Landstar System Inc. (NASDAQ:LSTR) Q4 2017 Earnings Conference Call - Final Transcript

Feb 01, 2018 • 08:00 am ET


Landstar System Inc. (NASDAQ:LSTR) Q4 2017 Earnings Conference Call - Final Transcript


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Good afternoon and welcome to Landstar System Incorporated Year End 2017 Earnings Release Conference Call. [Operator Instructions] Joining us today from Landstar are Jim Gattoni, President and CEO; Kevin Stout, Vice President and CFO; Pat O'Malley, Vice President and Chief Commercial and Marketing Officer; Joe Beacom, Vice President and Chief Safety and Operations Officer.

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

Jim Gattoni

Thank you, Jo. Good morning and welcome to Landstar's 2017 fourth-quarter earnings conference call. This conference call will be limited to one hour. When we open the line for questions, I ask that each participant have a two-question limit. Time permitting, we can circle back for additional questions.

Before we begin, let me read the following statement. The following is a Safe Harbor statement under the Private Securities Litigation Reform Act of 1995. Statements made during this conference call that are not based on historical facts are forward-looking statements. During this conference call, we may make statements that contain forward-looking information that relates to Landstar's business objectives, plan, strategies and expectations. Such information is by nature subject to uncertainties and risks, including, but not limited to, the operational financial and legal risks detailed in Landstar's Form 10-K for the 2016 fiscal year described in the section Risk Factors and other SEC filings from time to time.

These risks and uncertainties could cause actual results or events to differ materially from historical results or those anticipated. Investors should not place undue reliance on such forward-looking information and Landstar undertakes no obligation to publicly update or revise any forward-looking information.

2017 was a great year for Landstar, highlighted by many new financial and operational records. Revenue in fiscal 2017 was an annual record of $3.6 billion and exceeded 2016 by 15% on the strength of increased loadings hauled via truck of 9% and increased revenue per load of 6%. Demand for our services was strong throughout the year. We had record loadings hauled via truck in 2017. The number of loads hauled via truck in 2017 first quarter, second quarter and third quarter exceeded the prior year quarters by 10%, 9% and 13% respectively. The number of loads hauled via trucks in the 2017 fourth quarter exceeded prior year by 3% or 10% when excluding loads from the extra week and favorable timing of Christmas in 2016.

Revenue per load on loads hauled via truck in 2017 exceeded prior-year by 1%, 3%, 6% and 13% in the first, second, third and fourth quarters of 2017 respectively. The strength in spot market pricing that began at the end of the third quarter continued through the remainder of 2017 resulting in revenue per load approaching the record level reached in the fourth quarter of 2014.

During 2017, we had a record 542 agents generate revenue in excess of $1 million. Revenue from new agents defined as an agent who contracted with Landstar subsequent to January 1, 2016 was approximately $117 million in 2017. Gross