What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-07-29 compared with 2025-05-13 · 145 added, 70 removed, 280 unchanged (43% of the section changed)

6 unchanged sentences

Such statements are by nature subject to uncertainties and risks, including but not limited to:

trade relationships;

trade relationships and potential or imposed tariffs;

an increase in the frequency or severity of accidents or other claims;

15 unchanged sentences

regulations requiring the purchase and use of zero-emission vehicles;

acquisitions and investments;

intellectual property;

and other operational, financial or legal risks or uncertainties detailed in Landstar’s Form 10-K for the 2024 fiscal year, described in Item 1A “Risk Factors,” in this report or in Landstar’s other Securities and Exchange Commission filings from time to time.

and other operational, financial or legal risks or uncertainties detailed in Landstar’s Form 10-K for the 2024 fiscal year, described in Item 1A “Risk Factors,” in Landstar’s Form 10-Q for the quarterly period ended March 29, 2025, described in Part II, Item A “Risk Factors,” in this report or in Landstar’s other Securities and Exchange Commission filings from time to time.

These risks and uncertainties could cause actual results or events to differ materially from historical results or those anticipated.

17 unchanged sentences

de C.V., and Landstar Blue, LLC.

Transportation services offered by the Company include truckload, less-than-truckload and other truck transportation, rail intermodal, air cargo, ocean cargo, expedited ground and air delivery of time-critical freight, heavy-haul/specialized, cold chain/temperature-controlled, U.S.-Canada and U.S.-Mexico cross-border, intra-Mexico, intra-Canada,

project cargo and customs brokerage.

Examples of the industries serviced by the transportation logistics segment include automotive parts and assemblies, consumer durables, building products, metals, chemicals, foodstuffs, heavy machinery, retail, electronics and military equipment and general commodities.

2 unchanged sentences

Billings for freight transportation services are typically charged to customers on a per shipment basis for the physical transportation of freight and are referred to as transportation revenue.

During the thirteen weeks ended March 29, 2025, revenue generated by BCO Independent Contractors, Truck Brokerage Carriers and railroads represented approximately 37%, 54% and 2%, respectively, of the Company’s consolidated revenue.

Collectively, revenue generated by air and ocean cargo carriers represented approximately 6% of the Company’s consolidated revenue in the thirteen-week period ended March 29, 2025.

During the twenty-six weeks ended June 28, 2025, revenue generated by BCO Independent Contractors, Truck Brokerage Carriers and railroads represented approximately 38%, 54% and 2%, respectively, of the Company’s consolidated revenue.

Collectively, revenue generated by air and ocean cargo carriers represented approximately 5% of the Company’s consolidated revenue in the twenty-six period ended June 28, 2025.

The insurance segment is comprised of Signature Insurance Company (“Signature”), a wholly owned offshore insurance subsidiary, and Risk Management Claim Services, Inc.

2 unchanged sentences

Revenue at the insurance segment represents reinsurance premiums from third party insurance companies that provide insurance programs to BCO Independent Contractors where all or a portion of the risk is ultimately borne by Signature.

Revenue at the insurance segment represented approximately 1% of the Company’s consolidated revenue for the thirteen-week period ended March 29, 2025.

Revenue at the insurance segment represented approximately 1% of the Company’s consolidated revenue for the twenty-six period ended June 28, 2025.

Changes in Financial Condition and Results of Operations

Management believes the Company’s success principally depends on its ability to generate freight revenue through its network of independent commission sales agents and to deliver freight safely and efficiently utilizing third party capacity providers.

Management believes the Company’s success principally depends on its ability to generate freight revenue through its network of independent commission sales agents and to deliver freight safely, securely and efficiently utilizing BCO Independent Contractors and other third party capacity providers.

Management believes the most significant factors to the Company’s success include increasing revenue, sourcing capacity, empowering its network through technology-based tools and controlling costs, including insurance and claims.

9 unchanged sentences

The following table summarizes this information by trailer type for truck transportation and by mode for all others:

Twenty-Six Weeks Ended

Thirteen Weeks Ended

41 unchanged sentences

The following table summarizes the number of available truck capacity providers on the dates indicated:

March 29, 2025

March 30, 2024

June 28, 2025

June 29, 2024

BCO Independent Contractors

23 unchanged sentences

Also included in other operating costs are trailer rental costs and gains/losses, if any, on sales of Company-owned trailing equipment.

As further described in Note 15 in the “Notes to Consolidated Financial Statements” in this Quarterly Report on Form 10-Q, during the last week of the Company’s 2025 first quarter, the Company identified a supply chain fraud relating to the Company’s international freight forwarding operations.

Other operating costs during the twenty-six-week period ended June 28, 2025 included a $4.8 million expense relating to this matter.

In addition, it is anticipated that legal and other professional fees included in selling, general and administrative costs may be slightly elevated during the remainder of the Company’s 2025 fiscal year in connection with this matter.

Insurance and claims

17 unchanged sentences

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 require additional payments of premium in the event of unfavorable loss experience or a refund of premium in the event of favorable loss experience.

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, it is anticipated that during the 2025 second fiscal quarter, the Company will receive a $12,000,000 cash payment from a third party reinsurance provider in the form of a “no claims bonus” due to favorable loss experience with respect to claims incurred during the policy period.

The Company intends to record the receipt of this payment as a deferred gain on the balance sheet until such time as all underlying claims with exposure under the applicable excess layer insurance arrangement are resolved.

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.

As discussed in Part I, Item 2, “ Management’s Discussion and Analysis of Financial Condition and Results of Operations - Legal Matters ,” 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.

A substantial verdict

resulting from the Trial could result in the Company not meeting the requirements relating to the “no claims bonus”.

No assurances can be provided regarding whether the Company will be able to recognize a gain with respect to the “no claims bonus.”

Furthermore, the Company’s third party insurance arrangements provide excess coverage up to an uppermost coverage layer, in excess of which the Company retains additional financial exposure.

6 unchanged sentences

Selling, general and administrative

During the thirteen-week period ended March 29, 2025, employee compensation and benefits accounted for approximately 58% of the Company’s selling, general and administrative costs.

During the twenty-six-week period ended June 28, 2025, employee compensation and benefits accounted for approximately 62% of the Company’s selling, general and administrative costs.

Employee compensation and benefits include wages and employee benefit costs as well as incentive compensation and stock-based compensation expense.

Incentive compensation and stock-based compensation expense is highly variable in nature in comparison to wages and employee benefit costs.

As further described in Note 14 in the “Notes to Consolidated Financial Statements” in this Quarterly Report on Form 10-Q, during the last week of the Company’s 2025 first quarter, the Company identified a supply chain fraud relating to the Company’s international freight forwarding operations.

While remediation and collection efforts continue, selling, general and administrative costs during the thirteen-week period ended March 29, 2025 included a $4.8 million expense relating to this matter.

In addition, it is anticipated that legal and other professional fees may be slightly elevated during the remainder of the Company’s 2025 fiscal year as a result of this matter.

Depreciation and amortization

18 unchanged sentences

The reconciliations of gross profit to variable contribution and gross profit margin to variable contribution margin are each presented below:

Twenty-Six Weeks Ended

Thirteen Weeks Ended

18 unchanged sentences

For revenue generated by Truck Brokerage Carriers, variable contribution margin may be either a fixed or variable percentage, depending on the contract with each individual independent commission sales agent.

agents at a contractually agreed upon percentage of the amount represented by revenue less purchased transportation for these types of shipments.

Approximately 42% of the Company’s consolidated revenue in the thirteen-week period ended March 29, 2025 was generated under transactions that pay a fixed percentage of revenue to the third party capacity provider and/or agents while 58% was generated under transactions that pay a variable percentage of revenue to the third party capacity provider and/or agents.

Variable contribution margin on revenue generated from shipments hauled by railroads, air cargo carriers, ocean cargo carriers and Truck Brokerage Carriers, other than those under retention contracts, is variable in nature, as the Company’s contracts with independent commission sales agents provide commissions to agents at a contractually agreed upon percentage of the amount represented by revenue less purchased transportation for these types of shipments.

Approximately 43% of the Company’s consolidated revenue in the twenty-six-week period ended June 28, 2025 was generated under transactions that pay a fixed percentage of revenue to the third party capacity provider and/or agents while 57% was generated under transactions that pay a variable percentage of revenue to the third party capacity provider and/or agents.

Operating income as a percentage of gross profit and operating income as a percentage of variable contribution

6 unchanged sentences

and (iv) management considers this financial information in its decision-making, such as budgeting for infrastructure, trailing equipment and selling, general and administrative costs.

Twenty-Six Weeks Ended

Thirteen Weeks Ended

4 unchanged sentences

Operating income as % of variable contribution

The decrease in operating income as a percentage of gross profit from the 2024 thirteen-week period to the 2025 thirteen-week period resulted from the decrease of operating income at a more rapid percentage rate than the decrease in gross profit, primarily due to the impact of the Company’s fixed cost infrastructure, principally certain components of selling, general and administrative costs, in comparison to a smaller gross profit base.

The decrease in operating income as a percentage of variable contribution from the 2024 thirteen-week period to the 2025 thirteen-week period resulted from the decrease of operating income at a more rapid percentage rate than the decrease in variable contribution, primarily due to the impact of the Company’s fixed cost infrastructure, principally certain components of selling, general and administrative costs, in comparison to a smaller variable contribution base, and the impact of increased insurance and claims costs during the 2025 thirteen-week period.

The decrease in operating income as a percentage of gross profit from the 2024 twenty-six-week period to the 2025 twenty-six-week period and from the 2024 thirteen-week period to the 2025 thirteen-week period resulted from the decrease of operating income at a more rapid percentage rate than the decrease in gross profit, primarily due to the impact of the Company’s fixed cost infrastructure, principally certain components of selling, general and administrative costs, in comparison to a smaller gross profit base.

The decrease in operating income as a percentage of variable contribution from the 2024 twenty-six-week period to the 2025 twenty-six-week period and from the 2024 thirteen-week period to the 2025 thirteen-week period resulted from the decrease of operating income at a more rapid percentage rate than the decrease in variable contribution, primarily due to the impact of the Company’s fixed cost infrastructure, principally certain components of selling, general and administrative costs, in comparison to a smaller variable contribution base, and the impact of increased insurance and claims costs.

Also, as previously mentioned, the Company reports two operating segments:

7 unchanged sentences

and (4) the insurance segment has no depreciation and amortization.

THIRTEEN WEEKS ENDED MARCH 29, 2025 COMPARED TO THIRTEEN WEEKS ENDED MARCH 30, 2024

TWENTY-SIX WEEKS ENDED JUNE 28, 2025 COMPARED TO TWENTY-SIX WEEKS ENDED JUNE 29, 2024

Revenue for the 2025 twenty-six-week period was $2,363,885,000, a decrease of $32,163,000, or 1%, compared to the 2024 twenty-six-week period.

Transportation revenue decreased $29,175,000, or 1%.

The decrease in transportation revenue was attributable to a decreased number of loads hauled of approximately 1%, while revenue per load was approximately the same as compared to the 2024 twenty-six-week period.

Reinsurance premiums were $29,453,000 and $32,441,000 for the 2025 and 2024 twenty-six-week periods, respectively.

The decrease in revenue from reinsurance premiums was primarily attributable to a decrease in the average number of trucks provided by BCO Independent Contractors in the 2025 twenty-six-week period compared to the 2024 twenty-six-week period.

Truck transportation revenue generated by BCO Independent Contractors and Truck Brokerage Carriers (together, the “third party truck capacity providers”) for the 2025 twenty-six-week period was $2,167,856,000, representing 92% of total revenue, a decrease of $6,765,000, or less than 1%, compared to the 2024 twenty-six-week period.

The number of loads hauled by third party truck capacity providers decreased approximately 1% compared to the 2024 twenty-six-week period, while revenue per load on loads hauled by third party truck capacity providers increased approximately 1% in the 2025 twenty-six-week period compared to the 2024 twenty-six-week period.

The decrease in the number of loads hauled via truck compared to the 2024 twenty-six-week period was primarily due to decreased demand from the 2024 twenty-six-week period for the Company’s less-than-truckload and van transportation services.

Loads hauled via less-than-truckload loadings decreased 7% and loads hauled via van equipment decreased 5%, while loads hauled via other truck transportation services increased 26% and loads hauled via unsided/platform equipment increased 1% as compared to the 2024 twenty-six-week period.

The increase in revenue per load on loads hauled via truck was primarily due to an increased revenue per load on loads hauled via unsided/platform equipment, which was entirely attributable to an increase in the percentage of revenue contributed by heavy/specialized equipment, which typically has a higher revenue per load than standard unsided/platform loadings.

Revenue per load on loads hauled via unsided/platform equipment increased 2% and on loads hauled via other truck transportation services increased 2%, while revenue per load on less-than-truckload loadings decreased 4%.

Revenue per load on loads hauled via van equipment was approximately the same as compared to the 2024 twenty-six-week period.

Fuel surcharges billed to customers on revenue generated by BCO Independent Contractors are excluded from revenue.

Fuel surcharges on Truck Brokerage Carrier revenue identified separately in billings to customers and included as a component of Truck Brokerage Carrier revenue were $54,016,000 and $60,302,000 in the 2025 and 2024 twenty-six-week periods, respectively.

It should be noted that billings to many customers of the Company’s truck brokerage services include a single all-in rate that do not separately identify fuel surcharges on loads hauled via Truck Brokerage Carriers.

Accordingly, the overall impact of changes in fuel prices on revenue and revenue per load on loads hauled via truck is likely to be greater than that indicated.

Transportation revenue generated by rail intermodal, air cargo and ocean cargo carriers (collectively, the “multimode capacity providers”) for the 2025 twenty-six-week period was $155,941,000, or 7% of total revenue, a decrease of $14,441,000, or 8%, compared to the 2024 twenty-six-week period.

Revenue per load on revenue generated by multimode capacity providers decreased approximately 5% in the 2025 twenty-six-week period compared to the 2024 twenty-six-week period, and the number of loads hauled by multimode capacity providers decreased approximately 3% over the same period.

Revenue per load on loads hauled via rail intermodal and ocean decreased 10% and 5%, respectively, while revenue per load on loads hauled via air increased approximately 12% during the 2025 twenty-six-week period as compared to the 2024 twenty-six-week period.

The decrease in revenue per load on loads hauled by rail intermodal carriers was broad-based with decreases at several customers during the 2025 twenty-six-week period.

The decrease in revenue per load on loads hauled by ocean cargo carriers was primarily attributable to one specific customer during the 2025 twenty-six-week period.

The increase in revenue per load on loads hauled by air cargo carriers was primarily attributable to the impact of high value air loadings at one specific customer during the 2025 twenty-six-week period.

Revenue per load on revenue generated by multimode capacity providers is influenced by many factors, including revenue mix among the various modes of transportation used, length of haul, complexity of freight, density of freight lanes, fuel costs and availability of capacity.

The decrease in the number of loads hauled by multimode capacity providers was due to a 5% decrease in air loadings, a 4% decrease in ocean loadings and a 3% decrease in rail loadings.

The 5% decrease in air loadings was broad-based with decreases at several customers.

The 4% decrease in ocean loadings was broad-based with decreases at several customers.

The 3% decrease in rail loadings was primarily attributable to decreased loadings at one specific customer.

Purchased transportation was 77.8% and 77.4% of revenue in the 2025 and 2024 twenty-six-week periods, respectively.

The increase in purchased transportation as a percentage of revenue was primarily due to a decreased percentage of revenue generated by BCO Independent Contractors, which typically has a lower rate of purchased transportation than Truck Brokerage Carriers.

Commissions to agents were 8.2% of revenue in both the 2025 and 2024 twenty-six-week periods.

Investment income was $7,327,000 and $7,066,000 in the 2025 and 2024 twenty-six-week periods, respectively.

The increase in investment income was attributable to a higher average investment balance held by the insurance segment during the 2025 twenty-six-week period, partially offset by lower average rates of return on investments in the 2025 twenty-six-week period.

Other operating costs increased $2,430,000 in the 2025 twenty-six-week period compared to the 2024 twenty-six-week period.

The increase in other operating costs compared to the prior year was primarily due to an approximately $4,800,000 expense relating to the supply chain fraud matter referenced above under “ Expenses - Other operating costs, net of gains on asset sales/dispositions” and increased trailer equipment maintenance costs, partially offset by increased gains on sales of operating property.

Insurance and claims increased $16,869,000 in the 2025 twenty-six-week period compared to the 2024 twenty-six-week period.

The increase in insurance and claims expense compared to the prior year was primarily due to increased net unfavorable development of prior years’ claims in the 2025 twenty-six-week period and increased severity of current year trucking and cargo claims during the 2025 twenty-six-week period, partially offset by decreased BCO miles traveled during the 2025 twenty-six-week period.

During the 2025 and 2024 twenty-six-week periods, insurance and claims costs included $13,641,000 and $2,116,000 of net unfavorable adjustments to prior years’ claims estimates, respectively.

Selling, general and administrative costs increased $5,927,000 in the 2025 twenty-six-week period compared to the 2024 twenty-six-week period.

The increase in selling, general and administrative costs compared to prior year was primarily attributable to increased project consulting fees, increased wages, increased employee benefit costs, primarily attributable to increased medical and pharmacy costs under the self-insured portion of the Company’s medical plan, increased legal fees and increased annual agent convention costs, partially offset by the impact of Chief Executive Officer (“CEO”) transition costs on the 2024 twenty-six-week period.

Depreciation and amortization decreased $4,255,000 in the 2025 twenty-six-week period compared to the 2024 twenty-six-week period.

The decrease in depreciation and amortization expense was primarily due to decreased depreciation on information technology software in the 2025 twenty-six-week period.

The year-over-prior-year change in interest and debt expense (income) was $3,825,000, with net interest and debt expense of $539,000 in the 2025 twenty-six-week period compared to net interest and debt income of $3,286,000 in the 2024 twenty-six-week period.

The increase in interest and debt expense (income) was primarily attributable to decreased interest income earned on cash balances held by the transportation logistics segment and increased interest expense related to finance lease obligations.

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 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.

Net income was $71,699,000, or $2.05 per basic and diluted share, in the 2025 twenty-six-week period.

Net income was $99,720,000, or $2.79 per basic and diluted share, in the 2024 twenty-six-week period.

THIRTEEN WEEKS ENDED JUNE 28, 2025 COMPARED TO THIRTEEN WEEKS ENDED JUNE 29, 2024

Revenue for the 2025 thirteen-week period was $1,211,383,000, a decrease of $13,622,000, or 1%, compared to the 2024 thirteen-week period.

Transportation revenue decreased $12,388,000, or 1%.

The decrease in transportation revenue was attributable to a decreased number of loads hauled of approximately 1% while revenue per load was approximately the same as compared to the 2024 thirteen-week period.

The decrease in transportation revenue was attributable to a decreased number of loads hauled of approximately 2%, partially offset by an increased revenue per load of approximately 1% as compared to the 2024 thirteen-week period.

Reinsurance premiums were $14,696,000 and $15,930,000 for the 2025 and 2024 thirteen-week periods, respectively.

The decrease in revenue from reinsurance premiums was primarily attributable to a decrease in the average number of trucks provided by BCO Independent Contractors in the 2025 thirteen-week period compared to the 2024 thirteen-week period.

Truck transportation revenue generated by BCO Independent Contractors and Truck Brokerage Carriers (together, the “third party truck capacity providers”) for the 2025 thirteen-week period was $1,049,718,000, representing 91% of total revenue, a decrease of $19,214,000, or 2%, compared to the 2024 thirteen-week period.

The number of loads hauled by third party truck capacity providers decreased approximately 1% compared to the 2024 thirteen-week period, and revenue per load on loads hauled by third party truck capacity providers decreased approximately 1% in the 2025 thirteen-week period compared to the 2024 thirteen-week period.

The decrease in the number of loads hauled via truck compared to the 2024 thirteen-week period was primarily due to decreased demand from the 2024 thirteen-week period for the Company’s less-than-truckload, van and unsided/platform transportation services.

Loads hauled via less-than-truckload loadings decreased 12%, loads hauled via van equipment decreased 4% and loads hauled via unsided/platform equipment decreased 1%, while loads hauled via other truck transportation services increased 31% as compared to the 2024 thirteen-week period.

The decrease in revenue per load on loads hauled via truck was primarily due to a shorter average length of haul and the impact of lower diesel fuel costs on loads hauled via Truck Brokerage Carriers.

Revenue per load on loads hauled via other truck transportation services decreased 3%, on loads hauled via van equipment decreased 2% and on less-than-truckload loadings decreased 1%.

Revenue per load on loads hauled via unsided/platform equipment was approximately the same as compared to the 2024 thirteen-week period.

Truck transportation revenue generated by third party truck capacity providers for the 2025 thirteen-week period was $1,118,138,000, representing 92% of total revenue, an increase of $12,449,000, or 1%, compared to the 2024 thirteen-week period.

Revenue per load on loads hauled by third party truck capacity providers increased approximately 3%, while the number of loads hauled by third party truck capacity providers decreased approximately 1% in the 2025 thirteen-week period compared to the 2024 thirteen-week period.

The increase in revenue per load on loads hauled via truck was primarily due to an increased revenue per load on loads hauled via unsided/platform equipment, which was primarily attributable to an increase in the percentage of revenue contributed by heavy/specialized equipment, which typically has a higher revenue per load than standard unsided/platform loadings, an increased revenue per load on loads hauled via other truck transportation services and an increase in revenue per load on loads hauled via van equipment.

Revenue per load on loads hauled via other truck transportation services increased 6%, on loads hauled via unsided/platform equipment increased 3% and on loads hauled via van equipment increased 1%, while revenue per load on less-than-truckload loadings decreased 7%.

The decrease in the number of loads hauled via truck compared to the 2024 thirteen-week period was primarily due to decreased demand from the 2024 thirteen-week period for the Company’s van and less-than-truckload transportation services.

Loads hauled via van equipment decreased 6% and loads hauled via less-than-truckload loadings decreased 3%, while loads hauled via other truck transportation services increased 22% and loaded hauled via unsided/platform equipment increased 2% as compared to the 2024 thirteen-week period.

Fuel surcharges billed to customers on revenue generated by BCO Independent Contractors are excluded from revenue.

Fuel surcharges on Truck Brokerage Carrier revenue identified separately in billings to customers and included as a component of Truck Brokerage Carrier revenue were $27,091,000 and $30,269,000 in the 2025 and 2024 thirteen-week periods, respectively.

Accordingly, the overall impact of changes in fuel prices on revenue and revenue per load on loads hauled via truck is likely to be greater than that indicated.

Transportation revenue generated by rail intermodal, air cargo and ocean cargo carriers (collectively, the “multimode capacity providers”) for the 2025 thirteen-week period was $83,124,000, or 7% of total revenue, an increase of $6,355,000, or 8%, compared to the 2024 thirteen-week period.

Revenue per load on revenue generated by multimode capacity providers increased approximately 13% in the 2025 thirteen-week period compared to the 2024 thirteen-week period, while the number of loads hauled by multimode capacity providers decreased approximately 4% over the same period.

Revenue per load on loads hauled via air and ocean increased 19% and 14%, respectively, while rail intermodal decreased approximately 10% during the 2025 thirteen-week period as compared to the 2024 thirteen-week period.

The increase in revenue per load on loads hauled by ocean cargo carriers was primarily attributable to one specific customer during the 2025 thirteen-week period.

Transportation revenue generated by multimode capacity providers for the 2025 thirteen-week period was $72,817,000, or 6% of total revenue, a decrease of $20,796,000, or 22%, compared to the 2024 thirteen-week period.

Revenue per load on revenue generated by multimode capacity providers decreased approximately 20% in the 2025 thirteen-week period compared to the 2024 thirteen-week period, and the number of loads hauled by multimode capacity providers decreased approximately 3% over the same period.

Revenue per load on loads hauled via ocean and rail intermodal decreased 20% and 9%, respectively, while revenue per load on loads hauled via air increased approximately 5% during the 2025 thirteen-week period as compared to the 2024 thirteen-week period.

The decrease in revenue per load on loads hauled by ocean cargo carriers was primarily attributable to one specific customer during the 2025 thirteen-week period.

The decrease in revenue per load on loads hauled by rail intermodal carriers was primarily attributable to one specific agency during the 2025 thirteen-week period.

The increase in revenue per load on loads hauled by air cargo carriers was primarily attributable to the impact of high value air loadings at several specific customers during the 2025 thirteen-week period.

The decrease in the number of loads hauled by multimode capacity providers was due to a 14% decrease in rail loadings and a 1% decrease in air loadings, partially offset by a 7% increase in ocean loadings.

The 14% decrease in rail loadings was primarily attributable to decreased loadings at one specific agency.

The 7% increase in ocean loadings was broad-based with increases at several customers.

The decrease in the number of loads hauled by multimode capacity providers was due to a 14% decrease in ocean loadings and an 8% decrease in air loadings, partially offset by an 8% increase in rail loadings.

The 14% decrease in ocean loadings was broad-based with decreases at several customers.

The 8% decrease in air loadings was primarily attributable to decreased loadings at one specific customer.

The 8% increase in rail loadings was primarily attributable to increased loadings at one specific agency.

Purchased transportation was 77.7% and 77.6% of revenue in the 2025 and 2024 thirteen-week periods, respectively.

The increase in purchased transportation as a percentage of revenue was primarily due to an increased rate of purchased transportation on revenue generated by Truck Brokerage Carriers.

Commissions to agents were 8.2% and 8.1% of revenue in the 2025 and 2024 thirteen-week periods, respectively.

The decrease in commissions to agents as a percentage of revenue was primarily attributable to an increased cost of purchased transportation as a percentage of revenue on revenue generated by Truck Brokerage Carriers.

The increase in commissions to agents as a percentage of revenue was primarily attributable to a decreased cost of purchased transportation as a percentage of revenue on revenue generated by multimode capacity providers.

Investment income was $3,729,000 and $3,654,000 in the 2025 and 2024 thirteen-week periods, respectively.

The increase in investment income was attributable to a higher average investment balance held by the insurance segment during the 2025 thirteen-week period, partially offset by lower average rates of return on investments in the 2025 thirteen-week period.

Other operating costs decreased $3,030,000 in the 2025 thirteen-week period compared to the 2024 thirteen-week period.

The decrease in other operating costs compared to the prior year was primarily due to a decreased provision for contractor bad debt and increased gains on sales of operating property.

Other operating costs increased $5,460,000 in the 2025 thirteen-week period compared to the 2024 thirteen-week period.

The increase in other operating costs compared to the prior year was primarily due to the reclassification of the approximately $4,800,000 expense relating to the supply chain fraud matter referenced above under “ Expenses - Other operating costs, net of gains on asset sales/dispositions ” from selling, general and administrative costs and increased trailer equipment maintenance costs, partially offset by gains on sales of operating property.

Insurance and claims increased $3,285,000 in the 2025 thirteen-week period compared to the 2024 thirteen-week period.

The increase in insurance and claims expense compared to the prior year was primarily due to increased net unfavorable development of prior years’ claims in the 2025 thirteen-week period and increased severity of current year trucking and cargo claims during the 2025 thirteen-week period, partially offset by decreased BCO miles traveled during the 2025 thirteen-week period.

The increase in insurance and claims expense compared to the prior year was primarily due to increased severity of current year trucking and cargo claims during the 2025 thirteen-week period and increased net unfavorable development of prior years’ claims in the 2025 thirteen-week period, partially offset by decreased BCO miles traveled during the 2025 thirteen-week period.

During the 2025 and 2024 thirteen-week periods, insurance and claims costs included $2,289,000 and $989,000 of net unfavorable adjustments to prior years’ claims estimates, respectively.

Selling, general and administrative costs increased $767,000 in the 2025 thirteen-week period compared to the 2024 thirteen-week period.

The increase in selling, general and administrative costs compared to prior year was primarily attributable to an approximately $4,800,000 expense relating to the supply chain fraud matter referenced above under “ Expenses—Selling, general and administrative” and increased project consulting fees, partially offset by a decreased provision for incentive compensation and the impact of Chief Executive Officer (“CEO”) transition costs on the 2024 thirteen-week period.

Included in selling, general and administrative costs was incentive compensation expense of $1,000,000 and $2,853,000 for the 2025 and 2024 thirteen-week periods, respectively.

The increase in selling, general and administrative costs compared to prior year was primarily attributable to an increased provision for incentive compensation, increased project consulting fees, increased employee benefit costs, primarily attributable to increased medical and pharmacy costs under the self-insured portion of the Company’s medical plan, increased wages and increased costs associated with the Company’s annual agent convention, mostly offset by the reclassification of the approximately $4,800,000 expense relating to the supply chain fraud matter referenced above under “ Expenses - Other operating costs, net of gains on asset sales/dispositions” to other operating costs.

Included in selling, general and administrative costs was incentive compensation expense of $950,000 and a reduction to the Company’s provision for incentive compensation of $1,398,000 for the 2025 and 2024 thirteen-week periods, respectively.

Depreciation and amortization decreased $2,339,000 in the 2025 thirteen-week period compared to the 2024 thirteen-week period.

The decrease in depreciation and amortization expense was primarily due to decreased depreciation on information technology software in the 2025 thirteen-week period.

Net interest and debt income decreased $1,452,000 in the 2025 thirteen-week period compared to the 2024 thirteen-week period.

The decrease in interest and debt income was primarily attributable to decreased interest income earned on cash balances held by the transportation logistics segment and increased interest expense related to finance lease obligations.

The year-over-prior-year change in interest and debt expense (income) was $2,373,000, with net interest and debt expense of $698,000 in the 2025 thirteen-week period compared to net interest and debt income of $1,675,000 in the 2024 thirteen-week period.

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.

6 unchanged sentences

CAPITAL RESOURCES AND LIQUIDITY

Working capital and the ratio of current assets to current liabilities were $629,307,000 and 2.0 to 1, respectively, at March 29, 2025, compared with $646,713,000 and 2.0 to 1, respectively, at December 28, 2024.

Working capital and the ratio of current assets to current liabilities were $618,207,000 and 2.0 to 1, respectively, at June 28, 2025, compared with $646,713,000 and 2.0 to 1, respectively, at December 28, 2024.

Landstar has historically operated with current ratios within the range of 1.5 to 1 to 2.0 to 1.

Cash provided by operating activities was $55,698,000 in the 2025 thirteen-week period compared with $94,208,000 in the 2024 thirteen-week period.

The decrease in cash flow provided by operating activities was primarily attributable to decreased net income and decreased favorable net working capital impacts in connection with decreased net receivables, defined as accounts receivable less accounts payable.

The Company declared and paid $0.36 per share, or $12,688,000 in the aggregate, in cash dividends during the thirteen-week period ended March 29, 2025 and, during such period, also paid $70,632,000 of dividends payable which were declared in December 2024 and included in current liabilities in the consolidated balance sheet at December 28, 2024.

The Company declared and paid $0.33 per share, or $11,802,000 in the aggregate, in cash dividends during the thirteen-week period ended March 30, 2024 and, during such period, also paid $71,433,000 of dividends payable which were declared in December 2023 and included in current liabilities in the consolidated balance sheet at December 30, 2023.

During the thirteen-week period ended March 29, 2025, the Company purchased 386,318 shares of its

common stock at a total cost of $60,945,000, including $60,361,000 in cash purchases and accrued excise tax of $584,000, which is included in other current liabilities in the consolidated balance sheet at March 29,2025.

During the thirteen-week period ended March 30, 2024, the Company did not purchase any shares of its common stock.

As of March 29, 2025, the Company may purchase in the aggregate up to 2,161,663 shares of its common stock under its authorized stock purchase programs.

Long-term debt, including current maturities, was $93,968,000 at March 29, 2025, $8,339,000 lower than at December 28, 2024.

Shareholders’ equity was $930,755,000, or 91% of total capitalization (defined as long-term debt including current maturities plus equity), at March 29, 2025, compared to $972,439,000, or 90% of total capitalization, at December 28, 2024.

The decrease in shareholders’ equity was primarily the result of purchases of shares of the Company’s common stock and dividends declared by the Company, partially offset by the result of net income in the 2025 thirteen-week period.

Cash provided by operating activities was $62,836,000 in the 2025 twenty-six-week period compared with $142,343,000 in the 2024 twenty-six-week period.

The decrease in cash flow provided by operating activities was primarily attributable to the unfavorable impact of net working capital in connection with increased net receivables, defined as accounts receivable less accounts payable, and decreased net income.

The Company declared and paid $0.76 per share, or $26,604,000 in the aggregate, in cash dividends during the twenty-six-week period ended June 28, 2025 and, during such period, also paid $70,632,000 of dividends payable which were declared in December 2024 and included in current liabilities in the consolidated balance sheet at December 28, 2024.

The Company declared and paid $0.66 per share, or $23,579,000 in the aggregate, in cash dividends during the twenty-six-week period ended June 29, 2024 and, during such period, also paid $71,433,000 of dividends payable which were declared in December 2023 and included in current liabilities in the consolidated balance sheet at December 30, 2023.

During the twenty-six-week period ended June 28, 2025, the Company purchased 686,459 shares of 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 twenty-six-week period ended June 29, 2024, the Company purchased 315,649 shares of 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.

As of June 28, 2025, the Company may purchase in the aggregate up to 1,861,522 shares of its common stock under its authorized stock purchase programs.

Long-term debt, including current maturities, was $85,424,000 at June 28, 2025, $16,883,000 lower than at December 28, 2024.

Shareholders’ equity was $921,826,000, or 92% of total capitalization (defined as long-term debt including current maturities plus equity), at June 28, 2025, compared to $972,439,000, or 90% of total capitalization, at 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”).

8 unchanged sentences

The Company is currently in compliance with all of the debt covenants under the Credit Agreement.

At March 29, 2025, the Company had no borrowings outstanding and $35,250,000 of letters of credit outstanding under the Credit Agreement.

At March 29, 2025, there was $264,750,000 available for future borrowings under the Credit Agreement and access to an additional $300,000,000 under the Credit Agreement’s “accordion” feature.

In addition, the Company has $74,321,000 in letters of credit outstanding as collateral for insurance claims that are secured by investments totaling $82,579,000 at March 29, 2025.

At June 28, 2025, the Company had no borrowings outstanding and $35,415,000 of letters of credit outstanding under the Credit Agreement.

At June 28, 2025, there was $264,585,000 available for future borrowings under the Credit Agreement and access to an additional $300,000,000 under the Credit Agreement’s “accordion” feature.

In addition, the Company has $74,321,000 in letters of credit outstanding as collateral for insurance claims that are secured by investments totaling $82,579,000 at June 28, 2025.

Investments, all of which are carried at fair value, include primarily investment-grade bonds, asset-backed securities, commercial paper and U.S.

5 unchanged sentences

In addition, a significant portion of the trailing equipment used by the Company is provided by third party capacity providers, thereby reducing the Company’s capital requirements.

During the 2025 thirteen-week period, the Company purchased $1,902,000 of operating property.

During the 2025 twenty-six-week period, the Company purchased $4,383,000 of operating property.

Landstar anticipates acquiring either by purchase or lease financing during the remainder of fiscal year 2025 approximately $30,000,000 in operating property consisting primarily of new trailing equipment to replace older trailing equipment and information technology hardware and software.

Management believes that cash flow from operations combined with the Company’s borrowing capacity under the Credit Agreement will be adequate to meet Landstar’s debt service requirements, fund continued growth, both internal and through acquisitions, pay dividends, complete the authorized share purchase programs and meet working capital needs.

Management believes that available cash and cash flow from operations combined with the Company’s borrowing capacity under the Credit Agreement will be adequate to meet Landstar’s debt service requirements, fund continued growth, both internal and through acquisitions, pay dividends, complete the authorized share purchase programs and meet working capital needs.

LEGAL MATTERS

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

On July 22, 2025, a jury trial (the “Trial”) began in state court in El Paso County, Texas, in the matter of Eduardo Cabral, et.

Landstar Ranger, Inc., et.

al., in connection with a tragic vehicular accident (the “Accident”) that occurred on December 31, 2021, on I-10 in Hudspeth County, Texas.

The Accident involved a collision between a recreational vehicle, or RV, rented and occupied by ten members of the Cabral family and a tractor-trailer owned and operated by an independent trucking company named MyUniverse, Inc., a California-based motor carrier licensed by the U.S.

Department of Transportation.

Landstar Ranger, Inc., a wholly-owned subsidiary of the Company (“Landstar Ranger”), arranged the transportation of the shipment contained in the tractor-trailer owned by MyUniverse 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 MyUniverse truck and the conduct of the MyUniverse driver in connection with the Accident.

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 and the ultimate financial impact, as well as the timing of the ultimate resolution of this matter, are difficult to predict.

The ultimate resolution of this matter could have a material negative effect on the results of operations in the quarter or year in which such ultimate resolution occurs.

As previously disclosed in the Company’s Quarterly Report on Form 10-Q for the 2025 first quarter, 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 provide for a refund of premium in the event of favorable loss experience.

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.

On the first business day of the 2025 third fiscal quarter, the Company received the remaining $3,000,000 cash payment.

A substantial verdict resulting from the Trial could result in the Company not meeting the requirements relating to the “no claims bonus”.

No assurances can be provided regarding whether the Company will be able to recognize a gain with respect to the “no claims bonus.”

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.

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.

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 other 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.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

4 unchanged sentences

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

During the 2025 and 2024 thirteen-week periods, insurance and claims costs included $11,352,000 and $1,127,000 of net unfavorable adjustments to prior years’ claims estimates, respectively.

It is reasonably likely that the ultimate outcome of settling all outstanding claims will be more or less than the estimated claims liability at March 29, 2025, primarily due to the inherent difficulty in estimating the severity of commercial trucking claims and the potential judgment or settlement amount that may be incurred in connection with the resolution of such claims.

During the 2025 and 2024 twenty-six-week periods, insurance and claims costs included $13,641,000 and $2,116,000 of net unfavorable adjustments to prior years’ claims estimates, respectively.

It is reasonably likely that the ultimate outcome of settling all outstanding claims will be more or less than the estimated claims liability at June 28, 2025, primarily due to the inherent difficulty in estimating the severity of commercial trucking claims and the potential judgment or settlement amount that may be incurred in connection with the resolution of such claims.

Significant variances from the Company’s estimates for the ultimate resolution of self-insured claims could be expected to positively or negatively affect Landstar’s earnings in a given quarter or year.

3 unchanged sentences

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 2. Management’s Discussion and Analysis