Form 8-K - Current report

LANDSTAR SYSTEM, INC.

Date: January 31, 2024

/s/ James P. Todd

James P. Todd

Vice President, Chief Financial Officer and Assistant Secretary

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) January 31, 2024

LOGO

LANDSTAR SYSTEM, INC.

(Exact name of registrant as specified in its charter)

Delaware

021238

06-1313069

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(I.R.S. Employer

Identification No.)


13410 Sutton Park Drive South, Jacksonville, Florida		32224
(Address of principal executive offices)		(Zip Code)

(904) 398-9400

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange

on which registered

Common Stock

LSTR

NASDAQ

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02

Results of Operations and Financial Condition

On January 31, 2024, Landstar System, Inc. (“Landstar” or the “Company”) issued a press release announcing results for the fourth quarter of fiscal 2023. A copy of the press release is attached hereto as Exhibit 99.1.

The information contained in Item 7.01 concerning the presentation to Landstar investors is hereby incorporated into this Item 2.02 by reference.

The information furnished under Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.

Item 7.01

Regulation FD Disclosure

A slide presentation, dated January 31, 2024, is attached hereto as Exhibit 99.2 and is incorporated herein by reference. The slide presentation provides information that may be referred to by the Company on its conference call with investors scheduled to occur on February 1, 2024 in connection with the Company’s release of results for the fourth quarter of fiscal 2023.

The information furnished under Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.2 hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.

Item 9.01

Financial Statements and Exhibits

Exhibits


99.1		Press Release, dated January 31, 2024, of Landstar System, Inc.

99.2		Slide Presentation, dated January 31, 2024, of Landstar System, Inc.

104		Inline XBRL for the cover page of this Current Report on Form 8-K

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Exhibit 99.1

LOGO


For Immediate Release		Contact: Jim Todd (CFO)
		Landstar System, Inc.
		www.landstar.com
January 31, 2024		904-398-9400

LANDSTAR SYSTEM REPORTS

FOURTH QUARTER REVENUE OF $1.204B AND

EARNINGS PER SHARE OF $1.62

Jacksonville, FL - Landstar System, Inc. (NASDAQ: LSTR) (“Landstar” or the “Company”) reported basic and diluted earnings per share (“EPS”) of $1.62 in the 2023 thirteen-week fourth quarter on revenue of $1.204 billion. Landstar reported EPS of $2.60 on revenue of $1.675 billion in the 2022 fourteen-week fourth quarter.

The Company’s fiscal year ends each year on the last Saturday in December. As such, the Company’s 2022 fourth quarter ended on December 31^st and included fourteen weeks of operations, whereas the 2023 fourth quarter ended on December 30^th and included thirteen weeks of operations. We estimate the extra week in 2022 contributed revenue of approximately $65 million.

Gross profit in the 2023 fourth quarter was $124.6 million and variable contribution (defined as revenue less the cost of purchased transportation and commissions to agents) in the 2023 fourth quarter was $178.1 million. Gross profit in the 2022 fourth quarter was $180.0 million and variable contribution in the 2022 fourth quarter was $234.0 million. Reconciliations of gross profit to variable contribution and gross profit margin to variable contribution margin for the 2023 and 2022 fourth quarters and full fiscal years are provided in the Company’s accompanying financial disclosures.

LANDSTAR SYSTEM/2

Trailing twelve month return on average shareholders’ equity was 27% and return on invested capital, representing net income divided by the sum of average equity plus average debt, was 25%. The Company is currently authorized to purchase up to 3,000,000 shares of the Company’s common stock under its previously announced share purchase programs. Landstar announced today that its Board of Directors has declared a quarterly dividend of $0.33 per share payable on March 8, 2024, to stockholders of record as of the close of business on February 12, 2024. It is currently the intention of the Board to pay dividends on a quarterly basis going forward.

Truck transportation revenue hauled by independent business capacity owners (“BCOs”) and truck brokerage carriers in the 2023 fourth quarter was $1,085.1 million, or 90% of revenue, compared to $1,533.6 million, or 92% of revenue, in the 2022 fourth quarter. Truckload transportation revenue hauled via van equipment in the 2023 fourth quarter was $618.6 million, compared to $869.8 million in the 2022 fourth quarter. Truckload transportation revenue hauled via unsided/platform equipment in the 2023 fourth quarter was $339.9 million, compared to $423.4 million in the 2022 fourth quarter. Revenue from other truck transportation, which is largely related to power-only services, in the 2023 fourth quarter was $99.7 million, compared to $204.0 million in the 2022 fourth quarter. Revenue hauled by rail, air and ocean cargo carriers was $88.6 million, or 7% of revenue, in the 2023 fourth quarter, compared to $115.1 million, or 7% of revenue, in the 2022 fourth quarter.

“As expected, the soft macro-freight environment experienced throughout 2023 continued through the 2023 fourth quarter. The soft macro-freight environment, along with the additional operating week in the 2022 fourth quarter, made for challenging 2023 fourth quarter to 2022 fourth quarter comparisons,” said Landstar President and Chief Executive Officer Jim Gattoni. “The continuation of soft demand, driven by continued weakness in the U.S. manufacturing sector and a weaker than typical peak season, plus the continuation of a loose truck capacity market drove Landstar’s truck revenue per load and volumes in the 2023 fourth quarter below prior year levels. The number of loads hauled via truck declined 22% as compared to the 2022 fourth quarter, at the low end of the Company’s guidance included as part of the Company’s 2023 third quarter earnings release on October 25, 2023, while truck revenue per load declined 10% as compared to the 2022 fourth quarter, below the low end of the Company’s previously issued guidance.”

LANDSTAR SYSTEM/3

Gattoni continued, “Landstar’s financial performance in 2023, coming off back-to-back record setting years in 2022 and 2021 was admirable, considering the very difficult freight transportation backdrop. The Company’s performance during the downcycle in freight markets experienced in 2023 speaks to the strength and resiliency of the Landstar network and the power of our unique agent and capacity network. The Company’s balance sheet continues to be very strong, with cash and short term investments of approximately $541 million as of December 30, 2023. Cash flow from operations was $394 million during fiscal year 2023. The Company is well positioned to capitalize when freight market fundamentals improve.”

Gattoni further commented, “Typically, revenue in the first quarter is expected to be lower than the revenue of the immediately preceding fourth quarter. Through the first several weeks of January, the number of loads hauled via truck and truck revenue per load have each trended reasonably in-line with historical, pre-pandemic end of fourth quarter to the beginning of first quarter sequential patterns. Assuming a continuation of these recent trends, I expect revenue per load on loads hauled via truck to be in a range of 8% to 10% below the 2023 first quarter and the number of loads hauled via truck to be in a range of 14% to 16% below the 2023 first quarter. As such, I anticipate revenue for the 2024 first quarter to be in a range of $1.10 billion to $1.15 billion.”

Gattoni concluded, “Based on the range of revenue estimated for the 2024 first quarter, I would anticipate EPS to be in a range of $1.25 to $1.35. The anticipated range of EPS for the 2024 first quarter includes estimated insurance and claims costs of approximately 5.5% of BCO revenue. These costs were 5.7% of BCO revenue during fiscal year 2023. The anticipated range of EPS for the 2024 first quarter also reflects an estimated effective income tax rate of 24.5%.”

Landstar will provide a live webcast of its quarterly earnings conference call tomorrow morning at 8:00 a.m. ET. To access the webcast, visit the Company’s website at www.landstar.com; click on “Investor Relations” and “Webcasts,” then click on “Landstar’s Fourth Quarter 2023 Earnings Release Conference Call.”

LANDSTAR SYSTEM/4

About Landstar:

Landstar System, Inc., a Fortune 500 company, is a technology-enabled, asset-light provider of integrated transportation management solutions delivering safe, specialized transportation services to a broad range of customers utilizing a network of agents, third-party capacity providers and employees. Landstar transportation services companies are certified to ISO 9001:2015 quality management system standards and RC14001:2015 environmental, health, safety and security management system standards. Landstar System, Inc. is headquartered in Jacksonville, Florida. Its common stock trades on The NASDAQ Stock Market^® under the symbol LSTR.

Non-GAAP Financial Measures:

In this earnings release and accompanying financial disclosures, the Company provides the following information that may be deemed a non-GAAP financial measure: variable contribution and variable contribution margin. The Company believes variable contribution and variable contribution margin are useful measures of the variable costs that we incur at a shipment-by-shipment level attributable to our transportation network of third-party capacity providers and independent agents in order to provide services to our customers. The Company also believes that it is appropriate to present each of the financial measures that may be deemed a non-GAAP financial measure, as referred to above, for the following reasons: (1) disclosure of these matters will allow investors to better understand the underlying trends in the Company’s financial condition and results of operations; (2) this information will facilitate comparisons by investors of the Company’s results as compared to the results of peer companies; and (3) management considers this financial information in its decision making.

Forward Looking Statements Disclaimer:

The following is a “safe harbor” statement under the Private Securities Litigation Reform Act of 1995. Statements contained in this press release that are not based on historical facts are “forward-looking statements”. This press release contains forward-looking statements, such as statements which relate to Landstar’s business objectives, plans, strategies and expectations. Terms such as “anticipates,” “believes,” “estimates,” “intention,” “expects,” “plans,” “predicts,” “may,” “should,” “could,” “will,” the negative thereof and similar expressions are intended to identify forward-looking statements. Such

LANDSTAR SYSTEM/5

statements are by nature subject to uncertainties and risks, including but not limited to: the impact of the Russian conflict with Ukraine on the operations of certain independent commission sales agents, including the Company’s largest such agent by revenue in the 2023 fiscal year; an increase in the frequency or severity of accidents or other claims; unfavorable development of existing accident claims; dependence on third party insurance companies; dependence on independent commission sales agents; dependence on third party capacity providers; decreased demand for transportation services; U.S. trade relationships; substantial industry competition; disruptions or failures in the Company’s computer systems; cyber and other information security incidents; dependence on key vendors; potential changes in taxes; status of independent contractors; regulatory and legislative changes; regulations focused on diesel emissions and other air quality matters; intellectual property; and other operational, financial or legal risks or uncertainties detailed in Landstar’s Form 10-K for the 2022 fiscal year, described in Item 1A Risk Factors, Landstar’s Form 10-Q for the 2023 first and third fiscal quarters, described in Item 1A Risk Factors, and in 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 statements, and the Company undertakes no obligation to publicly update or revise any forward-looking statements.

LANDSTAR SYSTEM/6

Landstar System, Inc. and Subsidiary

Consolidated Statements of Income

(Dollars in thousands, except per share amounts)

(Unaudited)


	Fiscal Years Ended					Fiscal Quarters Ended
	December 30, 2023			December 31, 2022		December 30, 2023			December 31, 2022
Revenue	$	5,303,322		$	7,436,562	$	1,204,445		$	1,674,767
Investment income		10,141			3,162		3,267			1,139
Costs and expenses:
Purchased transportation		4,068,262			5,804,017		927,028			1,291,676
Commissions to agents		462,668			614,865		99,271			149,106
Other operating costs, net of gains on asset sales/dispositions		54,191			45,192		13,193			10,314
Insurance and claims		114,241			125,835		27,270			29,570
Selling, general and administrative		211,799			221,279		52,728			56,080
Depreciation and amortization		58,153			57,453		13,655			14,826

Total costs and expenses		4,969,314			6,868,641		1,133,145			1,551,572

Operating income		344,149			571,083		74,567			124,334
Interest and debt (income) expense		(3,946	)		3,620		(1,867	)		345

Income before income taxes		348,095			567,463		76,434			123,989
Income taxes		83,701			136,549		18,447			30,687

Net income	$	264,394		$	430,914	$	57,987		$	93,302

Basic and diluted earnings per share	$	7.36		$	11.76	$	1.62		$	2.60

Average basic and diluted shares outstanding		35,920,000			36,633,000		35,804,000			35,930,000

Dividends per common share	$	3.26		$	3.10	$	2.33		$	2.30

LANDSTAR SYSTEM/7

Landstar System, Inc. and Subsidiary

Consolidated Balance Sheets

(Dollars in thousands, except per share amounts)

(Unaudited)


	December 30, 2023			December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	481,043		$	339,581
Short-term investments		59,661			53,955
Trade accounts receivable, less allowance of $11,738 and $12,121		743,762			967,793
Other receivables, including advances to independent contractors, less allowance of $14,010 and $10,579		43,339			56,235
Other current assets		24,936			21,826

Total current assets		1,352,741			1,439,390

Operating property, less accumulated depreciation and amortization of $436,682 and $393,274		284,300			314,990
Goodwill		42,275			41,220
Other assets		122,530			136,279

Total assets	$	1,801,846		$	1,931,879

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Cash overdraft	$	61,541		$	92,953
Accounts payable		395,980			527,372
Current maturities of long-term debt		27,876			36,175
Insurance claims		41,825			50,836
Dividends payable		71,433			71,854
Other current liabilities		76,569			98,945

Total current liabilities		675,224			878,135

Long-term debt, excluding current maturities		43,264			67,225
Insurance claims		58,922			58,268
Deferred income taxes and other non-current liabilities		40,513			41,030
Shareholders’ equity:
Common stock, $0.01 par value, authorized 160,000,000 shares, issued 68,497,324 and 68,382,310		685			684
Additional paid-in capital		254,642			258,487
Retained earnings		2,783,645			2,635,960
Cost of 32,780,651 and 32,455,300 shares of common stock in treasury		(2,048,184	)		(1,992,886	)
Accumulated other comprehensive loss		(6,865	)		(15,024	)

Total shareholders’ equity		983,923			887,221

Total liabilities and shareholders’ equity	$	1,801,846		$	1,931,879

LANDSTAR SYSTEM/8

Landstar System, Inc. and Subsidiary

Supplemental Information

(Unaudited)


	Fiscal Years Ended						Fiscal Quarters Ended
	December 30,			December 31,			December 30,			December 31,
	2023			2022			2023			2022
Revenue generated through (in thousands):
Truck transportation
Truckload:
Van equipment	$	2,742,281		$	3,892,085		$	618,588		$	869,788
Unsided/platform equipment		1,490,393			1,760,357			339,910			423,401
Less-than-truckload		117,683			142,438			26,913			36,444
Other truck transportation ⁽¹⁾		479,173			835,959			99,702			203,958

Total truck transportation		4,829,530			6,630,839			1,085,113			1,533,591
Rail intermodal		98,297			145,017			24,344			31,255
Ocean and air cargo carriers		266,638			558,986			64,280			83,830
Other ⁽²⁾		108,857			101,720			30,708			26,091

	$	5,303,322		$	7,436,562		$	1,204,445		$	1,674,767

Revenue on loads hauled via BCO Independent Contractors ⁽³⁾ included in total truck transportation	$	1,998,408		$	2,636,036		$	454,774		$	592,264
Number of loads:
Truck transportation
Truckload:
Van equipment		1,259,578			1,496,247			292,711			365,984
Unsided/platform equipment		504,765			558,530			115,294			138,094
Less-than-truckload		175,650			191,233			41,070			48,493
Other truck transportation ⁽¹⁾		201,407			320,790			44,295			77,449

Total truck transportation		2,141,400			2,566,800			493,370			630,020
Rail intermodal		29,620			40,710			7,470			8,770
Ocean and air cargo carriers		32,820			41,850			7,440			7,440

		2,203,840			2,649,360			508,280			646,230

Loads hauled via BCO Independent Contractors ⁽³⁾ included in total truck transportation		898,610			1,027,480			209,350			250,230
Revenue per load:
Truck transportation
Truckload:
Van equipment	$	2,177		$	2,601		$	2,113		$	2,377
Unsided/platform equipment		2,953			3,152			2,948			3,066
Less-than-truckload		670			745			655			752
Other truck transportation ⁽¹⁾		2,379			2,606			2,251			2,633
Total truck transportation		2,255			2,583			2,199			2,434
Rail intermodal		3,319			3,562			3,259			3,564
Ocean and air cargo carriers		8,124			13,357			8,640			11,267
Revenue per load on loads hauled via BCO Independent Contractors ⁽³⁾	$	2,224		$	2,566		$	2,172		$	2,367
Revenue by capacity type (as a % of total revenue):
Truck capacity providers:
BCO Independent Contractors ⁽³⁾		38	%		35	%		38	%		35	%
Truck Brokerage Carriers		53	%		54	%		52	%		56	%
Rail intermodal		2	%		2	%		2	%		2	%
Ocean and air cargo carriers		5	%		8	%		5	%		5	%
Other		2	%		1	%		3	%		2	%

							December 30,			December 31,
							2023			2022
Truck Capacity Providers
BCO Independent Contractors ⁽³⁾								9,024			10,393

Truck Brokerage Carriers:
Approved and active ⁽⁴⁾								49,111			66,745
Other approved								27,524			30,999

								76,635			97,744

Total available truck capacity providers								85,659			108,137

Trucks provided by BCO Independent Contractors ⁽³⁾								9,809			11,281

(1)

Includes power-only, expedited, straight truck, cargo van, and miscellaneous other truck transportation revenue generated by the transportation logistics segment. Power-only refers to shipments where the Company furnishes a power unit and an operator but not trailing equipment, which is typically provided by the shipper or consignee.

(2)	Includes primarily reinsurance premium revenue generated by the insurance segment and intra-Mexico transportation services revenue generated by Landstar Metro.

(3)	BCO Independent Contractors are independent contractors who provide truck capacity to the Company under exclusive lease arrangements.

(4)	Active refers to Truck Brokerage Carriers who moved at least one load in the 180 days immediately preceding the fiscal quarter end.

LANDSTAR SYSTEM/9

Landstar System, Inc. and Subsidiary

Reconciliation of Gross Profit to Variable Contribution

(Dollars in thousands)

(Unaudited)


	Fiscal Years Ended						Fiscal Quarters Ended
	December 30,			December 31,			December 30,			December 31,
	2023			2022			2023			2022
Revenue	$	5,303,322		$	7,436,562		$	1,204,445		$	1,674,767
Costs of revenue:
Purchased transportation		4,068,262			5,804,017			927,028			1,291,676
Commissions to agents		462,668			614,865			99,271			149,106

Variable costs of revenue		4,530,930			6,418,882			1,026,299			1,440,782
Trailing equipment depreciation		31,319			36,653			7,079			8,893
Information technology costs (1)		25,486			19,834			5,695			5,966
Insurance-related costs (2)		116,069			127,605			27,585			28,784
Other operating costs		54,191			45,192			13,193			10,314

Other costs of revenue		227,065			229,284			53,552			53,957

Total costs of revenue		4,757,995			6,648,166			1,079,851			1,494,739

Gross profit	$	545,327		$	788,396		$	124,594		$	180,028

Gross profit margin		10.3	%		10.6	%		10.3	%		10.7	%
Plus: other costs of revenue		227,065			229,284			53,552			53,957

Variable contribution	$	772,392		$	1,017,680		$	178,146		$	233,985

Variable contribution margin		14.6	%		13.7	%		14.8	%		14.0	%

(1)

Includes costs of revenue incurred related to internally developed software including ASC 350-40 amortization, implementation costs, hosting costs and other support costs utilized to support the Company’s independent commission sales agents, third party capacity providers, and customers, included as a portion of depreciation and amortization and of selling, general and administrative in the Company’s Consolidated Statements of Income.

(2)

Primarily includes (i) insurance premiums paid for commercial auto liability, general liability, cargo and other lines of coverage related to the transportation of freight; (ii) the related cost of claims incurred under those programs; and (iii) brokerage commissions and other fees incurred relating to the administration of insurance programs available to BCO Independent Contractors that are reinsured by the Company, which are included in selling, general and administrative in the Company’s Consolidated Statements of Income.

Exhibit 99.2 DESIGNED TO RESPOND BUILT TO DELIVER Landstar System, Inc. Earnings Conference Call Fourth Quarter 2023 January 31, 2024 Date Published: 01/31/2024

Forward Looking Statements Disclaimer: 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 presentation may make certain statements containing forward-looking statements, such as statements which relate to Landstar’s business objectives, plans, strategies and expectations. Such statements are by nature subject to uncertainties and risks, including but not limited to: the operational, financial or legal risks or uncertainties detailed in Landstar’s Form 10-K for the 2022 fiscal year and Form 10-Qs for the 2023 first and third fiscal quarters, 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 statements, and the Company undertakes no obligation to publicly update or revise any forward-looking statements. 2 Date Published: 01/31/2024

Non-GAAP Financial Measures: In this slide presentation, the Company provides the following information that may be deemed a non-GAAP financial measure: variable contribution, variable contribution margin and operating income as a percentage of variable contribution. Management believes variable contribution and variable contribution margin are useful measures of the variable costs that we incur at a shipment-by-shipment level attributable to our transportation network of third-party capacity providers and independent agents in order to provide services to our customers. Management believes that operating income as a percentage of variable contribution is a useful measure as: (i) variable costs of revenue for a significant portion of the Company’s business arehighlyinfluencedbyshort- term market-based trends in the freight transportation industry, whereas other costs, including other costs of revenue, are much less impacted by short-term freight market trends; and (ii) this measure is meaningful to investors’ evaluations of the Company’s management of costs attributable to operations other than the purely variable costs associated with purchased transportation and commissionsto agentsthat the Companyincurs to provide services to our customers. Management also believes that it is appropriate to present each of the financial measures that may be deemed a non-GAAP financial measure, as referred to above, for the following reasons: (1) disclosure of these matters will allow investors to better understand the underlying trends in the Company’s financial condition and results of operations; (2) this information will facilitate comparisons by investors of the Company’s results as compared to the results of peer companies; and (3) management considers this financial information in its decision making. A tabulation of the expenses identified as costs of revenue as well as a reconciliation of gross profit to variable contribution and gross profit margin to variable contribution margin for the 2023 and 2022 fourth quarters and fiscal year periods is included in this slide presentation as Appendix A. 3 Date Published: 01/31/2024

Who We Are Landstar, a Fortune 500 company, is a technology- enabled, asset-light provider of integrated transportation management solutions delivering safe, specialized transportation services to a broad range of customers utilizing a network of agents, third party capacity providers and employees. 4 Date Published: 01/31/2024

Our Network 2023 Results $5.30 billion in revenue Agents Approx. 2.20 million loadings 1,100 524 million dollar agents 9,809 BCO trucks (2023 year-end) 76,635 Carriers (2023 year-end) Lands Landst ta ar r Employees 18,000+ Trailers (2023 year-end) Approx. 1,500 Customers Capacity 25,000+ 85,000+ 5 Date Published: 01/31/2024

Transportation Management Services Percentage of Revenue 4Q22 4Q23 Truck Transportation Truckload Van equipment 52% 51% Unsided/platform equipment 25% 28% Less-than-truckload 2% 2% Other truck transportation 12% 8% Rail intermodal 2% 2% Ocean and air cargo 5% 5% 6 Date Published: 01/31/2024

Revenue ($’s in thousands) Fiscal Year Quarter (2) (3) (2) (3) Year over Prior Year Rate Volume Change Qtr over Prior Year Qtr Rate Volume Change Truck Revenue - 12.7% - 16.6% - 27.2% Truck Revenue - 9.6% - 21.7% - 29.2% Rail Intermodal Revenue - 6.8% - 27.2% - 32.2% Rail Intermodal Revenue - 8.6% - 14.8% - 22.1% Ocean/Air Revenue - 39.2% - 21.6% - 52.3% Ocean/Air Revenue - 23.3% 0.0% - 23.3% Insurance Premiums NA NA - 7.7% Insurance Premiums NA NA - 11.6% Total Revenue - 28.7% Total Revenue - 28.1% (1) The Company’s fiscal year ends each year on the last Saturday in December and, as such, the Company’s 2022 fourth quarter included fourteen weeks of operations whereas the 2023 fourth quarter included thirteen weeks. Fiscal year 2022 included fifty-three weeks of operations whereas fiscal year 2023 included fifty-two. (2) Percentage change in rate is calculated on a revenue per load basis. (3) Percentage change in volume is calculated on the number of loads hauled. 7 Date Published: 01/31/2024

Truckload Loadings and Revenue per Truckload Trends Van Equipment Number of Loads Revenue per Load 400,000 $3,000 370,000 $2,800 $2,600 340,000 $2,400 310,000 $2,200 280,000 $2,000 250,000 $1,800 220,000 $1,600 Unsided/Platform Equipment Number of Loads Revenue per Load 150,000 $3,300 140,000 $3,100 130,000 $2,900 $2,700 120,000 $2,500 110,000 $2,300 $2,100 100,000 (1) The Company’s fiscal year ends each year on the last Saturday in December and, as such, the Company’s 2022 fourth quarter included fourteen weeks of operations whereas the 2023 fourth quarter included thirteen weeks. Fiscal year 2022 included fifty-three weeks of operations whereas fiscal year 2023 included fifty-two. 8 Date Published: 01/31/2024 4Q19 4Q19 1Q20 1Q20 2Q20 2Q20 3Q20 3Q20 4Q20 4Q20 1Q21 1Q21 2Q21 2Q21 3Q21 3Q21 4Q21 4Q21 1Q22 1Q22 2Q22 2Q22 3Q22 3Q22 4Q22 4Q22 1Q23 1Q23 2Q23 2Q23 3Q23 3Q23 4Q23 4Q23 4Q19 4Q19 1Q20 1Q20 2Q20 2Q20 3Q20 3Q20 4Q20 4Q20 1Q21 1Q21 2Q21 2Q21 3Q21 3Q21 4Q21 4Q21 1Q22 1Q22 2Q22 2Q22 3Q22 3Q22 4Q22 4Q22 1Q23 1Q23 2Q23 2Q23 3Q23 3Q23 4Q23 4Q23

Industries Served As a Percentage of Revenue Quarter over Prior Year Quarter 4Q22 4Q23 Change in Revenue Consumer Durables 28.9 27.8 -31% Machinery 12.5 13.7 -21% Automotive 10.9 11.6 -23% Building Products 7.7 8.1 -25% AA&E, Hazmat 7.8 7.6 -30% Metals 4.6 4.9 -24% Foodstuffs 3.3 2.7 -40% Substitute Line Haul 3.6 2.4 -53% Other 20.7 21.2 -27% Transportation Revenue 100.0 100.0 -28% 9 Date Published: 01/31/2024

(1) (2) Gross Profit and Gross Profit Margin ($’s in thousands) Fiscal Year Quarter 10.6% 10.3% 10.7% 10.3% (1) Gross profit equals revenue less the cost of purchased transportation, commissions to agents and other costs of revenue. (2) Gross profit margin equals gross profit divided by revenue. (3) The Company’s fiscal year ends each year on the last Saturday in December and, as such, the Company’s 2022 fourth quarter included fourteen weeks of operations whereas the 2023 fourth quarter included thirteen weeks. Fiscal year 2022 included fifty-three weeks of operations whereas fiscal year 2023 included fifty-two. 10 Date Published: 01/31/2024

(1) (2) Variable Contribution and Variable Contribution Margin ($’s in thousands) Fiscal Year Quarter 13.7% 14.0% 14.6% 14.8% (4) (4) 4th Qtr Fiscal Year Changes in variable contribution Changes in variable contribution margin % margin % 2022 Period 2022 Period 14.0 13.7 Revenue - fixed Revenue - fixed 0.4 -0.1 Revenue - variable Revenue - variable 0.0 0.6 Change in mix and other Change in mix and other 0.4 0.4 2023 Period 2023 Period 14.8 14.6 (1) Variable contribution equals revenue less the cost of purchased transportation and commissions to agents. (2) Variable contribution margin equals variable contribution divided by revenue. (3) The Company’s fiscal year ends each year on the last Saturday in December and, as such, the Company’s 2022 fourth quarter included fourteen weeks of operations whereas the 2023 fourth quarter included thirteen weeks. Fiscal year 2022 included fifty-three weeks of operations whereas fiscal year 2023 included fifty-two. (4) Revenue on transactions where the Company’s variable contribution margin was based on a contractually pre-determined percentage of revenue accounted for 40% and 43% of revenue in the 2022 and 2023 fiscal year periods, respectively, and 41% and 43% of revenue in the 2022 and 2023 fourth quarters, respectively. 11 Date Published: 01/31/2024

Operating Income as a % of Gross Profit ($’s in thousands) Fiscal Year Quarter 72.4% 63.1% 69.1% 59.8% (1) The Company’s fiscal year ends each year on the last Saturday in December and, as such, the Company’s 2022 fourth quarter included fourteen weeks of operations whereas the 2023 fourth quarter included thirteen weeks. Fiscal year 2022 included fifty-three weeks of operations whereas fiscal year 2023 included fifty-two. 12 Date Published: 01/31/2024

Operating Income as a % of Variable Contribution ($’s in thousands) Fiscal Year Quarter 56.1% 44.6% 41.9% 53.1% Fiscal Year 4th Qtr Changes in operating income as a % of variable Changes in operating income as a % of variable contribution contribution % % 2022 Period 2022 Period 56.1 53.1 Other operating costs Other operating costs -2.5 -3.0 Insurance and claims Insurance and claims -1.4 -1.3 SG&A SG&A -5.7 -5.6 Depreciation and amortization Depreciation and amortization -1.9 -1.3 2023 Period 2023 Period 44.6 41.9 (1) The Company’s fiscal year ends each year on the last Saturday in December and, as such, the Company’s 2022 fourth quarter included fourteen weeks of operations whereas the 2023 fourth quarter included thirteen weeks. Fiscal year 2022 included fifty-three weeks of operations whereas fiscal year 2023 included fifty-two. 13 Date Published: 01/31/2024

Truck Capacity Data (All information is provided as of the end of the applicable period) Dec 31, Dec 30, (2) (2) 2022 2023 BCO Independent Contractors 10,393 9,024 Truck Brokerage Carriers: (1) Approved and Active 66,745 49,111 Other Approved 30,999 27,524 97,744 76,635 Total Available Truck Capacity Providers 108,137 85,659 Trucks Provided by BCO Independent Contractors 11,281 9,809 (1) Active refers to truck brokerage carriers who hauled freight for Landstar in the 180 day period immediately preceding the period end. (2) Fuel surcharges billed to customers on freight hauled by BCO Independent Contractors, which are paid 100% to the BCO and excluded from revenue, and the cost of purchased transportation were $324.4 million and $445.0 million in the 2023 and 2022 fiscal year periods, respectively, and $79.5 million and $114.8 million in the 2023 and 2022 fourth quarters, respectively. 14 Date Published: 01/31/2024

Key Balance Sheet and Cash Flow Statistics ($’s in thousands) Dec 31, Dec 30, 2022 2023 Balance sheet (period end amounts): Debt to Capital 10% 7% Net Cash (1) $ 290,136 $ 469,564 Cash flow: Cash flow from operations $ 622,659 $ 393,648 Capital expenditures $ 26,005 $ 25,688 Share repurchases $ 285,983 $ 53,919 Dividends paid $ 115,671 $ 117,130 Returns (trailing 12 months): Return on Equity 50% 27% Return on Invested Capital 44% 25% Return on Assets 21% 14% (1) Net cash is defined as cash and cash equivalents plus short term investments less outstanding debt. 15 Date Published: 01/31/2024

(1) Free Cash Flow , Stock Purchases and Dividends (In Thousands) $700,000 40,000 39,500 $600,000 39,000 $500,000 38,500 38,000 $400,000 37,500 $300,000 37,000 36,500 $200,000 36,000 $100,000 35,500 $0 35,000 2019 2020 2021 2022 2023 Free Cash Flow Share Purchases Dividends Paid Common Share Count 2023 (000's ) Free cash flow (1) $ 367,960 Share purchases $ 53,919 Dividends paid $ 117,130 Ending common share count 35,717 (1) Free cash flow is defined as cash flow from operations less capital expenditures, each set forth on the prior slide. 16 Date Published: 01/31/2024

Appendix A Reconciliation of Gross Profit to Variable Contribution ($’s in thousands) Fiscal Years Ended Fiscal Quarters Ended December 30, December 31, December 30, December 31, 2023 2022 2023 2022 Revenue $ 5,303,322 $ 7,436,562 $ 1,204,445 $ 1,674,767 Costs of revenue: Purchased transportation 4,068,262 5,804,017 927,028 1,291,676 Commissions to agents 462,668 614,865 99,271 149,106 Variable costs of revenue 4,530,930 6,418,882 1,026,299 1,440,782 Trailing equipment depreciation 31,319 36,653 7,079 8,893 Information technology costs (1) 25,486 19,834 5,695 5,966 Insurance-related costs (2) 116,069 127,605 27,585 28,784 Other operating costs 54,191 45,192 13,193 10,314 Other costs of revenue 227,065 229,284 53,552 53,957 Total costs of revenue 4,757,995 6,648,166 1,079,851 1,494,739 Gross profit $ 545,327 $ 788,396 $ 124,594 $ 180,028 Gross profit margin 10.3% 10.6% 10.3% 10.7% Plus: other costs of revenue 227,065 229,284 53,552 53,957 Variable contribution $ 772,392 $ 1,017,680 $ 178,146 $ 233,985 Variable contribution margin 14.6% 13.7% 14.8% 14.0% (1) Includes costs of revenue incurred related to internally developed software including ASC 350-40 amortization, implementation costs, hosting costs and other support costs utilized to support the Company’s independent commission sales agents, third party capacity providers, and customers, included as a portion of depreciation and amortization and of selling, general and administrative in the Company's Consolidated Statements of Income. (2) Primarily includes (i) insurance premiums paid for commercial auto liability, general liability, cargo and other lines of coverage related to the transportation of freight; (ii) the related cost of claims incurred under those programs; and (iii) brokerage commissions and other fees incurred relating to the administration of insurance programs available to BCO Independent Contractors that are reinsured by the Company, which are included in selling, general and administrative in the Company’s Consolidated Statements of Income. 17 Date Published: 01/31/2024

DESIGNED TO RESPOND BUILT TO DELIVER 18 Date Published: 01/31/2024

Document and Entity Information	Jan. 31, 2024
Cover [Abstract]
Entity Registrant Name	LANDSTAR SYSTEM INC
Entity File Number	021-238
Amendment Flag	false
Entity Central Index Key	0000853816
Document Type	8-K
Document Period End Date	Jan. 31, 2024
Entity Incorporation State Country Code	DE
Entity Tax Identification Number	06-1313069
Entity Address, Address Line One	13410 Sutton Park Drive South
Entity Address, City or Town	Jacksonville
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	32224
City Area Code	(904)
Local Phone Number	398-9400
Written Communications	false
Soliciting Material	false
Pre Commencement Tender Offer	false
Pre Commencement Issuer Tender Offer	false
Security 12b Title	Common Stock
Trading Symbol	LSTR
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false