Henry H. Gerkens – President, Chief Executive Officer & Director
James B. Gattoni – Chief Financial Officer & Vice President
Landstar System, Inc. (LSTR) F1Q08 Mid-Quarter Update Call March 3, 2008 2:00 PM ET
Welcome to the Landstar Systems Incorporated first quarter mid quarter update call. All lines will be in a listen only mode. Today’s conference is being recorded, if you have any objections you may disconnect at this time. Joining us today from Landstar are Henry Gerkens, President and Chief Executive Officer; Jim Gattoni, Vice President and Chief Financial Officer. Now, I would like to turn the call over to Mr. Henry Gerkens. Sir, you may begin
Henry H. Gerkens
Good afternoon and welcome to the Landstar 2008 first quarter mid quarter update conference call. Jim Gattoni, Chief Financial Officer and I are here in Orlando at the Raymond James Institutional Investor Conference where we are scheduled to present tomorrow morning. Interested investors can listen in live via the Internet at www.Landstar.com, click on investor relations and then on webcasts.
Before we start this mid quarter update call 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 I 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 and legal risks detailed in Landstar’s Form 10K for the 2007 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 statements and Landstar undertakes no obligation to publically update or revise any forward-looking statements.
As a reminder, let me review how our mid quarter update call works; there is no question and answer period during this call. The purpose of the call is to provide a brief update on how management sees the current quarter shaping up as it relates to business levels and earnings projections. The call will last approximately five minutes.
A couple of general things about the first quarter before we start, the first quarter of any year is typically Landstar’s slowest quarter with the first two months typically the slowest within the first quarter. The pickup in quarter-over-quarter revenue we saw in the 2007 versus 2006 fourth quarters has continued through the first two months of the 2008 first quarter when compared to the first two months of the 2007 first quarter. During the first two months of 2008 our overall revenue per load compared with the first two months of 2007 has improved. Weakness does still exist in the same sectors that were weak all of last year however, Landstar has continued to offset that weakness with increased revenue from new agents, new business, better revenue per load and increased account penetration. Despite some periods of bad weather across the US, 2008 so far has been a good year from a safety standpoint.
Right now, the first quarter of 2008 is shaping up pretty much as I anticipated. Our 2008 plan as it was in 2007 is to attack the market place through new agent additions and increased account penetration taking market share to offset weak economic conditions that exist in certain sectors. Our agent pipeline remains very strong. Additionally, I believe there will be further strengthening in price throughout the year as capacity exits the marketplace. Based upon the revenue generated in the first two months of 2008 and assuming our March revenue comes in at our forecasted levels there is no change in the revenue outlook for the 2008 first quarter previously given during our 2007 fourth quarter earnings conference call.
During that conference call I also stated that I anticipated diluted earnings per share to be in a range of $0.41 to $0.46 per diluted share based upon the above revenue forecast and assuming no change in the current operating environment, I am reaffirming that guidance. I want to mention several other items worthy of note that occurred in the first two months of the year. First, we have moved all of the BCO Expedited truck operations of Landstar Express America under the direction of the carrier group. Second, Landstar Global Logistics signed its first offshore agent in the 2008 first quarter. In addition, Landstar Canada which was formed in the fourth quarter of 2007 is now in the process of setting up its operational structure. We expect little impact from these initiatives in 2008 however, these movements are all part of our overall longer term revenue growth strategy.
I am excited about Landstar’s prospects in 2008 and beyond. Our ability to execute on our revenue growth strategies has proven to be successful and will continue to be the driver of our future success. Thank you for your time and we look forward to talking with you again on our April 17, 2008 first quarter earnings conference call. Have a good afternoon.
Thank you for joining the conference call today. Have a good afternoon. Please disconnect your lines at this time.