What changed in this filing

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Item 1. Financial Statements

2021-07-30 compared with 2021-04-30 · 170 added, 94 removed, 278 unchanged (49% of the section changed)

4 unchanged sentences

and do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements.

Operating results for the thirteen weeks ended March 27, 2021 are not necessarily indicative of the results that may be expected for the entire fiscal year ending December 25, 2021.

Operating results for the twenty six weeks ended June 26, 2021 are not necessarily indicative of the results that may be expected for the entire fiscal year ending December 25, 2021.

These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 2020 Annual Report on Form 10-K.

10 unchanged sentences

Total current assets

Operating property, less accumulated depreciation and amortization of $ 309,464 and $ 299,407

Operating property, less accumulated depreciation and amortization of $ 321,181

and $ 299,407

LIABILITIES AND SHAREHOLDERS’ EQUITY

11 unchanged sentences

Shareholders’ Equity

Common stock, $ 0.01 par value, authorized 160,000,000 shares, issued 68,212,296 and 68,183,702 shares

Common stock, $ 0.01 par value, authorized 160,000,000 shares, issued

68,229,880 and

68,183,702 shares

Additional paid-in

9 unchanged sentences

(Dollars in thousands, except per share amounts)

Twenty Six Weeks Ended

Thirteen Weeks Ended

7 unchanged sentences

Depreciation and amortization

Impairment of intangible and other assets

Total costs and expenses

10 unchanged sentences

(Dollars in thousands)

Twenty Six Weeks Ended

Thirteen Weeks Ended

Other comprehensive loss:

Unrealized holding losses on available-for-sale

investments, net of tax benefits of $ 147 and $ 432

Foreign currency translation losses

Other comprehensive loss

Other comprehensive income (loss):

Unrealized holding (losses) gains on available-for-sale

investments, net of tax (benefit) expense of ($ 243 ), $ 338 , ($ 96 ) and $ 770

Foreign currency translation gains (losses)

Other comprehensive income (loss)

Comprehensive income

4 unchanged sentences

(Dollars in thousands)

Thirteen Weeks Ended

Twenty Six Weeks Ended

OPERATING ACTIVITIES

4 unchanged sentences

Gains on sales/disposals of operating property

Impairment of intangible and other assets

Deferred income taxes, net

1 unchanged sentence

Changes in operating assets and liabilities:

Decrease in trade and other accounts receivable

Decrease in other assets

Increase in accounts payable

(Increase) decrease in trade and other accounts receivable

Increase in other assets

Increase (decrease) in accounts payable

Increase in other liabilities

7 unchanged sentences

Proceeds from sales of operating property

Consideration paid for acquisition

NET CASH USED BY INVESTING ACTIVITIES

FINANCING ACTIVITIES

Increase (decrease) in cash overdraft

Decrease in cash overdraft

Dividends paid

3 unchanged sentences

Principal payments on finance lease obligations

Payment of deferred

consideration

NET CASH USED BY FINANCING ACTIVITIES

7 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Thirteen Weeks Ended March 27, 2021 and March 28, 2020

Twenty Six and Thirteen Weeks Ended June 26, 2021 and June 27, 2020

(Dollars in thousands)

1 unchanged sentence

Comprehensive

(Loss) Income

Balance December 26, 2020

Dividends ($ 0.21 per share)

Issuance of stock related to stock-based compensation plans

Issuance of stock related to stock-

ased compensation plans

Stock-based compensation

1 unchanged sentence

Balance March 27, 2021

Dividends ($ 0.21 per share)

Purchases of common stock

Issuance of stock related to stock-based compensation plans

Stock-based compensation

Other comprehensive income

Balance June 26, 2021

Treasury Stock at Cost

Comprehensive

(Loss) Income

Balance December 28, 2019

2 unchanged sentences

Purchases of common stock

Issuance of stock related to stock-based compensation plans

Issuance of stock related to

compensation plans

Stock-based compensation

1 unchanged sentence

Balance March 28, 2020

Dividends ($ 0.185 per share)

Issuance of stock related to

based compensation plans

Stock-based compensation

Other comprehensive income

Balance June 27, 2020

See accompanying notes to consolidated financial statements.

10 unchanged sentences

Revenue from Contracts with Customers – Disaggregation of Revenue

The following table summarizes (i) the percentage of consolidated revenue generated by mode of transportation and (ii) the total amount of truck transportation revenue hauled by BCO Independent Contractors and Truck Brokerage Carriers

generated by equipment type during the thirteen-week periods ended March 27, 2021

and March 28, 2020

(dollars in thousands):

and thirteen-week periods ended June 26, 2021 and June 27, 2020 (dollars in thousands):

Twenty Six Weeks Ended

Thirteen Weeks Ended

8 unchanged sentences

Share-based Payment Arrangements

As of March 27, 2021, the Company had two

employee equity incentive plans, the 2002 employee stock option and stock incentive plan (the “ESOSIP”) and the 2011 equity incentive plan (the “2011 EIP”).

No further grants can be made under the ESOSIP and no stock options previously

granted under the ESOSIP are unvested or unexercised as of March 27, 2021.

The Company also has a stock compensation plan for members of its Board of Directors, the Amended and Restated 2013 Directors Stock Compensation Plan (as amended and restated as of May 17, 2016, the “2013

6,000,000 shares of the Company’s common stock were authorized for issuance under the 2011 EIP and

115,000 shares of the Company’s common stock were authorized for issuance under the 2013 DSCP.

The ESOSIP, 2011 EIP and 2013 DSCP are each referred to herein as a “Plan,” and, collectively, as the “Plans.”

Amounts recognized in the financial statements with respect to these Plans are as follows (in thousands):

As of June 26, 2021, the Company has an employee equity incentive plan, the 2011 equity incentive plan (the “2011 EIP”).

6,000,000 shares of the Company’s common stock were authorized for issuance under the 2011 EIP and 115,000 shares of the Company’s common stock were authorized for issuance under the 2013 DSCP.

The 2011 EIP and 2013 DSCP are each referred to herein as a “Plan,” and, collectively, as the “Plans.” Amounts recognized in the financial statements with respect to these Plans are as follows (in thousands):

Twenty Six Weeks Ended

Thirteen Weeks Ended

2 unchanged sentences

Net cost of the Plans during the period

Included in income tax benefits recognized in the thirteen-week periods ended March 27, 2021 and March 28, 2020 were excess tax benefits from stock-based awards of $ 343,000 and $ 706,000 , respectively.

As of March 27, 2021, there were 60,586 shares of the Company’s common stock reserved for issuance under the 2013 DSCP and 3,521,140 shares of the Company’s common stock reserved for issuance under the 2011

Included in income tax benefits recognized in the twenty-six-week

periods ended June 26, 2021 and June 27, 2020 were excess tax benefits from stock-based awards of $ 1,038,000 and $ 829,000 , respectively.

As of June 26, 2021, there were 56,782 shares of the Company’s common stock reserved for issuance under the 2013 DSCP and 3,499,568 shares of the Company’s common stock reserved for issuance under the 2011 EIP.

Restricted Stock Units

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Outstanding at December 26, 2020

Shares earned in excess of target (1)

Vested shares

Outstanding at March 27, 2021

During the thirteen-week period ended March 27, 2021, the Company granted RSUs with a performance condition.

Outstanding RSUs at both December 26, 2020 and March 27, 2021 include RSUs with a performance condition and RSUs with a market condition, as further described below and in the Company’s 2020 Annual Report on Form 10-K.

Outstanding at June 26, 2021

Represents shares earned in excess of target under the May 1, 2015 RSU award as total shareholder return exceeded the target under the award.

During the twenty-six-week

period ended June 26, 2021, the Company granted RSUs with a performance condition.

Outstanding RSUs at both December 26, 2020 and June 26, 2021 include RSUs with a performance condition and RSUs with a market condition, as further described below and in the Company’s 2020 Annual Report on Form 10-K.

RSUs with a performance condition granted on January 29, 2021 may vest on January 31 of 2024, 2025 and 2026 based on growth in operating income and pre-tax

1 unchanged sentence

impairment charges recorded in the Company’s 2020 fiscal year related to certain assets, primarily customer contract and related customer relationship intangible assets, held by the Company’s Mexican subsidiaries.

The Company recognized approximately $ 3,223,000 and ($ 136,000 ) of share-based compensation expense/(benefit) related to RSU awards in the thirteen-week periods ended March 27, 2021

and March 28, 2020, respectively.

As of March 27, 2021

, there was a maximum of $ 39.8 million of total unrecognized compensation cost related to RSU awards granted under the Plans with an expected average remaining life of approximately 3.4 years.

The Company recognized approximately $ 9,249,000 and ($ 308,000 ) of share-based compensation expense/(benefit) related to RSU awards in the twenty-six-week

periods ended June 26, 2021 and June 27, 2020, respectively.

As of June 26, 2021, there was a maximum of $ 33.8 million of total unrecognized compensation cost related to RSU awards granted under the Plans with an expected average remaining life of approximately 3.3 years.

With respect to RSU awards with a performance condition, the amount of future compensation expense to be recognized will be determined based on future operating results.

1 unchanged sentence

The following table summarizes information regarding the Company’s outstanding shares of non-vested

restricted stock and Deferred Stock Units (defined below) under the Plans:

restricted stock and Deferred Stock Units

(defined below) under the Plans:

Number of Shares

2 unchanged sentences

at December 26, 2020

at March 27, 2021

The fair value of each share of non-vested restricted stock issued and Deferred Stock Unit granted under the Plans is based on the fair value of a share of the Company’s common stock on the date of grant.

Shares of non-vested restricted stock are generally subject to vesting in three equal annual installments either on the first, second and third anniversary of the date of the grant or the third, fourth and fifth anniversary of the date of the grant, or 100 % on the first or fifth anniversary of the date of the grant.

at June 26, 2021

The fair value of each share of non-vested

restricted stock issued and Deferred Stock Unit granted under the Plans is based on the fair value of a share of the Company’s common stock on the date of grant.

Shares of non-vested

restricted stock are generally subject to vesting in three equal annual installments either on the first, second and third anniversary of the date of the grant or the third, fourth and fifth anniversary of the date of the grant, or 100 % on the first or fifth anniversary of the date of the grant.

For restricted stock awards granted under the 2013 DSCP plan, each recipient may elect to defer receipt of shares and instead receive restricted stock units (“Deferred Stock Units”), which represent contingent rights to receive shares of the Company’s common stock on the date of recipient separation from service from the Board of Directors, or, if earlier, upon a change in control event of the Company.

2 unchanged sentences

However, Deferred Stock Units do contain the right to receive dividend equivalent payments prior to settlement into shares.

As of March 27, 2021, there was $ 5,054,000 of total unrecognized compensation cost related to non-vested shares of restricted stock and Deferred

Stock Units granted under the Plans.

The unrecognized compensation cost related to these non-vested shares of restricted stock and Deferred Stock Units is expected to be recognized over a weighted average period of 2.4 years.

As of June 26, 2021, there was

5,626,000 of total unrecognized compensation cost related to

shares of restricted stock and Deferred Stock Units granted under the Plans.

The unrecognized compensation cost related to these

shares of restricted stock and Deferred Stock Units is expected to be recognized over a weighted average period of

Stock Options

The following table summarizes information regarding the Company’s outstanding stock options under the Plans:

Weighted Average

Exercise Price per

Average Exercise

Price per Share

Weighted Average

1 unchanged sentence

Options outstanding at December 26, 2020

Options outstanding at March 27, 2021

Options exercisable at March 27, 2021

The total intrinsic value of stock options exercised during the thirteen-week periods ended March 27, 2021 and March 28, 2020 was $ 521,000 and $ 1,023,000 , respectively.

As of March 27, 2021, there was no unrecognized compensation cost related to stock options granted under the Plans.

The provisions for income taxes for the 2021 and 2020 thirteen-week periods were based on estimated annual effective income tax rates of 24.4 % and 24.2 %, respectively, adjusted for discrete events, such as benefits resulting from stock-based awards.

Options outstanding at June 26, 2021

Options exercisable at June 26, 2021

The total intrinsic value of stock options exercised during the twenty-six-week

periods ended June 26, 2021 and June 27, 2020 was $

521,000 and $

1,071,000 , respectively.

As of June 26, 2021, there was no unrecognized compensation cost related to stock options granted under the Plans.

The provisions for income taxes for the 2021 and 2020 twenty-six-week

periods were based on estimated annual effective income tax rates of 24.4 % and 24.2 %, respectively, adjusted for discrete events, such as benefits resulting from stock-based awards.

The increase in the estimated annual effective income tax rate was primarily attributable to increased anticipated nondeductible executive compensation during the 2021 period.

The effective income tax rate for the 2021 thirteen-week period was 24.4 %, which was higher than the statutory federal income tax rate of 21 % primarily attributable to state taxes and non-deductible

The effective income tax rate for the 2021 twenty-six-week

period was 24.1 %, which was higher than the statutory federal income tax rate of 21 % primarily attributable to state taxes and nondeductible

executive compensation, partially offset by excess tax benefits realized on stock-based awards.

The effective income tax rate for the 2020 thirteen-week period was 22.9 %, which was higher than the statutory federal income tax rate of 21 % primarily attributable to state taxes and the meals and entertainment exclusion, partially offset by excess tax benefits realized on stock based awards.

The effective income tax rate for the 2020 twenty-six-week

period was 22.7 %, which was higher than the statutory federal income tax rate of 21 % primarily attributable to state taxes and the meals and entertainment exclusion, partially offset by state tax refunds and excess tax benefits realized on stock-based awards.

Earnings Per Share

2 unchanged sentences

Diluted earnings per share are based on the weighted average number of common shares and Deferred Stock Units outstanding plus the incremental shares that would have been outstanding upon the assumed exercise of all dilutive stock options.

During the 2021 and 2020 thirteen-week periods, in reference to the determination of diluted earnings per share, the future compensation cost attributable to outstanding shares of non-vested

During the 2021 and 2020 twenty-six-week

and thirteen-week periods, in reference to the determination of diluted earnings per share, the future compensation cost attributable to outstanding shares of non-vested

restricted stock exceeded the impact of incremental shares that would have been outstanding upon the assumed exercise of all dilutive stock options.

For each of the thirteen-week periods ended March 27, 2021 and March 28, 2020, no options outstanding to purchase shares of common stock were antidilutive.

For each of the twenty-six-week

periods ended June 26, 2021 and June 27, 2020, no options outstanding to purchase shares of common stock were antidilutive.

Outstanding RSUs were excluded from the calculation of diluted earnings per share for all periods because the performance metric requirements or market condition for vesting had not been satisfied.

Additional Cash Flow Information

During the 2021 thirteen-week period, Landstar paid income taxes and interest of $ 353,000 and $ 983,000 , respectively.

During the 2020 thirteen-week period, Landstar paid income taxes and interest of $ 7,000 and $ 1,079,000 , respectively.

Landstar did no t acquire any operating property by entering into finance leases in either the 2021 or 2020 thirteen-week periods.

During the 2021 twenty-six-week

period, Landstar paid income taxes and interest of $ 51,679,000 and $ 1,883,000 , respectively.

During the 2020 twenty-six-week

period, Landstar paid income taxes and interest of $ 16,198,000 and $ 2,057,000 , respectively.

Landstar did no t acquire any operating property by entering into finance leases in the 2021 twenty-six-week

Landstar acquired operating property by entering into finance leases in the amount of $ 7,485,000 in the 2020 twenty-six-week

Segment Information

The following table summarizes information about the Company’s reportable business segments as of and for the thirteen-week periods ended March 27, 2021 and March 28, 2020 (in thousands):

The following table summarizes information about the Company’s reportable business segments as of and for the twenty-six-week and thirteen-week periods ended June 26, 2021 and June 27, 2020 (in thousands):

Twenty Six Weeks Ended

June 26, 2021

June 27, 2020

Transportation

External revenue

Internal revenue

Investment income

Operating income

Expenditures on long-lived assets

Thirteen Weeks Ended

March 27, 2021

March 28, 2020

June 26, 2021

June 27, 2020

Transportation

5 unchanged sentences

Expenditures on long-lived assets

In the thirteen-week periods ended March 27, 2021 and March 28, 2020, no single customer accounted for more than 10 % of the Company’s consolidated revenue.

In the twenty-six-week

periods ended June 26, 2021 and June 27, 2020, no single customer accounted for more than 10 % of the Company’s consolidated revenue.

Other Comprehensive Income

The following table presents the components of and changes in accumulated other comprehensive income (loss), net of related income taxes, as of and for the thirteen-week period ended March 27, 2021 (in thousands):

The following table presents the components of and changes in accumulated other comprehensive income (loss), net of related income taxes, as of and for the twenty-six-week

period ended June 26, 2021 (in thousands):

Holding Gains

Available-for-Sale

Foreign Currency

Balance as of December 26, 2020

Other comprehensive loss

Balance as of March 27, 2021

Amounts reclassified from accumulated other comprehensive income to investment income due to the realization of previously unrealized gains and losses in the accompanying consolidated statements of income were not significant for the thirteen-week period ended March 27, 2021.

Other comprehensive (loss) gain

Balance as of June 26, 2021

period ended June 26, 2021.

Investments include primarily investment-grade corporate bonds and U.S.

Treasury obligations having maturities of up to five years (the “bond portfolio”) and money market investments.

Investments in the bond portfolio are reported as available-for-sale

and are carried at fair value.

Investments in the bond portfolio are reported as available-for-sale and are carried at fair value.

Investments maturing less than one year from the balance sheet date are included in short-term investments and investments maturing more than one year from the balance sheet date are included in other assets in the consolidated balance sheets.

Management performs an analysis of the nature of the unrealized losses on available-for-sale

investments to determine whether an allowance for credit loss is necessary.

Management performs an analysis of the nature of the unrealized losses on available-for-sale investments to determine whether an allowance for credit loss is necessary.

Unrealized losses, representing the excess of the purchase price of an investment over its fair value as of the end of a period, considered to be a result of credit-related factors, are to be included as a charge in the statement of income, while unrealized losses considered to be a result of noncredit-related factors are to be included as a component of shareholders’ equity.

Investments whose values are based on quoted market prices in active markets are classified within Level 1.

Investments that trade in markets that are not considered to be active, but are valued based on quoted market prices, are classified within Level 2.

As Level 2 investments include positions that are not traded in active markets, valuations may be adjusted to reflect illiquidity and/or non-transferability,

which are generally based on available market information.

Investments that trade in markets that are not considered

to be active, but are valued based on quoted market prices, are classified within Level 2.

As Level 2 investments include positions that are not traded in active markets, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.

Any transfers between levels are recognized as of the beginning of any reporting period.

Fair value of the bond portfolio was determined using Level 1 inputs related to U.S.

Treasury obligations and money market investments and Level 2 inputs related to

investment-grade corporate bonds, asset-backed securities and direct obligations of government agencies.

Unrealized gains, net of unrealized losses, on the investments in the bond portfolio were $ 2,897,000 at March 27, 2021 and $ 3,578,000 at December 26, 2020, respectively.

Treasury obligations and money market investments and Level 2 inputs related to investment-grade corporate bonds, asset-backed securities and direct obligations of government agencies.

Unrealized gains, net of unrealized losses, on the investments in the bond portfolio were

$ 2,452,000 at June 26, 2021 and $ 3,578,000 at December 26, 2020, respectively.

The amortized cost and fair values of available-for-sale

investments are as follows at March 27, 2021 and December 26, 2020 (in thousands):

March 27, 2021

investments are as follows at June 26, 2021 and December 26, 2020 (in thousands):

June 26, 2021

Money market investments

8 unchanged sentences

For those available-for-sale

investments with unrealized losses at March 27, 2021 and December 26, 2020, the following table summarizes the duration of the unrealized loss (in thousands):

investments with unrealized losses at June 26, 2021 and December 26, 2020, the following table summarizes the duration of the unrealized loss (in thousands):

Less than 12 months

12 months or longer

March 27, 2021

Asset-backed securities

Corporate bonds and direct obligations of government agencies

June 26, 2021

Corporate bonds and direct obligations of

government agencies

December 26, 2020

Asset-backed securities

Corporate bonds and direct obligations of government agencies

Corporate bonds and direct obligations of

government agencies

The Company believes unrealized losses on investments were primarily caused by rising interest rates rather than changes in credit quality.

17 unchanged sentences

therefore, based on the applicable lease terms and the current economic environment, we apply a portfolio approach for determining the incremental borrowing rate.

The components of lease cost for finance leases and operating leases for the thirteen weeks ended March 27, 2021 were (in thousands):

The components of lease cost for finance leases and operating leases for the twenty six weeks ended June 26, 2021 were (in thousands):

Finance leases:

7 unchanged sentences

Total net lease cost

A summary of the lease classification on our consolidated balance sheet as of March 27, 2021 is as follows (in thousands):

A summary of the lease classification on our consolidated balance sheet as of June 26, 2021 is as follows (in thousands):

Operating lease right-of-use

2 unchanged sentences

Total lease assets

The following table reconciles the undiscounted cash flows for the finance and operating leases to the finance and operating lease liabilities recorded on the balance sheet at March 27, 2021 (in thousands) :

The following table reconciles the undiscounted cash flows for the finance and operating leases to the finance and operating lease liabilities recorded on the balance sheet at June 26, 2021 (in thousands):

2021 Remainder

Total future minimum lease paym

Total future minimum lease payments

Less amount representing interest ( 1.9 % to 4.4 %)

3 unchanged sentences

Other current liabilities

Deferred income taxes and other noncurrent liabilitie s

The weighted average remaining lease term and the weighted average discount rate for finance and operating leases as of March 27, 2021 were:

Deferred income taxes and other noncurrent liabilities

The weighted average remaining lease term and the weighted average discount rate for finance and operating leases as of June 26, 2021 were:

Finance Leases

2 unchanged sentences

Weighted average discount rate

Other than the finance lease obligations as presented on the consolidated balance sheets, the Company had no outstanding debt as of March 27, 2021 and December 26, 2020.

Other than the finance lease obligations as presented on the consolidated balance sheets, the Company had no outstanding debt as of June 26, 2021 and December 26, 2020.

On August 18, 2020 , Landstar entered into an amended and restated credit agreement with a syndicate of banks and JPMorgan Chase Bank, N.A., as administrative agent (the “Credit Agreement”).

3 unchanged sentences

The revolving credit facility bears a commitment fee, payable quarterly in arrears, of 0.25 % to 0.35 %, based on the Company’s Leverage Ratio at the end of the most recent applicable fiscal quarter for which financial statements have been delivered.

As of March 27, 2021 and December 26, 2020, the Company had no borrowings outstanding under the Credit Agreement.

As of June 26, 2021 and December 26, 2020, the Company had no borrowings outstanding under the Credit Agreement.

The Credit Agreement contains a number of covenants that limit, among other things, the incurrence of additional indebtedness.

8 unchanged sentences

Commitments and Contingencies

Short-term investments include $ 41,407,000 in current maturities of investments held by the Company’s insurance segment at March 27, 2021.

Short-term investments include $ 52,560,000 in current maturities of investments held by the Company’s insurance segment at June 26, 2021.

The non-current

2 unchanged sentences

investments, provide collateral for the $ 65,434,000 of letters of credit issued to guarantee payment of insurance claims.

As of March 27, 2021, Landstar also had $ 33,620,000 of additional letters of credit outstanding under the Company’s Credit Agreement.

As of June 26, 2021, Landstar also had $ 33,579,000 of additional letters of credit outstanding under the Company’s Credit Agreement.

The Company is involved in certain claims and pending litigation arising from the normal conduct of business.

1 unchanged sentence

Based on knowledge of the facts and, in certain cases, opinions of outside counsel, management believes that adequate provisions have been made for probable losses with respect to the resolution of all such claims and pending litigation and that the ultimate outcome, after provisions therefor, will not have a material adverse effect on the financial condition of the Company, but could have a material effect on the results of operations in a given quarter or year.

Change in Accounting Estimate for Self-Insured Claims

Landstar provides for the estimated costs of self-insured claims primarily on an actuarial basis.

The amount recorded for the estimated liability for claims incurred is based upon the facts and circumstances known on the applicable balance sheet date.

The ultimate resolution of these claims may be for an amount greater or less than the amount estimated by management.

The Company continually revises its existing claim estimates as new or revised information becomes available on the status of each claim.

Historically, the Company has experienced both favorable and unfavorable development of prior years’ claims estimates.

The following table summarizes the adverse effect of the increase in the cost of insurance claims resulting from unfavorable development of prior year self-insured claims estimates on operating income, net income and earnings per share set forth in the consolidated statements of income for the twenty-six-week

and thirteen-week periods ended June 26, 2021 and June 27, 2020 (in thousands, except per share amounts):

Twenty Six Weeks Ended

Thirteen Weeks Ended

Operating income

Diluted earnings per share

Impairment of Intangible and Other Assets

During the 2020 second fiscal quarter, the Company recorded a non-cash

impairment charge of $ 2,582 ,000 in respect of certain assets, primarily customer contract and related customer relationship intangible assets, acquired on September 20, 2017, along with substantially all of the other assets of the asset-light transportation logistics business of Fletes Avella, S.A.

(“Fletes Avella”).

As previously disclosed in Item 1A.

Risk Factors in the Company’s Form 10-Q for the 2020 first quarter, negative macroeconomic trends in Mexico during the first half of 2020, including issues in the international oil and gas sector, caused significant disruptions in the Mexican economy.

Accordingly, management performed impairment tests of the carrying values of certain assets that primarily related to intra-Mexico business acquired as a part of the Fletes Avella acquisition.

The impairment tests resulted in an impairment charge

of $ 2,582 ,000, as the negative macroeconomic trends in Mexico caused financial projections as of the end of the 2020 second quarter relating to these intangible assets to be substantially below those originally anticipated at the acquisition date.

no corresponding goodwill impairment charge recorded as the fair value of the Company’s Mexico and cross-border reporting unit significantly exceeded its carrying value as of June 27, 2020.

The fair value of the Company’s Mexico and cross-border reporting unit continues to significantly exceed its carrying value as of June 26, 2021.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements