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Item 1. Financial Statements

2026-04-29 compared with 2025-10-28 · 93 added, 242 removed, 350 unchanged (49% of the section changed)

4 unchanged sentences

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

Operating results for the thirty-nine weeks ended September 27, 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.

Operating results for the thirteen weeks ended March 28, 2026 are not necessarily indicative of the results that may be expected for the entire fiscal year ending December 26, 2026.

These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 2025 Annual Report on Form

LANDSTAR SYSTEM, INC.

2 unchanged sentences

(Dollars in thousands, except per share amounts)

September 27,

Current Assets

14 unchanged sentences

Dividends payable

Contractor escrow

Liabilities held for sale

17 unchanged sentences

(Dollars in thousands, except per share amounts)

Thirty-Nine Weeks Ended

Thirteen Weeks Ended

September 27,

September 28,

September 27,

September 28,

Investment income

6 unchanged sentences

Depreciation and amortization

Impairment of intangible and other assets

Total costs and expenses

10 unchanged sentences

(Dollars in thousands)

Thirty-Nine Weeks Ended

Thirteen Weeks Ended

September 27,

September 28,

September 27,

September 28,

Other comprehensive income (loss):

Unrealized holding gains on available-for-sale

investments, net of tax expense of $ 570 ,

$ 828 , $ 146 and $ 624

Foreign currency translation gains (losses)

Other comprehensive income (loss)

Other comprehensive (loss) income:

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

investments, net of tax (benefit) expense of ($ 214 ) and $ 264

Foreign currency translation (losses) gains

Other comprehensive (loss) income

Comprehensive income

4 unchanged sentences

(Dollars in thousands)

Thirty-Nine Weeks Ended

September 27,

September 28,

Thirteen Weeks Ended

OPERATING ACTIVITIES

4 unchanged sentences

Gains on sales/disposals of operating property

Impairment of intangible and other assets

Deferred income taxes, net

1 unchanged sentence

Changes in operating assets and liabilities:

(Increase) decrease in trade and other accounts receivable

Increase in other assets

Increase in trade and other accounts receivable

Decrease in other assets

Increase in accounts payable

Increase (decrease) in other liabilities

Increase in other liabilities

Increase in insurance claims

5 unchanged sentences

Proceeds from sales of operating property

NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES

NET CASH (USED) PROVIDED BY INVESTING ACTIVITIES

FINANCING ACTIVITIES

15 unchanged sentences

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Thirty-Nine and Thirteen Weeks Ended September 27, 2025 and September 28, 2024

Thirteen Weeks Ended March 28, 2026 and March 29, 2025

(Dollars in thousands)

1 unchanged sentence

Comprehensive

(Loss) Income

Balance December 27, 2025

3 unchanged sentences

Stock-based compensation

Other comprehensive income

Other comprehensive loss

Balance March 28, 2026

Dividends ($ 0.40 per share)

Purchases of common stock

Issuance of stock related to stock-based compensation plans

Stock-based compensation

Other comprehensive income

Balance June 28, 2025

Dividends ($ 0.40 per share)

Purchases of common stock

Issuance of stock related to stock-based compensation plans

Stock-based compensation

Other comprehensive income

Balance September 27, 2025

Treasury Stock at Cost

3 unchanged sentences

Dividends ($ 0.36 per share)

Issuance of stock related to stock-based compensation plans

Stock-based compensation

Other comprehensive income

Balance March 30, 2024

Dividends ($ 0.33 per share)

Purchases of common stock

1 unchanged sentence

Stock-based compensation

Other comprehensive loss

Balance June 29, 2024

Dividends ($ 0.36 per share)

Purchases of common stock

Issuance of stock related to stock-based compensation plans

Stock-based compensation

Other comprehensive income

Balance September 28, 2024

Balance March 29, 2025

See accompanying notes to consolidated financial statements.

8 unchanged sentences

and its subsidiary are herein referred to as “Landstar” or the “Company.” Significant intercompany accounts have been eliminated in consolidation.

Significant Accounting Policies

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 thirty-nine-week and thirteen-week periods ended September 27, 2025 and September 28, 2024 (dollars in thousands):

Thirty-Nine Weeks Ended

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 28, 2026 and March 29, 2025 (dollars in thousands):

Thirteen Weeks Ended

September 27,

September 28,

September 27,

September 28,

Truck – BCO Independent Contractors

10 unchanged sentences

Share-based Payment Arrangements

As of September 27, 2025, the Company has an employee equity incentive plan, the 2011 equity incentive plan (the “2011 EIP”).

As of March 28, 2026, 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):

Thirty-Nine Weeks Ended

Thirteen Weeks Ended

September 27,

September 28,

September 27,

September 28,

Total cost of the Plans during the period

1 unchanged sentence

Net cost of the Plans during the period

Included in income tax benefits recognized in the thirty-nine-week periods ended September 27, 2025 and September 28, 2024 were tax deficiencies (excess tax benefits) from stock-based awards of $ 106,000 and ($ 1,122,000 ), respectively.

As of September 27, 2025, there were 174,149 shares of the Company’s common stock reserved for issuance under the 2022 DSCP and 2,672,025 shares of the Company’s common stock reserved for issuance under the 2011 EIP.

Included in income tax benefits recognized in the thirteen-week periods ended March 28, 2026 and March 29, 2025 were tax deficiencies from stock-based awards of $ 151,000 and $ 51,000 , respectively.

As of March 28, 2026, there were 172,859 shares of the Company’s common stock reserved for issuance under the 2022 DSCP and 2,550,096 shares of the Company’s common stock reserved for issuance under the 2011 EIP.

Restricted Stock Units

2 unchanged sentences

Outstanding at December 27, 2025

Outstanding at September 27, 2025

During the thirty-nine-week period ended September 27, 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 September 27, 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

income per diluted share from continuing operations as compared to the results from the 2024 fiscal year.

Outstanding at March 28, 2026

During the thirteen-week period ended March 28, 2026, the Company granted RSUs with a performance condition and RSUs with a market condition, as further described below.

Outstanding RSUs at both December 27, 2025 and March 28, 2026 include RSUs with a performance condition and RSUs with a market condition, as further described below and in the Company’s 2025 Annual Report on Form 10-K.

RSUs with a performance condition granted during the thirteen-week period ended March 28, 2026 may vest on January 31 of 2029, 2030 and 2031 based on growth in diluted earnings per share as compared to the results from the 2025 fiscal year, adjusted to reflect the add back of (i) the charge taken by the Company in the 2025 first quarter in connection with a supply chain fraud relating to the Company’s international freight forwarding operations;

and (ii) impairment charges recorded in the Company’s 2025 fiscal year related to:

the decision to actively market for sale Landstar Metro, S.A.P.I.

de C.V., the Company’s wholly-owned Mexican operating subsidiary;

the decision to wind-down the Landstar Blue TMS;

and a non-controlling

equity investment made by the Company in Cavnue, LLC, a privately held technology start-up

On January 30, 2026, the Company granted 6,715 RSUs that vest based on a market condition.

These RSUs may vest based on the achievement of the target Company’s total shareholder return (“TSR”) compound annual growth rate, adjusted to reflect dividends (if any) paid during such periods and capital adjustments as may be necessary, and are eligible to vest annually starting after the sixth anniversary of the grant date and concluding after the tenth anniversary of the grant date.

These RSUs may vest based on the achievement of a specific total shareholder return (“TSR”) compound annual growth rate, adjusted to reflect dividends (if any) paid during such periods and capital adjustments as may be necessary, and are eligible to vest annually starting after the sixth anniversary of the grant date and concluding after the tenth anniversary of the grant date.

The fair value of this RSU award was determined at the time of grant based on the expected achievement of the market condition.

1 unchanged sentence

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 $ 1,586,000 and $ 408,000 of share-based compensation expense related to RSU awards in the thirty-nine-week periods ended September 27, 2025 and September 28, 2024, respectively.

As of September 27, 2025, there was a maximum of $ 52.3 million of total unrecognized compensation cost related to RSU awards granted under the Plans with an expected average remaining life of approximately 3.0 years.

The Company recognized approximately $ 1,241,000 and $ 857,000 of share-based compensation expense related to RSU awards in the thirteen-week periods ended March 28, 2026 and March 29, 2025, respectively.

As of March 28, 2026, there was a maximum of $ 56.9 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 27, 2025

at September 27, 2025

at March 28, 2026

The fair value of each share of non-vested

1 unchanged sentence

Shares of non-vested

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

For restricted stock awards granted under the 2022 DSCP, each recipient may elect to defer receipt of shares and instead receive restricted stock units (“Deferred Stock Units”), which represent contingent rights to receive shares of the Company’s common stock on the date of the recipient’s separation from service from the Board of Directors, or, if earlier, upon a change in control event of the Company.

2 unchanged sentences

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

As of September 27, 2025, there was $ 5,727,000 of total unrecognized compensation cost related to non-vested

As of March 28, 2026, there was $ 7,340,000 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 2.3 years.

The provisions for income taxes for the 2025 and 2024 thirty-nine-week periods were based on estimated annual effective income tax rates of 24.6 % and 24.3 %, respectively, adjusted for discrete events, such as benefits resulting from stock-based awards.

The effective income tax rate for the 2025 thirty-nine-week period was 24.9 %.

The provisions for income taxes for the 2026 and 2025 thirteen-week periods were based on estimated annual effective income tax rates of 24.9 % and 24.3 %, respectively, adjusted for discrete events, such as excess tax benefits or deficiencies resulting from stock-based awards.

The effective income tax rate for the 2026 thirteen-week period was 25.2 %.

The effective income tax rate was higher than the statutory federal income tax rate of 21 % in the 2026 period primarily attributable to state taxes.

The effective income tax rate for the 2024 thirty-nine-week period was 23.4 %.

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, partially offset by federal tax credits.

The effective income tax rate for the 2025 thirteen-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.

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 thirty-nine-week periods.

Additional Cash Flow Information

During the 2025 thirty-nine-week period, Landstar paid income taxes and interest of $ 45,646,000 and $ 4,107,000 , respectively.

During the 2024 thirty-nine-week period, Landstar paid income taxes and interest of $ 45,638,000 and $ 2,641,000 , respectively.

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

Landstar acquired operating property by entering into finance leases in the amount of $ 24,238,000 in the 2024 thirty-nine-week period.

During the 2025 thirty-nine-week period, the Company purchased its common stock at a total cost of $ 143,908,000 , including $ 142,512,000 in cash purchases and accrued excise tax of $ 1,396,000 , which is included in other current liabilities in the consolidated balance sheet at September 27, 2025.

The Company also paid $ 718,000 in excise tax on its common stock purchases, which was included in other current liabilities in the consolidated balance sheet at December 28, 2024.

During the 2024 thirty-nine-week period, the Company purchased its common stock at a total cost of $ 79,388,000 , including $ 78,697 ,000 in cash purchases and accrued excise tax of $ 691,000 , which was included in other current liabilities in the cons

olidated balance sheet at September 28, 2024.

During the 2026 thirteen-week period, Landstar paid income taxes and interest of $ 442,000 and $ 1,233,000 , respectively.

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

Landstar did not acquire any operating property by entering into finance leases in the 2026 or 2025 thirteen-week periods.

During the 2026 thirteen-week period, the Company purchased its common stock at a total cost of $ 22,587 ,000, including $ 22,387,000 in cash purchases and accrued excise tax of $ 200,000 , which is included in other current liabilities in the consolidated balance sheet at March 28, 2026.

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 accrued excise tax of $ 584,000 , which was included in other current liabilities in the consolidated balance sheet at March 29, 2025.

Segment Information

4 unchanged sentences

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 thirty-nine-week and thirteen-week periods ended September 27, 2025 and September 28, 2024 (in thousands):

Thirty-Nine Weeks Ended

September 27, 2025

September 28, 2024

Transportation

The following tables summarize information about the Company’s reportable business segments as of and for the thirteen-week periods ended March 28, 2026 and March 29, 2025 (in thousands):

Transportation

9 unchanged sentences

Depreciation and amortization

Impairment of intangible and other assets

Operating income

Interest and debt expense (income) (1)

Income before income taxes

Thirteen Weeks Ended

September 27, 2025

September 28, 2024

Transportation

External revenue

8 unchanged sentences

Depreciation and amortization

Impairment of intangible and other assets

Operating income

Thirteen Weeks Ended

Operating income

1 unchanged sentence

Income before income taxes

Interest and debt expense (income) includes (i) interest income earned on cash balances held by the transportation logistics segment of $ 3,549

in the 2025 and 2024 thirty-nine-week periods, respectively, and $ 1,140

in the 2025 and 2024 thirteen-week periods, respectively, and (ii) consolidated total interest expense of $ 4,305

in the 2025 and 2024 thirty-nine-week periods, respectively, and $ 1,357

in the 2025 and 2024 thirteen-week periods, respectively.

In the thirty-nine-week periods ended September 27, 2025 and September 28, 2024, no single customer accounted 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 $ 778 and $ 1,668 in the 2026 and 2025 thirteen-week periods, respectively and (ii) consolidated total interest expense of $ 1,296 and $ 1,509 in the 2026 and 2025 thirteen-week periods, respectively.

In the thirteen-week periods ended March 28, 2026 and March 29, 2025, 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 thirty-nine-week period ended September 27, 2025 (in thousands):

Holding (Losses)

The following table presents the components of and changes in accumulated other comprehensive loss, net of related income taxes, as of and for the thirteen-week period ended March 28, 2026 (in thousands):

Holding Losses on

Available-for-Sale

1 unchanged sentence

Balance as of December 27, 2025

Other comprehensive income

Balance as of September 27, 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 thirty-nine-week period ended September 27, 2025.

Other comprehensive loss

Balance as of March 28, 2026

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

treasury obligations having maturities of up to five years

(the “bond portfolio”) and money market investments.

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

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

12 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 $ 922,000

and $ 3,573,000

at September 27, 2025 and December 28, 2024, respectively.

Unrealized losses, net of unrealized gains, on the investments in the bond portfolio were $ 1,498,000 and $ 504,000 at March 28, 2026 and December 27, 2025, respectively.

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

investments are as follows at September 27, 2025 and December 28, 2024 (in thousands):

September 27, 2025

investments are as follows at March 28, 2026 and December 27, 2025 (in thousands):

March 28, 2026

Money market investments

6 unchanged sentences

Corporate bonds, commercial paper and direct obligations of government agencies

Treasury obligations

For those available-for-sale

investments with unrealized losses at September 27, 2025 and December 28, 2024, the following table summarizes the duration of the unrealized loss (in thousands):

investments with unrealized losses at March 28, 2026 and December 27, 2025, the following table summarizes the duration of the unrealized loss (in thousands):

Less than 12 months

12 months or longer

September 27, 2025

March 28, 2026

Asset-backed securities

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

Treasury obligations

December 27, 2025

2 unchanged sentences

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

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.

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.

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

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

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

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

12 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 thirty-nine weeks ended September 27, 2025 were (in thousands):

The components of lease cost for finance leases and operating leases for the thirteen weeks ended March 28, 2026 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 September 27, 2025 is as follows (in thousands):

A summary of the lease classification on the Company’s consolidated balance sheet as of March 28, 2026 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 September 27, 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 March 28, 2026 (in thousands):

2026 Remainder

6 unchanged sentences

Deferred income taxes and other noncurrent liabilities

The weighted average remaining lease term and the weighted average discount rate for finance and operating leases as of September 27, 2025 were:

The weighted average remaining lease term and the weighted average discount rate for finance and operating leases as of March 28, 2026 were:

Finance Leases

Operating Leases

Weighted average remaining lease term (years)

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 September 27, 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 March 28, 2026 and December 27, 2025.

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”).

The Credit Agreement, which matures July 1, 2027, provides for borrowing capacity in the form of a revolving credit facility of $ 300,000,000

, $ 45,000,000

of which may be utilized in the form of letters of credit.

The Credit Agreement, which matures July 1, 2027, provides for borrowing capacity in the form of a revolving credit facility of $ 300,000,000 , $ 45,000,000 of which may be utilized in the form of letters of credit.

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 September 27, 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

%, or (ii) an alternate base rate plus an applicable margin ranging from 0.25

%, 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.

As of March 28, 2026, 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.

The revolving credit facility bears a commitment fee, payable quarterly in arrears, of 0.20 % to 0.30 %, based on the Company’s Leverage Ratio at the end of the most recent applicable fiscal quarter for which financial statements have been delivered.

2 unchanged sentences

The Credit Agreement provides for a restriction on cash dividends and other distributions to stockholders on the Company’s capital stock to the extent there is a default under the Credit Agreement.

In addition, the Credit Agreement under certain circumstances limits the amount of such cash dividends and other distributions to stockholders to the extent that, after giving effect to any payment made to effect such cash dividend or other distribution, the Leverage Ratio would exceed 2.5 to 1 on a pro forma basis as of the end of the Company’s most recently completed fiscal quarter.

to 1 on a pro forma basis as of the end of the Company’s most recently completed fiscal quarter.

The Credit Agreement provides for an event of default in the event that, among other things, a person or group acquires 35 % or more of the outstanding capital stock of the Company or obtains power to elect a majority of the Company’s directors or the directors cease to consist of a majority of Continuing Directors, as defined in the Credit Agreement.

4 unchanged sentences

Commitments and Contingencies

Short-term investments include $ 59,227,000

in current maturities of investments held by the Company’s insurance segment at September 27, 2025.

Short-term investments include $ 57,697,000 in current maturities of investments held by the Company’s insurance segment at March 28, 2026.

The non-current

portion of the bond portfolio of $ 86,139,000

is included in other assets.

The short-term investments, together with $ 24,474,000

of non-current

investments, provide collateral for the $ 75,331,000

of letters of credit issued to guarantee payment of insurance claims.

As of September 27, 2025, Landstar also had $ 34,916,000

of additional letters of credit outstanding under the Company’s Credit Agreement.

As previously disclosed by the Company in its Quarterly Report on Form 10-Q

for the 2025 second quarter and in a Current Report on Form 8-K

filed on August 13, 2025, a trial verdict (the “Verdict”) was rendered on August 6, 2025 in state court in El Paso County, Texas, in the matter of Eduardo Cabral, et.

Landstar Ranger, Inc., et.

(the “Cabral Matter”).

The Verdict included a determination by the jury that Landstar Ranger acted as a broker and not as a motor carrier with respect to the transportation of the shipment involved in a tragic, catastrophic accident.

The Verdict also determined that 15 % of the total monetary damages were attributed to Landstar Ranger, or $ 3.42 million, of the $ 22.8 million total monetary damages, with the remainder of the total monetary damages being attributed to the hauling motor carrier, MyUniverse, and the MyUniverse truck 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 September 27, 2025, with respect to the Cabral Matter.

The plaintiffs, as well as Landstar Ranger, have filed post-trial motions and may attempt to appeal the Verdict.

No assurances can be provided as to the probability of success with respect to any post-trial motions or appeals relating to the Verdict or the ultimate outcome of any such motions or appeals.

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

portion of the bond portfolio of $ 89,745,000 is included in other assets.

The short-term investments, together with $ 26,004,000 of non-current

investments, provide collateral for the $ 75,331,000 of letters of credit issued to guarantee payment of insurance claims.

As of March 28, 2026, Landstar also had $ 34,916,000 of additional letters of credit outstanding under the Company’s Credit Agreement.

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

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 and reasonably estimable losses with respect to the resolution of all such claims and pending litigation and that the ultimate outcome, after provisions therefor, will not have a material adverse effect on the financial condition of the Company, but could have a material effect on the results of operations in a given quarter or year.

Change in Accounting Estimate for Self-Insured Claims

4 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 net 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 thirty-nine-week and thirteen-week periods ended September 27, 2025 and September 28, 2024 (in thousands, except per share amounts):

Thirty-Nine Weeks Ended

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 28, 2026 and March 29, 2025 (in thousands, except per share amounts):

Thirteen Weeks Ended

September 27,

September 28,

September 27,

September 28,

Operating income

Basic and diluted earnings per share

The unfavorable development of prior years’ claims during the thirty-nine-week period ended September 27, 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 thirty-nine-week period, 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.

The Company recorded this payment as a deferred gain within other current liabilities in the consolidated balance sheet as of September 27, 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.

Based on the Verdict, the Cabral Matter referenced above in footnote 11 is not anticipated to adversely impact the Company’s ability to meet the requirements of such “no claims bonus”.

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

The unfavorable development of prior years’ claims during the thirteen-week period ended March 28, 2026 was primarily attributable to cargo loss experience as a result of fraud and theft in the supply chain and several specific commercial trucking claims.

Held for Sale Subsidiary

During the 2025 third fiscal quarter, the Company entered into an arrangement with a financial advisor to actively market its Mexican subsidiary, Landstar Metro, S.A.P.I.

During the 2025 fiscal year, the Company entered into an arrangement with a financial advisor to actively market its Mexican subsidiary, Landstar Metro, S.A.P.I.

(“Landstar Metro”) and to consider other strategic alternatives for this subsidiary, which may involve a sale or other disposition in whole or in part of Landstar Metro during the Company’s 2026 fiscal year.

1 unchanged sentence

It is not anticipated that a sale or other disposition of Landstar Metro will adversely affect the Company’s ability to provide U.S.-Mexico cross-border services, given that Landstar Metro is principally engaged in intra-Mexico truck transportation services.

In connection with the decision to actively market Landstar Metro, management identified a triggering event to perform a quantitative goodwill impairment test.

As part of its analysis, the Company used a combination of the discounted cash flow method and the market approach.

Based on the quantitative assessment, the Company concluded that Landstar Metro’s goodwill was impaired and recorded a non-cash

impairment charge of $ 7,530,000 to goodwill within the transportation logistics segment.

Further, based on the expected fair value of Landstar Metro, net of costs to sell, the Company recognized an impairment on assets held for sale of $ 8,612,000 .

Both impairments are included in impairment of intangible and other assets within the Company’s consolidated statements of income.

During the 2025 third and fourth fiscal quarters, based on the expected fair value of Landstar Metro, net of anticipated costs to sell, the Company recognized impairments on assets held for sale in the aggregate of

included in impairment of intangible and other assets within the Company’s consolidated statements of income for the 2025 third and fourth fiscal quarters.

In the 2026 thirteen-week perio

d, the Company recognized an additional impairment on assets held for sale of $ 1,054,000 included in selling, general and administrative costs within the Company’s consolidated statements of income.

No assurances can be provided that there will not be additional charges and expenses incurred by the Company in connection with this sale process or upon any ultimate disposition of Landstar Metro.

As of September 27, 2025, the assets and liabilities of Landstar Metro are presented as held for sale at carrying value.

As of March 28, 2026, the assets and liabilities of Landstar Metro are presented as held for sale at carrying value.

A summary of assets and liabilities associated with Landstar Metro that are held for sale, is presented below (in thousands):

As of September 27, 2025

As of March 28, 2026

Assets held for sale:

11 unchanged sentences

Cumulative translation loss of foreign entities held for sale is included within accumulated other comprehensive loss on the consolidated balance sheets.

Impairment of Software Assets

The Company evaluates its operating property whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable in accordance with ASC 360, Property,

Plant and Equipment

When such events or changes in circumstances occur, a recoverability test is performed based on projected undiscounted cash flows expected to be realized from the use and eventual disposition of the asset or asset group.

An impairment is recorded for any excess of the carrying amount over the estimated fair value.

Fair value is determined based on quoted market values, discounted cash flows or external appraisals, as appropriate.

During the 2025 third fiscal quarter, the Company performed a strategic review of its operations.

In connection with this strategic review, management evaluated its transportation management systems (“TMSs”), including the Landstar TMS, a cloud-based platform for truckload freight agent workflow, and the Blue TMS, a cloud-based platform built specifically to service the truckload brokerage contract services market.

Management determined that the Landstar TMS, rather than the Blue TMS, would be the Company’s primary TMS used in the future to service the truckload brokerage contract services market.

As a result of this decision, the Company also determined to wind-down the Blue TMS and, in connection therewith, the Company performed a recoverability test with respect to potential impairment of the software assets associated with the Blue TMS and determined estimated fair value based on discounted cash flows.

The Company subsequently recorded a $ 8,963,000 non-cash impairment charge within its transportation logistics segment, which is included in impairment of intangible and other assets within the Company’s consolidated statements of income.

Impairment of Equity Investment

In 2022, the Company acquired a minority equity investment in Cavnue, LLC (“Cavnue”), a privately held start-up

company focused on combining technology and road infrastructure to unlock the full potential of connected and autonomous vehicles.

This non-controlling

investment in units of Cavnue is considered an investment in non-marketable

equity securities without a readily determinable market value.

The carrying value of the non-marketable

equity securities is adjusted to fair value upon observable transactions for identical or similar investments of the same issuer or impairment (referred to as the measurement alternative).

During the 2025 third fiscal quarter, the Company determined that there were indicators of potential impairment related to the value of its equity investment in Cavnue related to the financial performance of the company and its ability to raise additional capital to finance continued investment in its operations.

As such, the Company recorded a non-cash

impairment charge for the carrying value of its investment in Cavnue of $ 4,999,000 during the thirteen-week period ended September 27, 2025, which is included in impairment of intangible and other assets within the Company’s consolidated statements of income.

Recent Accounting Pronouncements

Accounting Standards Issued But Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09,

Income Taxes (Topic 740):

Improvements to Income Tax Disclosures

(“ASU 2023-09”),

which expands disclosures in an entity’s income tax rate reconciliation table and regarding cash taxes paid both in the U.S.

and foreign jurisdictions.

is effective for annual periods beginning after December 15, 2024.

is not expected to have a material impact on the Company’s consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU 2024-03,

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on its consolidated financial statements and disclosures.

Supply Chain Fraud Matter

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.

This supply chain fraud matter does not involve the Company’s core North American truckload services.

In connection with this supply chain fraud matter, consolidated revenue and purchased transportation as reported in the Company’s fiscal year 2024, 2023 and 2022 financial results were each overstated by approximately 2

%, and less than 0.5

%, respectively.

As the overstated amount of revenue was approximately equal to the overstated amount of purchased transportation, the impact on each of operating income and net income, as reported, was less than 1

% in fiscal year 2024 and less than 0.2

% in fiscal years 2023 and 2022, respectively.

The Company has performed a quantitative and qualitative analysis of the impact of this supply chain fraud matter in respect of the 2025 first quarter and the financial statements for each prior fiscal year period during which identified instances of fraud relating to this matter occurred.

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

The Company’s financial results for the 2025 first quarter and for the thirty-nine week period ended September 27, 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 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 September 27, 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