Truck broker Landstar System Inc. (NASDAQ: LSTR) announced Wednesday after the market close that it will pay a one-time special dividend of $2 per share on Jan. 22.
The Jacksonville, Florida-based company’s president and CEO, Jim Gattoni, had indicated during a presentation at an investor conference last month that the cash payment would likely be the preferred method of deploying cash to shareholders. The other option was the repurchase of the company’s stock, assuming an attractive buying window presented itself. A recent surge in shares, up 12% in the past month, likely closed that window in the near term.
“Landstar’s strong balance sheet and free cash flow generation enables us to continue to return value to our stockholders through a special dividend,” said Gattoni in a press release.
Landstar raised fourth-quarter guidance at the same mid-November conference, noting elevated demand for consumer durables and home improvement items as well as a leveling in flatbed demand.
Through the third quarter, Landstar had generated $186 million in cash flow from operations, amassing $258 million in cash and short-term investments. Even with COVID-related cost headwinds and bonuses to capacity providers, the company’s net cash position of $170 million was only $45 million lower year-over-year. The latest dividend represents more than $75 million in cash payments to shareholders.
Landstar ended the third quarter with minimal debt leverage; debt-to-capital was 11%.
The company has a long history of paying special dividends. Landstar declared a $2-per-share special dividend at the end of 2019, $1.50 in 2017, $1 in 2014, 35 cents in 2013 and 50 cents in 2012.
“Since January 1997, after paying this special dividend, the Company will have returned a total of approximately $2.3 billion to its stockholders through dividends and its long-standing stock purchase program. The Company intends to continue to use its available free cash flow to purchase its stock under its stock purchase program,” Gattoni concluded.