1.15 million loadings (1) Percentage change in rate is calculated on a revenue per load basis. (2) Percentage change in volume is calculated on the number of loads hauled. $1,600 $1,800 $2,000 $2,200 $2,400 $2,600 $2,800 $3,000 2Q193Q194Q191Q202Q203Q204Q201Q212Q213Q214Q211Q222Q223Q224Q221Q232Q23 LANDSTAR SYSTEM/2 "Landstar's business model performed well in the 2023 second quarter considering the challenging freight environment," said Landstar President and Chief Executive Officer Jim Gattoni. "After a reco ...

Financial Data and Key Metrics Changes - In the 2023 second quarter, total truck revenue was $1.247 billion, a 29% decrease from the 2022 second quarter, driven by a 16% decrease in load volume and a 15% decrease in revenue per load [94] - Gross profit was $139.7 million in the 2023 second quarter compared to $208.1 million in the 2022 second quarter, with a gross profit margin of 10.2% in 2023 versus 10.5% in 2022 [29][30] - Variable contribution was $198.2 million in the 2023 second quarter, down from $267.5 million in the same period last year, with a variable contribution margin of 14.4% compared to 13.5% in 2022 [30][31] Business Line Data and Key Metrics Changes - Insurance and claims costs were $29.8 million in the 2023 second quarter, down from $34.1 million in 2022, but represented 5.8% of BCO revenue in 2023 compared to 4.9% in 2022 [4] - Other operating costs increased to $13.5 million in the 2023 second quarter from $10.4 million in 2022, primarily due to increased provisions for contractor bad debt and general equipment maintenance costs [32] - Selling, general and administrative costs decreased to $54.5 million in the 2023 second quarter from $59 million in 2022, mainly due to a decreased provision for compensation under variable programs [34] Market Data and Key Metrics Changes - The BCO truck count decreased by 261 trucks in the quarter, an improvement compared to a 472 truck decrease in the first quarter of 2023, with an overall decrease of approximately 11% since the end of the second quarter of 2022 [1] - The 12-month rolling average turnover for BCOs is currently about 37%, similar to the 36% term rate experienced in 2019 during a comparable soft rate environment [2] - The company does not anticipate significant volume from any potential bankruptcies in the industry, indicating a stable outlook despite market disruptions [28] Company Strategy and Development Direction - The company aims to leverage growth in variable contribution to improve operating income, targeting a 70% pass-through of incremental growth in variable contribution to operating income by 2025 [20][51] - The management is focused on building efficiencies within the agent's office to handle more volume without significantly increasing headcount, indicating a strategy of operational efficiency [49] - The company is investing in technology and digital tools to enhance communication and efficiency, with a consistent annual spend of $25 million to $30 million on AI and digital technologies [80] Management's Comments on Operating Environment and Future Outlook - Management expects continued seasonal softness in both van and flatbed segments, with no clear indicators of a turnaround in the near term [8] - The company acknowledges the unpredictability of future economic conditions, making it challenging to forecast truckload volume levels beyond a few months [119] - Management believes that the current down cycle may see an inflection point in late 2023 or early 2024, with readiness to capitalize on the recovery [83] Other Important Information - The effective income tax rate remained stable at 24.6% for both the 2023 and 2022 second quarters [110] - Cash and short-term investments at the end of the quarter were $419 million, with cash flow from operations for the first half of 2023 at $192 million [111] - The company generated free cash flow of $179 million through the first half of 2023, demonstrating resilience despite challenging market conditions [119] Q&A Session Summary Question: Are volumes underperforming seasonality? - Management confirmed that volumes starting in July are underperforming seasonality and expect this trend to continue into August and September [10][12] Question: What is the outlook for truckload pricing and volumes? - Management anticipates truckload pricing to be 10% to 12% below the 2022 third quarter, with loads expected to be approximately 6% below the 2023 second quarter [118] Question: How is the company preparing for potential market disruptions? - Management indicated that they are well-prepared with new pricing tools and efficiencies to better handle volume when demand picks up [49] Question: What are the trends in industrial end markets? - Management noted that machinery and building products are performing better than consumer categories, but overall demand remains soft [64] Question: How is the company leveraging technology and AI? - The company is investing in AI and digital tools to improve operational efficiencies and communication, with a focus on enhancing service delivery [80][76]

Jim G, starting in October, you began walking us through kind of a hypothetical revenue downside scenario and how the business might perform. I think you started off at 20% and you honed that a little bit for us in January or February. Can you walk us through -- trying to kind of walk the business to trough how the business might perform and anything you would change to what you shared with us before based on how this year has developed so far? But I am concerned a little bit on the cost side with the -- a ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Or Form 10-K (Mark One) ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2022 Landstar System, Inc. (Exact name of registrant as specified in its charter) Delaware 06-1313069 (State or other jurisdiction of incorporation or organization) 13410 Sutton Park Drive South Jacksonville, Florida 32224 (Address of principal executive offices) (Zip Cod ...

Landstar System, Inc. (NASDAQ:LSTR) Q4 2022 Earnings Conference Call February 2, 2023 8:00 AM ET Company Participants Jim Gattoni - President & Chief Executive Officer Jim Todd - Vice President & Chief Financial Officer Rob Brasher - Vice President & Chief Commercial Officer Joe Beacom - Vice President, Chief Safety & Operations Officer Conference Call Participants Todd Fowler - KeyBanc Capital Market Scott Group - Wolfe Research Jack Atkins - Stephens Bruce Chan - Stifel Bascome Majors - Susquehanna Stepha ...

Financial Performance - The third quarter of 2022 marked the best financial performance in Landstar's history, with revenue approximately 5% above the third quarter of 2021 [6] - Earnings per diluted share increased by 7% compared to the third quarter of 2021, aligning with the low end of guidance [7] - Gross profit was $185.7 million, down from $189.2 million in the same period last year, with a gross profit margin of 10.2% compared to 10.9% in 2021 [25][26] - Variable contribution margin decreased to 13.5% of revenue from 14% in the previous year, primarily due to a higher percentage of revenue from truck brokerage carriers [27] Business Line Performance - Truck revenue was up 1% year-over-year, driven by a 1% increase in truckload volume, while revenue from other transportation modes surged by 49% [7] - Revenue per mile on van equipment decreased sequentially since peaking in February 2022, with a notable decline in August 2022 [13][14] - Revenue per mile on loads hauled by BCOs via unsided equipment reached a record high, increasing by 5% year-over-year [17] Market Performance - Total truckload volume in July was 5% higher than the previous year, but August was flat, and September saw a 1% decline compared to September 2021 [18] - The growth rate in load count for key industry verticals slowed in the third quarter compared to the second quarter [19] - Substitute line haul volume decreased by 27% compared to the third quarter of 2021, attributed to softer consumer demand [20] Company Strategy and Industry Competition - The company continues to invest in technology and facilities while returning cash to shareholders through stock buybacks and dividends [45][46] - Management anticipates a challenging first half of 2023 due to difficult comparisons and a softening economy [54] - The company does not foresee significant M&A opportunities that would conflict with its business model, focusing instead on supporting its agent network [117] Management Commentary on Operating Environment and Future Outlook - Management noted a softening demand environment, with expectations for a muted holiday shipping season and a potential decline in truckload volume of 2% to 4% in the fourth quarter [41][42] - The effective income tax rate remained stable at 24.3%, with expectations of continued strong free cash flow generation even in a downturn [33][44] - Management expressed concerns about pricing volatility and its impact on revenue per load, emphasizing that volume changes have less impact on the business model [102] Other Important Information - The company ended the quarter with cash and short-term investments totaling $228 million, with operating cash flow generation exceeding any full fiscal year in the company's history [34] - The number of approved third-party carriers increased by 21% year-over-year, indicating a growing network [24] Q&A Session Summary Question: Macro outlook and customer feedback on inventory demand - Management noted a shift from expectations of a strong peak season to a more muted outlook, with customers now anticipating flat to soft demand [52] Question: Maintaining operating margins in a downturn - Management highlighted that fixed costs are low relative to variable contributions, allowing for some margin maintenance even in a revenue decline scenario [56] Question: Variable compensation and its impact - Current accrual for variable compensation in 2023 is about $31 million, with potential adjustments based on revenue performance [63] Question: Impact of housing market slowdown on flatbed demand - Management indicated that a slowdown in housing would negatively impact the unsided market, particularly in building products [74] Question: Strength in air and ocean transportation - The increase in air and ocean revenue was primarily rate-driven, with some contribution from new agents in those categories [80] Question: Revenue per load trends versus spot rates - Management discussed the decoupling of revenue per load from spot rates, attributing it to the nature of their business model and the stability provided by contracted rates [86]

Landstar System, Inc. (NASDAQ:LSTR) Q2 2022 Earnings Conference Call July 21, 2022 8:00 AM ET Company Participants Jim Gattoni - President & CEO Jim Todd - VP & CFO Rob Brasher - VP & CCO Joe Beacom - VP, Chief Safety & Operations Officer Conference Call Participants Jon Chappell - Evercore ISI Todd Fowler - KeyBanc Capital Markets Allison Poliniak - Wells Fargo Bascome Majors - Susquehanna Jack Atkins - Stephens Scott Group - Wolfe Research Scott Schneeberger - Oppenheimer Bruce Chan - Stifel Operator Good ...

Financial Performance - Second Quarter 2022 revenue reached $1975064000, a 257% increase compared to $1570718000 in the second quarter of 2021[19, 20] - Year-to-date revenue as of June 25, 2022, was $3945663000, a 380% increase compared to $2858252000 for the same period in 2021[14, 18] - Second Quarter 2022 gross profit was $208080000, compared to $174844000 in the second quarter of 2021, with gross profit margin at 105% and 111% respectively[29] - Year-to-date gross profit was $422646000, compared to $321975000 for the same period in 2021, with gross profit margin at 107% and 113% respectively[28] - Second Quarter 2022 variable contribution was $267520000, compared to $220784000 in the second quarter of 2021, with variable contribution margin at 135% and 141% respectively[32] - Year-to-date variable contribution was $538011000, compared to $410024000 for the same period in 2021, with variable contribution margin at 136% and 143% respectively[31] - Second Quarter 2022 operating income was $150418000, compared to $122248000 in the second quarter of 2021[40] - Year-to-date operating income was $313251000, compared to $225516000 for the same period in 2021[38] Operational Data - The company had approximately 1200 agents, over 25000 customers, and over 111000 capacity providers as of June 25, 2022[14] - Total available truck capacity providers reached 111126 as of June 25, 2022[44]

Financial Performance - The first quarter of 2022 marked the best-ever quarterly performance in the company's history, with revenue reaching an all-time record of $1.970 billion, a 53% increase compared to the first quarter of 2021 [8][11] - Gross profit for the first quarter was $214.6 million, up 46% from $147.1 million in the same period last year, with a gross profit margin of 10.9% [26][29] - Diluted earnings per share for the first quarter were also at an all-time high, reflecting strong overall financial performance [49] Business Line Performance - Truckload revenue per load in the first quarter set a record, exceeding the previous fourth quarter by 4%, with truck revenue per load increasing by 25%, 29%, and 17% year-over-year for January, February, and March respectively [12][16] - Revenue from new agents was $25 million in the first quarter, the second highest in the past 17 quarters, indicating strong growth in the agent network [22] - Loads hauled via BCOs increased by 7% year-over-year, with a record number of approved third-party carriers in the network, which increased by 39% [23] Market Data - The company experienced strong growth in truckload rates and volume, alongside increased revenue from ocean freight services due to rate hikes [11] - The demand for consumer durables and small packages via e-commerce drove a 17% increase in van volume compared to the first quarter of 2021 [21] - The overall truckload volume increased by 20% year-over-year, with January, February, and March showing increases of 17%, 30%, and 14% respectively [19] Strategic Direction and Industry Competition - The company continues to focus on profitable load volume growth and increasing available capacity, with expectations for a strong freight environment to persist, albeit at a decelerated growth rate [40][53] - The company is actively recruiting agents to capture market share in air and ocean freight, with a focus on maintaining a consistent level of service and profitability [66] Management Commentary on Operating Environment and Future Outlook - Management noted that while there are signs of softness in certain areas, overall demand remains robust, and the company does not see the extent of decline reported in the media [56][60] - The company anticipates that the second quarter will see revenue in the range of $2 billion to $2.5 billion, with diluted earnings per share expected to be between $3.22 and $3.32 [47] Other Important Information - The effective income tax rate for the first quarter was 22.8%, down from 24.4% in the previous year, with expectations to return to 24.5% in the second quarter [37] - The company returned $194 million to shareholders through dividends and share repurchases during the quarter [38] Q&A Session Summary Question: Insights on volume and demand trends - Management indicated expectations of a cooling demand but noted no significant weakness in specific sectors, with automotive showing strong recovery [56] Question: Flexibility of the Landstar model in different market cycles - Management emphasized the difficulty in predicting the extent of downturns but noted that costs are built into the system, making drastic declines less likely [59] Question: Trends in air and ocean business growth - Management acknowledged growth in ocean freight due to increased rates and volume, while air freight remains volatile [66] Question: Impact of Ukraine operations on guidance - Management expects steady trends from operations in Ukraine, with no significant disruptions anticipated [68] Question: Expectations around supply chain disruptions - Management noted that ongoing port congestion could create more freight volumes, positively impacting business [77] Question: Technology spending in downturns - Management plans to maintain technology spending to support agent services, regardless of market conditions [93] Question: Trailer procurement and inflation - Management indicated expectations of continued inflation in trailer costs, with potential procurement late in the year [95] Question: Impact of the convention on SG&A costs - Management noted an expected increase in SG&A costs due to the convention, estimated at $2.5 million to $3 million [97]

DESIGNED TO RESPOND BUILT TO DELIVER | --- | --- | |--------------------------|-------| | | | | Landstar System, Inc. | | | | | | Earnings Conference Call | | | | | | | | | First Quarter 2022 | | | April 20, 2022 | | Date Published: 04/20/2022 Forward Looking Statements Disclaimer: 2 The following is a "safe harbor" statement under the Private Securities Litigation Reform Act of 1995. Statements made in this slide presentation that are not based on historical facts are "forward looking statements." This pre ...