Landstar System(LSTR) - 2018 Q4 - Annual Report

Revenue Growth - Landstar reported consolidated revenue of $4.6 billion for the most recently completed fiscal year, an increase from $3.6 billion in the previous year, representing a growth of approximately 26%[107]. - Revenue generated through truck transportation reached $4.28 billion in fiscal year 2018, compared to $3.39 billion in 2017, marking a 26% increase[115]. - Revenue for fiscal year 2018 was $4,615,144,000, an increase of $968,780,000, or 27%, compared to fiscal year 2017[131]. - Transportation revenue increased by $963,414,000, or 27%, attributed to a 9% increase in loads hauled and a 16% increase in revenue per load[131]. - Truck transportation revenue from third party truck capacity providers was $4,280,412,000, representing 93% of total revenue, an increase of $892,879,000, or 26%[132]. - In fiscal year 2018, Landstar's external revenue from the transportation logistics segment was $4,562,796,000, while the insurance segment generated $52,348,000, totaling $4,615,144,000 in external revenue[283]. Agent Performance - The number of Million Dollar Agents increased to 608 in fiscal year 2018, up from 542 in 2017, contributing to 94% of the consolidated revenue[113]. - The average revenue generated per Million Dollar Agent rose to $7.15 million in 2018, up from $6.19 million in 2017, reflecting a growth of 15%[113]. - The company aims to increase the number of Million Dollar Agents through recruiting and enhancing technology-based tools for existing agents[113]. Operating Costs and Expenses - Purchased transportation was 77.4% of revenue in fiscal year 2018, up from 76.9% in fiscal year 2017[135]. - Selling, general and administrative costs increased by $17,629,000, representing 28.2% of gross profit in fiscal year 2018, down from 31.4% in fiscal year 2017[139]. - Other operating costs represented 4.8% of gross profit in fiscal year 2018, down from 5.3% in fiscal year 2017[137]. - Insurance and claims increased by $13,132,000 in fiscal year 2018, representing 11.3% of gross profit compared to 11.5% in fiscal year 2017[138]. Net Income and Earnings - Net income attributable to the Company was $255,281,000, or $6.19 per common share in fiscal year 2018, up from $177,088,000, or $4.22 per common share in fiscal year 2017[146]. - Net income for the fiscal year ended December 29, 2018, was $255.3 million, an increase from $177.1 million in the previous year, representing a 44% growth[205]. - Earnings per common share for 2018 was $6.19, up from $4.22 in 2017, reflecting a 46.6% increase[196]. - The company reported a net income of $68,300 for the fourth quarter of 2018, which is an increase from $64,683 in the fourth quarter of 2017[300]. Cash Flow and Dividends - Cash provided by operating activities was $297,901,000 in fiscal year 2018, an increase attributed to higher net income and improved timing of collections[162]. - The Company declared and paid cash dividends of $0.63 per share, totaling $25,933,000 in fiscal year 2018, compared to $0.38 per share or $15,938,000 in fiscal year 2017[163]. - Dividends paid for the fiscal year were $25.9 million, equating to $0.63 per share, compared to $78.9 million or $1.88 per share in the prior year[205]. Assets and Liabilities - Total assets as of December 29, 2018, were $1,380,564, compared to $1,352,460 as of December 30, 2017, indicating a growth of 2.1%[193]. - Long-term debt, including current maturities, was $128,425,000 at December 29, 2018, an increase from $125,113,000 at December 30, 2017[164]. - Total current liabilities decreased to $535,818 in 2018 from $548,643 in 2017, a reduction of 2.3%[193]. - The company had no outstanding debt as of December 29, 2018, and December 30, 2017, other than capital lease obligations[250]. Taxation - The actual effective income tax rate for fiscal year 2018 was 22.3%, lower than the estimated rate of 24.5% due to excess tax benefits recognized[142]. - The total income taxes for fiscal year 2018 amounted to $73,168,000, an increase from $63,806,000 in 2017[242]. - The company recognized a provisional tax benefit of $20,430,000 due to the reduction in the U.S. corporate income tax rate from 35% to 21% effective January 1, 2018[240]. Stock and Compensation - The Company purchased 2,000,000 shares of its Common Stock at a total cost of $208,087,000 in fiscal year 2018, while no shares were purchased in fiscal year 2017[163]. - Total stock-based compensation for the fiscal year 2018 was $18.3 million, compared to $7.7 million in 2017, reflecting a significant increase in compensation expenses[205]. - The company recognized approximately $15,985,000 in share-based compensation expense related to RSU awards in fiscal year 2018, up from $5,849,000 in 2017 and $849,000 in 2016[262]. Future Outlook - The Company anticipates acquiring approximately $70,000,000 in operating property in fiscal year 2019, primarily for new trailing equipment and IT hardware[169]. - The company is currently evaluating the impact of ASU 2016-13 on its financial statements, which addresses the measurement of credit losses on financial instruments[290].