EX-99.2 3 d301066dex992.htm EX-99.2

Exhibit 99.2

DESIGNED TO RESPOND BUILT TO DELIVER Landstar System, Inc. Earnings Conference Call Third Quarter 2022 September 24, 2022 Date Published: 10/19/2022

Forward Looking Statements Disclaimer : The following is a “safe harbor” statement under the Private Securities Litigation ReformActof1995. Statements made in this slide presentation that are not based on historical fact sare “forward looking statements. ”This presentation may make certain statements containing forward -looking statements, suchas statements which relate to Landstar’s business objectives, plans, strategies and expectations. Such statements arebynaturesubjectto uncertainties andrisks, including but not limited to: the operational, financial andlegalrisks detailed in Landstar’s Form10-Kforthe2021fiscalyearandForm 10-Qsforthe 2022firstandsecondfiscalquarters, described inthe section Risk Factors, and other SEC filingsfromtimetotime.Theserisksand uncertainties couldcauseactualresultsoreventstodiffer materially from historical resultsorthose anticipated. Investors should not place undue reliance on such forward -looking statements, and Landstar undertakes no obligation to publicly updateorrevise anyforward -lookingstatements. 2 Date Published: 10/19/2022

Non-GAAP Financial Measures : In this slide presentation, the Company provides the following information thatmaybe deemed anon-GAAP financial measure: variable contribution, variable contribution marginand operating incomeasa percentage ofvariablecontribution. Management believes variable contribution and variable contribution marginareuseful measures of the variable coststhatweincurata shipment -by-shipment level attributable toour transportation network of third-party capacity providers and independent agentsinorderto provideservicesto our customers. Management believes that operating incomeasa percentage of variable contribution isauseful measure as: (i)variablecostsofrevenueforasignificantportionoftheCompany’sbusinessarehighly influencedbyshort -termmarket-basedtrendsinthefreight transportation industry, whereas othercosts, including othercostsof revenue, aremuchless impacted byshort-termfreightmarkettrends;and(ii)this measure is meaningful to investors’evaluationsoftheCompany’smanagementofcostsattributabletooperationsotherthanthepurely variable costs associated with purchased transportation and commissions toagentsthatthe Company incurs toprovideservicestoourcustomers. Management also believes thatitis appropriate to present eachofthe financial measures thatmaybe deemedanon -GAAPfinancialmeasure,asreferredtoabove,forthefollowingreasons:(1)disclosureofthese matters willallow investors tobetter understand the underlying trendsinthe Company’s financial condition andresultsofoperations;(2)thisinformationwillfacilitatecomparisonsbyinvestorsoftheCompany’sresults as compared totheresultsofpeer companies; and(3) management considers this financial information inits decisionmaking. Atabulationoftheexpensesidentifiedascostsofrevenueaswellasareconciliationofgrossprofittovariable contributionandgross profit marginto variable contributionmargin for the2022 and2021 third quarters and year-to-dateperiodsisincludedinthisslidepresentationasAppendixA. 3 Date Published: 10/19/2022

Who We Are Landstar, a Fortune 500 company, is a worldwide, 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: 10/19/2022

Our Network September 24, 2022 YTD Results $5.76 billion in revenue Agents 2.00 million loadings Approx. 1,200 593 million dollar agents (based on 2021 fiscal year) 11,644 BCO trucks 101,429 Carriers Landstar Employees 18,000+ Trailers Approx. 1,300 Capacity Customers 112,000+ 25,000+ 5 Date Published: 10/19/2022

Transportation Management Services Percentage of Revenue 3Q21 3Q22 Truck Transportation Truckload Van equipment 53% 50% Unsided/platform equipment 24% 25% Less-than-truckload 2% 2% Other truck transportation 12% 11% Rail intermodal 3% 2% Ocean and air cargo 5% 9% 6 Date Published: 10/19/2022

Revenue ($’s in thousands) Year-to-Date Quarter Year over Prior Year Rate (1) Volume (2) Change Qtr over Prior Year Qtr Rate (1) Volume (2) Change Truck Revenue 10.0% 9.9% 20.8% Truck Revenue 0.1% 1.0% 1.1% Rail Intermodal Revenue 19.4% -21.0% -5.6% Rail Intermodal Revenue 9.7% -43.3% -37.8% Ocean/Air Revenue 113.3% 16.1% 147.5% Ocean/Air Revenue 72.7% 13.1% 95.3% Insurance Premiums NA NA 11.0% Insurance Premiums NA NA 7.8% Total Revenue 25.5% Total Revenue 4.7% (1) Percentage change in rate is calculated on a revenue per load basis. (2) Percentage change in volume is calculated on the number of loads hauled. 7 Date Published: 10/19/2022

Truckload Loadings and Revenue per Truckload Trends Van Equipment Revenue per Load Number of Loads 400,000 $3,000 370,000 $2,800 340,000 $2,600 $2,400 310,000 $2,200 280,000 $2,000 250,000 $1,800 220,000 $1,600 3Q194Q191Q202Q203Q204Q201Q212Q213Q214Q211Q222Q223Q22 3Q194Q191Q202Q203Q204Q201Q212Q213Q214Q211Q222Q223Q22 Unsided/Platform Equipment Revenue per Load Number of Loads 150,000 $3,600 $3,400 140,000 $3,200 130,000 $3,000 $2,800 120,000 $2,600 110,000 $2,400 100,000 $2,200 3Q194Q191Q202Q203Q204Q201Q212Q213Q214Q211Q222Q223Q22 3Q194Q191Q202Q203Q204Q201Q212Q213Q214Q211Q222Q223Q22 8 Date Published: 10/19/2022

Industries Served As a Percentage of Revenue Quarterover Prior Year Quarter 3Q21 3Q22 Changein Revenue Consumer Durables 30.3 28.6 -1% Machinery 11.1 12.1 14% Automotive 6.8 8.7 33% Building Products 8.2 8.5 8% AA&E, Hazmat 8.7 8.4 0% Metals 5.1 4.9 1% Foodstuffs 3.9 3.4 -10% Substitute Line Haul 5.4 3.3 -36% Other 20.5 22.1 14% Transportation Revenue 100.0 100.0 5% 9 Date Published: 10/19/2022

Gross Profit (1)and Gross Profit Margin (2) ($’s in thousands) Year-to-Date Quarter 11.1% 10.6% 10.9% 10.2% (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. 10 Date Published: 10/19/2022

Variable Contribution(1)and Variable Contribution Margin (2) ($’s in thousands) Year-to-Date Quarter 14.2% 13.6% 14.0% 13.5% (3) (3) 3rd Qtr YTD 3rd Qtr Changes in variable contribution Changes in variable contribution margin % margin % 2021 Period 14.2 2021 Period 14.0 Revenue - fixed 0.0 Revenue - fixed -0.1 Revenue - variable 0.3 Revenue - variable 0.3 Change in mix and other -0.9 Change in mix and other -0.7 2022 Period 13.6 2022 Period 13.5 (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) Revenue on transactions where the Company’s variable contribution margin was based on a contractually pre-determined percentage of revenue accounted for 46% and 40% of revenue in the 2021 and 2022 year-to-date periods, respectively, and 44% and 39% of revenue in the 2021 and 2022 third quarters, respectively. 11 Date Published: 10/19/2022

Operating Income as a % of Gross Profit ($’s in thousands) Year-to-Date Quarter 69.8% 73.4% 69.4% 71.9% 12 Date Published: 10/19/2022

Operating Income as a % of Variable Contribution ($’s in thousands) Year-to-Date Quarter 54.7% 57.0% 54.2% 54.3% 3rd Qtr YTD 3rd Qtr Changes in operating income as a % of variable Changes in operating income as a % of variable contribution % contribution % 2021 Period 54.7 2021 Period 54.2 Other operating costs -0.3 Other operating costs -1.1 Insurance and claims -0.8 Insurance and claims -0.6 SG&A 3.2 SG&A 2.7 Depreciation and amortization 0.2 Depreciation and amortization -0.9 2022 Period 57.0 2022 Period 54.3 13 Date Published: 10/19/2022

Truck Capacity Data (All information is provided as of the end of the applicable period) Sep 25, Dec 25, Sep 24, (2) (2) 2021 2021 2022 BCO Independent Contractors 10,955 11,057 10,742 Truck Brokerage Carriers: (1) Approved and Active 58,676 64,476 71,207 Other Approved 24,602 25,870 30,222 83,278 90,346 101,429 Total Available Truck Capacity Providers 94,233 101,403 112,171 Trucks Provided by BCO Independent Contractors 11,746 11,864 11,644 (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 $330.2 million and $182.7 million in the 2022 and 2021 year-to-date periods, respectively, and $120.4 million and $68.7 million in the 2022 and 2021 third quarters, respectively. 14 Date Published: 10/19/2022

Key Balance Sheet and Cash Flow Statistics ($’s in thousands) Sep 25, Sep 24, 2021 2022 Balance sheet (period end amounts): Debt to Capital 10% 11% Net Cash (1) $ 169,867 $ 118,963 Cash flow (year-to-date): Cash flow from operations $ 216,990 $ 436,381 Capital expenditures $ 18,561 $ 21,096 Share repurchases $ 50,230 $ 285,983 Dividends paid $ 102,463 $ 104,893 Returns (trailing 12 months): Return on Equity 43% 52% Return on Invested Capital 38% 46% Return on Assets 20% 23% (1)Net cash is defined as cash and cash equivalents plus short term investments less outstanding debt. 15 Date Published: 10/19/2022

Free Cash Flow (1) , Stock Purchases and Dividends (In Thousands) $350,000 43,000 $300,000 42,000 $250,000 41,000 $200,000 40,000 $150,000 39,000 $100,000 38,000 $50,000 $0 37,000 2017 2018 2019 2020 2021 Free Cash Flow Share Purchases Dividends Paid Common Share Count Third Quarter 2022 YTD (000’s) Free cash flow (1) $ 415,285 Share purchases $ 285,983 Dividends paid $ 104,893 Ending common share count 35,925 (1) Free cash flow is defined as cash flow from operations less capital expenditures, each set forth on the prior slide. 16 Date Published: 10/19/2022

Appendix A Reconciliation of Gross Profit to Variable Contribution ($’s in thousands) Thirty Nine Weeks Ended Thirteen Weeks Ended September 24, September 25, September 24, September 25, 2022 2021 2022 2021 Revenue $5,761,795 $4,592,551 $ 1,816,132 $1,734,299 Costs of revenue: Purchased transportation 4,512,341 3,583,197 1,416,323 1,356,671 Commissions to agents 465,759 356,997 154,125 135,295 Variable costs of revenue 4,978,100 3,940,194 1,570,448 1,491,966 Trailing equipment depreciation 27,760 26,362 9,397 8,615 Information technology costs (1) 13,868 9,534 4,829 3,450 Insurance -related costs (2) 98,821 78,175 32,380 30,502 Other operating costs 34,878 27,117 13,356 10,572 Other costs of revenue 175,327 141,188 59,962 53,139 Total costs of revenue 5,153,427 4,081,382 1,630,410 1,545,105 Gross profit $608,368 $511,169 $185,722 $189,194 Gross profit margin 10.6% 11.1% 10.2% 10.9% Plus: other costs of revenue 175,327 141,188 59,962 53,139 Variable contribution $783,695 $652,357 $245,684 $242,333 Variable contribution margin 13.6% 14.2% 13.5% 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: 10/19/2022

DESIGNED TO RESPOND BUILT TO DELIVER 18 Date Published: 10/19/2022