Landstar System Earnings 2019-06-29
LSTR 10Q Quarterly Report
| Balance Sheet | Income Statement | Cash Flow |
|---|---|---|
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
June 29, 2019
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
(Exact name of registrant as specified in its charter)
| | | |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices)
(Zip Code)
(
904
)
398-9400
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| | | |
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
☒
No
☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
Yes
S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files):
☒
No
☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
| ☒ | Accelerated filer | ☐ | ||||
| Non-accelerated filer | ☐ | Smaller reporting company | | |||
| Emerging growth company | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule
☒
12b-2
of the Exchange Act). Yes
☐
No
The number of shares of the registrant’s common stock, par value $0.01 per share, outstanding as of the close of business on July 22, 2019 was 39,629,695 .
Index
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| Page 32 | ||
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| Page 33 | ||
| Page 35 |
| EX – 31.1 Section 302 CEO Certification |
| EX – 31.2 Section 302 CFO Certification |
| EX – 32.1 Section 906 CEO Certification |
| EX – 32.2 Section 906 CFO Certification |
2
PART I - FINANCIAL INFORMATION
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 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 twenty six weeks ended June 29, 2019 are not necessarily indicative of the results that may be expected for the entire fiscal year ending December 28, 2019.
These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 2018 Annual Report on Form 10-K.
3
LANDSTAR SYSTEM, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)
(Unaudited)
| June 29, 2019 | December 29, 2018 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | | $ | | ||||
| Short-term investments | | | ||||||
| Trade accounts receivable, less allowance of $ | | | ||||||
| Other receivables, including advances to independent contractors, less allowance of $ | | | ||||||
| Other current assets | | | ||||||
| Total current assets | | | ||||||
| Operating property, less accumulated depreciation and amortization of $ | | | ||||||
| Goodwill | | | ||||||
| Other assets | | | ||||||
| Total assets | $ | | $ | | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current Liabilities | ||||||||
| Cash overdraft | $ | | $ | | ||||
| Accounts payable | | | ||||||
| Current maturities of long-term debt | | | ||||||
| Insurance claims | | | ||||||
| Accrued compensation | | | ||||||
| Contractor escrow | | | ||||||
| Other current liabilities | | | ||||||
| Total current liabilities | | | ||||||
| Long-term debt, excluding current maturities | | | ||||||
| Insurance claims | | | ||||||
| Deferred income taxes and other noncurrent liabilities | | | ||||||
| Equity | ||||||||
| Landstar System, Inc. and subsidiary shareholders’ equity | ||||||||
| Common stock, $ | | | ||||||
| Additional paid-in capital | | | ||||||
| Retained earnings | | | ||||||
| Cost of | ( | ) | ( | ) | ||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Total Landstar System, Inc. and subsidiary shareholders’ equity | | | ||||||
| Noncontrolling interest | — | | ||||||
| Total equity | | | ||||||
| Total liabilities and equity | $ | | $ | | ||||
See accompanying notes to consolidated financial statements.
4
LANDSTAR SYSTEM, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Dollars in thousands, except per share amounts)
(Unaudited)
| Twenty Six Weeks Ended | Thirteen Weeks Ended | |||||||||||||||
| June 29, 2019 | June 30, 2018 | June 29, 2019 | June 30, 2018 | |||||||||||||
| Revenue | $ | | $ | | $ | | $ | | ||||||||
| Investment income | | | | | ||||||||||||
| Costs and expenses: | ||||||||||||||||
| Purchased transportation | | | | | ||||||||||||
| Commissions to agents | | | | | ||||||||||||
| Other operating costs, net of gains on asset sales/dispositions | | | | | ||||||||||||
| Insurance and claims | | | | | ||||||||||||
| Selling, general and administrative | | | | | ||||||||||||
| Depreciation and amortization | | | | | ||||||||||||
| Total costs and expenses | | | | | ||||||||||||
| Operating income | | | | | ||||||||||||
| Interest and debt expense | | | | | ||||||||||||
| Income before income taxes | | | | | ||||||||||||
| Income taxes | | | | | ||||||||||||
| Net income | | | | | ||||||||||||
| Less: Net loss attributable to noncontrolling interest | ( | ) | ( | ) | | ( | ) | |||||||||
| Net income attributable to Landstar System, Inc. and subsidiary | $ | | $ | | $ | | $ | | ||||||||
| Earnings per common share attributable to Landstar System, Inc. and subsidiary | $ | | $ | | $ | | $ | | ||||||||
| Diluted earnings per share attributable to Landstar System, Inc. and subsidiary | $ | | $ | | $ | | $ | | ||||||||
| Average number of shares outstanding: | ||||||||||||||||
| Earnings per common share | | | | | ||||||||||||
| Diluted earnings per share | | | | | ||||||||||||
| Dividends per common share | $ | | $ | | $ | | $ | | ||||||||
See accompanying notes to consolidated financial statements.
5
LANDSTAR SYSTEM, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Dollars in thousands)
(Unaudited)
| Twenty Six Weeks Ended | Thirteen Weeks Ended | |||||||||||||||
| June 29, 2019 | June 30, 2018 | June 29, 2019 | June 30, 2018 | |||||||||||||
| Net income attributable to Landstar System, Inc. and subsidiary | $ | | $ | | $ | | $ | | ||||||||
| Other comprehensive income (loss): | ||||||||||||||||
| Unrealized holding gains (losses) on available-for-sale investments, net of tax expense(benefit) of $ | | ( | ) | | ( | ) | ||||||||||
| Foreign currency translation gains (losses) | | ( | ) | | ( | ) | ||||||||||
| Other comprehensive income (loss) | | ( | ) | | ( | ) | ||||||||||
| Comprehensive income attributable to Landstar System, Inc. and subsidiary | $ | | $ | | $ | | $ | | ||||||||
See accompanying notes to consolidated financial statements.
6
LANDSTAR SYSTEM, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
| Twenty Six Weeks Ended | ||||||||
| June 29, 2019 | June 30, 2018 | |||||||
| OPERATING ACTIVITIES | ||||||||
| Net income | $ | | $ | | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization of operating property and intangible assets | | | ||||||
| Non-cash interest charges | | | ||||||
| Provisions for losses on trade and other accounts receivable | | | ||||||
| Gains on sales/disposals of operating property | ( | ) | ( | ) | ||||
| Deferred income taxes, net | | | ||||||
| Stock-based compensation | | | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Decrease (increase) in trade and other accounts receivable | | ( | ) | |||||
| Increase in other assets | ( | ) | ( | ) | ||||
| (Decrease) increase in accounts payable | ( | ) | | |||||
| Decrease in other liabilities | ( | ) | ( | ) | ||||
| Increase in insurance claims | | | ||||||
| NET CASH PROVIDED BY OPERATING ACTIVITIES | | | ||||||
| INVESTING ACTIVITIES | ||||||||
| Sales and maturities of investments | | | ||||||
| Purchases of investments | ( | ) | ( | ) | ||||
| Purchases of operating property | ( | ) | ( | ) | ||||
| Proceeds from sales of operating property | | | ||||||
| NET CASH USED BY INVESTING ACTIVITIES | ( | ) | ( | ) | ||||
| FINANCING ACTIVITIES | ||||||||
| (Decrease) increase in cash overdraft | ( | ) | | |||||
| Dividends paid | ( | ) | ( | ) | ||||
| Proceeds from exercises of stock options | | | ||||||
| Taxes paid in lieu of shares issued related to stock-based compensation plans | ( | ) | ( | ) | ||||
| Purchases of common stock | ( | ) | ( | ) | ||||
| Principal payments on finance lease obligations | ( | ) | ( | ) | ||||
| Purchase of noncontrolling interest | ( | ) | — | |||||
| Payment of contingent consideration | — | ( | ) | |||||
| NET CASH USED BY FINANCING ACTIVITIES | ( | ) | ( | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | | ( | ) | |||||
| Increase (decrease) in cash and cash equivalents | | ( | ) | |||||
| Cash and cash equivalents at beginning of period | | | ||||||
| Cash and cash equivalents at end of period | $ | | $ | | ||||
See accompanying notes to consolidated financial statements.
7
LANDSTAR SYSTEM, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
Twenty Six and Thirteen Weeks Ended June 29, 2019 and June 30, 2018
(Dollars in thousands)
(Unaudited)
| Landstar System, Inc. and Subsidiary Shareholders | |||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-In | Retained | Treasury Stock at Cost | Accumulated Other Comprehensive | Non- controlling | ||||||||||||||||||||||||||||||||
| Shares | Amount | Capital | Earnings | Shares | Amount | (Loss) Income | Interests | Total | |||||||||||||||||||||||||||||
| Balance December 29, 2018 | | $ | | $ | | $ | | | $ | ( | ) | $ | ( | ) | $ | | $ | | |||||||||||||||||||
| Net income (loss) | | ( | ) | | |||||||||||||||||||||||||||||||||
| Dividends ($ | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Purchases of common stock | | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Purchase of noncontrolling interests | | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Issuance of stock related to stock-based compensation plans | | | ( | ) | | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Stock-based compensation | | | |||||||||||||||||||||||||||||||||||
| Other comprehensive income | | | | ||||||||||||||||||||||||||||||||||
| Balance March 30, 2019 | | $ | | $ | | $ | | | $ | ( | ) | $ | ( | ) | $ | — | $ | | |||||||||||||||||||
| Net income | | | |||||||||||||||||||||||||||||||||||
| Dividends ($ | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Purchases of common stock | | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Issuance of stock related to stock-based compensation plans | | | ( | ) | | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Stock-based compensation | | | |||||||||||||||||||||||||||||||||||
| Other comprehensive income | | | |||||||||||||||||||||||||||||||||||
| Balance June 29, 2019 | | $ | | $ | | $ | | | $ | ( | ) | $ | ( | ) | $ | | $ | | |||||||||||||||||||
8
| Landstar System, Inc. and Subsidiary Shareholders | |||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-In | Retained | Treasury Stock at Cost | Accumulated Other Comprehensive | Non- controlling | ||||||||||||||||||||||||||||||||
| Shares | Amount | Capital | Earnings | Shares | Amount | Loss | Interests | Total | |||||||||||||||||||||||||||||
| Balance December 30, 2017 | | $ | | $ | | $ | | | $ | ( | ) | $ | ( | ) | $ | | $ | | |||||||||||||||||||
| Adoption of accounting standards | | | |||||||||||||||||||||||||||||||||||
| Net income (loss) | | ( | ) | | |||||||||||||||||||||||||||||||||
| Dividends ($ | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Purchases of common stock | | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Issuance of stock related to stock-based compensation plans | | | ( | ) | | ( | ) | ( | ) | ||||||||||||||||||||||||||||
| Stock-based compensation | | | |||||||||||||||||||||||||||||||||||
| Other comprehensive (loss) income | ( | ) | | ( | ) | ||||||||||||||||||||||||||||||||
| Balance March 31, 2018 | | $ | | $ | | $ | | | $ | ( | ) | $ | ( | ) | $ | | $ | | |||||||||||||||||||
| Net income (loss) | | ( | ) | | |||||||||||||||||||||||||||||||||
| Dividends ($0.15 per share) | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Purchases of common stock | | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||
| Issuance of stock related to stock-based compensation plans | | | | ( | ) | ( | ) | ||||||||||||||||||||||||||||||
| Stock-based compensation | |||||||||||||||||||||||||||||||||||||