Landstar reports record revenue, net income in 4Q ’05

user-gravatar

Landstar System has reported a 36 percent increase in revenue to a record $800 million in the 14-week 2005 fourth quarter, up from $590 million in the 13-week 2004 fourth quarter. Net income for the 2005 fourth quarter was a record $43.0 million, compared to $24.6 million in the 2004 fourth quarter. Operating margin in the 2005 fourth quarter was 8.9 percent compared with 6.9 percent in the 2004 fourth quarter.

Included in the 2005 fourth-quarter revenue was $138 million of revenue related to disaster relief efforts for the various hurricanes that impacted the United States during the second half of 2005. These emergency transportation services were provided primarily under a contract between Landstar Express America and the U.S. Department of Transportation/Federal Aviation Administration. The revenue recognized under this contract during the 2005 fourth quarter generated $27.8 million of operating income that, net of related income taxes, increased net income by $16.7 million.

Included in the 2004 fourth-quarter revenue was $35.9 million of revenue related to disaster relief efforts provided primarily under the contract with the FAA. The revenue recognized under the FAA contract during the 2004 fourth quarter generated $6.8 million of operating income that increased net income by $4.2 million. Revenue attributable to emergency transportation services provided primarily under the FAA contract increased operating margin in the 2005 and 2004 fourth quarters about 2.3 percent and 0.8 percent, respectively.

Landstar’s carrier group of companies generated $494 million of revenue in the 2005 fourth quarter, compared with revenue of $401 million in the 2004 fourth quarter. In the 2005 and 2004 fourth quarters, the carrier group invoiced customers $45.4 million and $23.2 million, respectively, in fuel surcharges that were passed on 100 percent to business capacity owners and excluded from revenue. Landstar Global Logistics, comprised of Landstar Express America and Landstar Logistics, generated $298 million of revenue, which included $138 million related to disaster relief services, in the 2005 fourth quarter compared with $181 million of revenue, which included $35.9 million related to disaster relief services, in the 2004 fourth quarter.

Net income for the 2005 fiscal year was $120.0 million, compared to net income of $71.9 million for the 2004 fiscal year. Operating margin for the 2005 fiscal year was 7.9 percent compared to 5.9 percent for the 2004 fiscal year. Included in net income for the 2005 fiscal year was $51.9 million of operating income related to $275.9 million of revenue from emergency transportation services provided under the FAA contract. This $51.9 million of operating income, net of related income taxes, increased net income $31.6 million. Included in net income for the 2004 fiscal year was $11.8 million of operating income related to $63.8 million of revenue from emergency transportation services provided primarily under the FAA contract. This $11.8 million of operating income, net of related income taxes, increased net income $7.3 million. Also included in the 2004 fiscal year was $7.6 million of costs to settle one severe accident. This charge, net of related income tax benefits, reduced net income by $4.9 million.

Revenue was $2.518 billion in the 53-week 2005 fiscal year, compared to revenue of $2.020 billion in the 52-week 2004 fiscal year. Landstar’s carrier group of companies generated $1.692 billion of revenue in the 2005 fiscal year, compared with $1.455 billion in the 2004 fiscal year. In the 2005 and 2004 fiscal years, the carrier group invoiced customers $126.9 million and $60.5 million, respectively, of fuel surcharges that were passed on 100 percent to business capacity owners and excluded from revenue. Landstar Global Logistics generated $795 million of revenue, which included $275.9 million of revenue related to disaster relief services, in the 2005 fiscal year compared with $535 million of revenue, which included $63.8 million related to disaster relief services, in the 2004 fiscal year.

“I am extremely pleased with Landstar’s fourth-quarter performance,” says Henry Gerkens, president and chief executive officer of Jacksonville, Fla.-based Landstar. “Consolidated revenue for the 2005 fourth quarter was the highest quarterly revenue in Landstar history and represented a 36 percent increase over the 2004 fourth quarter. In the 2005 fourth quarter, Landstar provided $138 million of transportation services in support of disaster relief efforts, including $19.5 million related to buses and $14.5 million for air transportation services. All of our contractors, agents and employees involved in the relief effort did an outstanding job.

“Overall, revenue at the carrier segment increased 23 percent, and revenue at the global logistics segment increased 65 percent. Quarter-over-quarter revenue generated through other third-party truck capacity providers increased 57 percent, and revenue hauled by Landstar BCOs increased 19 percent. Excluding the revenue from hurricane relief efforts from both the 2005 and 2004 fourth quarters, revenue increased an impressive 20 percent.”