Landstar System Inc. (NASDAQ:LSTR) Q4 2014 Earnings Conference Call - Final Transcript

Jan 29, 2015 • 02:00 pm ET


Landstar System Inc. (NASDAQ:LSTR) Q4 2014 Earnings Conference Call - Final Transcript


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Good afternoon, and welcome to Landstar System Inc's Year-End 2014 Earnings Release Conference Call. (Operator Instructions) Today's call is being recorded. If you have any objections, you may disconnect at this time. Joining us from Landstar are, Jim Gattoni, President and CEO; Kevin Stout, VP and CFO; Pat O'Malley, VP and Chief Commercial and Marketing Officer; and Joe Beacom, VP and Chief Safety and Operations Officer.

Now, I would like to turn the conference over to Jim Gattoni. Sir, you may begin.

James Gattoni

Thank you, Dory. Good afternoon, and welcome to Landstar's 2014 fourth quarter and year-end earnings conference call. This conference call will be limited to no more than one hour. Due to a high level of participation on these calls, I'm requesting that each participant have a two-question limit. Time permitting, we can circle back for additional questions.

(Forward-Looking Cautionary Statements)

First off, I would like to say what a privilege it is to be able to lead this final earnings call for 2014 and then we look forward to an exciting 2015. Needless to say, I'm extremely pleased with the 2014 performance.

As you may recall, in late December 2013, we sold the supply chain-based companies that had -- we had previously purchased in July 2009. The sale of those entities allowed us to get back to the basics and focus on the core of the Landstar model, to provide transportation management services through our network of agents and capacity providers.

2014 full-year results included many records. Annual revenue, gross profit, operating income and diluted earnings per share from continuing operations were all annual records. Additionally, the number of loads hauled via truck and average revenue per load on those loads during 2014 were both records.

We net added more BCOs in 2014 than in any other year and also in 2014 had the highest number of truck broker carriers haul Landstar loads compared to any year in Landstar's history. Landstar ended 2014 with a total truck capacity network of over 46,000 providers, more than 1,300 over the 2014 third quarter and 6,700 over year-end 2013. Both approved and active carrier count were at record levels at the end of 2014.

Agents joining the company in 2013 and 2014 contributed $121 million of revenue in 2014, while revenue at existing agents has increased 18% over 2013. We ended the year with a record 525 agents who contributed $1 million or more of Landstar revenue. During the year, we opened a new Dallas Fort Worth facility in support of our BCO network, provided new shipment tracking tools to the agent family and launched Landstar Connect, a smartphone-enabled GPS tracking tool available to BCOs and broker carriers to provide timely in-transit freight visibility.

As discussed on our fourth quarter mid-quarter conference call held on December 4, 2014, we anticipated revenue for the 2014 fourth quarter to be in a range from $820 million to $840 million. We also anticipated that diluted earnings per share would be in a range of $0.79