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10-Q - LANDSTAR SYSTEM INC (0000853816) (Filer)

Tue, May 13, 9:14 PM (36 days ago)

**Landstar System, Inc. (LSTR) Q1 2025 Financial Summary** **Financial Health and Performance:** - **Revenue:** $1,152.5 million, a 2% decrease from $1,171.0 million in Q1 2024. - **Net Income:** $29.8 million, down from $47.1 million in Q1 2024. - **Earnings per Share (EPS):** $0.85, a decrease from $1.32 in Q1 2024. - **Operating Income:** $39.4 million, down from $59.9 million in Q1 2024. - **Cash Flow from Operations:** $55.7 million, a decrease from $94.2 million in Q1 2024. **Profit Margins:** - **Operating Margin:** 3.4%, down from 5.1% in Q1 2024. - **Net Margin:** 2.6%, down from 4.0% in Q1 2024. **Cash Flow:** - **Operating Cash Flow:** $55.7 million, down from $94.2 million in Q1 2024. - **Capital Expenditures:** $1.9 million, down from $9.3 million in Q1 2024. **Earnings Changes:** - **Year-over-Year Change:** Net income decreased by 36.9%. - **Quarter-over-Quarter Change:** Net income decreased by 36.9%. **Quarterly Performance Discussion:** - **Revenue Decline:** Due to a 1% decrease in the number of loads hauled and stable revenue per load. - **Cost Increases:** Higher insurance and claims costs, increased selling, general, and administrative expenses due to a supply chain fraud matter. - **Cash Flow Decline:** Attributed to decreased net income and reduced favorable working capital impacts. **Trends and Uncertainties:** - **Supply Chain Fraud:** A $4.8 million pre-tax expense related to a supply chain fraud matter. - **Insurance Costs:** Increased severity of current year trucking and cargo claims. - **Economic Factors:** Seasonal trends and economic conditions affecting demand for transportation services. **Future Operations Impact:** - **Capital Expenditures:** Anticipated spending of $32.0 million on operating property for the remainder of 2025. - **Debt and Liquidity:** No borrowings outstanding under the credit agreement, with $264.8 million available for future borrowings. - **Share Repurchases:** Purchased 386,318 shares at a total cost of $60.9 million during Q1 2025. **Key Metrics:** - **Current Ratio:** 2.0, indicating strong short-term liquidity. - **Debt-to-Equity Ratio:** Low, with no significant long-term debt. - **Shareholders' Equity:** $930.8 million, or 91% of total capitalization. **Conclusion:** Landstar System, Inc. faced challenges in Q1 2025, including revenue declines, increased costs, and a supply chain fraud matter. However, the company maintains strong liquidity and is positioned to invest in future growth while managing operational uncertainties.