Available Truck Capacity Providers 50,239 53,350 54,587 Trucks Provided by BCO Independent Contractors 9,308 9,500 9,462 Fuel Surcharges - BCO Loadings only ($ in thousands) (2) 47,876 $ 174,661 $ 30,771 $ are paid 100% to the BCO and excluded from revenue and the cost of purchased transportation. (1) Active refers to truck brokerage carriers who hauled freight for Landstar in the 180 day period immediately preceding the period end. (2) Fuel surcharges billed to customers during the applicable period on freight hauled by BCO Independent Contractors
(1) Net cash is defined as cash and cash equivalents plus short term investments less outstanding debt. Date Published: 07/20/2016 Key Balance Sheet and Cash Flow Statistics ($’s in thousands) YTD YTD Jun 27, Jun 25, 2015 2016 Balance sheet (period end amounts) : Debt to Capital 17% 19% Net Cash (1) 38,081 $ 95,965 $ Cash flow: Cash flow from operations 82,017 $ 105,135 $ Capital expenditures 3,050 $ 8,955 $ Share repurchases 84,635 $ 26,485 $ Dividends paid 50,980 $ 6,782 $ Returns: TTM Return on Equity 30% 29% TTM Return on Invested Capital 25% 23% TTM Return on Assets 15% 14%
Free Cash Flow / Share Purchases (In Thousands) Free cash flow is defined as cash flow from operations less capital expenditures, each set forth on the prior slide. YTD through June Date Published: 07/20/2016 40,000 42,000 44,000 46,000 48,000 50,000 $- $50,000 $100,000 $150,000 $200,000 $250,000 2012 2013 2014 2015 2016(2) Free Cash Flow Share Purchases Common Share Count Second quarter 2016 YTD (000's) Free cash flow (1) $96,180 Share purchases $26,485 Ending common share count 42,108
Date Published: 07/20/2016