What changed in this filing

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Item 1A. Risk Factors

2026-02-24 compared with 2025-02-24 · 105 added, 35 removed, 159 unchanged (47% of the section changed)

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Landstar retains liability through a self-insured retention for commercial trucking claims up to $5 million per occurrence.

Historically, these third party insurance arrangements were based on policy year periods beginning on May 1 and ending on the subsequent April 30.

Beginning with the policy year period commencing May 1, 2025, the Company and its third party insurance providers adjusted the applicable policy year period, beginning in 2026, to commence on June 1 and end on the subsequent May 31.

All applicable third party insurance arrangements with a policy period ending April 30, 2026 have been amended to provide for a policy period ending May 31, 2026, as reflected below.

Effective May 1, 2023, the Company entered into a three year commercial auto liability insurance arrangement for losses incurred between $5 million and $10 million (the “2023 Initial Excess Policy”) with a third party insurance company.

For commercial trucking claims incurred on or after May 1, 2023 through April 30, 2026, the 2023 Initial Excess Policy provides for an aggregate deductible of $18 million over the thirty-six-month term ending April 30, 2026.

After payment of the deductible, the 2023 Initial Excess Policy provides for a limit for a single loss of $5 million, with an aggregate limit of $15 million for the thirty-six-month term ending April 30, 2026.

For commercial trucking claims incurred on or after May 1, 2023 through May 31, 2026, the 2023 Initial Excess Policy provides for an aggregate deductible of $18 million over the thirty-seven-month term ending May 31, 2026.

After payment of the deductible, the 2023 Initial Excess Policy provides for a limit for a single loss of $5 million, with an aggregate limit of $15 million for the thirty-seven-month term ending May 31, 2026.

The Company also maintains third party insurance arrangements providing excess coverage for commercial trucking liabilities in excess of $10 million.

These third party arrangements provide coverage on a per occurrence or aggregated basis.

Over the past decade, there has been a significant increase in the prevalence of trials in courts throughout the United States involving catastrophic injury and fatality claims against commercial motor carriers that have resulted in verdicts in excess of $10 million.

Over the past fifteen years, there has been a significant increase in the occurrence of trials in courts throughout the United States involving catastrophic injury and fatality claims against commercial motor carriers that have resulted in verdicts in excess of $10 million.

Within the transportation logistics industry, these verdicts are often referred to as “Nuclear Verdicts.” The increase in Nuclear Verdicts has had a significant impact on the cost of commercial auto liability claims throughout the United States.

Due to the increasing cost of commercial auto liability claims, the availability of excess coverage has significantly decreased, and the pricing associated with such excess coverage, to the extent available, has significantly increased.

Since the annual policy year ended April 30, 2020, as compared to the annual policy year ending April 30, 2025, the Company experienced an increase of approximately $22 million, or over 400%, in the premiums charged by third party insurance companies to the Company for excess coverage for commercial trucking liabilities in excess of $10 million.

Moreover, the Company from year to year manages the level of its financial exposure to commercial trucking claims in excess of $10 million, including through the use of additional self-insurance, deductibles, aggregate loss limits, quota shares and other arrangements with third party insurance companies, based on the availability of coverage within certain excess insurance coverage layers and estimated cost differentials between proposed premiums from third party insurance companies and historical and actuarially projected losses experienced by the Company at various levels of excess insurance coverage.

For example, with respect to a single hypothetical claim in the amount of $65 million incurred during the annual policy year ending April 30, 2025, the Company would have an aggregate financial exposure of approximately $30 million.

Since the annual policy year ended April 30, 2020, as compared to the annual policy year ending May 31, 2026, the Company experienced an increase of approximately $22 million, or approximately 400%, in the premiums charged by third party insurance companies to the Company for excess coverage for commercial trucking liabilities in excess of $10 million.

In addition to the significant increase in the cost to motor carriers relating to commercial auto liability claims throughout the United States, there has also been a very significant increase throughout the United States in the number of, and potential loss exposure associated with, claims asserted against freight brokers in connection with accidents involving motor carriers the freight broker has engaged and contracted with to haul a shipment.

The claims asserted against freight brokers often involve claims of

negligent selection of the motor carrier who was involved in the relevant accident.

Within the transportation logistics industry, these matters are often referred to as “Broker Liability Claims.” For example, see the discussion of the Cabral Matter (as defined below) in Item 7, “ Management’s Discussion and Analysis of Financial Condition and Results of Operations — Legal Proceedings.

” There is currently significant legal uncertainty regarding Broker Liability Claims as state and federal courts across the United States are divided as to whether such claims are preempted by federal law under the FAAAA, or are subject to the “safety exception” under the FAAAA.

The matter of Montgomery v.

Caribe Transport II, LLC, in which the Company is not a party, is currently pending before the U.S.

Supreme Court and may result in a ruling relating to federal preemption of Broker Liability Claims under the FAAAA.

No assurances can be provided as to any such ruling by the U.S.

Supreme Court, the timing thereof, or the impact any such ruling may have on pending or future Broker Liability Claims asserted against the Company, including the Cabral Matter.

Moreover, the Company from year to year manages the level of its financial exposure to commercial trucking claims in excess of $10 million, including through the use of additional self-insurance, deductibles, aggregate loss limits, quota shares and other structured arrangements with third party insurance companies, based on the availability of coverage within certain excess insurance coverage layers and estimated cost differentials between proposed premiums from third party insurance companies and historical and actuarially projected losses experienced by the Company at various levels of excess insurance coverage.

For example, with respect to a single hypothetical claim in the amount of $65 million incurred during the annual policy year ending May 31, 2026, the Company would have an aggregate financial exposure of approximately $36 million.

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.

During the 2025 fiscal year, 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 $12,000,000 of cash payments 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.

As further described in Note 11 in the “Notes to Consolidated Financial Statements” in this Annual Report on Form 10-K, in connection with the Judgment (as defined below) in the Cabral Matter, the Company has recorded the “no claims bonus” within current insurance claims in the consolidated balance sheet as of December 27, 2025.

The Company intends to vigorously appeal the Cabral Matter, including the Judgment;

however, no assurances can be provided regarding whether the Company will ultimately be able to recognize a gain with respect to the “no claims bonus.” For more information about the Cabral Matter, see Item 7, “ Management’s Discussion and Analysis of Financial Condition and Results of Operations – Legal Proceedings .”

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.

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Moreover, the occurrence of a Nuclear Verdict, or the settlement of a catastrophic injury and/or fatality claim that could have otherwise resulted in a Nuclear Verdict, could have a material adverse effect on Landstar’s cost of insurance and claims and its results of operations.

Further, the Company retains liability of up to $2,000,000 for each general liability claim, $250,000 for each workers’ compensation claim and $250,000 for each cargo claim.

In recent years, the amount of cargo theft throughout the freight transportation and logistics supply chain in the United States has significantly increased.

The Company has experienced, and may continue to experience, increases in the amount of cargo theft, resulting in increased exposure to liability from cargo claims.

As noted below in Item 1, “ Legal, Tax, Regulatory and Compliance Risks — Regulatory and legislative changes ,” several of the Operating Subsidiaries maintain a federal hazardous materials safety permit in connection with the Company’s transportation of hazardous substances.

In the event the Company is involved in a spill or other accident involving hazardous substances, there is a release of hazardous materials while such hazardous materials are being transported by the Company, or Landstar is found to be in violation of or fail to comply with applicable environmental laws or regulations in connection with the transportation of hazardous materials, the Company could be subject to clean-up costs and liabilities, including substantial fines or penalties or civil and criminal liability, any of which could have a material adverse effect on the Company’s business and results of operations.

The Company retains liability of up to $2,000,000 for each general liability claim, $250,000 for each workers’ compensation claim and $250,000 for each cargo claim.

In addition, under reinsurance arrangements by Signature of certain risks of the Company’s BCO Independent Contractors, the Company retains liability of up to $500,000, $1,000,000 or $2,000,000 with respect to certain occupational accident claims and up to $750,000 with respect to certain workers’ compensation claims.

The Company’s exposure to liability associated with accidents incurred by Truck Brokerage Carriers, railroads and air and ocean cargo carriers who transport freight on behalf of the Company is reduced by various legal defenses and other factors including the extent to which such carriers maintain their own insurance coverage.

A material increase in the frequency or severity of accidents, cargo claims, including further increases in the amount of cargo theft, or workers’ compensation claims or the material unfavorable development of existing claims could have a material adverse effect on Landstar’s cost of insurance and claims and its results of operations.

In recent years, the amount and sophistication of fraud and cargo theft throughout the freight transportation and logistics supply chain has significantly increased.

In particular, “strategic” cargo theft refers to instances when bad actors incorporate deceptive tactics to commit cargo theft.

Such tactics may involve the use of fraud to deceive shippers, brokers, and/or carriers using a combination of methods including identity theft and impersonation, fictitious track-and-trace information, fictitious proof of delivery information and fraudulent carrier schemes.

The Company has experienced, and may continue to experience, increases in the amount of cargo theft, including strategic cargo theft, resulting in increased exposure to liability from cargo claims.

The Company has also experienced, and may continue to experience, incidences of other types of supply chain fraud, for example the fraud referenced in Note 19 in the “Notes to Consolidated Financial Statements” in this Annual Report on Form 10-K.

A material increase in the frequency or severity of accidents, cargo claims, or workers’ compensation claims, claims in connection with the transportation of hazardous materials, or the material unfavorable development of existing claims could have a material adverse effect on Landstar’s business, cost of insurance and claims and its results of operations.

Dependence on third party insurance companies.

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Included among these Million Dollar Agents, 77 agents generated at least $10,000,000 of Landstar revenue during the 2025 fiscal year, or in the aggregate approximately 68% of Landstar’s consolidated revenue.

Of these larger agencies, one such Landstar independent commission sales agency, itself with a very diversified customer base, generated approximately $470,000,000, or 10%, of Landstar’s consolidated revenue and approximately 5% of Landstar’s consolidated variable contribution in fiscal year 2024.

A number of these larger agencies, including the largest of Landstar’s independent commission sales agents by revenue, maintain administrative operations in countries outside of North America where the risks may be different than in the United States or Canada due to geopolitical, legal or other risks associated with maintaining administrative operations in such foreign jurisdictions.

Of these larger agencies, two such Landstar independent commission sales agencies each generated over 10% of Landstar’s consolidated revenue, or in the aggregate approximately $994,000,000, or 21%, of Landstar’s consolidated revenue and approximately 16% of Landstar’s consolidated variable contribution in fiscal year 2025.

A number of these larger agencies, including the second largest of Landstar’s independent commission sales agents by revenue, maintain administrative operations in countries outside of North America where the risks may be different than in the United States or Canada due to geopolitical, legal or other risks associated with maintaining administrative operations in such foreign jurisdictions.

There can be no assurance regarding the potential disruption and impact adverse geopolitical developments in these foreign jurisdictions could have on the ability of certain large independent commission sales agents to generate and maintain administrative operations in support of significant amounts of Landstar revenue.

As disclosed in a Current Report on Form 8-K filed by the Company on February 28, 2022, the largest Landstar independent commission sales agency by revenue referenced above, while based in the United States, has significant administrative operations located in Ukraine.

As disclosed in a Current Report on Form 8-K filed by the Company on February 28, 2022, the second largest Landstar independent commission sales agency by 2025 revenue referenced above, while based in the United States, has significant administrative operations located in Ukraine.

The administrative operations of this agency were significantly disrupted during the onset of the Russian invasion of Ukraine and continue to be affected by the ongoing conflict.

The Company also has another of its largest independent commission sales agencies, as measured by revenue, that is based in the United States but conducts a portion of its administrative operations in western Ukraine.

western Ukraine.

Russian efforts to destroy infrastructure throughout Ukraine has impacted the availability of electricity and other basic utilities at various times throughout the country.

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Cyber incidents that impact the security, availability, reliability, speed, accuracy or other proper functioning of these systems and data, including outages, computer viruses, break-ins and similar disruptions, could have a significant impact on our operations.

Accordingly, information security and the continued development and enhancement of the controls and processes designed to protect our systems, computers, software, data and networks from attack, damage or unauthorized access remain a priority for us.

Our information systems and those of our third party service providers have been, and will likely continue to be, targeted by or subject to viruses, malware or other malicious codes, unauthorized access, cyber-attacks, cyber frauds, ransomware or other unauthorized occurrences which jeopardize the confidentiality, integrity or availability of our information or information systems.

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The rapid evolution and increased adoption of artificial intelligence technologies may intensify our cybersecurity risks including the deployment of artificial intelligence technologies by threat actors.

Although we believe that we have robust security procedures and other safeguards in place, as threats continue to evolve, we may be required to expend additional resources to continue to enhance our information security measures and/or to investigate and remediate any security vulnerabilities.

believe that we have robust security procedures and other safeguards in place, as threats continue to evolve, we may be required to expend additional resources to continue to enhance our information security measures and/or to investigate and remediate any security vulnerabilities.

At any given time, we face known and unknown cybersecurity risks and threats that are not fully mitigated, and we may discover vulnerabilities as we continuously work to enhance our cybersecurity risk management program.

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Adoption of artificial intelligence (“AI”).

The adoption of AI and other emerging technologies may become significant to operating results in the future.

While AI and other technologies may offer substantial benefits, they may also introduce additional risk.

If we are unable to successfully adapt to, implement and utilize such emerging technologies as effectively as competitors, our results of operations may be negatively affected.

The Company uses, and will continue to expand its use of, machine learning and AI technologies to deliver services and operate its business.

If the Company fails to successfully integrate AI into its digital ecosystem and business processes, or if it fails to keep pace with rapidly evolving AI technological developments, including attracting and retaining talented AI developers and programmers and cybersecurity personnel, the Company may face a competitive disadvantage.

At the same time, the use or offering of AI technologies may result in new or expanded risks and liabilities, including enhanced government or regulatory scrutiny, litigation, privacy and compliance issues, ethical or confidentiality concerns, reputational harm, and security risks.

It is not possible to predict all of the risks related to the use of AI, and changes in laws, rules, directives, and regulations governing the use of AI may adversely affect the Company’s ability to develop and use AI or subject it to legal liability.

The cost of complying with laws and regulations governing AI could be significant and could increase our operating expenses, which could adversely affect our business, financial condition, and results of operations.

Further, market demand and acceptance of AI technologies, including by our independent commission sales agents and BCO Independent Contractors, are uncertain, and we may be unsuccessful in efforts to further incorporate AI into our ecosystem of digital tools that are designed to:

(i) assist Landstar independent commission sales agents in efficiently sourcing capacity, pricing transportation services and managing and analyzing the performance of their independent businesses, (ii) assist customers in meeting their transportation needs, (iii) assist third party capacity providers in identifying desirable freight opportunities and operating their independent businesses, and (iv) improve operational and administrative efficiency throughout the Company.

Acquisitions, Divestitures and Investments.

The Company periodically considers acquisitions and equity investments that it believes are strategically important based on the potential that any such acquisition or investment candidate would further strengthen the Company’s strategic goals and service offerings.

The Company makes no assurance that it will be able to successfully achieve its strategic goals as it relates to any such acquisition or investment.

Further, the Company may have difficulties integrating acquired companies or efficiently managing divestitures.

For potential acquisitions, success may depend upon efficiently integrating the acquired business into our existing systems and operations.

If we complete a large acquisition or multiple acquisitions within a short period of time, we may experience heightened difficulties integrating the acquired companies.

The Company would also be required to integrate these acquired businesses into our internal control environment, which may present challenges that are different than those presented by organic growth and that may be difficult to manage.

If we are unable to successfully integrate and grow any acquired businesses and to realize contemplated revenue synergies and cost savings from such acquisitions, our business, prospects, results of operations, financial position, and cash flows could be materially and adversely affected.

During 2017, the Company established Landstar Metro, S.A.P.I.

(“Landstar Metro”), which acquired substantially all of the assets of the asset-light transportation logistics business of Fletes Avella, S.A.

Landstar Metro provides freight and logistics services within Mexico and in conjunction with Landstar’s U.S.-Mexico cross-border services.

The Company’s initial investment in Landstar Metro was approximately $8.5 million.

The carrying value of the Company’s investment in Landstar

Metro, as of December 27, 2025, was approximately $6.5 million, reflecting additional investment and the results of operations of Landstar Metro since inception, less non-cash impairment charges.

Landstar Metro is subject to certain risks arising from doing business in Mexico, including:

changes in Mexico’s economic strength;

changes in trade agreements, US-Mexico trade relations, or the imposition of tariffs on imports from Mexico and related retaliatory tariffs that may be imposed by the Mexican government;

disruptions related to port of entry restrictions;

difficulties in enforcing contractual obligations;

foreign currency fluctuations;

theft or vandalism of equipment;

and social, political, and economic instability.

As previously disclosed in a Current Report on Form 8-K, filed with the SEC on August 13, 2025, in connection with an annual strategic review of the Company’s operations, the Company determined that Landstar Metro has not been able to meet the Company’s strategic or operational goals and expectations, and, in connection therewith, the Company entered into an arrangement with a financial advisor to actively market Landstar Metro and consider strategic alternatives for this business, which may involve a sale or other disposition in whole or in part of Landstar Metro.

No assurances can be provided regarding any potential sale or other disposition of Landstar Metro and whether any additional non-cash impairment charges or other additional charges and expenses will be incurred by the Company in connection with this sale process or upon any ultimate disposition of Landstar Metro.

Economic, Competitive and Industry Risks

Decreased demand for transportation services;

trade relationships.

trade relationships and potential or imposed tariffs.

The transportation industry historically has experienced cyclical financial results as a result of slowdowns in economic activity, the business cycles of customers, and other economic factors beyond Landstar’s control.

If a slowdown in economic activity or a downturn in the Company’s customers’ business cycles causes a reduction in the volume of freight shipped by those customers, the Company’s operating results could be materially adversely affected.

In addition, Landstar hauls a significant number of shipments that have either been imported into the United States or are destined for export from the United States.

Moreover, Landstar hauls a significant number of shipments that have either been imported into the United States or are destined for export from the United States.

There is significant uncertainty in the marketplace as to the potential actions of the U.S.

government with respect to international trade policy and the potential for significant tariffs to be enacted, particularly with respect to trade between the United States and, respectively, Mexico, Canada and China.

Any decision by the U.S.

government to adopt actions such as an increase in tariffs or customs duties, a border tax on imports, the renegotiation of U.S.

trade agreements, in particular, the United States-Mexico-Canada Agreement, or any other action that could have a negative impact on international trade could cause a reduction in the volume of freight shipped by many Landstar customers.

Any changes in tax and trade policies in the United States and corresponding actions by other countries, including a retaliatory increase in tariffs on goods destined for export from the United States, could adversely affect our financial performance.

government with respect to international trade policy, and the impact of tariffs may significantly adversely impact our customers, our industry, and our business.

government has made significant changes in U.S.

trade policy, including the imposition on April 2, 2025, of a baseline tariff of 10% on product imports from almost all countries and individualized higher tariffs on certain other countries.

While the announcement of the tariffs has been followed by announcements of limited exceptions and temporary pauses, certain foreign governments either have taken or are threatening to take retaliatory actions in response.

The changes in U.S.

trade policy and tariffs have caused uncertainty and volatility in financial markets.

Further, there is potential for significant disruption with respect to trade between the United States and, respectively, Mexico and Canada, in connection with the anticipated review in 2026 of the United States-Mexico-Canada Agreement and related potential impacts on trade, tariffs and border duties and taxes throughout North America.

Moreover, on February 20, 2026, the U.S.

Supreme Court ruled that the U.S.

government cannot use the International Emergency Economic Powers Act (“IEEPA”) to impose tariffs, overturning certain recent tariffs announced throughout 2025, including those on global imports from China, Canada and Mexico.

This decision creates uncertainty about the immediate path forward for many supply chains, as billions of dollars in duties are now in question and the process for potential refunds remains unclear.

Further, not all tariffs announced throughout 2025 will be impacted by this U.S.

Supreme Court decision since many tariffs were imposed under other legal authorities that remain in effect and new tariffs may continue to be implemented through these other legal authorities.

Tariffs or other trade restrictions may lead to continuing uncertainty and volatility in U.S.

and global financial and economic conditions, declining consumer confidence, inflation or an economic slowdown.

These tariffs or other trade restrictions, including corresponding actions taken by other countries in response to U.S.

governmental actions or continuing uncertainty around the timing, scope, level, magnitude, duration and product range of tariffs, could have an adverse economic impact in the markets in which the Company operates, could cause reduced demand for the Company’s services and a reduction in the volume of shipments transported by the Company’s network, and could have a material adverse effect on Landstar’s results of operations.

Substantial industry competition.

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This industry is extremely competitive and fragmented.

Landstar competes primarily with truckload carriers, intermodal transportation service providers, railroads, less-than-truckload carriers, third party logistics companies, digital freight brokers and other asset-light transportation and logistics service providers.

Landstar competes primarily with truckload carriers, intermodal transportation service providers, railroads, less-than-truckload carriers, third party logistics companies, freight brokers and other asset-light transportation and logistics service providers.

Management believes that competition for the freight transported by the Company is based on service, efficiency, safety and freight rates, which are influenced significantly by the economic environment, particularly the amount of available transportation capacity and freight demand.

In recent years, the use of technology and the implementation of technology-based innovations have become increasingly important to compete within the transportation and logistics industry.

In recent years, the use of technology and the implementation of technology-based innovations, which may increasingly incorporate AI, have become increasingly important to compete within the transportation and logistics industry.

In particular, management believes leadership in the development, operation and support of an ecosystem of digital technologies and applications is an ongoing part of providing high quality service.

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Many large shippers use 3PLs other than the Company to outsource the management and coordination of their transportation needs rather than directly arrange for transportation services with carriers.

As noted above, there were 10 transportation service providers, including 3PLs, included in the Company’s top 25 customers for the fiscal year ended December 28, 2024.

As noted above, there were eight transportation service providers, including 3PLs, included in the Company’s top 25 customers for the fiscal year ended December 27, 2025.

Usage by large shippers of 3PLs often provides carriers, such as the Company, with a less direct relationship with the shipper and, as a result, may increase pressure on freight rates while making it more difficult for the Company to compete primarily based on service and efficiency.

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Department of Transportation as an indirect air carrier.

One of the Company’s subsidiaries is licensed by the U.S.

One of the Company’s

subsidiaries is licensed by the U.S.

Department of Homeland Security through the Bureau of U.S.

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In particular, the FMCSA may propose regulatory changes that affect the operation of commercial motor carriers across the United States.

For example, effective May 20, 2025, the FMCSA established a new enforcement policy with respect to English language proficiency (“ELP”) requirements applicable to commercial motor vehicle drivers and the ability of such drivers to communicate effectively with law enforcement and understand highway traffic signs throughout the United States.

In 2025, the FMCSA also proposed amendments to federal regulations applicable to the issuance by State Driver’s Licensing Agencies (“SDLAs”) of CDLs to foreign-domiciled individuals in order to significantly limit the authority of SDLAs to issue and renew CDLs with respect to individuals domiciled in a foreign jurisdiction and/or who do not maintain a lawful immigration status in the United States.

It is difficult to predict in what form FMCSA regulations may be implemented, modified or enforced and what impact any such regulations may have on motor carrier operations or the aggregate number of trucks that provide hauling capacity to the Company.

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Nevertheless, federal, state and local governmental agencies may engage in efforts to support legislation and regulations mandating the transition of diesel-fuel based commercial motor vehicles, such as Class 8 tractors operated by the Company’s BCO Independent Contractors and Truck Brokerage Carriers, to ZEVs.

For example, CARB has adopted a regulation, the Advanced Clean Trucks (“ACT”) regulation intended to accelerate a large-scale transition to medium-and heavy-duty ZEVs.

The regulation includes a manufacturer sales requirement and a reporting requirement that applies to large employers including retailers, manufacturers, brokers and others, as well as fleet owners with 50 or more trucks operating in California.

The following states have also adopted the ACT regulation:

Colorado, Maryland, Massachusetts, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont and Washington.

Mandates requiring the transition to ZEVs would create substantial costs for the Company’s third party capacity providers and, in turn, increase the cost of purchased transportation to the Company.

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An increase in costs to implement these initiatives without a corresponding increase in price to the customer could adversely affect Landstar, including its results of operations and financial condition.

General Risk Factors

Supply Chain Fraud Matter.

As disclosed in a Current Report on Form 8-K filed with the SEC on April 2, 2025 and the Company’s Quarterly Report on Form 10-Q for the 2025 first quarter, filed with the SEC on May 13, 2025, during the last week of the Company’s 2025 first fiscal quarter, the Company identified a supply chain fraud relating to the Company’s international freight forwarding operations (the “Supply Chain Fraud Matter”).

The Supply Chain Fraud Matter did not involve the Company’s core North American truckload services.

The Company’s financial results for the fiscal year ended December 27, 2025 included a $4.8 million pre-tax expense, or $0.10 per basic and diluted share, relating to this matter.

This expense reflected the total 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.

No assurance can be provided with respect to the Company’s ability to collect anticipated recoveries relating to the Supply Chain Fraud Matter or the cost of legal and other professional fees that may be incurred by the Company in the future in connection with such collection efforts related to the Supply Chain Fraud Matter.

The inability of the Company to recover additional amounts relating to the Supply Chain Fraud Matter could impose additional adverse financial impact and costs on the Company.

Potential changes in taxes.

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The excise tax could have an adverse effect on the Company’s cash flows in future years.

General Risk Factors

Intellectual property.

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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-K

Item 1A. Risk Factors