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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: September 8, 1998 Date of Event: August 22, 1998
LANDSTAR SYSTEM, INC.
(Exact name of registrant as specified in its charter)
Delaware 021238 06-1313069
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) file number) Identification No.)
4160 Woodcock Drive, Jacksonville, Florida
(Address of principal executive offices)
32207
(Zip Code)
(904) 390-1234
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last
report)
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Item 2 Acquisition or Disposition of Assets.
On August 22, Landstar Poole, Inc. ("Landstar Poole"), an indirect wholly-owned
subsidiary of Landstar System, Inc.("Landstar"), sold all of its tractors and
trailers, certain operating assets and the Landstar Poole business to Schneider
National, Inc. for approximately $41,592,000 in cash. This transaction was
fully described in Landstar's quarterly report on Form 10-Q for the quarter
ended June 27, 1998.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of business acquired.
N/A
(b) Financial Statements and Pro Forma Financial Information and Exhibits
Pro Forma Consolidated Financial Statement Information as of
June 27, 1998 and December 27, 1997.
On August 22, 1998, Landstar Poole, which comprised Landstar's entire
company-owned tractor segment, completed the sale of all its tractors and
trailers, certain operating assets and the Landstar Poole business to Schneider
National, Inc. for approximately $41,592,000 in cash, of which $750,000 has
been placed in escrow pending a final accounting for certain asset
values. In addition, Landstar Poole has entered into an agreement to sell
its remaining truck terminal to an unrelated third party for approximately
$732,000 in cash. Certain liabilities of the company-owned tractor segment were
retained by Landstar, primarily insurance claims, accounts payable and capital
lease obligations.
The Pro Forma Financial Information is not necessarily indicative of what the
financial condition of Landstar would have been had the disposition been
completed on the date assumed, nor is such information necessarily indicative
of the future financial condition or results of operations of Landstar.
The unaudited Pro Forma Financial Information should be read in conjunction
with the explanatory notes thereto, and the consolidated financial statements
of Landstar for the thirteen and twenty-six week periods ended June 27, 1998,
included in Landstar's quarterly report on Form 10-Q, and the fiscal year ended
December 27, 1997, included in Landstar's annual report on Form 10-K, both
of which were previously filed with the Commission.
The historical Statements of Income for the thirteen and twenty-six weeks ended
June 27, 1998 and June 28, 1997 included in Landstar's June 27, 1998 quarterly
report on Form 10-Q fully reflect the results of operations and the disposition
of the company-owned tractor segment as a discontinued operation for all
periods presented. The Pro Forma Balance Sheet information at June 27, 1998 and
the Pro Forma Statement of Income information for the fiscal year ended
December 27, 1997 follows:
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LANDSTAR SYSTEM, INC. AND SUBSIDIARY
CONSOLIDATED PRO FORMA BALANCE SHEET INFORMATION
(Dollars in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
June 27, Pro Forma Pro Forma Balance
1998 Adjustments Sheet Information
---------- ------------- ------------
ASSETS
<S> <C> <C> <C>
Current assets:
Cash $ 21,786 $ 25,431 $ 47,217
Short-term investments 1,460 1,460
Trade accounts receivable, less allowance of $7,724 170,586 170,586
Other receivables, including advances to independent
contractors, less allowance of $4,804 13,195 1,482 14,677
Prepaid expenses and other current assets 9,503 9,503
Assets held for sale 42,324 (42,324)
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Total current assets 258,854 (15,411) 243,443
--------- ---------- ----------
Operating property, less accumulated depreciation
and amortization of $27,606 40,471 40,471
Goodwill, less accumulated amortization of $5,953 35,609 35,609
Deferred income taxes and other assets 10,274 10,274
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Total assets $ 345,208 $ (15,411) $ 329,797
========= ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Cash overdraft $ 15,033 $ 15,033
Accounts payable 59,972 59,972
Current maturities of long-term debt 35,284 $ (15,411) 19,873
Insurance claims 31,490 31,490
Other current liabilities 35,329 35,329
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Total current liabilities 177,108 (15,411) 161,697
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Long-term debt, excluding current maturities 27,000 27,000
Insurance claims 31,367 31,367
Shareholders' equity:
Common stock, $.01 par value, authorized 20,000,000
shares, issued 12,943,174 shares 129 129
Additional paid-in capital 63,216 63,216
Retained earnings 103,672 103,672
Cost of 2,028,041 shares of common stock in treasury (57,284) (57,284)
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Total shareholders' equity 109,733 109,733
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Total liabilities and shareholders' equity $ 345,208 $ (15,411) $ 329,797
========= ========== ==========
See accompanying explanatory note to consolidated Pro Forma financial information.
</TABLE> 3
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LANDSTAR SYSTEM, INC. AND SUBSIDIARY
CONSOLIDATED PRO FORMA STATEMENT OF INCOME INFORMATION
(Dollars in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Fiscal Year Ended December 27, 1997
-----------------------------------
Historical Disposition Pro Forma
Financial of Financial
Information Business Information
----------- ----------- -----------
<S> <C> <C> <C>
Revenue $ 1,312,704 $ 93,393 $ 1,219,311
Costs and expenses:
Purchased transportation 923,654 14,837 908,817
Drivers' wages and benefits 28,010 28,010
Fuel and other operating costs 48,733 26,057 22,676
Insurance and claims 47,993 5,108 42,885
Commissions to agents and brokers 99,848 1,423 98,425
Selling, general and administrative 93,214 7,628 85,586
Depreciation and amortization 20,918 9,564 11,354
Restructuring costs 3,164 (83) 3,247
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Total costs and expenses 1,265,534 92,544 1,172,990
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Operating income 47,170 849 46,321
Interest and debt expense 4,602 1,897 2,705
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Income before income taxes 42,568 (1,048) 43,616
Income taxes 17,878 (310) 18,188
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Net income $ 24,690 $ (738) $ 25,428
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Earnings per common share $ 1.97 $ (0.06) $ 2.03
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Diluted earnings per share $ 1.96 $ (0.06) $ 2.02
=========== =========== ===========
Average number of common shares outstanding:
Earnings per common share 12,541,000 12,541,000 12,541,000
=========== =========== ===========
Diluted earnings per share 12,580,000 12,580,000 12,580,000
=========== =========== ===========
See accompanying explanatory note to consolidated Pro Forma financial information.
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LANDSTAR SYSTEM, INC.
EXPLANATORY NOTES TO PRO FORMA FINANCIAL INFORMATION
(Unaudited)
The Pro Forma Balance Sheet Information assumes that the transaction was
completed on June 27, 1998 and reflects that $15,411,000 of the proceeds
received from sale were utilized to repay the capital lease obligations
secured by the assets sold.
The Pro Forma Statement of Income Information for the fiscal year ended
December 27, 1997 assumes that the disposal of the company-owned tractor
segment occurred on December 28, 1996, the end of the Company's 1996 fiscal
year.
(c) Exhibits
The exhibits listed on the Exhibit Index are filed as part of this Current
Report on Form 8-K.
Exhibit Index
Exhibit No. Description
- ----------- -----------
(2) Plan of acquisition, reorganization, arrangement,
Liquidation or succession.
(2.1) Asset Purchase Agreement, by and between Landstar
Poole, Inc. as the seller, and Landstar System,
Inc. as the guarantor, and Schneider National, Inc.
as the purchaser, dated as of July 15, 1998
(a copy of which has been previously
filed with the Commission with the
Company's June 27, 1998 quarterly report on
Form 10-Q).
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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, thereunto duly authorized.
LANDSTAR SYSTEM, INC.
Date: September 8, 1998 Henry H. Gerkens
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Henry H. Gerkens
Executive Vice President and
Chief Financial Officer;
Principal Financial Officer
Date: September 8, 1998 Robert C. LaRose
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Robert C. LaRose
Vice President Finance and Treasurer;
Principal Accounting Officer
