What changed in this filing

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Item 1. Financial Statements

2021-10-29 compared with 2021-07-30 · 138 added, 130 removed, 318 unchanged (46% 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 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.

Operating results for the thirty nine weeks ended September 25, 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.

3 unchanged sentences

(Dollars in thousands, except per share amounts)

September 25,

Current Assets

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Total current assets

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

and $ 299,407

Operating property, less accumulated depreciation and amortization of $ 332,785 and $ 299,407

LIABILITIES AND SHAREHOLDERS’ EQUITY

11 unchanged sentences

Shareholders’ Equity

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

68,229,880 and

68,183,702 shares

Common stock, $ 0.01 par value, authorized 160,000,000 shares, issued 68,231,013 and 68,183,702 shares

Additional paid-in

9 unchanged sentences

(Dollars in thousands, except per share amounts)

Twenty Six Weeks Ended

Thirty Nine Weeks Ended

Thirteen Weeks Ended

September 25,

September 26,

September 25,

September 26,

Investment income

19 unchanged sentences

(Dollars in thousands)

Twenty Six Weeks Ended

Thirty Nine Weeks Ended

Thirteen Weeks Ended

Other comprehensive income (loss):

September 25,

September 26,

September 25,

September 26,

Other comprehensive (loss) income:

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

1 unchanged sentence

Foreign currency translation gains (losses)

Other comprehensive income (loss)

Other comprehensive (loss) income

Comprehensive income

4 unchanged sentences

(Dollars in thousands)

Twenty Six Weeks Ended

Thirty Nine Weeks Ended

September 25,

September 26,

OPERATING ACTIVITIES

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Changes in operating assets and liabilities:

(Increase) decrease in trade and other accounts receivable

Increase in trade and other accounts receivable

Increase in other assets

Increase (decrease) in accounts payable

Increase in accounts payable

Increase in other liabilities

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FINANCING ACTIVITIES

Decrease in cash overdraft

Increase (decrease) in cash overdraft

Dividends paid

Payment for debt issue costs

Proceeds from exercises of stock options

2 unchanged sentences

Principal payments on finance lease obligations

Payment of deferred

consideration

Payment of deferred consideration

NET CASH USED BY FINANCING ACTIVITIES

7 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

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

Thirty Nine and Thirteen Weeks Ended September 25, 2021 and September 26, 2020

(Dollars in thousands)

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Dividends ($ 0.21 per share)

Issuance of stock related to stock-

ased compensation plans

Issuance of stock related to stock-based compensation plans

Stock-based compensation

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Balance June 26, 2021

Treasury Stock at Cost

Comprehensive

(Loss) Income

Dividends ($ 0.25 per share)

Purchases of common stock

Issuance of stock related to stock-based compensation plans

Stock-based compensation

Other comprehensive loss

Balance September 25, 2021

Balance December 28, 2019

2 unchanged sentences

Purchases of common stock

Issuance of stock related to

compensation plans

Issuance of stock related to stock-based compensation plans

Stock-based compensation

2 unchanged sentences

Dividends ($ 0.185 per share)

Issuance of stock related to

based compensation plans

Issuance of stock related to stock-based compensation plans

Stock-based compensation

1 unchanged sentence

Balance June 27, 2020

Dividends ($ 0.21 per share)

Issuance of stock related to stock-based compensation plans

Stock-based compensation

Other comprehensive income

Balance September 26, 2020

See accompanying notes to consolidated financial statements.

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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 twenty-six-week

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

Twenty Six Weeks Ended

Thirty Nine Weeks Ended

Thirteen Weeks Ended

September 25,

September 26,

September 25,

September 26,

Truck – BCO Independent Contractors

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Less-than-truckload

Other truck transportation (1)

Includes power-only, expedited, straight truck, cargo van, and miscellaneous other truck transportation revenue generated by the transportation logistics segment.

Power-only refers to shipments where the Company furnishes a power unit and an operator but not trailing equipment, which is typically provided by the shipper or consignee.

(2) Share-based Payment Arrangements

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

As of September 25, 2021, the Company has an employee equity incentive plan, the 2011 equity incentive plan (the “2011 EIP”).

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 DSCP”).

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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

Thirty Nine Weeks Ended

Thirteen Weeks Ended

September 25,

September 26,

September 25,

September 26,

Total cost of the Plans during the period

1 unchanged sentence

Net cost of the Plans during the period

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.

Included in income tax benefits recognized in the thirty-nine-week periods ended September 25, 2021 and September 26, 2020 were excess tax benefits from stock-based awards of $ 1,039,000 and $ 927,000 , respectively.

As of September 25, 2021, there were 56,782 shares of the Company’s common stock reserved for issuance under the 2013 DSCP and 3,505,880 shares of the Company’s common stock reserved for issuance under the 2011 EIP.

Restricted Stock Units

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Vested shares

Outstanding at June 26, 2021

Outstanding at September 25, 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.

During the thirty-nine-week period ended September 25, 2021, the Company granted RSUs with a performance condition.

Outstanding RSUs at both December 26, 2020 and September 25, 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

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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 $ 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.

The Company recognized

approximately $

16,223,000 and $

415,000 of share-based compensation expense related to RSU awards in the thirty-nine-week periods ended September

2021 and September

2020 , respectively.

As of September

2021 , there was a maximum of $

26.3 million of total unrecognized compensation cost related to RSU awards granted under the Plans with an expected average remaining life of approximately

With respect to RSU awards with a performance condition, the amount of future compensation expense to be recognized will

determined based on future operating results.

Restricted Stock and Deferred Stock Units

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 June 26, 2021

at September 25, 2021

The fair value of each share of non-vested

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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.

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.

Deferred Stock Units become vested 100 % on the first anniversary of the date of the grant.

1 unchanged sentence

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

As of June 26, 2021, there was

As of September

2021 , there was $

4,726,000 of total unrecognized compensation cost related to

4 unchanged sentences

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

Average Exercise

Price per Share

Weighted Average

Aggregate Intrinsic

Exercise Price

Options outstanding at December 26, 2020

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 $

Options outstanding at September 25, 2021

Options exercisable at September 25, 2021

The total intrinsic value of

stock options exercised during the thirty-nine-week periods ended September

2021 and September

644,000 and $

1,599,000 , 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.

As of September

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

(3) Income Taxes

The provisions for income taxes for the 2021 and 2020 thirty-nine-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 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 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.

The effective income tax rate for the 2021 thirty-nine-week period was 24.2 %, 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 thirty-nine-week period was 23.3 %, 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 and state tax refunds.

(4) Earnings Per Share

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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 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

During the 2021 and 2020 thirty-nine-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 twenty-six-week

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

For each of the thirty-nine-week periods ended September 25, 2021 and September 26, 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.

(5) Additional Cash Flow Information

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

During the 2021 thirty-nine-week period, Landstar paid income taxes and interest of $ 71,823,000 and $ 2,780,000 , respectively.

During the 2020 thirty-nine-week period, Landstar paid income taxes and interest of $ 28,761,000 and $ 3,087,000 , respectively.

Landstar acquired operating property by entering into finance leases in the amounts of $ 23,080,000 and $ 7,485,000 in the 2021 and 2020 thirty-nine-week periods, respectively.

(6) Segment Information

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

The following table summarizes information about the Company’s reportable business segments as of and for the thirty-nine-week and thirteen-week periods ended September 25, 2021 and September 26, 2020 (in thousands):

Thirty Nine Weeks Ended

September 25, 2021

September 26, 2020

Transportation

6 unchanged sentences

Thirteen Weeks Ended

June 26, 2021

June 27, 2020

September 25, 2021

September 26, 2020

Transportation

5 unchanged sentences

Expenditures on long-lived assets

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.

In the thirty-nine-week and thirteen-week periods ended September 25, 2021 and September 26, 2020, no single customer accounted for more than 10 % of the Company’s consolidated revenue.

(7) 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 twenty-six-week

period ended June 26, 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 thirty-nine-week period ended September 25, 2021 (in thousands):

Holding Gains

3 unchanged sentences

Other comprehensive (loss) gain

Balance as of June 26, 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 twenty-six-week

period ended June 26, 2021.

Balance as of September 25, 2021

(8) Investments

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.

1 unchanged sentence

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.

Unrealized gains, net of unrealized losses, on the investments in the bond portfolio were $ 1,971,000 at September 25, 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 June 26, 2021 and December 26, 2020 (in thousands):

June 26, 2021

investments are as follows at September 25, 2021 and December 26, 2020 (in thousands):

September 25, 2021

Money market investments

8 unchanged sentences

For those available-for-sale

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

investments with unrealized losses at September 25, 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

June 26, 2021

Corporate bonds and direct obligations of

government agencies

September 25, 2021

Asset-backed securities

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.

2 unchanged sentences

Landstar’s noncancelable leases are primarily comprised of finance leases for the acquisition of new trailing equipment.

Each finance lease for the acquisition of trailing equipment is a five year lease with a $ 1 purchase option for the applicable equipment at lease expiration.

Substantially all of Landstar’s operating lease right-of-use

Each finance lease for the acquisition of trailing equipment is a

five year lease with a $

1 purchase option for the applicable equipment at lease expiration.

Substantially all of Landstar’s operating lease

assets and operating lease liabilities represent leases for facilities maintained in support of the Company’s network of BCO Independent Contractors and office space used to conduct Landstar’s business.

These leases do not have significant rent escalation holidays, concessions, leasehold improvement incentives or other build-out

These leases do not have significant rent escalation holidays, concessions, leasehold improvement incentives or other

Further, the leases do not contain contingent rent provisions.

9 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 twenty six weeks ended June 26, 2021 were (in thousands):

The components of lease cost for finance leases and operating leases for the thirty nine weeks ended September 25, 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 June 26, 2021 is as follows (in thousands):

Operating lease right-of-use

A summary of the lease classification on our consolidated balance sheet as of September 25, 2021 is as follows (in thousands):

Finance lease assets

1 unchanged sentence

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 June 26, 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 September 25, 2021 (in thousands):

2021 Remainder

6 unchanged sentences

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:

The weighted average remaining lease term and the weighted average discount rate for finance and operating leases as of September 25, 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 June 26, 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 September 25, 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 June 26, 2021 and December 26, 2020, the Company had no borrowings outstanding under the Credit Agreement.

As of September 25, 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

(11) Commitments and Contingencies

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

Short-term investments include $ 36,644,000 in current maturities of investments held by the Company’s insurance segment at September 25, 2021.

The non-current

2 unchanged sentences

investments, provide collateral for the $ 69,434,000 of letters of credit issued to guarantee payment of insurance claims.

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

As of September 25, 2021, Landstar also had $ 33,577,000 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

(12) Impairment of Intangible and Other Assets

3 unchanged sentences

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.

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.

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.

There was 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 September 25, 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