Landstar System Inc. on Wednesday, April 15, reported 2009 first-quarter net income of $13.9 million on revenue of $469.2 million compared to net income of $23.7 million on revenue of $608.8 million in the 2008 first quarter.
“Landstar’s revenue continued to be negatively impacted by the severe downturn in the domestic and global economies,” said Henry Gerkens, president and chief executive officer of the Jacksonville, Fla.-based company. The number of loads hauled during the quarter was about 17 percent lower than the number of loads hauled during the same period last year, Gerkens said.
“The number of loads hauled for shippers in the automotive industry and for shippers in our substitute line-haul business were significantly below prior-year levels,” he said. “Volume declines were experienced in just about every sector serviced by the company. Revenue per load decreased in the 2009 first quarter compared to the 2008 first quarter as excess capacity and low freight demand created increased pressure on price.”
Gerkens said that although volume declines remained generally consistent with the year-over-year volume decline experienced during the last four weeks of December 2008, “the increased pressure on price, along with lower fuel surcharge revenue on freight hauled by truck brokerage carriers, caused overall revenue to decline 23 percent quarter over quarter.”
Gerkens said, however, that Landstar’s nonasset-based variable cost business model “continues to generate significant cash flow and outstanding returns.” He said that during the quarter, cash from operations was $81 million compared to $34 million during the year-ago period; and as of March 28, the company had $147 million available for borrowings under its senior credit facility, while the ratio of debt to capital was 32 percent. Also, since December 2008, cash and short-term investments have increased $32 million to $154 million as of March 28, Gerkens said. “Landstar’s balance sheet remains strong,” he said.