What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-04-29 compared with 2025-10-28 · 83 added, 181 removed, 261 unchanged (50% of the section changed)

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Statements contained in this document that are not based on historical facts are “forward-looking statements.” This Management’s Discussion and Analysis of Financial Condition and Results of Operations and other sections of this Form 10-Q contain forward-looking statements, such as statements which relate to Landstar’s business objectives, plans, strategies and expectations.

Terms such as “anticipates,” “believes,” “estimates,” “intention,” “expects,” “plans,” “predicts,” “may,” “should,” “could,” “will,” the negative thereof and similar expressions are intended to identify forward-looking statements.

Terms such as “anticipates,” “believes,” “estimates,” “intention,” “expects,” “plans,” “predicts,” “may,” “should,” “could,” “would,” “will,” the negative thereof and similar expressions are intended to identify forward-looking statements.

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

decreased demand for transportation services;

trade relationships and potential or imposed tariffs;

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dependence on third party capacity providers;

the impact of the Russian conflict with Ukraine on the operations of certain independent commission sales agents, including the Company’s largest such agent by revenue in the 2024 fiscal year;

decreased demand for transportation services;

the impact of the Russian conflict with Ukraine on the operations of certain independent commission sales agents, including the Company’s second largest such agent by revenue in the 2025 fiscal year;

substantial industry competition;

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dependence on key vendors;

adoption of artificial intelligence;

potential changes in taxes;

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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 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.

acquisitions and investments;

and other operational, financial or legal risks or uncertainties detailed in Landstar’s Form 10-K for the 2025 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.

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

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and its subsidiary, Landstar System Holdings, Inc.

(collectively referred to herein with their subsidiaries and other affiliated companies as “Landstar” or the “Company”), is a technology-enabled, asset-light provider of integrated transportation management solutions delivering safe, specialized transportation services to a broad range of customers utilizing a network of agents, third party capacity providers and employees.

(collectively referred to herein with their subsidiaries and other affiliated companies as “Landstar” or the “Company”), is a technology-enabled, asset-light provider of freight transportation and logistics solutions focused on safety, security and service to a broad range of customers utilizing a network of agents, third party capacity providers and employees.

The Company offers services to its customers across multiple transportation modes, with the ability to arrange for individual shipments of freight to comprehensive third party logistics solutions to meet all of a customer’s transportation needs.

Landstar provides services principally throughout the United States and to a lesser extent in Canada and Mexico, and between the United States and Canada, Mexico and other countries around the world.

The Company’s services emphasize safety, information coordination and customer service and are delivered through a network of approximately 1,000 independent commission sales agents and over 75,000 third party capacity providers, primarily truck capacity providers, linked together by a series of digital technologies which are provided and coordinated by the Company.

The Company’s services emphasize information coordination and are delivered through a network of approximately 980 independent commission sales agents and over 72,000 third party capacity providers, primarily truck capacity providers, linked together by a series of digital technologies which are provided and coordinated by the Company.

The nature of the Company’s business is such that a significant portion of its operating costs varies directly with revenue.

Landstar markets its integrated transportation management solutions primarily through independent commission sales agents and exclusively utilizes third party capacity providers to transport customers’ freight.

Landstar markets its freight transportation and logistics services primarily through independent commission sales agents and exclusively utilizes third party capacity providers to transport customers’ freight.

Landstar’s independent commission sales agents enter into contractual arrangements with the Company and are responsible for locating freight, making that freight available to Landstar’s capacity providers and coordinating the transportation of the freight with customers and capacity providers.

The Company’s third party capacity providers consist of independent contractors who provide truck capacity to the Company under exclusive lease arrangements (the “BCO Independent Contractors”), unrelated trucking companies who provide truck capacity to the Company under non-exclusive contractual arrangements (the “Truck Brokerage Carriers”), air cargo carriers, ocean cargo carriers and railroads.

Through this network of agents and capacity providers linked together by Landstar’s ecosystem of digital technologies, Landstar operates an integrated transportation management solutions business primarily throughout North America with revenue of $4.8 billion during the most recently completed fiscal year.

Through this network of agents and capacity providers linked together by Landstar’s ecosystem of digital technologies, Landstar operates a freight transportation and logistics business primarily throughout North America with revenue of $4.7 billion during the most recently completed fiscal year.

The Company reports the results of two operating segments:

the transportation logistics segment and the insurance segment.

The transportation logistics segment provides a wide range of integrated transportation management solutions.

The transportation logistics segment provides a wide range of freight transportation and logistics services.

Transportation services are provided by Landstar’s “Operating Subsidiaries”:

Landstar Ranger, Inc., Landstar Inway, Inc., Landstar Ligon, Inc., Landstar Gemini, Inc., Landstar Transportation Logistics, Inc., Landstar Global Logistics, Inc., Landstar Express America, Inc., Landstar Canada, Inc., Landstar Metro, S.A.P.I.

Landstar Metro, S.A.P.I.

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, hazardous materials (“haz-mat”), 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.

In addition, the transportation logistics segment provides transportation services to other transportation companies, including third party logistics and less-than-truckload service providers.

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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 thirty-nine weeks ended September 27, 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 thirty-nine-week period ended September 27, 2025.

During the thirteen weeks ended March 28, 2026, revenue generated by BCO Independent Contractors, Truck Brokerage Carriers and railroads represented approximately 41%, 52% and 2%, respectively, of the Company’s consolidated revenue.

Collectively, revenue generated by air and ocean cargo carriers represented approximately 4% of the Company’s consolidated revenue in the thirteen-week period ended March 28, 2026.

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

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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 thirty-nine-week period ended September 27, 2025.

Revenue at the insurance segment represented approximately 1% of the Company’s consolidated revenue for the thirteen-week period ended March 28, 2026.

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, securely and efficiently utilizing BCO Independent Contractors and other third party capacity providers.

Management believes the Company’s success principally depends on its ability to generate freight transportation opportunities 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.

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Management’s emphasis with respect to revenue growth is on revenue generated by independent commission sales agents who on an annual basis generate $1 million or more of Landstar revenue (“Million Dollar Agents”).

Management believes future revenue growth is primarily dependent on its ability to increase both the revenue generated by Million Dollar Agents and the number of Million Dollar Agents through a combination of recruiting new agents, increasing the revenue opportunities generated by existing independent commission sales agents and providing its independent commission sales agents with digital technologies they may use to grow revenue and increase efficiencies at their businesses.

Management believes future revenue growth is primarily dependent on its ability to increase both the revenue generated by Million Dollar Agents and the number of Million Dollar Agents through a combination of recruiting new agents, increasing the revenue opportunities generated by existing independent commission sales agents and providing its independent commission sales agents with technologies they may use to grow revenue and increase efficiencies at their businesses.

During the 2025 fiscal year, 457 independent commission sales agents generated $1 million or more of Landstar revenue and thus qualified as Million Dollar Agents.

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

Thirty-Nine Weeks Ended

Thirteen Weeks Ended

September 27,

September 28,

September 27,

September 28,

Revenue generated through (in thousands):

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

September 27, 2025

September 28, 2024

BCO Independent Contractors

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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 16 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 thirty-nine-week period ended September 27, 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

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The Company also maintains third party insurance arrangements providing coverage for commercial trucking liabilities in excess of $5 million.

Historically, these third party insurance arrangements were based on policy year periods beginning on May 1 and ending on a 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 a subsequent May 31.

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

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.

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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 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.

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.

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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 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.

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

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 also 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.

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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Selling, general and administrative

During the thirty-nine-week period ended September 27, 2025, employee compensation and benefits accounted for approximately 62% of the Company’s selling, general and administrative costs.

During the thirteen-week period ended March 28, 2026, employee compensation and benefits accounted for approximately 66% 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 previously disclosed by the Company in current and periodic reports filed with the SEC, 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.

Selling, general and administrative costs during the thirteen-week period ended March 29, 2025 included a $4.8 million expense related to this matter.

Depreciation and amortization

Depreciation and amortization primarily relate to depreciation of trailing equipment and information technology hardware and software.

Impairment of intangible and other assets

During the 2025 third fiscal quarter, the Company recorded certain non-cash, non-recurring impairment charges of $30,104,000 in the aggregate (the “Non-Cash Impairment Charges”).

The Non-Cash Impairment Charges represented $0.66 per basic and diluted share.

The Non-Cash Impairment Charges consisted of:

$16,142,000, or $0.35 per basic and diluted share, in impairment charges to goodwill and certain other assets related to the Company’s decision to actively market for sale Landstar Metro, S.A.P.I.

de C.V., the Company’s wholly-owned Mexican operating subsidiary, principally engaged in intra-Mexico truck transportation services.

For additional information, see Note 14 in the “Notes to Consolidated Financial Statements” in this Quarterly Report on Form 10-Q.

$8,963,000, or $0.20 per basic and diluted share, in impairment charges related to the decision to select one of the Company’s transportation management systems as its primary such system for truckload brokerage services and, in connection with that decision, wind-down an alternative transportation management system currently in use by Landstar Blue, LLC, one of the Company’s operating subsidiaries.

For additional information, see Note 15 in the “Notes to Consolidated Financial Statements” in this Quarterly Report on Form 10-Q.

$4,999,000 or $0.11 per basic and diluted share, relating to the carrying value of a non-controlling equity investment made by the Company in 2022 in Cavnue, LLC, a privately held technology start-up company.

For additional information, see Note 16 in the “Notes to Consolidated Financial Statements” in this Quarterly Report on Form 10-Q.

Costs of revenue

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Variable costs of revenue include purchased transportation and commissions to agents, as these costs are entirely variable on a shipment-by-shipment basis.

frequency and severity of insurance claims, the number of miles traveled by BCO Independent Contractors, or the number and/or scale of information technology projects in process or in-service to support revenue generating activities, rather than on a shipment-by-shipment basis.

Other costs of revenue include fixed costs of revenue and semi-variable costs of revenue, where such costs may vary over time based on certain economic factors or operational metrics such as the number of Company-controlled trailers, the number of BCO Independent Contractors, the frequency and severity of insurance claims, the number of miles traveled by BCO Independent Contractors, or the number and/or scale of information technology projects in process or in-service to support revenue generating activities, rather than on a shipment-by-shipment basis.

Other costs of revenue associated with the transportation of freight include:

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

Thirty-Nine Weeks Ended

Thirteen Weeks Ended

September 27,

September 28,

September 27,

September 28,

Costs of revenue:

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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 thirty-nine-week period ended September 27, 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.

Approximately 45% of the Company’s consolidated revenue in the thirteen-week period ended March 28, 2026 was generated under transactions that pay a fixed percentage of revenue to the third party capacity provider and/or agents while 55% 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

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

Thirty-Nine Weeks Ended

Thirteen Weeks Ended

September 27,

September 28,

September 27,

September 28,

Operating income

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Operating income as % of variable contribution

The decrease in operating income as a percentage of gross profit from the 2024 thirty-nine-week period to the 2025 thirty-nine-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 impairment of certain intangible and other assets and 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 thirty-nine-week period to the 2025 thirty-nine-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 impairment of certain intangible and other assets, 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.

The increase in operating income as a percentage of gross profit from the 2025 thirteen-week period to the 2026 thirteen-week period resulted from the increase of operating income at a more rapid percentage rate than the increase in gross profit, as the Company was able to scale its fixed cost infrastructure, primarily certain components of selling, general and administrative costs, across a larger gross profit base, and the impact of the supply chain fraud matter in the 2025 thirteen-week period and decreased insurance and claims costs in the 2026 thirteen-week period.

The increase in operating income as a percentage of variable contribution from the 2025 thirteen-week period to the 2026 thirteen-week period resulted from the increase of operating income at a more rapid percentage rate than the increase in variable contribution, as the Company was able to scale its fixed cost infrastructure, primarily certain components of selling, general and administrative costs across a larger variable contribution base, and the impact of the supply chain fraud matter in the 2025 thirteen-week period and decreased insurance and claims costs in the 2026 thirteen-week period.

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

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

THIRTY-NINE WEEKS ENDED SEPTEMBER 27, 2025 COMPARED TO THIRTY-NINE WEEKS ENDED SEPTEMBER 28, 2024

Revenue for the 2025 thirty-nine-week period was $3,569,291,000, a decrease of $40,624,000, or 1%, compared to the 2024 thirty-nine-week period.

Transportation revenue decreased $36,707,000, 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 thirty-nine-week period.

Reinsurance premiums were $44,057,000 and $47,974,000 for the 2025 and 2024 thirty-nine-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 thirty-nine-week period compared to the 2024 thirty-nine-week period.

Truck transportation revenue generated by BCO Independent Contractors and Truck Brokerage Carriers (together, the “third party truck capacity providers”) for the 2025 thirty-nine-week period was $3,257,752,000, representing 91% of total revenue, a decrease of $7,993,000, or less than 1%, compared to the 2024 thirty-nine-week period.

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

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

Loads hauled via van equipment decreased 4% and less-than-truckload loadings decreased 3%, while loads hauled via other truck transportation services increased 18% and loads hauled via unsided/platform equipment increased 2% as compared to the 2024 thirty-nine-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 1%, while revenue per load on less-than-truckload loadings decreased 4%.

Revenue per load on loads hauled via van equipment and other truck transportation services were approximately the same as compared to the 2024 thirty-nine-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 $82,232,000 and $89,862,000 in the 2025 and 2024 thirty-nine-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 thirty-nine-week period was $251,879,000, or 7% of total revenue, a decrease of $15,831,000, or 6%, compared to the 2024 thirty-nine-week period.

Revenue per load on revenue generated by multimode capacity providers decreased approximately 3% in the 2025 thirty-nine-week period compared to the 2024 thirty-nine-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 approximately 7% and 1%, respectively, while revenue per load on loads hauled via air increased approximately 18% during the 2025 thirty-nine-week period as compared to the 2024 thirty-nine-week period.

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

The increase in revenue per load on loads hauled by air cargo carriers was primarily attributable to increases at several customers during the 2025 thirty-nine-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 7% decrease in ocean loadings and a 5% decrease in air loadings, while rail loadings increased 3%.

The 7% decrease in ocean loadings was broad-based with decreases at several customers.

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

The 3% increase in rail loadings was primarily attributable to increased loadings at one specific agent.

Purchased transportation was 77.8% and 77.5% of revenue in the 2025 and 2024 thirty-nine-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, and an increased rate of purchased transportation paid to Truck Brokerage Carriers.

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

Investment income was $10,620,000 and $10,988,000 in the 2025 and 2024 thirty-nine-week periods, respectively.

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

Other operating costs increased $2,858,000 in the 2025 thirty-nine-week period compared to the 2024 thirty-nine-week period.

The increase in other operating costs compared to the prior year was primarily due to increased trailer equipment maintenance costs, partially offset by the favorable resolution of a multi-year foreign sales tax matter and increased gains on sales of operating property.

Insurance and claims increased $19,479,000 in the 2025 thirty-nine-week period compared to the 2024 thirty-nine-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 thirty-nine-week period and increased severity of current year trucking and cargo claims during the 2025 thirty-nine-week period, partially offset by decreased BCO miles traveled during the 2025 thirty-nine-week period.

During the 2025 and 2024 thirty-nine-week periods, insurance and claims costs included $22,860,000 and $6,666,000 of net unfavorable adjustments to prior years’ claims estimates, respectively.

Selling, general and administrative costs increased $11,690,000 in the 2025 thirty-nine-week period compared to the 2024 thirty-nine-week period.

The increase in selling, general and administrative costs compared to prior year was primarily attributable to increased information technology project consulting fees, increased stock-based compensation expense, 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 wages, partially offset by the impact of Chief Executive Officer (“CEO”) transition costs on the 2024 thirty-nine-week period.

Included in selling, general and administrative costs was stock-based compensation expense of $5,243,000 and $3,573,000 for the 2025 and 2024 -thirty-nine- week periods, respectively.

Depreciation and amortization decreased $8,117,000 in the 2025 thirty-nine-week period compared to the 2024 thirty-nine-week period.

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

Impairment of intangibles and other assets was $30,104,000 in the 2025 thirty-nine-week period.

This was attributable to the impairment matters referenced above under “ Expenses – Impairment of intangible and other assets.

The year-over-prior-year change in interest and debt expense (income) was $5,211,000, with net interest and debt expense of $756,000 in the 2025 thirty-nine-week period compared to net interest and debt income of $4,455,000 in the 2024 thirty-nine-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 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 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 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.

Net income was $91,063,000, or $2.61 per basic and diluted share, in the 2025 thirty-nine-week period.

Net income was $149,753,000, or $4.21 per basic and diluted share, in the 2024 thirty-nine-week period.

Net income during the 2025 thirty-nine-week period was unfavorably impacted by $30,104,000, or $0.66 per basic and diluted share, related to the impairment of intangible and other assets charges noted above.

THIRTEEN WEEKS ENDED SEPTEMBER 27, 2025 COMPARED TO THIRTEEN WEEKS ENDED SEPTEMBER 28, 2024

Revenue for the 2025 thirteen-week period was $1,205,406,000, a decrease of $8,461,000, or less than 1%, compared to the 2024 thirteen-week period.

Transportation revenue decreased $7,532,000, or less than 1%.

The number of loads hauled and revenue per load on transportation revenue were both approximately flat as compared to the 2024 thirteen-week period.

THIRTEEN WEEKS ENDED MARCH 28, 2026 COMPARED TO THIRTEEN WEEKS ENDED MARCH 29, 2025

Revenue for the 2026 thirteen-week period was $1,171,291,000, an increase of $18,789,000, or 2%, compared to the 2025 thirteen-week period.

Transportation revenue increased $19,256,000, or 2%.

The increase in transportation revenue was attributable to an increased revenue per load of approximately 4%, while the number of loads hauled decreased approximately 3% as compared to the 2025 thirteen-week period.

Reinsurance premiums were $14,290,000 and $14,757,000 for the 2026 and 2025 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 2026 thirteen-week period compared to the 2025 thirteen-week period.

Truck transportation revenue generated by third party truck capacity providers for the 2025 thirteen-week period was $1,089,896,000, representing 90% of total revenue, a decrease of $1,228,000, or less than 1%, compared to the 2024 thirteen-week period.

Revenue per load on loads hauled by third party truck capacity providers and the number of loads hauled by third party truck capacity providers were both approximately flat in the 2025 thirteen-week period compared to the 2024 thirteen-week period.

Revenue per load on loads hauled via truck for the 2025 thirteen-week period was approximately flat compared to the 2024 thirteen-week period.

Revenue per load on loads hauled via unsided/platform equipment and on loads hauled via van equipment increased less than 1% each, while revenue per load on less-than-truckload loadings decreased 5% and on loads hauled via other truck transportation services decreased 2%.

The number of loads hauled via truck for the 2025 thirteen-week period was approximately flat compared to the 2024 thirteen-week period.

Loads hauled via less-than-truckload loadings increased 6%, loads hauled via other truck transportation services increased 5% and loaded hauled via unsided/platform equipment increased 4%, while loads hauled via van equipment decreased 3% as 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 2026 thirteen-week period was $1,082,281,000, representing 92% of total revenue, an increase of $32,563,000, or 3%, compared to the 2025 thirteen-week period.

Revenue per load on loads hauled by third party truck capacity providers increased approximately 6% in the 2026 thirteen-week period compared to the 2025 thirteen-week period, while the number of loads hauled by third party truck capacity providers decreased approximately 2% in the 2026 thirteen-week period compared to the 2025 thirteen-week period.

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

During the 2026 thirteen-week period, revenue per load on loads hauled via unsided/platform equipment increased 11%, on less-than-truckload loadings increased 8% and on loads hauled via van equipment increased 5%, while revenue per load on other truck transportation services decreased 11%, in each case, as compared to the 2025 thirteen-week period.

The decrease in the number of loads hauled via truck for the 2026 thirteen-week period compared to the 2025 thirteen-week period was primarily due to decreased demand from the 2025 thirteen-week period for the Company’s van, unsided/platform and less-than-truckload services and, secondarily, due to efforts by customers in the 2025 first quarter to “pull-forward” shipments typically scheduled to occur later in the year in an effort to avoid the potential impact of tariffs that subsequently may have become effective in fiscal year 2025.

Loads hauled via van equipment decreased 4%, loads hauled via unsided/platform equipment decreased 2% and loads hauled via less-than-truckload loadings decreased 2%, while loads hauled via other truck transportation services increased 5%, in each case, as compared to the 2025 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 $26,691,000 and $26,925,000 in the 2026 and 2025 thirteen-week periods, respectively.

Transportation revenue generated by multimode capacity providers for the 2025 thirteen-week period was $95,938,000, or 8% of total revenue, a decrease of $1,390,000, or 1%, compared to the 2024 thirteen-week period.

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 2026 thirteen-week period was $67,283,000, or 6% of total revenue, a decrease of $15,841,000, or 19%, compared to the 2025 thirteen-week period.

The number of loads hauled by multimode capacity providers decreased approximately 13% in the 2026 thirteen-week period compared to the 2025 thirteen-week period, and revenue per load on revenue generated by multimode capacity providers decreased approximately 7% over the same period.

The decrease in the number of loads hauled by multimode capacity providers was due to a 31% decrease in ocean loadings and a 12% decrease in air loadings, while rail loadings increased 7%.

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

The 6% decrease in air loadings was primarily attributable to decreased loadings at one specific customer.

The 31% decrease in ocean loadings was broad-based with decreases at several customers, which the Company partially attributes to efforts by customers in the 2025 first quarter to “pull-forward” shipments typically scheduled to occur later in the year in an effort to avoid the potential impact of tariffs that subsequently may have become effective in fiscal year 2025.

The 12% decrease in air loadings was primarily attributable to decreases at one specific agency.

The 7% increase in rail loadings was primarily attributable to increased loadings at one specific agency.

Revenue per load on loads hauled via rail intermodal decreased 1%, while revenue per load on loads hauled via air and ocean increased approximately 29% and 8%, respectively, during the 2025 thirteen-week period as compared to the 2024 thirteen-week period.

The decrease in revenue per load on loads hauled by rail intermodal carriers was primarily attributable to several specific customers 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 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.

Revenue per load on loads hauled via air decreased approximately 3%, while ocean and rail intermodal increased approximately 4% and 3%, respectively, during the 2026 thirteen-week period as compared to the 2025 thirteen-week period.

The decrease in revenue per load on loads hauled by air cargo carriers was primarily attributable to decreases at several specific customers during the 2026 thirteen-week period.

The increase in revenue per load on loads hauled by ocean was primarily attributable to increases at several customers during the 2026 thirteen-week period.

The increase in revenue per load on loads hauled by rail intermodal carriers was broad-based with increases at multiple customers during the 2026 thirteen-week period.

Purchased transportation was 77.4% and 77.9% of revenue in the 2026 and 2025 thirteen-week periods, respectively.

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

The decrease in purchased transportation as a percentage of revenue was primarily due to an increased 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 7.9% and 8.1% of revenue in the 2026 and 2025 thirteen-week periods, respectively.

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 Truck Brokerage Carriers.

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.

Investment income was $2,974,000 and $3,598,000 in the 2026 and 2025 thirteen-week periods, respectively.

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

The decrease in investment income was attributable to a lower average investment balance held by the insurance segment in the 2026 thirteen-week period and lower average rates of return on investments during the 2026 thirteen-week period.

Other operating costs increased $2,971,000 in the 2026 thirteen-week period compared to the 2025 thirteen-week period.

Insurance and claims increased $2,610,000 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 a decrease in frequency of trucking accidents in the 2025 thirteen-week period.

The increase in other operating costs compared to the prior year was primarily due to increased trailer equipment maintenance costs, increased trailer rental costs and decreased gains on sales of operating property.

Insurance and claims decreased $4,288,000 in the 2026 thirteen-week period compared to the 2025 thirteen-week period.

The decrease in insurance and claims expense compared to the prior year was primarily due to decreased net unfavorable development of prior years’ claims in the 2026 thirteen-week period, partially offset by increased frequency of current year trucking claims during the 2026 thirteen-week period and increased BCO miles traveled during the 2026 thirteen-week period.

During the 2026 and 2025 thirteen-week periods, insurance and claims costs included $4,888,000 and $11,352,000 of net unfavorable adjustments to prior years’ claims estimates, respectively.

Selling, general and administrative costs increased $5,763,000 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 increased stock-based compensation expense, 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, increased wages and increased information technology project consulting fees.

Included in selling, general and administrative costs was stock-based compensation expense of $1,586,000 and a reduction to the Company’s stock compensation expense of $43,000 for the 2025 and 2024 thirteen-week periods, respectively.

Selling, general and administrative costs decreased $617,000 in the 2026 thirteen-week period compared to the 2025 thirteen-week period.

The decrease in selling, general and administrative costs compared to prior year was primarily attributable to approximately $4,800,000 of expense relating to the supply chain fraud matter referenced above under “ Expenses—Selling, general and administrative” in the 2025 thirteen-week period and a decreased provision for customer bad debt, almost entirely offset by an increased provision for incentive compensation and increased employee benefit costs in the 2026 thirteen-week period.

Included in selling, general and administrative costs was incentive compensation expense of $3,396,000 and $1,000,000, respectively, for the 2026 and 2025 thirteen-week periods.

Depreciation and amortization decreased $1,666,000 in the 2026 thirteen-week period compared to the 2025 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.

Impairment of intangibles and other assets was $30,104,000 in the 2025 thirteen-week period.

This was attributable to the impairment matters referenced above under “ Expenses – Impairment of intangible and other assets.

The year-over-prior-year change in interest and debt expense (income) was $1,386,000, with net interest and debt expense of $217,000 in the 2025 thirteen-week period compared to net interest and debt income of $1,169,000 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 24.6% and 24.3%, respectively, adjusted for discrete events, such as benefits resulting from stock-based awards.

The decrease in depreciation and amortization expense was primarily due to decreased depreciation on information technology software and decreased trailing equipment depreciation in the 2026 thirteen-week period.

The year-over-prior-year change in interest and debt expense (income) was $677,000, with net interest and debt expense of $518,000 in the 2026 thirteen-week period compared to net interest and debt income of $159,000 in 2025 thirteen-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, partially offset by decreased interest expense related to finance lease obligations.

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%.

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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 2024 period primarily attributable to state taxes, partially offset by federal tax credits.

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.

Net income was $39,440,000, or $1.16 per basic and diluted share, in the 2026 thirteen-week period.

Net income was $29,806,000, or $0.85 per basic and diluted share, in the 2025 thirteen-week period.

Net income during the 2025 thirteen-week period was unfavorably impacted by $30,104,000, or $0.66 per basic and diluted share, related to the impairment of intangible and other assets charges noted above.

CAPITAL RESOURCES AND LIQUIDITY

Working capital and the ratio of current assets to current liabilities were $626,030,000 and 2.0 to 1, respectively, at September 27, 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 $552,881,000 and 1.9 to 1, respectively, at March 28, 2026, compared with $520,486,000 and 1.7 to 1, respectively, at December 27, 2025.

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 $152,169,000 in the 2025 thirty-nine-week period compared with $225,439,000 in the 2024 thirty-nine-week period.

The decrease in cash flow provided by operating activities was primarily attributable to the timing of collections of receivables and decreased net income, partially offset by the timing of payments of accounts payable.

The Company declared and paid $1.16 per share, or $40,465,000 in the aggregate, in cash dividends during the thirty-nine-week period ended September 27, 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 $1.02 per share, or $36,325,000 in the aggregate, in cash dividends during the thirty-nine-week period ended September 28, 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 thirty-nine-week period ended September 27, 2025, the Company purchased 995,168 shares of 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 thirty-nine-week period ended September 28, 2024, the Company purchased 436,919 shares of 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 consolidated balance sheet at September 28, 2024.

As of September 27, 2025, the Company may purchase in the aggregate up to 1,552,813 shares of its common stock under its authorized stock purchase programs.

Long-term debt, including current maturities, was $77,131,000 at September 27, 2025, $25,176,000 lower than at December 28, 2024.

Shareholders’ equity was $888,704,000, or 92% of total capitalization (defined as long-term debt including current maturities plus equity), at September 27, 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 thirty-nine-week period.

Cash provided by operating activities was $78,211,000 in the 2026 thirteen-week period compared with $55,698,000 in the 2025 thirteen-week period.

The increase in cash flow provided by operating activities was primarily attributable to the timing of payments of accounts payable and the impact of increased net income, partially offset by the timing of payments of insurance claims.

The Company declared and paid $0.40 per share, or $13,614,000 in the aggregate, in cash dividends during the thirteen-week period ended March 28, 2026 and, during such period, also paid $68,117,000 of dividends payable which were declared in December 2025 and included in current liabilities in the consolidated balance sheet at December 27, 2025.

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.

During the thirteen-week period ended March 28, 2026, the Company purchased 150,923 shares of 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.

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

As of March 28, 2026, the Company may purchase in the aggregate up to 1,115,195 shares of its common stock under its authorized stock purchase programs.

Long-term debt, including current maturities, was $69,266,000 at March 28, 2026, $7,556,000 lower than at December 27, 2025.

Shareholders’ equity was $798,976,000, or 92% of total capitalization (defined as long-term debt including current maturities plus equity), at March 28, 2026, compared to $795,665,000, or 91% of total capitalization, at December 27, 2025.

The increase in shareholders’ equity was primarily the result of net income, almost entirely offset by purchases of shares of the Company’s common stock and dividends declared by the Company in the 2026 thirteen-week period.

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”).

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

At September 27, 2025, the Company had no borrowings outstanding and $34,916,000 of letters of credit outstanding under the Credit Agreement.

At September 27, 2025, there was $265,084,000 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 $75,331,000 in letters of credit outstanding as collateral for insurance claims that are secured by investments totaling $83,701,000 at September 27, 2025.

At March 28, 2026, the Company had no borrowings outstanding and $34,916,000 of letters of credit outstanding under the Credit Agreement.

At March 28, 2026, there was $265,084,000 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 $75,331,000 in letters of credit outstanding as collateral for insurance claims that are secured by investments totaling $83,701,000 at March 28, 2026.

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

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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 thirty-nine-week period, the Company purchased $7,673,000 of operating property.

During the 2026 thirteen-week period, the Company purchased $5,814,000 of operating property.

Landstar anticipates acquiring either by purchase or lease financing during the remainder of fiscal year 2026 approximately $113,000,000 in operating property consisting primarily of new trailing equipment to replace older trailing equipment and information technology hardware and software.

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LEGAL MATTERS

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.

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 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.

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.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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

During the 2025 and 2024 thirty-nine-week periods, insurance and claims costs included $22,860,000 and $6,666,000 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 September 27, 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 2026 and 2025 thirteen-week periods, insurance and claims costs included $4,888,000 and $11,352,000 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 28, 2026, 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.

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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-Q

Item 2. Management’s Discussion and Analysis