LANDSTAR SYSTEM, INC. (NASDAQ:LSTR) Files An 8-K Regulation FD DisclosureItem 7.01
During the five day period from April4 through April8, 2018, Landstar System, Inc. (collectively with its subsidiaries and affiliates, “Landstar” or the “Company”) will be holding its annual agent meeting for its independent sales agents. During this meeting in Boca Raton, Florida, the Company intends to have a separate meeting on April4, 2018 with approximately fifteen sell-side financial analysts from firms currently covering the Company. During this meeting with members of the financial community, Landstar intends to discuss current business trends and provide updated first quarter 2018 revenue and diluted earnings per share guidance.
The Company previously issued first quarter 2018 revenue and diluted earnings per share guidance (the “2018 First Quarter Prior Guidance”) in its 2017 fourth quarter earnings release, a copy of which was included as an exhibit to a Current Report on Form 8-K filed with the Securities and Exchange Commission on January31, 2018. The 2018 First Quarter Prior Guidance included revenue guidance of $925million to $975million and diluted earnings per share guidance of $1.22 to $1.27. The 2018 First Quarter Prior Guidance anticipated the number of loads hauled via truck in the 2018 first quarter to increase in a high-single digit percentage range over the 2017 first quarter. Additionally, the 2018 First Quarter Prior Guidance anticipated revenue per load on loads hauled via truck in the 2018 first quarter to increase in a mid-teen percentage range over the 2017 first quarter. The 2018 First Quarter Prior Guidance also assumed that insurance and claims costs in the 2018 first quarter would approximate the historical average of insurance and claims costs as equal to approximately 3.5% of revenue generated by the Company’s BCO Independent Contractors.
Through the first eight weeks of fiscal 2018, the number of loads hauled via truck increased approximately 11% over the same period in 2017, mostly due to an increase of 13% and 7% in loads hauled via van equipment and unsided/platform equipment, respectively. Revenue per load on loads hauled via truck during the first eight weeks of 2018 was 21% above the truck revenue per load experienced during the first eight weeks of 2017, mostly due to a 24% increase in revenue per load on loads hauled via van equipment and an 18% increase in revenue per load on loads hauled via unsided/platform equipment.
“The momentum we experienced closing out 2017 has carried over into 2018. We continue to drive strong year over year volume growth and are currently experiencing an exceptional pricing environment,” said Jim Gattoni, Landstar’s President and CEO.
Gattoni continued, “The strength in both truckload volume and pricing experienced in the first eight weeks of 2018 continued through March. As such, I expect the 2018 first quarter number of loads and revenue per load on loads hauled via truck to exceed the 2017 first quarter in an amount similar to the growth experienced during the first eight weeks of the 2018 first quarter.”
Gattoni further commented, “Given these trends, we anticipate revenue for the 2018 first quarter to be in a range of $1.03billion to $1.05billion. We expect insurance and claims costs to be elevated in the 2018 first quarter due to both increased severity of accidents and unfavorable development of prior year claims. Assuming that range of revenue and elevated insurance and claims costs, we anticipate 2018 first quarter diluted earnings per share to be in a range of $1.35 to $1.40 per share. Included in the updated 2018 first quarter diluted earnings per share guidance is approximately $0.03 of excess tax benefits realized on stock-based awards during the first eight weeks of fiscal 2018.”
The information furnished under Item 7.01 of this Current Report on Form8-K shall not be deemed “filed” for purposes of Section18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.
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; 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; changes in fuel taxes; status of independent contractors; regulatory and legislative changes; regulations focused on diesel emissions and other air quality matters; 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 2017 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 SYSTEM, INC. (NASDAQ:LSTR)
Landstar System, Inc. (Landstar) is an asset-light provider of integrated transportation management solutions. The Company offers services to its customers across multiple transportation modes, with the ability to arrange for individual shipments of freight to enterprise solutions to manage customer’s transportation needs. It operates in two segments: the Transportation Logistics segment and the Insurance segment. The Transportation Logistics segment provides a range of integrated transportation management solutions. Transportation services offered by it include truckload and less-than-truckload transportation, rail intermodal, air cargo, ocean cargo, expedited ground and air delivery of time-critical freight, heavy-haul or specialized, the United States-Canada and the United States-Mexico cross-border, project cargo and customs brokerage. The insurance segment consists of Signature Insurance Company, which is an offshore insurance subsidiary, and Risk Management Claim Services, Inc.