What changed in this filing

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Item 1. Financial Statements

2025-07-29 compared with 2025-05-13 · 137 added, 78 removed, 359 unchanged (37% 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 29, 2025 are not necessarily indicative of the results that may be expected for the entire fiscal year ending December 27, 2025.

Operating results for the twenty-six

weeks ended June 28, 2025 are not necessarily indicative of the results that may be expected for the entire fiscal year ending December 27, 2025.

These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 2024 Annual Report on Form 10-K.

24 unchanged sentences

Shareholders’ Equity

Common stock, $ 0.01 par value, authorized 160,000,000 shares, issued 68,581,772

and 68,559,269

Common stock, $ 0.01 par value, authorized 160,000,000 shares, issued 68,589,418 and 68,559,269 shares

Additional paid-in

20 unchanged sentences

Operating income

Interest and debt (income) expense

Interest and debt expense (income)

Income before income taxes

7 unchanged sentences

(Dollars in thousands)

Twenty-Six Weeks Ended

Thirteen Weeks Ended

3 unchanged sentences

Foreign currency translation gains (losses)

Other comprehensive income

Other comprehensive income (loss)

Comprehensive income

4 unchanged sentences

(Dollars in thousands)

Thirteen Weeks Ended

OPERATING ACTIVITIES

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(Increase) decrease in trade and other accounts receivable

Decrease in other assets

Increase (decrease) in accounts payable

Increase in other liabilities

Increase (decrease) in insurance claims

Increase in other assets

Increase in accounts payable

Increase (decrease) in other liabilities

Increase in insurance claims

NET CASH PROVIDED BY OPERATING ACTIVITIES

4 unchanged sentences

Proceeds from sales of operating property

NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES

NET CASH USED BY INVESTING ACTIVITIES

FINANCING ACTIVITIES

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Thirteen Weeks Ended March 29, 2025 and March 30, 2024

and Thirteen Weeks Ended June 28, 2025 and June 29, 2024

(Dollars in thousands)

9 unchanged sentences

Balance March 29, 2025

Dividends ($ 0.40

Purchases of common stock

Issuance of stock related to stock-based compensation plans

Stock-based compensation

Other comprehensive income

Balance June 28, 2025

Treasury Stock at Cost

7 unchanged sentences

Balance March 30, 2024

Dividends ($ 0.33 per share)

Purchases of common stock

Issuance of stock related to stock-based compensation plans

Stock-based compensation

Other comprehensive loss

Balance June 29, 2024

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 29, 2025 and March 30, 2024 (dollars in thousands):

and thirteen-week periods ended June 28, 2025 and June 29, 2024 (dollars in thousands):

Thirteen Weeks Ended

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Share-based Payment Arrangements

As of March 29, 2025, the Company has an employee equity incentive plan, the 2011 equity incentive plan (the “2011 EIP”).

As of June 28, 2025, 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 2022 Directors Stock Compensation Plan (the “2022 DSCP”).

1 unchanged sentence

The 2011 EIP and 2022 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 29, 2025 and March 30, 2024 were tax deficiencies (excess tax benefits) from stock-based awards of $

51,000 and ($ 729,000 ), respectively.

As of March 29, 2025, there were 181,450 shares of the Company’s common stock reserved for issuance under the 2022 DSCP and 2,671,437 shares of the Company’s common stock reserved for issuance under the 2011 EIP.

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

periods ended June 28, 2025 and June 29, 2024 were tax deficiencies (excess tax benefits) from stock-based awards of $ 104,000 and ($ 799,000 ), respectively.

As of June 28, 2025, there were 174,149 shares of the Company’s common stock reserved for issuance under the 2022 DSCP and 2,672,870 shares of the Company’s common stock reserved for issuance under the 2011 EIP.

Restricted Stock Units

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Outstanding at December 28, 2024

Outstanding at March 29, 2025

During the thirteen-week period ended March 29, 2025, the Company granted RSUs with a performance condition and RSUs with a market condition, as further described below.

Outstanding RSUs at both December 28, 2024 and March 29, 2025 include RSUs with a performance condition and RSUs with a market condition, as further described below and in the Company’s 2024 Annual Report on Form 10-K.

Outstanding at June 28, 2025

During the twenty-six-week

period ended June 28, 2025, the Company granted RSUs with a performance condition and RSUs with a market condition, as further described below.

Outstanding RSUs at both December 28, 2024 and June 28, 2025 include RSUs with a performance condition and RSUs with a market condition, as further described below and in the Company’s 2024 Annual Report on Form 10-K.

RSUs with a performance condition granted on January 31, 2025 and February 3, 2025 may vest on January 31 of 2028, 2029 and 2030 based on growth in operating income and pre-tax

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Previously recognized compensation cost would be reversed only if the employee did not complete the requisite service period due to termination of employment.

The Company recognized approximately $ 857,000 and $ 632,000 of share-based compensation expense related to RSU awards in the thirteen-week periods ended March 29, 2025 and March 30, 2024, respectively.

As of March 29, 2025, there was a maximum of $ 53.3 million of total unrecognized compensation cost related to RSU awards granted under the Plans with an expected average remaining life of approximately 3.5 years.

The Company recognized approximately $ 1,253,000 and $ 1,315,000 of share-based compensation expense related to RSU awards in the twenty-six-week

periods ended June 28, 2025 and June 29, 2024, respectively.

As of June 28, 2025, there was a maximum of $ 52.5 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.

6 unchanged sentences

at December 28, 2024

at March 29, 2025

at June 28, 2025

The fair value of each share of non-vested

6 unchanged sentences

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

As of March 29, 2025, there was $ 7,119,000 of total unrecognized compensation cost related to non-vested

As of June 28, 2025, there was $ 6,981,000 of total unrecognized compensation cost related to non-vested

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

1 unchanged sentence

shares of restricted stock and Deferred Stock Units is expected to be recognized over a weighted average period of 1.9 years.

The provisions for income taxes for the 2025 and 2024 thirteen-week periods were based on estimated annual effective income tax rates of 24.3 % and 24.5 %, respectively, adjusted for discrete events, such as benefits resulting from stock-based awards.

The effective income tax rate for the 2025 thirteen-week period was 24.7 %.

The provisions for income taxes for the 2025 and 2024 twenty-six-week

periods were based on estimated annual effective income tax rates of 24.3 % and 24.5 %, respectively, adjusted for discrete events, such as benefits resulting from stock-based awards.

The effective income tax rate for the 2025 twenty-six-week

period was 24.7 %.

The effective income tax rate was higher than the statutory federal income tax rate of 21 % in the 2025 period primarily attributable to state taxes.

The effective income tax rate for the 2024 thirteen-week period was 23.5 %.

The effective income tax rate was higher than the statutory federal income tax rate of 21 % in the 2024 period primarily attr ibut

able to state taxes.

The effective income tax rate for the 2024 twenty-six-week

period was 24.1 %.

The effective income tax rate was higher than the statutory federal income tax rate of 21 % in the 2024 period primarily attributable to state taxes.

Earnings Per Share

3 unchanged sentences

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.

Accordingly, the Company had no reconciling items between the average number of common shares outstanding used to calculate basic earnings per common share and the average number of common shares and common share equivalents outstanding used to calculate diluted earnings per share during each of the 2025 and 2024 thirteen-week periods.

Additional Cash Flow Information

During the 2025 thirteen-week period, Landstar paid income taxes and interest of $ 480,000 and $ 1,446,000 , respectively.

During the 2024 thirteen-week period, Landstar received income tax refunds, net of income tax payments, of $ 495,000 and paid interest of $ 825,000 .

Landstar did not acquire any operating property by entering into finance leases in the 2025 thirteen-week period.

Landstar acquired operating property by entering into finance leases in the amount of $

1,325,000 in the 2024 thirteen-week period.

During the 2025 thirteen-week period, the Company purchased its common stock at a total cost of $

60,945 ,000, including $

60,361 ,000 in cash purchases and acc

ued excise tax of $

which is included in other current liabilities in the consolidated balance sheet at March 29, 2025.

During the 2024 thirteen-week period, the Company did not purchase any shares of its common stock.

During the 2025 twenty-six-week

period, Landstar paid income taxes and interest of $ 33,972,000 and $ 2,816,000 , respectively.

During the 2024 twenty-six-week

period, Landstar paid income taxes and interest of $ 28,096,000 and $ 1,628,000 , respectively.

Landstar did not acquire any operating property by entering into finance leases in the 2025 twenty-six-week

Landstar acquired operating property by entering into finance leases in the amount of $ 17,144,000 in the 2024 twenty-six-week

During the 2025 twenty-six-week

period, the Company purchased its common stock at a total cost of $ 103,295 ,000, including $ 102,300 ,000 in cash purchases and accrued excise tax of $ 995,000 , which is included in other current liabilities in the consolidated balance sheet at June 28, 2025.

During the 2024 twenty-six-week

period, the Company purchased its common stock at a total cost of $ 56,995 ,000, including $ 56,515 ,000 in cash purchases and accrued excise tax of $ 480,000 , which was included in other current liabilities in the consolidated balance sheet at June 29, 2024.

Segment Information

1 unchanged sentence

the transportation logistics segment and the insurance segment.

The Company’s chief

operating decision maker (“CODM”) is our Chief Executive Officer.

The Company’s chief operating decision maker (“CODM”) is our Chief Executive Officer.

The CODM evaluates each segment’s performance and makes decisions about resource allocations primarily based on operating income, which is the principal financial metric utilized to monitor budgeted versus actual results by segment of the Company.

Asset information by segment is not typically provided to the CODM for purposes of evaluating performance or allocating resources, and therefore such information has not been presented.

The following tables summarize information about the Company’s reportable business segments as of and for the thirteen-week periods ended March 29, 2025 and March 30, 2024 (in thousands):

The following tables summarize information about the Company’s reportable business segments as of and for the twenty-six-week

and thirteen-week periods ended June 28, 2025 and June 29, 2024 (in thousands):

June 28, 2025

June 29, 2024

Transportation

External revenue

9 unchanged sentences

Operating income

Interest and debt expense (income) (1)

Income before income taxes

Thirteen Weeks Ended

June 28, 2025

June 29, 2024

Transportation

External revenue

9 unchanged sentences

Operating income

Thirteen Weeks Ended

Operating income

Interest and debt (income) expense (1)

Interest and debt expense (income) (1)

Income before income taxes

Interest and debt (income) expense includes (i) interest income earned on cash balances held by the transportation logistics segment of $ 1,668 and $ 2,500 in the 2025 and 2024 thirteen-week periods, respectively and (ii) consolidated total interest expense of $ 1,509 and $ 889 in the 2025 and 2024 thirteen-week periods, respectively

In the thirteen-week periods ended March 29, 2025 and March 30, 2024, no single customer acco u

nted for more than 10 % of the Company’s consolidated revenue.

Interest and debt expense (income) includes (i) interest income earned on cash balances held by the transportation logistics segment of $ 2,409 and $ 5,045 in the 2025 and 2024 twenty-six-week

periods, respectively, and $ 741 and $ 2,545 in the 2025 and 2024 thirteen-week periods, respectively, and (ii) consolidated total interest expense of $ 2,948 and $ 1,759 in the 2025 and 2024 twenty-six-week

periods, respectively, and $ 1,439 and $ 870 in the 2025 and 2024 thirteen-week periods, respectively.

In the twenty-six-week

periods ended June 28, 2025 and June 29, 2024, 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 (loss) income, net of related income taxes, as of and for the thirteen-week period ended March 29, 2025 (in thousands):

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

period ended June 28, 2025 (in thousands):

Holding (Losses)

Available-for-Sale

Foreign Currency

Balance as of December 28, 2024

Other comprehensive income

Balance as of March 29, 2025

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 29, 2025.

Balance as of June 28, 2025

period ended June 28, 2025.

Investments include primarily investment-grade corporate bonds, asset-backed securities, commercial paper and U.S.

14 unchanged sentences

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

Unrealized losses, net of unrealized gains, on the investments in the bond portfolio were $ 2,345,000 and $ 3,573,000 at March 29, 2025 and December 28, 2024, respectively.

Unrealized losses, net of unrealized gains, on the investments in the bond portfolio were $ 1,603,000 and $ 3,573,000 at June 28, 2025 and December 28, 2024, respectively.

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

investments are as follows at March 29, 2025 and December 28, 2024 (in thousands):

March 29, 2025

investments are as follows at June 28, 2025 and December 28, 2024 (in thousands):

June 28, 2025

Money market investments

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Corporate bonds, commercial paper and direct obligations of government agencies

For those available

investments with unrealized losses at March 29, 2025 and December 28, 2024, the following table summarizes the duration of the unrealized loss (in thousands):

For those available-for-sale

investments with unrealized losses at June 28, 2025 and December 28, 2024, the following table summarizes the duration of the unrealized loss (in thousands):

Less than 12 months

12 months or longer

March 29, 2025

June 28, 2025

Asset-backed securities

Corporate bonds, commercial paper, and direct obligations of government agencies

Treasury obligations

December 28, 2024

3 unchanged sentences

The Company expects to recover, through collection of all of the contractual cash flows of each security, the amortized cost basis of these securities as it does not intend to sell, and does not anticipate being required to sell, these securities before recovery of the cost basis.

For these reasons, no losses have been recognized

in the Company’s consolidated statements of income.

For these reasons, no losses have been recognized in the Company’s consolidated statements of income.

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

14 unchanged sentences

therefore, based on the applicable lease terms and the current economic environment, the Company applies 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 29, 2025 were (in thousands):

The components of lease cost for finance leases and operating leases for the twenty-six

weeks ended June 28, 2025 were (in thousands):

Finance leases:

7 unchanged sentences

Total net lease cost

A summary of the lease classification on the Company’s consolidated balance sheet as of March 29, 2025 is as follows (in thousands):

A summary of the lease classification on the Company’s consolidated balance sheet as of June 28, 2025 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 29, 2025 (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 28, 2025 (in thousands):

2025 Remainder

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Deferred income taxes and other noncurrent liabilities

average remaining lease term and the weighted average discount rate for finance and operating leases as of March 29, 2025 were:

The weighted average remaining lease term and the weighted average discount rate for finance and operating leases as of June 28, 2025 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 29, 2025 and December 28, 2024.

Other than the finance lease obligations as presented on the consolidated balance sheets, the Company had no outstanding debt as of June 28, 2025 and December 28, 2024.

On July 1, 2022, Landstar entered into a second amended and restated credit agreement with a bank syndicate led by JPMorgan Chase Bank, N.A., as administrative agent (as further amended as of June 21, 2024, the “Credit Agreement”).

1 unchanged sentence

The Credit Agreement also includes an “accordion” feature providing for a possible increase of up to an aggregate amount of borrowing capacity of $ 600,000,000 .

As of March 29, 2025, the Company had no borrowings outstanding under the Credit Agreement.

As of June 28, 2025, the Company had no

borrowings outstanding under the Credit Agreement.

The revolving credit loans under the Credit Agreement, at the option of Landstar, bear interest at (i) a forward-looking term rate based on the secured overnight financing rate plus 0.10 % and an applicable margin ranging from 1.25 % to 2.00 %, or (ii) an alternate base rate plus an applicable margin ranging from 0.25 % to 1.00 %, in each case with the applicable margin determined based upon the Company’s Leverage Ratio, as defined in the Credit Agreement, at the end of the most recent applicable fiscal quarter for which financial statements have been delivered.

9 unchanged sentences

Interest rates on borrowings under finance leases approximate the interest rates that would currently be available to the Company under similar terms and, as such, carrying value approximates fair value.

and Contingencies

Short-term investments include $ 56,016,000 in current maturities of investments held by the Company’s insurance segment at March 29, 2025.

Commitments and Contingencies

Short-term investments include $ 66,935,000 in current maturities of investments held by the Company’s insurance segment at June 28, 2025.

The non-current

2 unchanged sentences

investments, provide collateral for the $ 74,321,000 of letters of credit issued to guarantee payment of insurance claims.

As of March 29, 2025, Landstar also had $ 35,250,000 of additional letters of credit outstanding under the Company’s Credit Agreement.

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

As of June 28, 2025, Landstar also had $ 35,415,000 of additional letters of credit outstanding under the Company’s Credi t

On July 22, 2025, a jury trial (the “Trial”) began in state court in El Paso County, Texas, in connection with a tragic vehicular accident (the “Accident”) that occurred on December 31, 2021, near El Paso.

The Accident involved a collision between a recreational vehicle, or RV, rented by a family and a tractor-trailer owned and operated by an independent trucking company licensed by the U.S.

Department of Transportation.

This independent motor carrier was not a Landstar BCO Independent Contractor, but rather was providing truck capacity to Landstar Ranger, Inc., a wholly-owned subsidiary of the Company (“Landstar Ranger”), under a non-exclusive truck brokerage contractual arrangement.

The plaintiffs principally assert that Landstar Ranger acted as a motor carrier rather than as a broker with respect to the shipment involved in the Accident and, as a result, should be determined to be legally responsible for the operation of the independent, non-exclusive truck brokerage carrier involved in the Accident and the conduct of its driver.

Based on knowledge of the facts, available insurance coverage and the analysis of the Company’s outside counsel, an immaterial accrual was included in insurance claims in the Company’s consolidated balance sheet as of June 28, 2025.

No assurances can be provided as to the amount of the verdict that may be entered against Landstar Ranger at the conclusion of the Trial, which is expected to occur during the Company’s 2025 third quarter.

Moreover, the Trial could result in a substantial verdict against Landstar Ranger and could have a material negative effect on the results of operations for the Company’s 2025 third quarter and fiscal year.

The Company intends to preserve its right to appeal any such verdict.

No assurances can be provided as to the probability of success with respect to any potential appeal of any such verdict or the ultimate outcome of any such appeal.

The total cost associated with this matter, which may include post-judgment interest, bonding-related costs and legal and other professional fees, will depend on many factors.

The ultimate financial impact, as well as the timing of the ultimate resolution of this matter, are difficult to predict and could have a material negative effect on the results of operations in the quarter or year in which such ultimate resolution occurs.

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

Many of these claims are covered in whole or in part by insurance.

6 unchanged sentences

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

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 basic and diluted earnings per share set forth in the consolidated statements of income for the thirteen-week periods ended March 29, 2025 and March 30, 2024 (in thousands, except per share amounts):

The following table summarizes the adverse effect of the increase in the cost of insurance claims resulting fro m net u

nfavorable development of prior year self-insured claims estimates on operating income, net income and basic and diluted earnings per share set forth in the consolidated statements of income for the twenty-six-week

and thirteen-week periods ended June 28, 2025 and June 29, 2024 (in thousands, except per share amounts):

Twenty-Six Weeks Ended

Thirteen Weeks Ended

1 unchanged sentence

Basic and diluted earnings per share

The unfavorable development of prior years’ claims during the thirteen-week period ended March 29, 2025 was primarily attributable to elevated cargo loss experience as a result of fraud and theft in the supply chain and several specific commercial trucking claims.

The unfavorable development of prior years’ claims during the twenty-six-week

period ended June 28, 2025 was primarily attributable to elevated cargo loss experience as a result of fraud and theft in the supply chain and several specific commercial trucking claims.

Gain Contingency

The Company does not allow for the recognition of a gain contingency within its consolidated financial statements prior to the settlement of the underlying events or contingencies associated with the gain contingency.

As a result, the consideration related to a gain contingency is recorded in the consolidated financial statements during the period in which all underlying events or contingencies are resolved and the gain is realized.

Within the Company’s third party insurance arrangements providing excess coverage for commercial trucking liabilities, structured arrangements with third party reinsurers within a specific loss layer may include provisions that provide for a refund of premium in the event of favorable loss experience.

During the 2025 second fiscal quarter, with respect to one such three-year commercial auto liability reinsurance arrangement relating to certain excess claims incurred between May 1, 2020 through April 30, 2023, the Company received $

9,000,000 of an

anticipated $ 12,000,000 cash payment from third party reinsurance providers in the form of a “no claims bonus” due to favorable loss experience with respect to claims incurred during the applicable policy period.

The Company recorded this payment as a deferred gain within other current liabilities in the consolidated balance sheet as of June 28, 2025, until such time as all underlying claims with exposure under the applicable excess layer insurance arrangement are resolved and the gain can be recognized.

On the first business day of the 2025 third fiscal quarter, the Company received the remaining $

3,000,000 cash payment.

Recent Accounting Pronouncements

23 unchanged sentences

In connection therewith, the Company concluded that such impact was immaterial with respect to each such fiscal period.

While remediation and collection efforts continue, the Company’s 2025 first quarter financial results included a

$ 4.8 million

$ 0.10 per basic and diluted share, relating to this matter.

The Company’s financial results for the 2025 first quarter and for the twenty-six

week period ended June 28, 2025 included a $

4.8 million pre-tax

expense, or $ 0.10 per basic and diluted share, relating to this matter.

This expense reflects the total currently anticipated aggregate adverse financial impact to Landstar relating to the fraud, net of certain actual and anticipated recoveries and before taking into account the cost of legal and other professional fees as well as additional potential recoveries in the future.

This expense is reflected in 2025 first quarter selling, general & administrative costs as an increase to the provision for customer bad debt expense, resulting in an increase in the allowance for doubtful accounts related to trade accounts receivable.

This expense was reflected in 2025 first quarter selling, general & administrative costs as an increase to the provision for customer bad debt expense, resulting in an increase in the allowance for doubtful accounts related to trade accounts receivable.

In the 2025 second quarter, this expense was reclassified from the provision for customer bad debt expense within selling, general and administrative costs to the provision for contractor bad debt expense within other operating costs due to the finalization of certain agreements with the affected independent commission sales agency during the 2025 second fiscal quarter.

As of the June 28, 2025 consolidated balance sheet, this amount was included in the allowance for doubtful accounts related to other receivables.

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