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Landstar System Reports Record Second Quarter Results

July 18, 2008

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Landstar System, Jacksonville, Fla., reported record second quarter revenue, operating income, net income and diluted earnings per share in the 2008 13-week period ended June 28.


Revenue in the 2008 second quarter increased approximately 10 percent to $698 million compared to $633 million for the 2007 second quarter. Net income was $29.8 million, or $0.56 per diluted share, compared to net income of $29.7 million, or $0.53 per diluted share, for the same period in 2007.

Revenue hauled by BCO Independent Contractors in the second quarter of 2008 was $375.4 million, or 54 percent of revenue, compared to $364.2 million, or 58 percent of revenue, in the 2007 second quarter. Moreover, in the second quarters of 2008 and 2007, the company invoiced customers $90.3 million and $45.1 million, respectively, in fuel surcharges that were passed on 100 percent to BCO Independent Contractors and excluded from revenue. Revenue hauled by third-party truck brokerage carriers was $261.7 million, or 38 percent of revenue, in the 2008 second quarter compared to $217.1 million, or 34 percent of revenue, in the 2007 second quarter. Revenue hauled by rail, air, and ocean cargo carriers was $51.5 million, or 7 percent of revenue, in the 2008 second quarter compared to $42.5 million, or 7 percent of revenue, in the 2007 second quarter.

Revenue in the 26-week period ended June 28 increased approximately 8 percent to $1.31 billion compared to $1.21 billion for the 2007 first half. Net income for the first half of '08 was $53.5 million, or $1.01 per diluted share, compared to net income of $51.3 million, or $0.91 per diluted share, a year previous.

"I continue to be pleased with the Company's 2008 performance," said Landstar President and Chief Executive Officer Henry Gerkens. "In the 2008 second quarter, Landstar delivered double digit revenue growth and experienced strong revenue increases across multiple service offerings, as revenue hauled by BCO Independent Contractors increased over 3 percent, revenue hauled by truck brokerage carriers increased 21 percent, revenue hauled by rail carriers increased 23 percent and revenue hauled by ocean cargo carriers increased 76 percent. Landstar's operating margin was 7.2 percent in the 2008 second quarter compared to 7.8 percent in the 2007 second quarter. Despite increased rates for purchased transportation paid to third-party truck brokerage carriers, rail carriers and air and ocean cargo carriers in the 2008 second quarter, the Company generated record second quarter operating income of $50.2 million, which is the fourth highest quarterly operating income in any quarter in Landstar's history."

"Landstar's 2008 second quarter diluted earnings per share of $0.56 compared to 2007 second quarter diluted earnings per share of $0.53 represented an increase of 6 percent quarter over quarter. For comparative purposes, it should be noted that the 2008 second quarter included approximately $0.03 per diluted share of costs related to employee bonus accruals not included in the 2007 second quarter. Landstar's solid results once again demonstrate the strength and consistency of its non-asset based variable cost business model."

Gerkens continued, "I anticipate the freight environment in the third quarter of 2008 to be similar to that of the 2008 second quarter. As such, I would anticipate revenue for the third quarter of 2008 as compared to the third quarter of 2007 to increase in a range from the upper single to lower double digits. Based upon the above revenue forecast, I would anticipate Landstar's earnings for the 2008 third quarter to be within a range of $0.54 to $0.60 per diluted share."

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