(Source: PRNewswire-FirstCall)
JACKSONVILLE, Fla., July 15 /PRNewswire-FirstCall/ -- Landstar System, Inc. reported 2009 second quarter net income of $17.9 million, or $0.35 per diluted share, from revenue of $491.2 million. Included in the 2009 second quarter was $2.0 million of costs, or $0.02 per diluted share, related to two acquisitions that were completed in the first week of the 2009 third quarter. Net income for the 2008 second quarter was $29.8 million, or $0.56 per diluted share, from revenue of $697.7 million.
Revenue hauled by BCO Independent Contractors in the second quarter of 2009 was $288.6 million, or 59 percent of revenue, compared to $375.4 million, or 54 percent of revenue, in the 2008 second quarter. Moreover, in the second quarters of 2009 and 2008, the Company invoiced customers $27.3 million and $90.3 million, respectively, in fuel surcharges that were passed on 100 percent to BCO Independent Contractors and excluded from revenue. Revenue hauled by third-party truck brokerage carriers was $165.2 million, or 34 percent of revenue, in the 2009 second quarter compared to $261.7 million, or 38 percent of revenue, in the 2008 second quarter. Included in third-party truck brokerage revenue in the 2009 and 2008 second quarters was $9.2 million and $39.9 million, respectively, of fuel surcharges invoiced to customers. Revenue hauled by rail, air and ocean cargo carriers was $28.2 million, or 6 percent of revenue, in the 2009 second quarter compared to $51.5 million, or 7 percent of revenue, in the 2008 second quarter.
Revenue in the twenty-six-week period ended June 27, 2009 was $960 million compared to $1.306 billion for the 2008 twenty-six-week period. Net income for the twenty-six-week period ended June 27, 2009 was $31.8 million, or $0.61 per diluted share, compared to net income of $53.5 million, or $1.01 per diluted share, for the twenty-six-week period ended June 28, 2008.
Revenue hauled by BCO Independent Contractors in the 2009 twenty-six-week period was $550.7 million, or 57 percent of revenue, compared to $700.2 million, or 54 percent of revenue, in the 2008 twenty-six-week period. In the twenty-six-week periods of 2009 and 2008, the Company invoiced customers $51.5 million and $148.1 million, respectively, in fuel surcharges that were passed on 100 percent to BCO Independent Contractors and excluded from revenue. Revenue hauled by third-party truck brokerage carriers was $329.5 million, or 34 percent of revenue, in the 2009 twenty-six-week period compared to $490.3 million, or 38 percent of revenue, in the 2008 twenty-six-week period. Included in the third-party truck brokerage revenue in the 2009 and 2008 twenty-six-week periods was $19.0 million and $67.7 million, respectively, of fuel surcharges invoiced to customers. Revenue hauled by rail, air and ocean cargo carriers was $61.8 million, or 6 percent of revenue, in the 2009 twenty-six-week period compared to $97.3 million, or 7 percent of revenue, in the 2008 twenty-six-week period.
Landstar System, Inc. also announced that its Board of Directors has declared a quarterly dividend of $0.045 per share. This represents a 13 percent increase in the Company's quarterly dividend. The dividend is payable on August 28, 2009 to stockholders of record at the close of business on August 10, 2009. It is the intention of the Board of Directors to continue to pay a quarterly dividend. Under the Company's authorized share purchase programs, the Company currently has a total of 2,556,200 shares of its common stock available for purchase.
"In the 2009 second quarter, Landstar's revenue continued to be negatively impacted by the severe recession in the domestic and global economies," said Landstar President and Chief Executive Officer Henry Gerkens. "As was the case in the 2009 first quarter, revenue declines were experienced in just about every sector, including revenue generated from the U.S. Department of Defense. As anticipated, significant revenue declines occurred in the automotive sector and in our substitute line haul service offering. From a load volume perspective, the number of loads hauled in the 2009 second quarter decreased 16 percent compared to the 2008 second quarter, better than the 17 percent decline experienced in the 2009 first quarter compared to the 2008 first quarter, demonstrating a slow improvement in overall demand. However, this improvement was more than offset by continued pressure on price which was caused in part by lower fuel surcharge revenue on freight hauled by third-party truck brokerage carriers and rail, ocean and air cargo carriers. Revenue per load for revenue hauled by BCO Independent Contractors in the 2009 second quarter was 11 percent below the 2008 second quarter and revenue per load on freight hauled by third-party truck brokerage carriers, which includes the impact of lower fuel surcharges invoiced to customers in the 2009 second quarter, decreased 24 percent compared to the 2008 second quarter.
"Irrespective of the current economic environment, Landstar continues to generate outstanding returns. Trailing twelve month return on average shareholders' equity remained high at 35 percent and trailing twelve month return on invested capital, net income divided by the sum of average equity plus average debt, was 24 percent.
"Landstar's net revenue margin, defined as revenue less purchased transportation and commissions to agents divided by revenue, was 17.2%, up from 15.3% in the 2008 second quarter. And, as a direct result of Landstar's variable cost business model and other cost reduction actions taken in 2009, Landstar was able to generate an operating profit margin of 6.1%, despite the revenue decline. If one were to exclude the $2.0 million in one-time acquisition costs, the operating margin was 6.5%, a very respectable margin in a very difficult operating climate.
"In the first week of the Company's fiscal third quarter, Landstar completed the acquisitions of two supply chain transportation integration companies. I am excited about the opportunities that these acquisitions will provide to our independent agent and capacity network," Gerkens said. "The technology platforms acquired with these businesses should provide our independent agents the ability to offer customers complete supply chain solutions with industry leading technology and, in turn, provide additional loading opportunities to our vast capacity network. Landstar now possesses the tools to become a major player in the freight under management business. The Company expects that the acquisitions will not have a material effect on its revenue and earnings for the third and fourth quarters of 2009."
Gerkens continued, "I do not foresee a significant change in the current freight environment as we move through the third quarter. However, there has been a slight improvement in volume trends.
