8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) April 21, 2011

LANDSTAR SYSTEM, INC.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction
of incorporation) 021238
(Commission
File Number) 06-1313069
(I.R.S. Employer
Identification No.)

13410 Sutton Park Drive South, Jacksonville, Florida
(Address of principal executive offices) 32224
(Zip Code)

(904) 398-9400
(Registrant’s telephone number, including area code)

N/A
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition

On April 21, 2011, Landstar System, Inc. (the "Company") issued a press release announcing results for the first quarter of fiscal 2011. A copy of the press release is attached hereto as Exhibit 99.1.

In the press release attached hereto as Exhibit 99.1, the Company provided the following information that may be deemed a non-GAAP financial measure: percentage change in revenue for the first fiscal quarter of 2011, as compared to first fiscal quarter of 2010, exclusive of substitute line haul revenue.

Management believes that it is appropriate to present this financial information for the following reasons: (1) disclosure of these matters will allow investors to better understand the underlying trends in the Company’s financial condition and results of operations; (2) this information will facilitate comparisons by investors of the Company’s results as compared to the results of peer companies; and (3) management considers this financial information in its decision making.

The information furnished under Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.

Item 9.01 Financial Statements and Exhibits

Exhibits

99.1 News Release dated April 21, 2011 of Landstar System, Inc.

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 hereunto duly authorized.

	LANDSTAR SYSTEM, INC.
Date: April 21, 2011	By:	/s/ James B. Gattoni
		Name:	James B. Gattoni
		Title:	Vice President and Chief Financial Officer

EX-99.1

Exhibit 99.1

For Immediate Release	Contact: Jim Gattoni
	Landstar System, Inc.
	www.landstar.com
April 21, 2011	904-398-9400

LANDSTAR SYSTEM REPORTS FIRST QUARTER DILUTED EARNINGS PER SHARE INCREASE OF 26 PERCENT TO $0.43
PER DILUTED SHARE

Jacksonville, FL — Landstar System, Inc. (NASDAQ: LSTR) reported 2011 first quarter net income of $20.6 million, or $0.43 per diluted share, compared to net income of $17.2 million, or $0.34 per diluted share, for the 2010 first quarter. Operating margin was 35.4 percent in the 2011 first quarter compared to 31.3 percent in the 2010 first quarter. Revenue for the 2011 first quarter was $572.0 million compared to $548.1 million in the 2010 first quarter.

Truck transportation revenue hauled by independent business capacity owners (“BCOs”) and truck brokerage carriers in the 2011 first quarter was $520.6 million, or 91 percent of revenue, compared to $505.9 million, or 92 percent of revenue, in the 2010 first quarter. In the 2011 and 2010 first quarters, the Company invoiced customers $58.1 million and $41.3 million, respectively, of fuel surcharges that were passed 100 percent to BCOs and excluded from revenue. Included in revenue hauled by third-party truck capacity providers in the 2011 and 2010 first quarters were $19.3 million and $19.0 million, respectively, of fuel surcharges invoiced to customers on revenue hauled by third-party truck brokerage carriers. Also included in revenue hauled by third-party truck capacity providers was revenue generated under the Company’s less-than-truckload substitute line haul service offering of $19.4 million and $77.2 million in the 2011 and 2010 first quarters, respectively. Revenue hauled by rail, air and ocean cargo carriers was $37.9 million, or 7 percent of revenue, in the 2011 first quarter compared to $28.5 million, or 5 percent of revenue, in the 2010 first quarter. Transportation

LANDSTAR SYSTEM/2

management fee revenue generated by the supply chain solutions companies was $4.8 million and $4.1 million in the 2011 and 2010 first quarters, respectively.

Trailing twelve-month return on average shareholder’s equity was 33 percent and trailing twelve-month return on invested capital, net income divided by the sum of average equity plus average debt, was 23 percent. Landstar System, Inc. also announced that its Board of Directors has declared a quarterly dividend of $0.05 per share. The dividend is payable on May 27, 2011 to stockholders of record at the close of business on May 5, 2011. It is the intention of the Board of Directors to continue to pay a quarterly dividend.

“I am very pleased with the Company’s 2011 first quarter performance,” said Henry Gerkens, Landstar’s Chairman, President and CEO. “Despite the anticipated revenue decline in our substitute line haul service offering and the adverse effects of some inclement weather in the 2011 first quarter, revenue increased four percent over the 2010 first quarter. Gross profit, defined as revenue less the cost of purchased transportation and commissions to agents, increased 7 percent in the 2011 first quarter over the 2010 first quarter, operating income increased 20 percent and earnings per diluted share increased 26 percent. Excluding the substitute line haul revenue from both the 2011 and 2010 first quarters, revenue increased 17 percent, as demand and pricing were both strong in the 2011 first quarter.”

Gerkens continued, “In the 2011 first quarter, overall truckload capacity was seasonally tighter than experienced during prior year first quarters, which led to improved pricing. So far, in April, truckload pricing has continued to increase from the 2011 first quarter. I anticipate that trend to continue throughout the second quarter as freight demand increases over the 2011 first quarter. Assuming those operating trends continue throughout the quarter, I would expect operating margin in the 2011 second quarter to be about 42 percent and 2011 second quarter earnings to be in a range of $0.56 to $0.61 per diluted share.”

Landstar will provide a live webcast of its quarterly earnings conference call this afternoon at 2:00 pm ET. To access the webcast, visit the Company’s website at www.landstar.com; click on “Investor Relations” and “Webcasts,” then click on “Landstar’s First Quarter 2011 Earnings Release Conference Call.”

LANDSTAR SYSTEM/3

The following is a “safe harbor” statement under the Private Securities Litigation Reform Act of 1995. Statements contained in this press release that are not based on historical facts are “forward-looking statements”. This press release contains forward-looking statements, such as statements which relate to Landstar’s business objectives, plans, strategies, expectations and intentions. Terms such as “anticipates,” “believes,” “estimates,” “intention,” “plans,” “predicts,” “may,” “should,” “will,” the negative thereof and similar expressions are intended to identify forward-looking statements. Such statements are by nature subject to uncertainties and risks, including but not limited to: an increase in the frequency or severity of accidents or workers’ compensation claims; unfavorable development of existing claims; dependence on independent sales agents; dependence on third-party capacity providers; disruptions or failures in our computer systems; a downturn in domestic or international economic growth or growth in the transportation sector; substantial industry competition; and other operational, financial or legal risks or uncertainties detailed in Landstar’s Form 10K for the 2010 fiscal year, described in Item 1A Risk Factors, and other SEC filings from time-to-time. These risks and uncertainties could cause actual results or events to differ materially from historical results or those anticipated. Investors should not place undue reliance on such forward-looking statements, and Landstar undertakes no obligation to publicly update or revise any forward-looking statements.

About Landstar:

Landstar System, Inc. is a non-asset based provider of integrated supply chain solutions. Landstar delivers safe, specialized transportation, warehousing and logistics services to a broad range of customers worldwide utilizing a network of agents, third-party capacity owners and employees. All Landstar transportation companies are certified to ISO 9001:2008 quality management system standards and RC14001:2008 environmental, health, safety and security management system standards. Landstar System, Inc. is headquartered in Jacksonville, Florida. Its common stock trades on The NASDAQ Stock Market^® under the symbol LSTR.

(Tables follow)

LANDSTAR SYSTEM/4

Landstar System, Inc. and Subsidiary
Consolidated Statements of Income
(Dollars in thousands, except per share amounts)
(Unaudited)

	Thirteen Weeks Ended
	March 26,			March 27,
	2011			2010
Revenue	$	571,986		$	548,088
Investment income		528			285
Costs and expenses:
Purchased transportation		431,378			417,201
Commissions to agents		44,171			40,408
Other operating costs		7,944			7,536
Insurance and claims		11,266			12,298
Selling, general and administrative		37,264			36,843
Depreciation and amortization		6,399			5,792
Total costs and expenses		538,422			520,078
Operating income		34,092			28,295
Interest and debt expense		828			854
Income before income taxes		33,264			27,441
Income taxes		12,707			10,484
Net income		20,557			16,957
Less: Net loss attributable to noncontrolling interest		(62	)		(219	)
Net income attributable to Landstar System, Inc. and subsidiary	$	20,619		$	17,176
Earnings per common share attributable to Landstar System, Inc. and subsidiary	$	0.43		$	0.34
Diluted earnings per share attributable to Landstar System, Inc. and subsidiary	$	0.43		$	0.34
Average number of shares outstanding:
Earnings per common share		47,870,000			50,207,000
Diluted earnings per share		47,900,000			50,318,000
Dividends paid per common share	$	0.050		$	0.045

LANDSTAR SYSTEM/5

Landstar System, Inc. and Subsidiary
Consolidated Balance Sheets
(Dollars in thousands, except per share amounts)
(Unaudited)

	Mar. 26,			Dec. 25,
	2011			2010
ASSETS
Current assets:
Cash and cash equivalents	$	45,230		$	44,706
Short-term investments		30,756			23,266
Trade accounts receivable, less allowance of $5,525 and $5,324		344,459			307,350
Other receivables, including advances to independent contractors, less allowance of $5,018 and $5,511		30,972			23,943
Deferred income taxes and other current assets		15,218			21,652
Total current assets		466,635			420,917
Operating property, less accumulated depreciation and amortization of $142,330 and $137,830		127,957			132,649
Goodwill		57,470			57,470
Other assets		62,373			72,846
Total assets	$	714,435		$	683,882
LIABILITIES AND EQUITY
Current liabilities:
Cash overdraft	$	23,407		$	24,877
Accounts payable		160,704			137,297
Current maturities of long-term debt		19,878			22,172
Insurance claims		43,027			40,215
Other current liabilities		55,072			53,785
Total current liabilities		302,088			278,346
Long-term debt, excluding current maturities		95,710			99,439
Insurance claims		31,627			31,468
Deferred income taxes		22,573			23,662
Equity
Landstar System, Inc. and subsidiary shareholders’ equity
Common stock, $0.01 par value, authorized 160,000,000 shares, issued 66,553,099 and 66,535,169 shares		666			665
Additional paid-in capital		161,502			169,268
Retained earnings		862,357			844,132
Cost of 18,674,902 shares of common stock in treasury		(763,182	)		(763,182	)
Accumulated other comprehensive income		1,094			881
Total Landstar System, Inc. and subsidiary shareholders’ equity		262,437			251,764
Noncontrolling interest		—			(797	)
Total equity		262,437			250,967
Total liabilities and equity	$	714,435		$	683,882

LANDSTAR SYSTEM/6

Landstar System, Inc. and Subsidiary
Supplemental Information
(Unaudited)

	Thirteen Weeks Ended
	March 26,		March 27,
	2011		2010
Revenue generated through (in thousands):
Business Capacity Owners (1)	$	306,894	$	286,141
Truck Brokerage Carriers		213,723		219,755
Rail intermodal		16,465		14,776
Ocean cargo carriers		13,833		9,135
Air cargo carriers		7,560		4,603
Other (2)		13,511		13,678
	$	571,986	$	548,088
Number of loads:
Business Capacity Owners (1)		192,040		197,750
Truck Brokerage Carriers		135,740		149,350
Rail intermodal		7,260		6,870
Ocean cargo carriers		1,830		1,460
Air cargo carriers		1,950		1,500
		338,820		356,930
Revenue per load:
Business Capacity Owners (1)	$	1,598	$	1,447
Truck Brokerage Carriers		1,575		1,471
Rail intermodal		2,268		2,151
Ocean cargo carriers		7,559		6,257
Air cargo carriers		3,877		3,069

	March 26,		March 27,
	2011		2010
Truck Capacity
Business Capacity Owners (1) (3)		7,697		7,800
Truck Brokerage Carriers:
Approved and active (4)		16,773		15,644
Approved		9,347		9,674
		26,120		25,318
Total available truck capacity providers		33,817		33,118

(1)	Business Capacity Owners are independent contractors who provide truck capacity to the Company under exclusive lease arrangements.
(2)	Includes premium revenue generated by the insurance segment and warehousing and transportation management fee revenue generated by the transportation logistics segment.
(3)	Trucks provided by Business Capacity Owners were 8,226 and 8,384 at March 26, 2011 and March 27, 2010, respectively.
(4)	Active refers to Truck Brokerage Carriers who have moved at least one load in the past 180 days.