Landstar System Inc., a non-asset based provider of integrated transportation, warehousing and logistics services, has agreed to buy-out all future contingent payment obligations to the prior owner of National Logistics Management Co. (NLM) for $3.8 million.
In July 2009, Landstar acquired NLM, a technology-based supply chain solutions provider. Under the terms of the purchase agreement between the Company and the prior owner of NLM, Landstar agreed to pay additional purchase price to the prior owner contingent upon the achievement by NLM of certain levels of earnings through 2014. Under the terms of the buy-out agreement, Landstar and the prior owner of NLM have agreed to extinguish all of the company's contingent payment obligations under the purchase agreement in exchange for a total payment by Landstar to the prior owner of $3.8 million.
The $3.8 million one-time charge will be reflected in the company's 2010 third quarter results. The charge is expected to reduce the company's 2010 third quarter diluted earnings per share by $0.05.