Part I [Business](index=4&type=section&id=Item%201.%20Business) Landstar operates an asset-light model providing integrated transportation logistics solutions across North America through a network of independent agents and third-party capacity providers - Landstar operates an **asset-light model**, providing integrated transportation solutions through a network of **independent commission sales agents** and **third-party capacity providers**[14](index=14&type=chunk)[15](index=15&type=chunk) Revenue Contribution by Service (FY 2020) | Service Type | % of Consolidated Revenue | | :--- | :--- | | Truck Services | 92% | | Rail Intermodal Services | 3% | | Air and Ocean Services | 3% | | Insurance Segment | 1% | Revenue Contribution by Capacity Provider (FY 2020) | Capacity Provider | % of Consolidated Revenue | | :--- | :--- | | BCO Independent Contractors | 45% | | Truck Brokerage Carriers | 47% | | Rail, Air, and Ocean Carriers | 6% | - The company's agent network is a key operational factor, with **508 "Million Dollar Agents"** generating **92% of consolidated revenue** in fiscal year 2020[28](index=28&type=chunk) - As of December 26, 2020, the company employed **1,320 individuals** and implemented various measures to address the COVID-19 pandemic, including remote work, safety protocols, and a pandemic relief program for BCOs and agents[63](index=63&type=chunk)[69](index=69&type=chunk) [Risk Factors](index=12&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant operational, economic, and legal risks, including trucking accidents, reliance on independent contractors, and the impact of the COVID-19 pandemic - Operational risks include high potential liability from trucking accidents, with a self-insured retention of up to **$5,000,000** per occurrence and increasing costs for excess insurance coverage[67](index=67&type=chunk)[70](index=70&type=chunk)[71](index=71&type=chunk) - The business is highly dependent on its network of independent commission sales agents, with **508 "Million Dollar Agents"** accounting for **92% of 2020 revenue**, and on third-party capacity providers[75](index=75&type=chunk)[76](index=76&type=chunk) - The COVID-19 pandemic has had a **significant adverse impact**, causing unprecedented fluctuations in truckload volumes and creating uncertainty for future results[77](index=77&type=chunk)[78](index=78&type=chunk) - A significant legal risk involves the **reclassification of BCO Independent Contractors and agents** as independent contractors, where legislative or regulatory changes could materially affect the operating model[90](index=90&type=chunk)[92](index=92&type=chunk)[93](index=93&type=chunk) [Unresolved Staff Comments](index=19&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company has no unresolved staff comments from the Securities and Exchange Commission - None[106](index=106&type=chunk) [Properties](index=19&type=section&id=Item%202.%20Properties) The company owns and leases various properties across North America, including its headquarters, which are deemed adequate for current operations - The company's primary owned facilities are located in Jacksonville, FL, Rockford, IL, and Laredo, TX, which are considered adequate for current operations[107](index=107&type=chunk) [Legal Proceedings](index=19&type=section&id=Item%203.%20Legal%20Proceedings) Legal proceedings information is cross-referenced to Item 7, Management's Discussion and Analysis - Referenced to Item 7, MD&A[108](index=108&type=chunk) [Mine Safety Disclosures](index=19&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not applicable[109](index=109&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=20&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Landstar's common stock trades on NASDAQ, and the company has an active stock repurchase program and equity compensation plans - The company's common stock trades on the **NASDAQ** under the symbol **LSTR**[111](index=111&type=chunk) - As of December 26, 2020, the company was authorized to repurchase up to **1,821,030 shares** of its common stock[113](index=113&type=chunk) - The company maintains equity compensation plans for its Board of Directors and employees, with **3,732,872 securities** remaining available for future issuance as of December 26, 2020[114](index=114&type=chunk) [Selected Financial Data](index=22&type=section&id=Item%206.%20Selected%20Financial%20Data) This item is not applicable - Not applicable[118](index=118&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes the company's financial condition and operational results for fiscal years 2020, 2019, and 2018, including the impact of market conditions and critical accounting policies [Fiscal Year 2020 Compared to Fiscal Year 2019](index=28&type=section&id=Fiscal%20Year%202020%20Compared%20to%20Fiscal%20Year%202019) Fiscal 2020 revenue increased by 1% to $4.13 billion, but net income decreased to $192.1 million due to higher costs and one-time charges Financial Performance Comparison (2020 vs. 2019) | Metric | FY 2020 | FY 2019 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $4,133.0M | $4,084.6M | +$48.4M | +1% | | Gross Profit | $599.4M | $614.9M | -$15.5M | -2.5% | | Operating Income | $253.0M | $298.9M | -$45.9M | -15.4% | | Net Income | $192.1M | $227.7M | -$35.6M | -15.6% | | Diluted EPS | $4.98 | $5.72 | -$0.74 | -12.9% | - The **1% revenue increase** was driven by a **3% rise in revenue per load**, primarily from a tight van truckload capacity market in the second half of 2020, which offset a **2% decline in total loads** hauled[153](index=153&type=chunk)[155](index=155&type=chunk)[156](index=156&type=chunk) - Profitability was negatively impacted by several factors, including a **$15.5 million** commission program termination cost, a **$2.6 million** non-cash asset impairment charge, and **$12.6 million** in COVID-19 relief payments to BCOs and agents[161](index=161&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk) - Insurance and claims costs increased by **$7.5 million**, driven by a major accident claim, additional premiums, and increased severity of claims, partially offset by lower unfavorable development of prior years' claims[164](index=164&type=chunk) [Fiscal Year 2019 Compared to Fiscal Year 2018](index=31&type=section&id=Fiscal%20Year%202019%20Compared%20to%20Fiscal%20Year%202018) Fiscal 2019 revenue decreased by 11% to $4.08 billion, and net income fell to $227.7 million due to a softer freight market and higher claims costs Financial Performance Comparison (2019 vs. 2018) | Metric | FY 2019 | FY 2018 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue | $4,084.6M | $4,615.1M | -$530.5M | -11% | | Gross Profit | $614.9M | $668.2M | -$53.3M | -8.0% | | Operating Income | $298.9M | $331.7M | -$32.8M | -9.9% | | Net Income | $227.7M | $255.3M | -$27.6M | -10.8% | | Diluted EPS | $5.72 | $6.18 | -$0.46 | -7.4% | - The **11% revenue decline** was attributed to a softer freight market, leading to a **9% drop in revenue per load** and a **3% decrease in load volume**[173](index=173&type=chunk)[174](index=174&type=chunk) - Selling, general and administrative costs decreased by **$29.3 million**, primarily due to a lower provision for incentive compensation and decreased stock-based compensation expense[181](index=181&type=chunk) - Insurance and claims costs increased by **$4.6 million** due to increased net unfavorable development of prior years' claims and higher severity of current year claims[180](index=180&type=chunk) [Capital Resources and Liquidity](index=33&type=section&id=Capital%20Resources%20and%20Liquidity) The company maintains strong liquidity with $402 million in working capital and a $250 million credit facility, allocating capital to shareholder returns and operational investments Liquidity and Capitalization Overview | Metric | Dec 26, 2020 | Dec 28, 2019 | | :--- | :--- | :--- | | Working Capital | $402.0M | $445.0M | | Cash from Operations (FY) | $210.7M | $307.8M | | Long-Term Debt | $100.8M | $112.8M | | Total Equity | $691.8M | $721.5M | - In fiscal 2020, the company returned significant capital to shareholders, purchasing **1,178,970 shares** for **$116.0 million** and declaring dividends totaling **$109.5 million** (including a $2.00 special dividend)[188](index=188&type=chunk)[189](index=189&type=chunk) - The company has a **$250 million** revolving credit facility maturing in August 2023, with **$216.4 million** available for future borrowings as of year-end 2020[191](index=191&type=chunk)[195](index=195&type=chunk) - Anticipated capital expenditures for fiscal 2021 include approximately **$77 million** for new trailing equipment and **$23 million** for information technology[196](index=196&type=chunk) [Critical Accounting Policies and Estimates](index=34&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) The estimation of self-insured claims is a critical accounting policy, with significant net unfavorable adjustments recorded in recent fiscal years - The estimation of the liability for **self-insured claims** is a **critical accounting estimate**, as it is based on actuarial assumptions and subject to change as new information becomes available[200](index=200&type=chunk) Net Unfavorable Adjustments to Prior Years' Claims Estimates | Fiscal Year | Amount | | :--- | :--- | | 2020 | $9,196,000 | | 2019 | $16,679,000 | | 2018 | $13,960,000 | [Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk exposures to interest rates and foreign currency are not considered material to its financial condition or operations - The company is exposed to **interest rate risk** through its variable-rate revolving credit facility, but had **no borrowings outstanding** during 2020 or 2019[203](index=203&type=chunk)[205](index=205&type=chunk) - The investment portfolio consists of investment-grade bonds and U.S. Treasury obligations with maturities up to five years; a hypothetical **100 basis point change** in interest rates would **not have a material impact** on earnings[206](index=206&type=chunk) - **Foreign currency translation risk** from Canadian and Mexican operations is **not considered material**, as assets in these subsidiaries represent only about **4% of total consolidated assets**[207](index=207&type=chunk) [Financial Statements and Supplementary Data](index=36&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for fiscal years 2020, 2019, and 2018, including balance sheets, income statements, cash flows, and notes [Consolidated Financial Statements](index=36&type=section&id=Consolidated%20Financial%20Statements) The audited financial statements show total assets of $1.65 billion and shareholders' equity of $691.8 million as of December 26, 2020, with $4.13 billion in revenue and $192.1 million in net income for FY2020 Consolidated Balance Sheet Data (in thousands) | | Dec 26, 2020 | Dec 28, 2019 | | :--- | :--- | :--- | | **Total Current Assets** | $1,208,175 | $997,888 | | **Total Assets** | $1,653,799 | $1,427,711 | | **Total Current Liabilities** | $806,137 | $552,904 | | **Total Liabilities** | $961,964 | $706,242 | | **Total Shareholders' Equity** | $691,835 | $721,469 | Consolidated Income Statement Data (in thousands) | | FY 2020 | FY 2019 | FY 2018 | | :--- | :--- | :--- | :--- | | **Revenue** | $4,132,981 | $4,084,577 | $4,615,144 | | **Operating Income** | $252,950 | $298,904 | $331,735 | | **Net Income** | $192,106 | $227,720 | $255,281 | | **Diluted EPS** | $4.98 | $5.72 | $6.18 | Consolidated Cash Flow Data (in thousands) | | FY 2020 | FY 2019 | FY 2018 | | :--- | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $210,717 | $307,840 | $297,901 | | **Net Cash from Investing Activities** | ($28,419) | ($18,556) | ($8,194) | | **Net Cash from Financing Activities** | ($252,032) | ($170,565) | ($330,679) | | **Cash at End of Period** | $249,354 | $319,515 | $199,736 | [Notes to Consolidated Financial Statements](index=41&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies and financial statement accounts, including revenue recognition, insurance liabilities, and segment performance, with Transportation Logistics generating most revenue - **Revenue from freight transportation** is recognized over the transit period of a shipment, using a **days-in-transit output method** to measure progress[228](index=228&type=chunk) - The company retains liability for commercial trucking claims up to **$5,000,000** per occurrence and has an excess policy for losses between **$5,000,000** and **$10,000,000**, subject to aggregate limits[231](index=231&type=chunk) Segment Data for Fiscal Year 2020 (in thousands) | Segment | External Revenue | Operating Income | Total Assets | | :--- | :--- | :--- | :--- | | Transportation Logistics | $4,076,519 | $221,210 | $1,301,991 | | Insurance | $56,462 | $31,740 | $351,808 | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=61&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants regarding accounting and financial disclosure - None[326](index=326&type=chunk) [Controls and Procedures](index=61&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management and independent auditors concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 26, 2020 - Management concluded that the company's disclosure controls and procedures were **effective** as of December 26, 2020[327](index=327&type=chunk) - Based on an assessment using the COSO framework, management concluded that the company maintained **effective internal control over financial reporting** as of December 26, 2020[333](index=333&type=chunk) - KPMG LLP, the independent auditor, issued an **unqualified opinion** on the **effectiveness** of the company's internal control over financial reporting as of December 26, 2020[335](index=335&type=chunk)[338](index=338&type=chunk) [Other Information](index=65&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[347](index=347&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=66&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the definitive Proxy Statement - Information is incorporated by reference from the company's definitive Proxy Statement[349](index=349&type=chunk) [Executive Compensation](index=66&type=section&id=Item%2011.%20Executive%20Compensation) Executive and director compensation information is incorporated by reference from the definitive Proxy Statement - Information is incorporated by reference from the company's definitive Proxy Statement[351](index=351&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=66&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership information for beneficial owners and management is incorporated by reference from the definitive Proxy Statement - Information is incorporated by reference from the company's definitive Proxy Statement[353](index=353&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=66&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The company reports no related party transactions, and director independence information is incorporated by reference from the Proxy Statement - Information regarding director independence is incorporated by reference from the company's definitive Proxy Statement[354](index=354&type=chunk) [Principal Accounting Fees and Services](index=66&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information on principal accounting fees and services is incorporated by reference from the definitive Proxy Statement - Information is incorporated by reference from the company's definitive Proxy Statement[355](index=355&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=67&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists financial statements, schedules, and exhibits filed with the Form 10-K, including corporate documents and certifications - Lists the financial statements and exhibits filed with the annual report[357](index=357&type=chunk) - Key exhibits filed include the **Amended and Restated Credit Agreement**, various **equity incentive plans**, and **CEO/CFO certifications** pursuant to the Sarbanes-Oxley Act[358](index=358&type=chunk)[364](index=364&type=chunk)

Financial Data and Key Metrics Changes - Landstar achieved record quarterly financial results in Q4 2020, with revenue of $1.296 billion and diluted earnings per share of $1.70, exceeding guidance by $96 million [14][15] - Gross profit increased 23% to $182.4 million compared to $148.7 million in Q4 2019, with a gross profit margin of 14.1% [33][38] - Operating income rose 27% year-over-year to $84.4 million, representing 46.3% of gross profit [37][38] Business Line Data and Key Metrics Changes - The van truckload business saw significant growth, with revenue per load in Q4 2020 exceeding Q4 2019 by 17% and the number of loads hauled increasing by 13% [18][20] - Demand for services provided by unsided equipment improved, with load volume and revenue per load exceeding the 2019 fourth quarter [19][22] - The machinery and metal sectors showed recovery, with revenue from the machinery sector equal to Q4 2019 and metals sector revenue up 3% [24][25] Market Data and Key Metrics Changes - In Q4 2020, truck revenue per load increased approximately 18% for loads hauled by third-party carriers compared to Q4 2019 [29] - The number of loads hauled via truck in November and December 2020 increased by 13% and 15% respectively compared to the same months in 2019 [17][21] - The active truck broker carrier count rose from approximately 41,000 in Q3 2020 to a record 46,000 in Q4 2020 [27] Company Strategy and Development Direction - Landstar is focused on technology transformation, including a new transportation management system and improved user experience for agents and capacity providers [43][45][120] - The company plans to continue investing in technology, with an expected incremental cost of about $12 million in 2021 [47][118] - Landstar aims to grow gross profit in the mid-single-digit percentage range and increase diluted earnings per share in the high single to low double-digit percentage range over the next few years [50][108] Management's Comments on Operating Environment and Future Outlook - Management noted that strong demand is expected to continue into the first half of 2021, but year-over-year comparisons may become challenging in the second half due to record performance in 2020 [49][101] - The company anticipates a potential shift from spot to contract rates later in 2021, influenced by increased truck orders and driver wages [60][62] - Management expressed cautious optimism regarding the impact of potential regulatory changes on owner-operators, emphasizing the importance of independent contractor flexibility [66][68] Other Important Information - Landstar ended Q4 2020 with cash and short-term investments of $291 million, with cash flow from operations at $211 million [39] - The company incurred one-time costs related to pandemic relief and incentive commission arrangements, which are expected to provide a tailwind in 2021 [41][42] Q&A Session Summary Question: Market outlook for 2021 - Management indicated that while strong trends have continued into January, a normal cyclical slowdown is expected later in the year due to increased truck orders and wage pressures [56][60] Question: Regulatory changes impact - Management is monitoring potential regulatory changes regarding owner-operators and believes that while there may be some disruption, it will not significantly impact operations [63][66] Question: Insurance costs expectations - Management anticipates a 25% to 50% increase in commercial trucking liability coverage premiums but believes they can manage this through adjustments [71][72] Question: CapEx expectations for 2021 - Expected CapEx for technology is about $18 million, with additional investments in trailers funded through capital leases [76] Question: Unsided business volume growth - Management noted that the majority of volume growth in Q4 was on the van side, with expectations for high single-digit growth in the first quarter [80][81]

DESIGNED TO RESPOND BUILT TO DELIVER | --- | --- | |----------------------------------------------|-------| | | | | Landstar System, Inc. | | | | | | Earnings Conference Call Fourth Quarter 2020 | | | January 27, 2021 | | | | | Date Published: 01/27/2021 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 ...

Landstar Systems Inc. (NASDAQ:LSTR) Q3 2020 Results Earnings Conference Call October 22, 2020 8:00 AM ET Company Participants Jim Gattoni - President and Chief Executive Officer Kevin Stout - Vice President and Chief Financial Officer Joe Beacom - Vice President and Chief Safety and Operations Officer Rob Brasher - Vice President and Chief Commercial Officer Conference Call Participants Jack Atkins - Stephens, Inc. Todd Fowler - KeyBanc Capital Markets Scott Group - Wolfe Research Michael DiMattia - Wells F ...

DESIGNED TO RESPOND BUILT TO DELIVER | --- | --- | |--------------------------|-------| | | | | Landstar System, Inc. | | | | | | Earnings Conference Call | | | Third Quarter 2020 | | | | | | October 21, 2020 | | | | | Date Published: 10/21/2020 The following is a "safe harbor" statement under the Private Securities Litigation Reform Act of 1995. Statements made during this presentation that are not based on historical facts are "forward looking statements." During this presentation, I may make certain stat ...

Landstar Systems Inc. (NASDAQ:LSTR) Q2 2020 Earnings Conference Call July 23, 2020 8:00 AM ET Company Participants Jim Gattoni - Chief Executive Officer Kevin Stout - Chief Financial Officer Joe Beacom - Chief Safety and Operations Officer Rob Brasher - Chief Commercial Officer Conference Call Participants Scott Group - Wolfe Research Christine Hofmeister - Morgan Stanley Bascome Majors - Susquehanna Jack Atkins - Stephens Inc Todd Fowler - KeyBanc Capital Markets Adam Kramer - Cowen and Company Ben Hartfor ...

Landstar System, Inc. (NASDAQ:LSTR) Q1 2020 Results Earnings Conference Call April 23, 2020 8:00 AM ET Â Company Participants Jim Gattoni - President and Chief Executive Officer Kevin Stout - VP and Chief Financial Officer Rob Brasher - VP and Chief Commercial Officer Joe Beacom - VP and Chief Safety and Operations Officer Conference Call Participants Scott Group - Wolfe Research Jason Seidl - Cowen Securities Todd Fowler - KeyBanc Capital Markets Bascome Majors - Susquehanna Jack Atkins - Stephens Stephani ...

Londstar System, Inc. 13410 Sutton Park Drive, Society - Society - Society - 13410 Sutton - Jackson - Jackson - Jackson - Jackson - - Jackson - - - - - - - - - - - - - - - For Immediate Release Contact: Kevin Stout Landstar System, Inc. www.landstar.com April 22, 2020 904-398-9400 Jacksonville, FL – Landstar System, Inc. (NASDAQ: LSTR) reported diluted earnings per share of $1.04 in the 2020 first quarter on revenue of $927.6 million. Landstar reported diluted earnings per share of $1.58 on revenue of $1.03 ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 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 28, 2019 Or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 0-21238 Landstar System, Inc. (Exact name of registrant as specified in its charter) Delaware 06-1313069 (State or oth ...

Landstar System, Inc. (NASDAQ:LSTR) Q4 2019 Results Conference Call January 30, 2019 8:30 AM ET Company Participants Jim Gattoni - President and CEO Kevin Stout - VP and CFO Rob Brasher - VP and Chief Commercial Officer Joe Beacom - VP and Chief Safety and Operations Officer Conference Call Participants Jack Atkins - Stephens Scott Group - Wolfe Research Jason Seidl - Cowen and Company Todd Fowler - KeyBanc Bascome Majors - Susquehanna Daniel Hultberg - Oppenheimer Stephanie Benjamin - SunTrust Robinson Hum ...