<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 25, 2000
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from _________________ to _____________________
Commission File Number: 0-21238
LANDSTAR SYSTEM, INC.
(Exact name of registrant as specified in its charter)
Delaware 06-1313069
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
13410 Sutton Park Drive South, Jacksonville, Florida
(Address of principal executive offices)
32224
(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)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes ( X ) No ( )
The number of shares of the registrant's Common Stock, par value $.01 per
share, outstanding as of the close of business on April 21, 2000 was
8,988,833.
<PAGE>
PART I
FINANCIAL INFORMATION
Index
Item 1
Consolidated Balance Sheets as of March 25, 2000
and December 25, 1999 ............................................... Page 3
Consolidated Statements of Income for the Thirteen Weeks
Ended March 25, 2000 and March 27, 1999 ............................. Page 4
Consolidated Statements of Cash Flows for the Thirteen Weeks
Ended March 25, 2000 and March 27, 1999 ............................. Page 5
Consolidated Statement of Changes in Shareholders'
Equity for the Thirteen Weeks Ended March 25, 2000 .................. Page 6
Notes to Consolidated Financial Statements............................. Page 7
Item 2
Management's Discussion and Analysis of
Financial Condition and Results of Operations........................ Page 9
Item 3
Quantitative and Qualitative Disclosures About Market Risk............. Page 14
Item 1. Financial Statements
The interim consolidated financial statements contained herein reflect
all adjustments (all of a normal, recurring nature) which, in the opinion of
management, are necessary for a fair statement of the financial condition,
results of operations, cash flows and changes in shareholders' equity
for the periods presented. They have been prepared in accordance with Rule
10-01 of Regulation S-X and do not include all the information and footnotes
required by generally accepted accounting principles for complete financial
statements. Operating results for the thirteen weeks ended March 25,
2000 are not necessarily indicative of the results that may be expected for the
entire fiscal year ending December 30, 2000.
These interim financial statements should be read in conjunction with
the audited financial statements and notes thereto included in the Company's
1999 Annual Report on Form 10-K.
2
<PAGE>
LANDSTAR SYSTEM, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
March 25, December 25,
2000 1999
---------- ------------
ASSETS
<S> <C> <C>
Current assets:
Cash $ 47,237 $ 23,721
Short-term investments 500 1,000
Trade accounts receivable, less allowance of $3,327
and $4,002 179,371 207,024
Other receivables, including advances to independent
contractors, less allowance of $4,548 and $5,033 19,250 14,318
Prepaid expenses and other current assets 4,888 6,190
---------- -----------
Total current assets 251,246 252,253
---------- -----------
Operating property, less accumulated depreciation
and amortization of $36,531 and $34,283 63,210 63,797
Goodwill, less accumulated amortization of $8,081 and $7,777 33,429 33,733
Deferred income taxes and other assets 19,077 15,658
---------- -----------
Total assets $ 366,962 $ 365,441
========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Cash overdraft $ 10,885 $ 19,471
Accounts payable 61,184 67,322
Current maturities of long-term debt 4,413 6,769
Insurance claims 27,441 27,207
Accrued compensation 3,497 12,113
Other current liabilities 39,305 37,782
---------- -----------
Total current liabilities 146,725 170,664
---------- -----------
Long-term debt, excluding current maturities 87,594 60,529
Insurance claims 27,437 27,364
Shareholders' equity:
Common stock, $.01 par value, authorized 20,000,000
shares, issued 13,134,874 and 13,063,974 shares 131 131
Additional paid-in capital 68,085 65,833
Retained earnings 178,513 170,174
Cost of 4,083,541 and 3,909,041 shares of common stock in
treasury (138,100) (127,560)
Notes receivable arising from exercise of stock options (3,423) (1,694)
---------- -----------
Total shareholders' equity 105,206 106,884
---------- -----------
Total liabilities and shareholders' equity $ 366,962 $ 365,441
========== ===========
See accompanying notes to consolidated financial statements.
</TABLE> 3
<PAGE>
LANDSTAR SYSTEM, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Thirteen Weeks Ended
-----------------------
March 25, March 27,
2000 1999
---------- ----------
<S> <C> <C>
Revenue $ 327,006 $ 311,435
Investment income 930 544
Costs and expenses:
Purchased transportation 240,990 229,430
Commissions to agents 25,904 24,271
Other operating costs 7,447 6,669
Insurance and claims 9,104 10,145
Selling, general and administrative 25,948 25,518
Depreciation and amortization 3,054 2,643
---------- ----------
Total costs and expenses 312,447 298,676
---------- ----------
Operating income 15,489 13,303
Interest and debt expense 1,705 739
---------- ----------
Income before income taxes 13,784 12,564
Income taxes 5,445 5,089
---------- ----------
Net income $ 8,339 $ 7,475
========== ==========
Earnings per common share $ 0.91 $ 0.72
========== ==========
Diluted earnings per share $ 0.89 $ 0.71
========== ==========
Average number of shares outstanding:
Earnings per common share 9,169,000 10,368,000
========== ==========
Diluted earnings per share 9,371,000 10,491,000
========== ==========
See accompanying notes to consolidated financial statements.
</TABLE> 4
<PAGE>
LANDSTAR SYSTEM, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Thirteen Weeks Ended
---------------------------
March 25, March 27,
2000 1999
----------- -----------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 8,339 $ 7,475
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization of operating property 2,750 2,339
Amortization of goodwill 304 304
Non-cash interest charges 81 81
Provisions for losses on trade and other accounts receivable 270 934
Gains on sales of operating property (46) (61)
Deferred income taxes, net 263 106
Changes in operating assets and liabilities:
Decrease in trade and other accounts receivable 22,451 4,007
Decrease (increase) in prepaid expenses and other assets (2,461) 1,497
Increase (decrease) in accounts payable (6,138) 5,349
Decrease in other liabilities (5,631) (5,106)
Increase in insurance claims 307 1,415
----------- -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES 20,489 18,340
----------- -----------
INVESTING ACTIVITIES
Maturity of short-term investment 500
Purchases of operating property (2,304) (822)
Proceeds from sales of operating property 187 336
----------- -----------
NET CASH USED BY INVESTING ACTIVITIES (1,617) (486)
----------- -----------
FINANCING ACTIVITIES
Decrease in cash overdraft (8,586) (1,292)
Borrowings on revolving credit facility 26,500
Proceeds from exercise of stock options and related income tax benefit 79 8
Purchases of common stock (11,558) (8,072)
Principal payments on capital lease obligations (1,791) (1,470)
----------- -----------
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 4,644 (10,826)
----------- -----------
Increase in cash 23,516 7,028
Cash at beginning of period 23,721 26,681
----------- -----------
Cash at end of period $ 47,237 $ 33,709
=========== ===========
See accompanying notes to consolidated financial statements.
</TABLE> 5
<PAGE>
LANDSTAR SYSTEM, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES
IN SHAREHOLDERS' EQUITY
Thirteen Weeks Ended March 25, 2000
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Notes
Treasury Stock Receivable
Common Stock Additional at Cost Arising from
------------------ Paid-In Retained ------------------- Exercise of
Shares Amount Capital Earnings Shares Amount Stock Options Total
---------- ------- --------- --------- --------- --------- ------------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance December 25, 1999 13,063,974 $ 131 $ 65,833 $ 170,174 3,909,041 $(127,560) $ (1,694) $ 106,884
Net income 8,339 8,339
Purchases of common stock 205,700 (11,558) (11,558)
Exercise of stock options
and related income tax
benefit 70,900 1,808 (1,729) 79
Incentive compensation paid
in common stock 444 (31,200) 1,018 1,462
---------- ------- --------- --------- --------- --------- ------------- ---------
Balance March 25, 2000 13,134,874 $ 131 $ 68,085 $ 178,513 4,083,541 $(138,100) $ (3,423) $ 105,206
========== ======= ========= ========= ========= ========= ============= =========
See accompanying notes to consolidated financial statements.
</TABLE>
6
<PAGE>
LANDSTAR SYSTEM, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The consolidated financial statements include the accounts of Landstar System,
Inc. and its subsidiary, Landstar System Holdings, Inc., and reflect all
adjustments (all of a normal, recurring nature) which are, in the opinion of
management, necessary for a fair statement of the results for the periods
presented. The preparation of the consolidated financial statements requires
the use of management's estimates. Actual results could differ from those
estimates. Landstar System, Inc. and its subsidiary are herein referred to as
"Landstar."
(1) Income Taxes
The provisions for income taxes for the 2000 and 1999 thirteen-week
periods were based on estimated full year combined effective income
tax rates of approximately 39.5% and 40.5%, respectively, which is
higher than the statutory federal income tax rate primarily as a result
of state income taxes, amortization of certain goodwill and the meals and
entertainment exclusion.
(2) Earnings Per Share
Earnings per common share amounts are based on the weighted average
number of common shares outstanding and diluted earnings per share
amounts are based on the weighted average number of common shares
outstanding plus the incremental shares that would have been outstanding
upon the assumed exercise of all dilutive stock options.
(3) Additional Cash Flow Information
During the 2000 period, Landstar paid income taxes and interest of
$1,549,000 and $1,789,000, respectively. During the 1999 period, Landstar
paid income taxes and interest of $4,031,000 and $777,000, respectively.
7
<PAGE>
(4) Segment Information
The following tables summarize information about Landstar's reportable
business segments for the thirteen weeks ended
March 25, 2000 and March 27, 1999 (in thousands):
<TABLE>
<CAPTION>
Thirteen Weeks Ended March 25, 2000
------------------------------------------
Carrier Multimodal Insurance Other Total
------- ---------- --------- ----- -----
<S> <C> <C> <C> <C> <C>
External revenue $ 255,805 $ 65,198 $ 6,003 $ 327,006
Investment income 930 930
Internal revenue 9,080 48 5,203 14,331
Operating income 18,712 1,782 4,799 $ (9,804) 15,489
Thirteen Weeks Ended March 27, 1999
------------------------------------------
Carrier Multimodal Insurance Other Total
------- ---------- --------- ----- -----
<S> <C> <C> <C> <C> <C>
External revenue $ 251,631 $ 53,572 $ 6,232 $ 311,435
Investment income 544 544
Internal revenue 6,347 34 5,206 11,587
Operating income 16,826 1,388 4,178 $ (9,089) 13,303
</TABLE>
(5) Commitments and Contingencies
At March 25, 2000, Landstar had commitments for letters of
credit outstanding in the amount of $22,229,000, primarily as
collateral for insurance claims. The commitments for letters of credit
outstanding included $12,480,000 under the Second Amended and Restated
Credit Agreement and $9,749,000 secured by assets deposited with a
financial institution.
Landstar is involved in certain claims and pending litigation
arising from the normal conduct of business. Based on the
knowledge of the facts and, in certain cases, opinions of
outside counsel, management believes that adequate provisions
have been made for probable losses with respect to the resolution
of all claims and pending litigation and that the ultimate outcome,
after provisions thereof, will not have a material adverse effect
on the financial condition of Landstar, but could have a material
effect on the results of operations in a given quarter or year.
(6) Subsequent Events
On March 28, 2000, the Company announced a plan to relocate Landstar
Ligon, Inc.'s headquarters from Madisonville, Kentucky to Jacksonville,
Florida during the second quarter of 2000. Management anticipates
incurring a one-time pre-tax charge of approximately $3,000,000 for
severance pay, relocation expenses and other costs in connection
with this relocation.
8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following discussion should be read in conjunction with the attached
interim consolidated financial statements and notes thereto, and with the
Company's audited financial statements and notes thereto for the fiscal year
ended December 25, 1999 and Management's Discussion and Analysis of Financial
Condition and Results of Operations included in the 1999 Annual Report to
Shareholders.
RESULTS OF OPERATIONS
Landstar System, Inc. and its subsidiary, Landstar System Holdings, Inc.
("Landstar" or the "Company"), provide transportation services to a variety
of market niches throughout the United States and to a lesser extent in Canada
and between the United States and Canada and Mexico through its operating
subsidiaries. The Company has three reportable business segments. These are
the carrier, multimodal and insurance segments.
The carrier segment consists of Landstar Ranger, Inc., Landstar Inway, Inc.,
Landstar Ligon, Inc. ("Landstar Ligon") and Landstar Gemini, Inc. The carrier
segment provides truckload transportation for a wide range of general
commodities over irregular routes with its fleet of dry and specialty vans and
unsided trailers, including flatbed, drop deck and specialty. It also provides
short-to-long haul movement of containers by truck and dedicated power-only
truck capacity. The carrier segment markets its services primarily through
independent commission sales agents and utilizes tractors provided by
independent contractors. The nature of the carrier segment's business is such
that a significant portion of its operating costs varies directly with revenue.
The multimodal segment is comprised of Landstar Logistics, Inc. and Landstar
Express America, Inc. Transportation services provided by the multimodal
segment include the arrangement of intermodal moves, contract logistics, truck
brokerage and emergency and expedited ground and air freight. The multimodal
segment markets its services through independent commission sales agents and
utilizes capacity provided by independent contractors, including railroads and
air cargo carriers. The nature of the multimodal segment's business is such
that a significant portion of its operating costs also varies directly with
revenue.
9
<PAGE>
The insurance segment is comprised of Signature Insurance Company
("Signature"), a wholly-owned offshore insurance subsidiary and Risk Management
Claim Services, Inc. The insurance segment provides risk and claims management
services to Landstar's operating companies. In addition, it reinsures certain
property, casualty and occupational accident risks of certain independent
contractors who have contracted to haul freight for Landstar and provides
certain property and casualty insurance directly to Landstar's operating
subsidiaries.
Purchased transportation represents the amount an independent contractor
is paid to haul freight and is primarily based on a contractually agreed-
upon percentage of revenue generated by the haul for truck capacity provided by
independent contractors. Purchased transportation for the intermodal services
operations and the air freight operations of the multimodal segment is based on
a contractually agreed-upon fixed rate. Purchased transportation as a
percentage of revenue for the intermodal services operations is normally higher
than that of Landstar's other transportation operations. Purchased
transportation is the largest component of costs and expenses and, on a
consolidated basis, increases or decreases with revenue. Commissions to agents
are primarily based on contractually agreed-upon percentages of revenue at the
carrier segment and of gross profit at the multimodal segment. Commissions to
agents as a percentage of consolidated revenue will vary directly
with the percentage of consolidated revenue generated through independent
commission sales agents. Both purchased transportation and commissions to
agents generally will also increase or decrease as a percentage of the
Company's consolidated revenue if there is a change in the percentage of
revenue contributed by Signature or by the intermodal services operations or
the air freight operations of the multimodal segment.
Trailer rent and maintenance costs are the largest components of other
operating costs.
Potential liability associated with accidents in the trucking industry is
severe and occurrences are unpredictable. A material increase in the
frequency or severity of accidents or workers' compensation claims or the
unfavorable development of existing claims can be expected to adversely affect
Landstar's operating income.
Employee compensation and benefits account for over half of the Company's
selling, general and administrative expense. Other significant components of
selling, general and administrative expense are communications costs and rent
expense.
Depreciation and amortization primarily relates to depreciation of trailers
and management information services equipment.
10
<PAGE>
The following table sets forth the percentage relationships of
income and expense items to revenue for the periods indicated:
<TABLE>
<CAPTION>
Thirteen Weeks Ended
------------------------
March 25, March 27,
2000 1999
---------- ----------
<S> <C> <C>
Revenue 100.0% 100.0%
Investment income 0.3 0.2
Costs and expenses:
Purchased transportation 73.7 73.7
Commissions to agents 7.9 7.8
Other operating costs 2.3 2.1
Insurance and claims 2.8 3.3
Selling, general and administrative 8.0 8.2
Depreciation and amortization 0.9 0.8
------- ------
Total costs and expenses 95.6 95.9
------- ------
Operating income 4.7 4.3
Interest and debt expense 0.5 0.3
------- ------
Income before income taxes 4.2 4.0
Income taxes 1.7 1.6
------- ------
Net income 2.5% 2.4%
======= ======
</TABLE>
THIRTEEN WEEKS ENDED MARCH 25, 2000 COMPARED TO THIRTEEN WEEKS
ENDED MARCH 27, 1999
Revenue for the 2000 thirteen-week period was $327,006,000, an increase of
$15,571,000, or 5.0%, over the 1999 thirteen-week period. The increase was
attributable to increased revenue of $4,174,000 and $11,626,000
at the carrier and multimodal segments, respectively, partially offset by a
decrease in revenue at the insurance segment of $229,000. Overall,
revenue per revenue mile increased approximately 2%, which reflected
improved freight quality, while revenue miles were approximately 3%
higher than 1999. The insurance segment generated investment income of
$930,000 and $544,000 during the 2000 and 1999 periods, respectively.
11
<PAGE>
Purchased transportation was 73.7% of revenue in 2000 and 1999. Commissions to
agents were 7.9% of revenue in 2000 and 7.8% in 1999. The increase in
commissions to agents as a percentage of revenue was due to an increase in the
percentage of revenue contributed by the multimodal segment which tends to have
higher commission rates. Other operating costs were 2.3% of revenue in 2000
compared with 2.1% in 1999. The increase in other operating costs as a
percentage of revenue was primarily due to higher net trailer costs.
Insurance and claims were 2.8% of revenue in 2000 compared with 3.3 % in 1999.
The decrease in insurance and claims as a percentage of revenue was primarily
attributable to favorable development of prior year claims in 2000. Selling,
general and administrative costs were 8.0% of revenue in 2000 compared with
8.2% of revenue in 1999. This decrease was primarily due to a decrease in the
provision for customer bad debts, partially offset by increased management
information services costs, increased building operating costs related to the
new Jacksonville, Florida headquarters and increased wages and benefits.
Interest and debt expense was 0.5% and 0.3% of revenue in 2000 and 1999,
respectively. This increase was primarily attributable to the effect of higher
average borrowings on the senior credit facility, which were used to finance a
portion of the Company's stock repurchase program.
The provisions for income taxes for the 2000 and 1999 thirteen-week periods
were based on estimated full year combined effective income tax rates of
approximately 39.5% and 40.5%, respectively, which is higher than the
statutory federal income tax rate primarily as a result of state income taxes,
amortization of certain goodwill and the meals and entertainment exclusion.
Net income was $8,339,000, or $0.91 per common share ($0.89 per diluted share),
in the 2000 period compared with $7,475,000, or $0.72 per common share ($0.71
per diluted share), in the 1999 period.
On March 28, 2000, the Company announced a plan to relocate Landstar Ligon's
headquarters from Madisonville, Kentucky to Jacksonville, Florida during the
second quarter of 2000. Management anticipates incurring a one-time pre-tax
charge of approximately $3,000,000 for severance pay, relocation expenses and
other costs in connection with this relocation.
12
<PAGE>
CAPITAL RESOURCES AND LIQUIDITY
Shareholders' equity decreased to $105,206,000 at March 25, 2000 compared
with $106,884,000 at December 25, 1999, primarily as a result of the repurchase
of 205,700 shares of the Company's common stock at an aggregate cost of
$11,558,000, partially offset by net income for the period. Shareholders'
equity was 53% and 61% of total capitalization at March 25, 2000 and December
25, 1999, respectively.
Working capital and the ratio of current assets to current liabilities were
$104,521,000 and 1.71 to 1, respectively, at March 25, 2000, compared with
$81,589,000 and 1.48 to 1, respectively, at December 25, 1999. Landstar has
historically operated with current ratios approximating 1.5 to 1. Cash
provided by operating activities was $20,489,000 in the 2000 period compared
with $18,340,000 in the 1999 period. The increase in cash flow provided by
operating activities was primarily attributable to increased earnings and
the timing of the collection of accounts receivable. During the 2000 period,
Landstar purchased $2,304,000 of operating property. Management anticipates
acquiring approximately $24,000,000 of operating property during the remainder
of fiscal year 2000 either by purchase or lease financing.
Management believes that cash flow from operations combined with the Company's
borrowing capacity under its revolving credit agreement will be adequate to
meet Landstar's debt service requirements, fund continued growth, both internal
and through acquisitions, complete its announced stock repurchase program and
meet working capital needs.
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Investments and Hedging Activities." This Statement,
effective for fiscal years beginning after June 15, 2000, establishes standards
for reporting and display of derivative investments and for hedging activities.
Management believes that upon adoption of this Statement, Landstar's financial
statements will not be affected, considering the nature of the transactions the
Company routinely enters into.
INFLATION
Management does not believe inflation has had a material impact on the
results of operations or financial condition of Landstar in the past five
years. However, inflation higher than that experienced in the past five
years might have an adverse effect on the Company's results of operations.
13
<PAGE>
FORWARD-LOOKING STATEMENTS
The Company has included various statements in Management's Discussion and
Analysis of Financial Condition and Results of Operations, which may be
considered as forward-looking statements of expected future results of
operations or events. Such statements, based upon management's interpretation
of currently available information, are subject to risks and uncertainties that
could cause future financial results or events to differ materially from those
which are presented. Such risks and factors which are outside of the Company's
control include general economic conditions, competition in the transportation
industry, governmental regulation, the Company's ability to recruit and retain
qualified independent contractors, fuel prices and adverse weather conditions.
SEASONALITY
Landstar's operations are subject to seasonal trends common to the
trucking industry. Results of operations for the quarter ending in
March is typically lower than the quarters ending June, September
and December due to reduced shipments and higher operating costs in
the winter months.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company maintains a credit agreement with a syndicate of banks and The
Chase Manhattan Bank, as the administrative agent, (the "Second Amended and
Restated Credit Agreement") that provides $200,000,000 of borrowing
capacity, consisting of $150,000,000 revolving credit and $50,000,000 revolving
credit to finance acquisitions. Borrowings under the Second Amended and
Restated Credit Agreement bear interest at rates equal to, at the option of
Landstar, either (i) the greatest of (a) the prime rate as publicly announced
from time to time by The Chase Manhattan Bank, (b) the three month CD rate
adjusted for statutory reserves and FDIC assessment costs plus 1% and (c) the
federal funds effective rate plus 1/2%, or, (ii) the rate at the time offered
to The Chase Manhattan Bank in the Eurodollar market for amounts and periods
comparable to the relevant loan plus a margin that is determined based on the
level of the Company's Leverage Ratio, as defined in the Second Amended and
Restated Credit Agreement. There have been no significant changes that would
affect the information provided in Item 7a of the 1999 Annual Report on
Form 10-K regarding quantitative and qualitative disclosures about market risk.
14
<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings
The Company is routinely a party to litigation incidental to its business,
primarily involving claims for personal injury and property damage incurred
in the transportation of freight. The Company maintains insurance which covers
liability amounts in excess of retained liabilities from personal injury and
property damages claims.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
15
<PAGE>
Item 5. Other Information
None.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The exhibits listed on the Exhibit Index are filed as part
of this quarterly report on Form 10-Q.
(b) Form 8-K
None.
16
<PAGE>
EXHIBIT INDEX
Registrant's Commission File No.: 0-21238
Exhibit No. Description
- ------------ -----------
(11) Statement re: Computation of Per Share Earnings:
11.1 * Landstar System, Inc. and Subsidiary Calculation of Earnings
Per Common Share for the Thirteen Weeks Ended
March 25, 2000 and March 27, 1999
11.2 * Landstar System, Inc. and Subsidiary Calculation of Diluted
Earnings Per Share for the Thirteen Weeks
Ended March 25, 2000 and March 27, 1999
(27) Financial Data Schedules:
27.1 * 2000 Financial Data Schedule
__________________
* Filed herewith
17
<PAGE>
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: April 26, 2000 Henry H. Gerkens
----------------------------
Henry H. Gerkens
Executive Vice President and
Chief Financial Officer;
Principal Financial Officer
Date: April 26, 2000 Robert C. LaRose
----------------------------
Robert C. LaRose
Vice President Finance and Treasurer;
Principal Accounting Officer
18
<PAGE>
EXHIBIT 11.1
LANDSTAR SYSTEM, INC. AND SUBSIDIARY
CALCULATION OF EARNINGS PER COMMON SHARE
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Thirteen
Weeks Ended
---------------------------
March 25, March 27,
2000 1999
------------ ------------
Earnings available for earnings per share:
<S> <C> <C>
Net income $ 8,339 $ 7,475
============ ============
Average number of common shares outstanding 9,169 10,368
============ ============
Earnings per common share $ 0.91 $ 0.72
============ ============
19
</TABLE>
<PAGE>
EXHIBIT 11.2
LANDSTAR SYSTEM, INC. AND SUBSIDIARY
CALCULATION OF DILUTED EARNINGS PER SHARE
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Thirteen
Weeks Ended
---------------------------
March 25, March 27,
2000 1999
---------------------------
<S> <C> <C>
Net income $ 8,339 $ 7,475
============ ============
Average number of common shares
outstanding 9,169 10,368
Plus: Incremental shares from
assumed exercise of stock
options 202 123
------------ ------------
Average number of common shares
and common share equivalents
outstanding 9,371 10,491
============ ============
Diluted earnings per share $ 0.89 $ 0.71
============ ============
20
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Balance Sheets at March 25, 2000 (Unaudited) and the Consolidated
Statements of Income for the thirteen weeks ended March 25, 2000 (Unaudited)
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
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0
0
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</TABLE>
