ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
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(Address of principal executive offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
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☒ |
Accelerated filer |
☐ | |||
Non-accelerated filer |
☐ |
Smaller reporting company |
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Emerging growth company |
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Document |
Part of 10-K Into Which Incorporated |
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Proxy Statement relating to Landstar System, Inc.’s Annual Meeting of Stockholders scheduled to be held on May 19, 2020 |
Part III |
Page |
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Item 1. |
3 |
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Item 1A. |
10 |
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Item 1B. |
16 |
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Item 2. |
16 |
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Item 3. |
17 |
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Item 4. |
17 |
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Item 5. |
18 |
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Item 6. |
20 |
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Item 7. |
20 |
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Item 7A. |
33 |
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Item 8. |
35 |
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Item 9. |
62 |
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Item 9A. |
62 |
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Item 9B. |
65 |
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Item 10. |
66 |
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Item 11. |
66 |
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Item 12. |
66 |
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Item 13. |
66 |
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Item 14. |
66 |
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Item 15. |
67 |
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70 |
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EX – 31.1 Section 302 CEO Certification |
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EX – 31.2 Section 302 CFO Certification |
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EX – 32.1 Section 906 CEO Certification |
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EX – 32.2 Section 906 CFO Certification |
Item 1. |
Business |
Trailers by Type |
||||
Van |
13,841 |
|||
Unsided/platform, including flatbeds, step decks, drop decks and low boys |
3,092 |
|||
Temperature-controlled |
134 |
|||
Total |
17,067 |
|||
Item 1A. |
Risk Factors |
Item 1B. |
Unresolved Staff Comments |
Item 2. |
Properties |
Item 3. |
Legal Proceedings |
Item 4. |
Mine Safety Disclosures |
Item 5. |
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
Plan Category |
Number of Securities to be Issued Upon Exercise of Outstanding Options |
Weighted-average Exercise Price of Outstanding Options |
Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans |
|||||||||
Equity Compensation Plans Approved by Security Holders |
44,467 |
$ | 51.24 |
3,625,196 |
||||||||
Equity Compensation Plans Not Approved by Security Holders |
0 |
0 |
0 |
Item 6. |
Selected Financial Data |
Fiscal Years |
||||||||||||||||||||
Income Statement Data: |
2019 |
2018 |
2017 |
2016 |
2015 |
|||||||||||||||
Revenue |
$ | 4,084,577 |
$ | 4,615,144 |
$ | 3,646,364 |
$ | 3,167,634 |
$ | 3,321,091 |
||||||||||
Investment income |
5,041 |
3,816 |
2,498 |
1,502 |
1,396 |
|||||||||||||||
Costs and expenses: |
||||||||||||||||||||
Purchased transportation |
3,127,474 |
3,569,961 |
2,805,109 |
2,415,663 |
2,551,343 |
|||||||||||||||
Commissions to agents |
342,226 |
378,002 |
297,410 |
264,205 |
270,260 |
|||||||||||||||
Other operating costs, net of gains on asset sales/dispositions |
37,274 |
31,803 |
28,687 |
29,702 |
31,618 |
|||||||||||||||
Insurance and claims |
80,319 |
75,677 |
62,545 |
57,280 |
48,754 |
|||||||||||||||
Selling, general and administrative |
158,953 |
188,212 |
170,583 |
143,239 |
149,704 |
|||||||||||||||
Depreciation and amortization |
44,468 |
43,570 |
40,560 |
35,796 |
29,102 |
|||||||||||||||
Total costs and expenses |
3,790,714 |
4,287,225 |
3,404,894 |
2,945,885 |
3,080,781 |
|||||||||||||||
Operating income |
298,904 |
331,735 |
243,968 |
223,251 |
241,706 |
|||||||||||||||
Interest and debt expense |
3,141 |
3,354 |
3,166 |
3,794 |
2,949 |
|||||||||||||||
Income before income taxes |
295,763 |
328,381 |
240,802 |
219,457 |
238,757 |
|||||||||||||||
Income taxes |
68,060 |
73,168 |
63,806 |
82,107 |
91,068 |
|||||||||||||||
Net income |
227,703 |
255,213 |
176,996 |
137,350 |
147,689 |
|||||||||||||||
Less: Net loss attributable to noncontrolling interest |
(17 |
) | (68 |
) | (92 |
) | — |
— |
||||||||||||
Net income attributable to Landstar System, Inc. and subsidiary |
$ | 227,720 |
$ | 255,281 |
$ | 177,088 |
$ | 137,350 |
$ | 147,689 |
||||||||||
Earnings per common share attributable to Landstar System, Inc. and subsidiary |
$ | 5.72 |
$ | 6.19 |
$ | 4.22 |
$ | 3.26 |
$ | 3.38 |
||||||||||
Diluted earnings per share attributable to Landstar System, Inc. and subsidiary |
$ | 5.72 |
$ | 6.18 |
$ | 4.21 |
$ | 3.25 |
$ | 3.37 |
||||||||||
Dividends per common share |
$ | 2.70 |
$ | 0.63 |
$ | 1.88 |
$ | 0.34 |
$ | 0.30 |
Balance Sheet Data: |
Dec. 28, 2019 |
Dec. 29, 2018 |
Dec. 30, 2017 |
Dec. 31, 2016 |
Dec. 26, 2015 |
|||||||||||||||
Total assets |
$ | 1,427,711 |
$ | 1,380,564 |
$ | 1,352,460 |
$ | 1,096,591 |
$ | 991,518 |
||||||||||
Long-term debt, including current maturities |
112,844 |
128,425 |
125,113 |
138,304 |
124,292 |
|||||||||||||||
Equity |
721,469 |
689,133 |
653,877 |
542,557 |
466,237 |
Item 7. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Fiscal Years |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
Number of Million Dollar Agents |
555 |
608 |
542 |
|||||||||
Average revenue generated per Million Dollar Agent |
$ | 6,880,000 |
$ | 7,150,000 |
$ | 6,191,000 |
||||||
Percent of consolidated revenue generated by Million Dollar Agents |
93 |
% | 94 |
% | 92 |
% | ||||||
Fiscal Years |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
Revenue generated through (in thousands): |
||||||||||||
Truck transportation |
||||||||||||
Truckload: |
||||||||||||
Van equipment |
$ | 2,371,188 |
$ | 2,791,494 |
$ | 2,163,832 |
||||||
Unsided/platform equipment |
1,295,817 |
1,386,387 |
1,134,660 |
|||||||||
Less-than-truckload |
98,324 |
102,531 |
89,041 |
|||||||||
Total truck transportation |
3,765,329 |
4,280,412 |
3,387,533 |
|||||||||
Rail intermodal |
118,305 |
128,976 |
96,416 |
|||||||||
Ocean and air cargo carriers |
121,485 |
134,577 |
110,898 |
|||||||||
Other (1) |
79,458 |
71,179 |
51,517 |
|||||||||
$ | 4,084,577 |
$ | 4,615,144 |
$ | 3,646,364 |
|||||||
Revenue on loads hauled via BCO Independent Contractors included in total truck transportation |
$ | 1,831,752 |
$ | 2,001,665 |
$ | 1,655,026 |
||||||
Number of loads: |
||||||||||||
Truck transportation |
||||||||||||
Truckload: |
||||||||||||
Van equipment |
1,337,089 |
1,398,388 |
1,282,632 |
|||||||||
Unsided/platform equipment |
513,579 |
516,613 |
487,652 |
|||||||||
Less-than-truckload |
155,592 |
145,269 |
132,776 |
|||||||||
Total truck transportation |
2,006,260 |
2,060,270 |
1,903,060 |
|||||||||
Rail intermodal |
47,590 |
53,030 |
45,000 |
|||||||||
Ocean and air cargo carriers |
30,110 |
28,970 |
25,420 |
|||||||||
2,083,960 |
2,142,270 |
1,973,480 |
||||||||||
Loads hauled via BCO Independent Contractors included in total truck transportation |
954,990 |
949,330 |
916,190 |
|||||||||
Revenue per load: |
||||||||||||
Truck transportation |
||||||||||||
Truckload: |
||||||||||||
Van equipment |
$ | 1,773 |
$ | 1,996 |
$ | 1,687 |
||||||
Unsided/platform equipment |
2,523 |
2,684 |
2,327 |
|||||||||
Less-than-truckload |
632 |
706 |
671 |
|||||||||
Total truck transportation |
1,877 |
2,078 |
1,780 |
|||||||||
Rail intermodal |
2,486 |
2,432 |
2,143 |
|||||||||
Ocean and air cargo carriers |
4,035 |
4,645 |
4,363 |
|||||||||
Revenue per load on loads hauled via BCO Independent Contractors |
$ | 1,918 |
$ | 2,109 |
$ | 1,806 |
||||||
Revenue by capacity type (as a % of total revenue): |
||||||||||||
Truck capacity providers: |
||||||||||||
BCO Independent Contractors |
45 |
% | 43 |
% | 45 |
% | ||||||
Truck Brokerage Carriers |
47 |
% | 49 |
% | 48 |
% | ||||||
Rail intermodal |
3 |
% | 3 |
% | 3 |
% | ||||||
Ocean and air cargo carriers |
3 |
% | 3 |
% | 3 |
% | ||||||
Other |
2 |
% | 2 |
% | 1 |
% |
(1) |
Includes primarily reinsurance premium revenue generated by the insurance segment and intra-Mexico transportation services revenue generated by Landstar Metro. |
Dec. 28, 2019 |
Dec. 29, 2018 |
Dec. 30, 2017 |
||||||||||
BCO Independent Contractors |
9,554 |
9,884 |
9,087 |
|||||||||
Truck Brokerage Carriers: |
||||||||||||
Approved and active (1) |
39,497 |
41,069 |
34,243 |
|||||||||
Other approved |
16,820 |
17,985 |
15,691 |
|||||||||
56,317 |
59,054 |
49,934 |
||||||||||
Total available truck capacity providers |
65,871 |
68,938 |
59,021 |
|||||||||
Trucks provided by BCO Independent Contractors |
10,243 |
10,599 |
9,696 |
(1) | Active refers to Truck Brokerage Carriers who moved at least one load in the 180 days immediately preceding the fiscal year end. |
Fiscal Years |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
Revenue |
100.0 |
% | 100.0 |
% | 100.0 |
% | ||||||
Purchased transportation |
76.6 |
77.4 |
76.9 |
|||||||||
Commissions to agents |
8.4 |
8.2 |
8.2 |
|||||||||
Gross profit margin |
15.1 |
% | 14.5 |
% | 14.9 |
% | ||||||
Gross profit |
100.0 |
% | 100.0 |
% | 100.0 |
% | ||||||
Investment income |
0.8 |
0.6 |
0.5 |
|||||||||
Indirect costs and expenses: |
||||||||||||
Other operating costs, net of gains on asset sales/dispositions |
6.1 |
4.8 |
5.3 |
|||||||||
Insurance and claims |
13.1 |
11.3 |
11.5 |
|||||||||
Selling, general and administrative |
25.9 |
28.2 |
31.4 |
|||||||||
Depreciation and amortization |
7.2 |
6.5 |
7.5 |
|||||||||
Total costs and expenses |
52.2 |
50.9 |
55.6 |
|||||||||
Operating margin |
48.6 |
% | 49.7 |
% | 44.9 |
% | ||||||
Contractual Obligation |
Total |
Less Than 1 Year |
1-3 Years |
3-5 Years |
More Than 5 Years |
|||||||||||||||
Finance lease obligations |
$ | 119,327 |
$ | 45,670 |
$ | 53,401 |
$ | 20,256 |
$ | — |
||||||||||
Operating lease obligations |
3,003 |
725 |
1,325 |
953 |
— |
|||||||||||||||
Purchase obligations |
10,127 |
4,970 |
3,851 |
1,306 |
— |
|||||||||||||||
$ | 132,457 |
$ | 51,365 |
$ | 58,577 |
$ | 22,515 |
$ | — |
|||||||||||
Item 7A. |
Quantitative and Qualitative Disclosures About Market Risk |
Item 8. |
Financial Statements and Supplementary Data |
Dec. 28, 2019 |
Dec. 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 |
||||||||
Dividends payable |
— |
|||||||
Accrued compensation |
||||||||
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 |
$ | $ | ||||||
Fiscal Years Ended |
||||||||||||
Dec. 28, 2019 |
Dec. 29, 2018 |
Dec. 30, 2017 |
||||||||||
Revenue |
$ | |
$ | |
$ | |
||||||
Investment income |
|
|
|
|||||||||
Costs and expenses: |
||||||||||||
Purchased transportation |
|
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|
|||||||||
Commissions to agents |
|
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|
|||||||||
Other operating costs, net of gains on asset sales/dispositions |
|
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|
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Insurance and claims |
|
|
|
|||||||||
Selling, general and administrative |
|
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|
|||||||||
Depreciation and amortization |
|
|
|
|||||||||
Total costs and expenses |
|
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|
|||||||||
Operating income |
|
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|
|||||||||
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 |
$ | |
$ | |
$ | |
||||||
Fiscal Years Ended |
||||||||||||
Dec. 28, 2019 |
Dec. 29, 2018 |
Dec. 30, 2017 |
||||||||||
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 |
$ | $ | $ | |||||||||
Fiscal Years Ended |
||||||||||||
Dec. 28, 2019 |
Dec. 29, 2018 |
Dec. 30, 2017 |
||||||||||
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) increase in other liabilities |
( |
) | |
|
||||||||
Increase in insurance claims |
|
|
|
|||||||||
NET CASH PROVIDED BY OPERATING ACTIVITIES |
|
|
|
|||||||||
INVESTING ACTIVITIES |
||||||||||||
Net change in other short-term investments |
( |
) | — |
— |
||||||||
Sales and maturities of investments |
|
|
|
|||||||||
Purchases of investments |
( |
) | ( |
) | ( |
) | ||||||
Purchases of operating property |
( |
) | ( |
) | ( |
) | ||||||
Proceeds from sales of operating property |
|
|
|
|||||||||
Consideration paid for acquisitions |
— |
— |
( |
) | ||||||||
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 |
$ | |
$ | |
$ | |
||||||
|
Landstar System, Inc. and Subsidiary Shareholders |
|
|
|||||||||||||||||||||||||||||||||
|
|
Additional Paid-In Capital |
|
|
Accumulated Other Comprehensive (Loss) Income |
Non- controlling Interests |
|
|||||||||||||||||||||||||||||
|
Common Stock |
Retained Earnings |
Treasury Stock at Cost |
|
||||||||||||||||||||||||||||||||
|
Shares |
Amount |
Shares |
Amount |
Total |
|||||||||||||||||||||||||||||||
Balance December 31, 2016 |
|
$ | |
$ | |
$ | |
|
$ | ( |
) | $ | ( |
) | $ | |
$ | |
||||||||||||||||||
Net income (loss) |
|
( |
) | |
||||||||||||||||||||||||||||||||
Dividends ($ |
( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Issuance of stock related to stock-based compensation plans, including excess tax effect |
|
|
|
|
( |
) | |
|||||||||||||||||||||||||||||
Stock-based compensation |
|
|
||||||||||||||||||||||||||||||||||
Other comprehensive income |
( |
) | ( |
) | ( |
) | ||||||||||||||||||||||||||||||
Acquired business and noncontrolling interests |
|
|
||||||||||||||||||||||||||||||||||
Balance December 30, 2017 |
|
$ | |
$ | |
$ | |
|
$ | ( |
) | $ | ( |
) | $ | |
$ | |
||||||||||||||||||
Adoption of accounting standards (Note 1) |
|
|
||||||||||||||||||||||||||||||||||
Net income (loss) |
|
( |
) | |
||||||||||||||||||||||||||||||||
Dividends ($ |
( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Purchases of common stock |
|
( |
) | ( |
) | |||||||||||||||||||||||||||||||
Transaction with noncontrolling |
|
( |
) | — |
||||||||||||||||||||||||||||||||
Issuance of stock related to stock-based compensation plans |
|
|
( |
) | |
( |
) | ( |
) | |||||||||||||||||||||||||||
Stock-based compensation |
|
|
||||||||||||||||||||||||||||||||||
Other comprehensive (loss) income |
( |
) | |
( |
) | |||||||||||||||||||||||||||||||
Balance December 29, 2018 |
|
$ | |
$ | |
$ | |
|
$ | ( |
) | $ | ( |
) | $ | |
$ | |
||||||||||||||||||
Net income (loss) |
|
( |
) | |
||||||||||||||||||||||||||||||||
Dividends ($ |
( |
) | ( |
) | ||||||||||||||||||||||||||||||||
Purchases of common stock |
|
( |
) | ( |
) | |||||||||||||||||||||||||||||||
Purchase noncontrolling interests |
|
( |
) | ( |
) | |||||||||||||||||||||||||||||||
Issuance of stock related to stock-based compensation plans |
|
|
( |
) | |
( |
) | ( |
) | |||||||||||||||||||||||||||
Stock-based compensation |
|
|
||||||||||||||||||||||||||||||||||
Other comprehensive income |
|
|
|
|||||||||||||||||||||||||||||||||
Balance December 28, 2019 |
|
$ | |
$ | |
$ | |
|
$ | ( |
) | $ | ( |
) | $ | |
$ | |
Balance at Beginning of Period |
Charged to Costs and Expenses |
Write-offs, Net of Recoveries |
Balance at End of Period |
|||||||||||||
For the Fiscal Year Ended December 28, 2019 |
||||||||||||||||
Trade receivables |
$ | |
$ | |
$ | ( |
) | $ | |
|||||||
Other receivables |
|
|
( |
) | |
|||||||||||
Other non-current receivables |
|
|
— |
|
||||||||||||
$ | |
$ | |
$ | ( |
) | $ | |
||||||||
For the Fiscal Year Ended December 29, 2018 |
||||||||||||||||
Trade receivables |
$ | |
$ | |
$ | ( |
) | $ | |
|||||||
Other receivables |
|
|
( |
) | |
|||||||||||
Other non-current receivables |
|
|
( |
) | |
|||||||||||
$ | |
$ | |
$ | ( |
) | $ | |
||||||||
For the Fiscal Year Ended December 30, 2017 |
||||||||||||||||
Trade receivables |
$ | |
$ | |
$ | ( |
) | $ | |
|||||||
Other receivables |
|
|
( |
) | |
|||||||||||
Other non-current receivables |
|
|
— |
|
||||||||||||
$ | |
$ | |
$ | ( |
) | $ | |
Fiscal Years |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
Average number of common shares outstanding |
|
|
|
|||||||||
Incremental shares from assumed exercises of stock options |
— |
|
|
|||||||||
Average number of common shares and common share equivalents outstanding |
|
|
|
|||||||||
Unrealized Holding (Losses) Gains on Available-for-Sale Securities |
Foreign Currency Translation |
Total |
||||||||||
Balance as of December 31, 2016 |
$ | ( |
) | $ | ( |
) | $ |
( |
) | |||
Other comprehensive loss |
( |
) | — |
( |
) | |||||||
Balance as of December 30, 2017 |
( |
) | ( |
) | ( |
) | ||||||
Other comprehensive loss |
( |
) | ( |
) | ( |
) | ||||||
Balance as of December 29, 2018 |
( |
) | ( |
) | ( |
) | ||||||
Other comprehensive income |
|
|
|
|||||||||
Balance as of December 28, 2019 |
$ | |
$ | ( |
) | $ | ( |
) | ||||
Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Fair Value |
|||||||||||||
December 28, 2019 |
||||||||||||||||
Money market investments |
$ | |
$ | — |
$ | — |
$ | |
||||||||
Asset-backed securities |
|
— |
|
|
||||||||||||
Corporate bonds and direct obligations of government agencies |
|
|
|
|
||||||||||||
U.S. Treasury obligations |
|
|
|
|
||||||||||||
Total |
$ | |
$ | |
$ | |
$ |
|
||||||||
December 29, 2018 |
||||||||||||||||
Money market investments |
$ | |
$ | — |
$ | — |
$ | |
||||||||
Asset-backed securities |
|
— |
|
|
||||||||||||
Corporate bonds and direct obligations of government agencies |
|
|
|
|
||||||||||||
Total |
$ |
|
$ | |
$ | |
$ | |
||||||||
Less than 12 months |
12 months or longer |
Total |
||||||||||||||||||||||
Fair Value |
Unrealized Loss |
Fair Value |
Unrealized Loss |
Fair Value |
Unrealized Loss |
|||||||||||||||||||
December 28, 2019 |
||||||||||||||||||||||||
Asset-backed securities |
$ | |
$ | |
$ | |
$ | |
$ | |
$ | |
||||||||||||
Corporate bonds and direct obligations of government agencies |
|
|
|
|
|
|
||||||||||||||||||
U.S. Treasury obligations |
|
|
— |
— |
|
|
||||||||||||||||||
Total |
$ | |
$ | |
$ | |
$ | |
$ |
|
$ | |
||||||||||||
December 29, 2018 |
||||||||||||||||||||||||
Asset-backed securities |
$ | — |
$ | — |
$ | |
$ | |
$ | |
$ | |
||||||||||||
Corporate bonds and direct obligations of government agencies |
|
|
|
|
|
|
||||||||||||||||||
Total |
$ |
|
$ | |
$ |
|
$ | |
$ | |
$ | |
||||||||||||
Fiscal Years |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
Current: |
||||||||||||
Federal |
$ | |
$ | |
$ | |
||||||
State |
|
|
|
|||||||||
Foreign |
|
|
|
|||||||||
Total current |
$ | |
$ | |
$ | |
||||||
Deferred: |
||||||||||||
Federal |
$ | |
$ | |
$ | ( |
) | |||||
State |
|
|
|
|||||||||
Total deferred |
$ | |
$ | |
$ | ( |
) | |||||
Income taxes |
$ | |
$ | |
$ | |
||||||
Dec. 28, 2019 |
Dec. 29, 2018 |
|||||||
Deferred tax assets: |
||||||||
Receivable valuations |
$ | |
$ | |
||||
Share-based payments |
|
|
||||||
Self-insured claims |
|
|
||||||
Other |
|
|
||||||
Total deferred tax assets |
$ | |
$ | |
||||
Deferred tax liabilities: |
||||||||
Operating property |
$ | |
$ | |
||||
Goodwill |
|
|
||||||
Other |
|
|
||||||
Total deferred tax liabilities |
$ | |
$ | |
||||
Net deferred tax liability |
$ | |
$ | |
||||
Fiscal Years |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
Income taxes at federal income tax rate |
$ | |
$ | |
$ | |
||||||
State income taxes, net of federal income tax benefit |
|
|
|
|||||||||
Non-deductible executive compensation |
— |
|
— |
|||||||||
Meals and entertainment exclusion |
|
|
|
|||||||||
Share-based payments |
( |
) | ( |
) | ( |
) | ||||||
Section 199 deductions and R&D credits |
( |
) | ( |
) | ( |
) | ||||||
Tax Reform Act |
— |
— |
( |
) | ||||||||
Other, net |
|
|
( |
) | ||||||||
Income taxes |
$ |
|
$ |
|
$ | |
||||||
Fiscal Years |
||||||||
2019 |
2018 |
|||||||
Gross unrecognized tax benefits – beginning of the year |
$ | |
$ | |
||||
Gross increases related to current year tax positions |
|
|
||||||
Gross increases related to prior year tax positions |
|
|
||||||
Gross decreases related to prior year tax positions |
( |
) | ( |
) | ||||
Settlements |
( |
) | ( |
) | ||||
Lapse of statute of limitations |
( |
) | ( |
) | ||||
Gross unrecognized tax benefits – end of the year |
$ | |
$ | |
||||
Dec. 28, 2019 |
Dec. 29, 2018 |
|||||||
Land |
$ | |
$ | |
||||
Buildings and improvements |
|
|
||||||
Trailing equipment |
|
|
||||||
Other equipment |
|
|
||||||
Total operating property, gross |
|
|
||||||
Less accumulated depreciation and amortization |
|
|
||||||
Total operating property, net |
$ | |
$ | |
||||
Finance leases: |
||||
Amortization of right-of-use assets |
$ | |
||
Interest on lease liability |
|
|||
Total finance lease cost |
|
|||
Operating leases: |
||||
Lease cost |
|
|||
Variable lease cost |
— |
|||
Sublease income |
( |
) | ||
Total operating lease (income)/cost |
( |
) | ||
Total lease cost |
$ |
|
||
Operating lease right-of-use assets |
Other assets |
$ | |
|||
Finance lease assets |
Operating property, less accumulated depreciation and amortization |
|
||||
|
||||||
Total lease assets |
$ | |
||||
Finance Leases |
Operating Leases |
|||||||
2020 |
$ | |
$ | |
||||
2021 |
|
|
||||||
2022 |
|
|
||||||
2023 |
|
|
||||||
2024 |
|
|
||||||
Thereafter |
— |
— |
||||||
Total future minimum lease payments |
|
|
||||||
Less amount representing interest ( |
|
|
||||||
Present value of minimum lease payments |
$ | |
$ | |
||||
Current maturities of long-term debt |
|
|||||||
Long-term debt, excluding current maturities |
|
|||||||
Other current liabilities |
|
|||||||
Deferred income taxes and other noncurrent liabilities |
|
Finance Leases |
Operating Leases |
|||||||
Weighted average remaining lease term (years) |
|
|
||||||
Weighted average discount rate |
|
% | |
% |
Fiscal Years |
||||||||||||
2019 |
2018 |
2017 |
||||||||||
Total cost of the Plans during the period |
$ | |
$ | |
$ | |
||||||
Amount of related income tax benefit recognized during the period |
( |
) | ( |
) | ( |
) | ||||||
Net cost of the Plans during the period |
$ | |
$ |
|
$ | |
||||||
Number of RSUs |
Weighted Average Grant Date Fair Value |
|||||||
Outstanding at December 31, 2016 |
|
$ | |
|||||
Granted |
|
$ | |
|||||
Forfeited |
( |
) | $ | |
||||
Outstanding at December 30, 2017 |
|
$ | |
|||||
Granted |
|
$ | |
|||||
Vested |
( |
) | $ | |
||||
Forfeited |
( |
) | $ | |
||||
Outstanding at December 29, 2018 |
|
$ | |
|||||
Granted |
|
$ | |
|||||
Shares earned in excess of target (1) |
|
$ | |
|||||
Vested shares, including shares earned in excess of target |
( |
) | $ | |
||||
Forfeited |
( |
) | $ | |
||||
Outstanding at December 28, 2019 |
|
$ | |
|||||
(1) |
Represents shares earned in excess of target under the January 27, 2015 and January 29, 2016 RSU awards as actual results exceeded the target under both awards as a result of fiscal year 2018 results and under the May 1, 2015 RSU award as total shareholder return exceeded the target under the award. |
Options Outstanding |
Options Exercisable |
|||||||||||||||
Number of Options |
Weighted Average Exercise Price per Share |
Number of Options |
Weighted Average Exercise Price per Share |
|||||||||||||
Options at December 31, 2016 |
|
$ | |
|
$ | |
||||||||||
Exercised |
( |
) | $ | |
||||||||||||
Forfeited |
( |
) | $ | |
||||||||||||
Options at December 30, 2017 |
|
$ | |
|
$ | |
||||||||||
Exercised |
( |
) | $ | |
||||||||||||
Options at December 29, 2018 |
|
$ | |
|
$ | |
||||||||||
Exercised |
( |
) | $ | |
||||||||||||
Options at December 28, 2019 |
|
$ | |
|
$ | |
||||||||||
Options Outstanding |
||||||||||||
Range of Exercise Prices Per Share |
Number Outstanding |
Weighted Average Remaining Contractual Term (years) |
Weighted Average Exercise Price per Share |
|||||||||
$ |
|
|
$ | |
||||||||
$ |
|
|
$ | |
||||||||
$ |
|
|
$ | |
||||||||
|
|
$ | |
|||||||||
Options Exercisable |
||||||||||||
Range of Exercise Prices Per Share |
Number Exercisable |
Weighted Average Remaining Contractual Term (years) |
Weighted Average Exercise Price per Share |
|||||||||
$ |
|
|
$ | |
||||||||
$ |
|
|
$ | |
||||||||
$ |
|
|
$ | |
||||||||
|
|
$ | |
|||||||||
Number of Shares and Deferred Stock Units |
Weighted Average Grant Date Fair Value |
|||||||
Non-vested at December 31, 2016 |
|
$ | |
|||||
Granted |
|
$ | |
|||||
Vested |
( |
) | $ | |
||||
Non-vested at December 30, 2017 |
|
$ | |
|||||
Granted |
|
$ | |
|||||
Vested |
( |
) | $ | |
||||
Forfeited |
( |
) | $ | |
||||
Non-vested at December 29, 2018 |
|
$ | |
|||||
Granted |
|
$ | |
|||||
Vested |
( |
) | $ | |
||||
Non-vested at December 28, 2019 |
|
$ | |
|||||
Transportation Logistics |
Insurance |
Total |
||||||||||
2019 |
||||||||||||
External revenue |
$ | |
$ | |
$ | |
||||||
Internal revenue |
|
|
||||||||||
Investment income |
|
|
||||||||||
Interest and debt expense |
|
|
||||||||||
Depreciation and amortization |
|
|
||||||||||
Operating income |
|
|
|
|||||||||
Expenditures on long-lived assets |
|
|
||||||||||
Goodwill |
|
|
||||||||||
Finance lease additions |
|
|
||||||||||
Total assets |
|
|
|
|||||||||
2018 |
||||||||||||
External revenue |
$ | |
$ | |
$ | |
||||||
Internal revenue |
|
|
||||||||||
Investment income |
|
|
||||||||||
Interest and debt expense |
|
|
||||||||||
Depreciation and amortization |
|
|
||||||||||
Operating income |
|
|
|
|||||||||
Expenditures on long-lived assets |
|
|
||||||||||
Goodwill |
|
|
||||||||||
Finance lease additions |
|
|
||||||||||
Total assets |
|
|
|
|||||||||
2017 |
||||||||||||
External revenue |
$ | |
$ | |
$ | |
||||||
Internal revenue |
|
|
||||||||||
Investment income |
|
|
||||||||||
Interest and debt expense |
|
|
||||||||||
Depreciation and amortization |
|
|
||||||||||
Operating income |
|
|
|
|||||||||
Expenditures on long-lived assets |
|
|
||||||||||
Goodwill |
|
|
||||||||||
Finance lease additions |
|
|
||||||||||
Total assets |
|
|
|
Fiscal Years Ended |
||||||||||||
December 28, 2019 |
December 29, 2018 |
December 30, 2017 |
||||||||||
Operating income |
$ | |
$ | |
$ | |
||||||
Net income attributable to Landstar System, Inc. and subsidiary |
$ | |
$ | |
$ | |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share attributable to Landstar System, Inc. and subsidiary |
$ | |
$ | |
$ | |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per share attributable to Landstar System, Inc. and subsidiary |
$ | |
$ | |
$ | |
Fourth Quarter 2019 |
Third Quarter 2019 |
Second Quarter 2019 |
First Quarter 2019 |
|||||||||||||
Revenue |
$ |
$ | $ | $ | ||||||||||||
Operating income |
$ | $ | $ | $ | ||||||||||||
Income before income taxes |
$ | $ | $ | $ | ||||||||||||
Income taxes |
||||||||||||||||
Net income |
$ | $ | $ | $ | ||||||||||||
Less: Net income/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(1) |
$ | $ | $ | $ | ||||||||||||
Diluted earnings per share attributable to Landstar System, Inc. and subsidiary(1) |
$ | $ | $ | $ | ||||||||||||
Dividends per common share |
$ | $ | $ | $ | ||||||||||||
Fourth Quarter 2018 |
Third Quarter 2018 |
Second Quarter 2018 |
First Quarter 2018 |
|||||||||||||
Revenue |
$ | $ | $ | $ | ||||||||||||
Operating income |
$ | $ | $ | $ | ||||||||||||
Income before income taxes |
$ | $ | $ | $ | ||||||||||||
Income taxes |
||||||||||||||||
Net income |
$ | $ | $ | $ | ||||||||||||
Less: Net income 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(1) |
$ | $ | $ | $ | ||||||||||||
Diluted earnings per share attributable to Landstar System, Inc. and subsidiary(1) |
$ | $ | $ | $ | ||||||||||||
Dividends per common share |
$ | $ | $ | $ | ||||||||||||
(1) | Due to the changes in the number of average common shares and common stock equivalents outstanding during the year, the sum of earnings per share amounts for each quarter do not necessarily sum in the aggregate to the earnings per share amounts for the full year. |
Item 9. |
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure |
Item 9A. |
Controls and Procedures |
/s/ KPMG LLP |
Item 9B. |
Other Information |
Item 10. |
Directors, Executive Officers and Corporate Governance |
Item 11. |
Executive Compensation |
Item 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
Item 13. |
Certain Relationships and Related Transactions, and Director Independence |
Item 14. |
Principal Accounting Fees and Services |
Item 15. |
Exhibits and Financial Statement Schedules |
(a)(1) | Financial Statements and Supplementary Data |
Page |
| |||
35 |
||||
36 |
||||
37 |
||||
38 |
||||
39 |
||||
40 |
||||
59 |
(2) | Financial Statement Schedules |
Exhibit No. |
Description | |||
(3) |
Articles of Incorporation and By-Laws: | |||
3.1 |
||||
3.2 |
||||
(4) |
Instruments defining the rights of security holders, including indentures: | |||
4.1 P |
Specimen of Common Stock Certificate. (Incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-1 (Registration No. 33-57174)) | |||
4.2 |
||||
4.3 |
||||
4.4** |
||||
(10) |
Material contracts: | |||
10.1+ |
10.2+ |
||||
10.3+ |
||||
10.4+ |
||||
10.5+ |
||||
10.6+ |
||||
10.7+ |
||||
10.8+ |
||||
10.9+ |
||||
10.10+ |
||||
10.11+ |
||||
(21) |
Subsidiaries of the Registrant: | |||
21.1* |
||||
(23) |
Consents of experts and counsel: | |||
23.1* |
||||
(24) |
Power of attorney: | |||
24.1* |
||||
(31) |
Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002: | |||
31.1* |
||||
31.2* |
||||
(32) |
Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002: | |||
32.1** |
32.2** |
||||
101* |
The following materials from the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2019, formatted in Inline eXtensible Business Reporting Language (iXBRL): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii) Consolidated Statements of Comprehensive Income, (iv) Consolidated Statements of Cash Flows, (v) Consolidated Statements of Changes in Equity, (vi) Notes to Consolidated Financial Statements, and (vii) Financial Statement Schedule. | |||
104* |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
+ | management contract or compensatory plan or arrangement |
* | Filed herewith. |
** | Furnished herewith. |
Date: February 21, 2020 |
LANDSTAR SYSTEM, INC. | |||||
By: |
/s/ JAMES B. GATTONI | |||||
James B. Gattoni | ||||||
President and | ||||||
Chief Executive Officer | ||||||
By: |
/s/ L. KEVIN STOUT | |||||
L. Kevin Stout | ||||||
Vice President and Chief Financial Officer |
Signature |
Title |
Date | ||
/s/ JAMES B. GATTONI |
President and Chief Executive |
February 21, 2020 | ||
James B. Gattoni |
Officer; |
|||
Principal Executive Officer; Director |
||||
/s/ L. KEVIN STOUT |
Vice President and Chief Financial |
February 21, 2020 | ||
L. Kevin Stout |
Officer; Principal Financial Officer and |
|||
Principal Accounting Officer |
||||
* |
Director |
February 21, 2020 | ||
Homaira Akbari |
||||
* |
Director |
February 21, 2020 | ||
David G. Bannister |
||||
* |
Chairman of the Board |
February 21, 2020 | ||
Diana M. Murphy |
||||
* |
Director |
February 21, 2020 | ||
Anthony J. Orlando |
||||
* |
Director |
February 21, 2020 | ||
George P. Scanlon |
||||
* |
Director |
February 21, 2020 | ||
Larry J. Thoele |
By: |
/s/ MICHAEL K. KNELLER | |
Michael K. Kneller | ||
Attorney In Fact* |