LANDSTAR SYSTEM INC 10-Q

Item 1. Financial Statements The interim consolidated financial statements contained herein reflect all adjustments (all of a normal, recurring nature) which, in the opinion of management, are necessary for a fair statement of the financial condition, results of operations, cash flows and changes in shareholders’ equity for the periods presented. They have been prepared in accordance with Rule 10-01 of Regulation S-X and do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. Operating results for the thirteen weeks ended March 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 10-K. 3 Table of Contents LANDSTAR SYSTEM, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share amounts) (Unaudited) March 28, 2026 December 27, 2025 ASSETS Current Assets Cash and cash equivalents $ 353,255 $ 396,694 Short-term investments 57,697 55,531 Trade accounts receivable, less allowance of $ 8,606 and $ 12,490 692,016 670,137 Other receivables, including advances to independent contractors, less allowance of $ 15,791 and $ 18,759 48,402 52,784 Assets held for sale 11,788 12,231 Other current assets 20,443 28,949 Total current assets 1,183,601 1,216,326 Operating property, less accumulated depreciation and amortization of $ 480,097 and $ 473,642 255,738 261,322 Goodwill 34,005 34,005 Other assets 128,854 124,282 Total assets $ 1,602,198 $ 1,635,935 LIABILITIES AND SHAREHOLDERS’ EQUITY Current Liabilities Cash overdraft $ 54,432 $ 56,654 Accounts payable 396,654 369,567 Current maturities of long-term debt 26,121 28,342 Insurance claims 56,794 87,343 Dividends payable —   68,117 Liabilities held for sale 8,468 6,961 Other current liabilities 88,251 78,856 Total current liabilities 630,720 695,840 Long-term debt, excluding current maturities 43,145 48,480 Insurance claims 96,502 62,706 Deferred income taxes and other noncurrent liabilities 32,855 33,244 Shareholders’ Equity Common stock, $ 0.01 par value, authorized 160,000,000 shares, issued 68,619,240 and 68,590,708 shares 686 686 Additional paid-in capital 263,740 261,256 Retained earnings 2,878,506 2,852,680 Cost of 34,691,030 and 34,531,982 shares of common stock in treasury ( 2,336,869 ) ( 2,313,245 ) Accumulated other comprehensive loss ( 7,087 ) ( 5,712 ) Total shareholders’ equity 798,976 795,665 Total liabilities and shareholders’ equity $ 1,602,198 $ 1,635,935 See accompanying notes to consolidated financial statements. 4 Table of Contents LANDSTAR SYSTEM, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share amounts) (Unaudited) Thirteen Weeks Ended March 28, 2026 March 29, 2025 Revenue $ 1,171,291 $ 1,152,502 Investment income 2,974 3,598 Costs and expenses: Purchased transportation 906,997 897,878 Commissions to agents 92,143 93,314 Other operating costs, net of gains on asset sales/dispositions 14,800 11,829 Insurance and claims 35,564 39,852 Selling, general and administrative 60,965 61,582 Depreciation and amortization 10,560 12,226 Total costs and expenses 1,121,029 1,116,681 Operating income 53,236 39,419 Interest and debt expense (income) 518 ( 159 ) Income before income taxes 52,718 39,578 Income taxes 13,278 9,772 Net income $ 39,440 $ 29,806 Basic and diluted earnings per share $ 1.16 $ 0.85 Average basic and diluted shares outstanding 34,022,000 35,203,000 Dividends per common share $ 0.40 $ 0.36 See accompanying notes to consolidated financial statements. 5 Table of Contents LANDSTAR SYSTEM, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Dollars in thousands) (Unaudited) Thirteen Weeks Ended March 28, 2026 March 29, 2025 Net income $ 39,440 $ 29,806 Other comprehensive (loss) income: Unrealized holding (losses) gains on available-for-sale investments, net of tax (benefit) expense of ($ 214 ) and $ 264 ( 780 ) 964 Foreign currency translation (losses) gains ( 595 ) 50 Other comprehensive (loss) income ( 1,375 ) 1,014 Comprehensive income $ 38,065 $ 30,820 See accompanying notes to consolidated financial statements. 6 Table of Contents LANDSTAR SYSTEM, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited) Thirteen Weeks Ended March 28, 2026 March 29, 2025 OPERATING ACTIVITIES Net income $ 39,440 $ 29,806 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 10,560 12,226 Non-cash interest charges 66 66 Provisions for losses on trade and other accounts receivable 107 6,455 Gains on sales/disposals of operating property ( 335 ) ( 830 ) Deferred income taxes, net 250 146 Stock-based compensation 2,487 2,038 Changes in operating assets and liabilities: Increase in trade and other accounts receivable ( 17,604 ) ( 27,068 ) Decrease in other assets 2,629 8,657 Increase in accounts payable 27,087 5,967 Increase in other liabilities 10,277 8,514 Increase in insurance claims 3,247 9,721 NET CASH PROVIDED BY OPERATING ACTIVITIES 78,211 55,698 INVESTING ACTIVITIES Sales and maturities of investments 34,752 46,858 Purchases of investments ( 35,908 ) ( 48,085 ) Purchases of operating property ( 5,814 ) ( 1,902 ) Proceeds from sales of operating property 1,173 4,276 NET CASH (USED) PROVIDED BY INVESTING ACTIVITIES ( 5,797 ) 1,147 FINANCING ACTIVITIES Decrease in cash overdraft ( 2,222 ) ( 1,674 ) Dividends paid ( 81,731 ) ( 83,320 ) Taxes paid in lieu of shares issued related to stock-based compensation plans ( 1,040 ) ( 909 ) Purchases of common stock ( 22,387 ) ( 60,361 ) Principal payments on finance lease obligations ( 7,556 ) ( 8,339 ) NET CASH USED BY FINANCING ACTIVITIES ( 114,936 ) ( 154,603 ) Effect of exchange rate changes on cash and cash equivalents ( 781 ) 160 Decrease in cash and cash equivalents, including cash and cash equivalents classified as assets held for sale ( 43,303 ) ( 97,598 ) Less: Net change in cash and cash equivalents classified as assets held for sale ( 136 ) —   Net change in cash and cash equivalents ( 43,439 ) ( 97,598 ) Cash and cash equivalents at beginning of period 396,694 515,018 Cash and cash equivalents at end of period $ 353,255 $ 417,420 See accompanying notes to consolidated financial statements. 7 Table of Contents LANDSTAR SYSTEM, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY Thirteen Weeks Ended March 28, 2026 and March 29, 2025 (Dollars in thousands) (Unaudited) Common Stock Additional Paid-In Retained Treasury Stock at Cost Accumulated Other Comprehensive Shares Amount Capital Earnings Shares Amount Loss Total Balance December 27, 2025 68,590,708 $ 686 $ 261,256 $ 2,852,680 34,531,982 $ ( 2,313,245 ) $ ( 5,712 ) $ 795,665 Net income 39,440 39,440 Dividends ($ 0.40 per share) ( 13,614 ) ( 13,614 ) Purchases of common stock 150,923 ( 22,587 ) ( 22,587 ) Issuance of stock related to stock-based compensation plans 28,532 ( 3 ) 8,125 ( 1,037 ) ( 1,040 ) Stock-based compensation 2,487 2,487 Other comprehensive loss ( 1,375 ) ( 1,375 ) Balance March 28, 2026 68,619,240 $ 686 $ 263,740 $ 2,878,506 34,691,030 $ ( 2,336,869 ) $ ( 7,087 ) $ 798,976 Common Stock Additional Paid-In Retained Treasury Stock at Cost Accumulated Other Comprehensive Shares Amount Capital Earnings Shares Amount (Loss) Income Total Balance December 28, 2024 68,559,269 $ 686 $ 255,260 $ 2,859,916 33,243,196 $ ( 2,131,413 ) $ ( 12,010 ) $ 972,439 Net income 29,806 29,806 Dividends ($ 0.36 per share) ( 12,688 ) ( 12,688 ) Purchases of common stock 386,318 ( 60,945 ) ( 60,945 ) Issuance of stock related to stock-based compensation plans 22,503 ( 2 ) 6,081 ( 907 ) ( 909 ) Stock-based compensation 2,038 2,038 Other comprehensive income 1,014 1,014 Balance March 29, 2025 68,581,772 $ 686 $ 257,296 $ 2,877,034 33,635,595 $ ( 2,193,265 ) $ ( 10,996 ) $ 930,755 See accompanying notes to consolidated financial statements. 8 Table of Contents LANDSTAR SYSTEM, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) The consolidated financial statements include the accounts of Landstar System, Inc. and its subsidiary, Landstar System Holdings, Inc., and reflect all adjustments (all of a normal, recurring nature) which are, in the opinion of management, necessary for a fair statement of the results for the periods presented. The preparation of the consolidated financial statements requires the use of management’s estimates. Actual results could differ from those estimates. Landstar System, Inc. and its subsidiary are herein referred to as “Landstar” or the “Company.” Significant intercompany accounts have been eliminated in consolidation. 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 10-K. (1) 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 thirteen-week periods ended March 28, 2026 and March 29, 2025 (dollars in thousands): Thirteen Weeks Ended March 28, 2026 March 29, 2025 Mode Truck – BCO Independent Contractors 41 % 37 % Truck – Truck Brokerage Carriers 52 % 54 % Rail intermodal 2 % 2 % Ocean and air cargo carriers 4 % 6 % Truck Equipment Type Van equipment $ 603,406 $ 594,795 Unsided/platform equipment $ 368,569 $ 340,408 Less-than-truckload $ 23,788 $ 22,436 Other truck transportation (1) $ 86,518 $ 92,079 (1) Includes power-only, expedited, straight truck, cargo van, and miscellaneous other truck transportation revenue generated by the transportation logistics segment. Power-only refers to shipments where the Company furnishes a power unit and an operator but not trailing equipment, which is typically provided by the shipper or consignee. 9 Table of Contents (2) Share-based Payment Arrangements 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”). 6,000,000 shares of the Company’s common stock were authorized for issuance under the 2011 EIP and 200,000 shares of the Company’s common stock were authorized for issuance under the 2022 DSCP. 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): Thirteen Weeks Ended March 28, 2026 March 29, 2025 Total cost of the Plans during the period $ 2,487 $ 2,038 Amount of related income tax benefit recognized during the period ( 458 ) ( 448 ) Net cost of the Plans during the period $ 2,029 $ 1,590 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 The following table summarizes information regarding the Company’s outstanding restricted stock unit (“RSU”) awards with either a performance condition or a market condition under the Plans: Number of RSUs Weighted Average Grant Date Fair Value Outstanding at December 27, 2025 203,712 $ 143.95 Granted 61,058 $ 134.31 Forfeited ( 18,639 ) $ 155.21 Outstanding at March 28, 2026 246,131 $ 140.71 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 company. 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 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. With respect to these RSU awards, the Company reports compensation expense ratably over the service period of the award based on the number of units granted multiplied by the grant date fair value of the RSU. Previously recognized compensation cost would be reversed only if the employee did not complete the requisite service period due to termination of employment. 1 0 Table of Contents 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. Non-vested Restricted Stock and Deferred Stock Units The following table summarizes information regarding the Company’s outstanding shares of non-vested restricted stock and Deferred Stock Units (defined below) under the Plans: Number of Shares and Deferred Stock Units Weighted Average Grant Date Fair Value Non-vested at December 27, 2025 53,776 $ 168.95 Granted 28,532 $ 149.09 Vested ( 22,676 ) $ 177.48 Forfeited ( 1,226 ) $ 177.96 Non-vested at March 28, 2026 58,406 $ 155.75 The fair value of each share of non-vested restricted stock issued and Deferred Stock Unit granted under the Plans is based on the fair value of a share of the Company’s common stock on the date of grant. 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 or third 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. Deferred Stock Units become vested 100 % on the first anniversary of the date of the grant. Deferred Stock Units do not represent actual ownership in shares of the Company’s common stock and the recipient does not have voting rights or other incidents of ownership until the shares are issued. However, Deferred Stock Units do contain the right to receive dividend equivalent payments prior to settlement into shares. 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. The unrecognized compensation cost related to these non-vested shares of restricted stock and Deferred Stock Units is expected to be recognized over a weighted average period of 2.3 years. (3) Income Taxes 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 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. (4) Earnings Per Share Basic earnings per common share are based on the weighted average number of shares outstanding, which includes outstanding non-vested restricted stock and outstanding Deferred Stock Units. Diluted earnings per share are based on the weighted average number of common shares outstanding plus the dilutive effect of outstanding stock awards, if applicable. 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 2026 and 2025 thirteen-week periods. 11 Table of Contents (5) Additional Cash Flow Information 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. During the 2025 thirteen-week period, the Company purchased its common stock at a total cost of $ 60,945 ,000, including $ 60,361,000 in cash purchases and accrued excise tax of $ 584,000 , which was included in other current liabilities in the consolidated balance sheet at March 29, 2025. (6) Segment Information The Company reports the results of two operating segments: the transportation logistics segment and the insurance segment. The Company’s chief operating decision maker (“CODM”) is our Chief Executive Officer. The CODM evaluates each segment’s performance and makes decisions about resource allocations primarily based on operating income, which is the principal financial metric utilized to monitor budgeted versus actual results by segment of the Company. Asset information by segment is not typically provided to the CODM for purposes of evaluating performance or allocating resources, and therefore such information has not been presented. The following tables summarize information about the Company’s reportable business segments as of and for the thirteen-week periods ended March 28, 2026 and March 29, 2025 (in thousands): Transportation Logistics Insurance Total 2026 External revenue $ 1,157,001 $ 14,290 $ 1,171,291 Internal revenue —  11,294 11,294 Total revenue 1,157,001 25,584 1,182,585 Investment income 2,974 2,974 Purchased transportation 906,997 906,997 Commissions to agents 92,143 92,143 Other operating costs, net of gains on asset sales/dispositions 14,800 14,800 Insurance and claims 30,626 16,232 46,858 Selling, general and administrative 57,786 3,179 60,965 Depreciation and amortization 10,560 10,560 Operating income 44,089 9,147 53,236 Goodwill 34,005 34,005 Transportation Logistics Insurance Total 2025 External revenue $ 1,137,745 $ 14,757 $ 1,152,502 Internal revenue —  11,579 11,579 Total revenue 1,137,745 26,336 1,164,081 Investment income 3,598 3,598 Purchased transportation 897,878 897,878 Commissions to agents 93,314 93,314 Other operating costs, net of gains on asset sales/dispositions 11,829 11,829 Insurance and claims 33,856 17,575 51,431 Selling, general and administrative 59,426 2,156 61,582 Depreciation and amortization 12,226 12,226 Operating income 29,216 10,203 39,419 Goodwill 40,881 40,881 Thirteen Weeks Ended March 28, 2026 March 29, 2025 Operating income $ 53,236 $ 39,419 Interest and debt expense (income) (1) 518 ( 159 ) Income before income taxes 52,718 39,578 (1) 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. 1 2 Table of Contents 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. (7) Other Comprehensive Income 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): Unrealized Holding Losses on Available-for-Sale Securities Foreign Currency Translation Total Balance as of December 27, 2025 $ ( 396 ) $ ( 5,316 ) $ ( 5,712 ) Other comprehensive loss ( 780 ) ( 595 ) ( 1,375 ) Balance as of March 28, 2026 $ ( 1,176 ) $ ( 5,911 ) $ ( 7,087 ) Amounts reclassified from accumulated other comprehensive income to investment income due to the realization of previously unrealized gains and losses in the accompanying consolidated statements of income were not significant for the thirteen-week period ended March 28, 2026. (8) Investments 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. Investments in the bond portfolio are reported as available-for-sale and are carried at fair value. Investments maturing less than one year from the balance sheet date are included in short-term investments and investments maturing more than one year from the balance sheet date are included in other assets in the consolidated balance sheets. Management performs an analysis of the nature of the unrealized losses on available-for-sale investments to determine whether an allowance for credit loss is necessary. Unrealized losses, representing the excess of the purchase price of an investment over its fair value as of the end of a period, considered to be a result of credit-related factors, are to be included as a charge in the statement of income, while unrealized losses considered to be a result of non-credit-related factors are to be included as a component of shareholders’ equity. Investments whose values are based on quoted market prices in active markets are classified within Level 1. Investments that trade in markets that are not considered to be active, but are valued based on quoted market prices, are classified within Level 2. As Level 2 investments include positions that are not traded in active markets, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information. Any transfers between levels are recognized as of the beginning of any reporting period. Fair value of the bond portfolio was determined using Level 1 inputs related to U.S. 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 $ 1,498,000 and $ 504,000 at March 28, 2026 and December 27, 2025, respectively. 1 3 Table of Contents The amortized cost and fair values of available-for-sale investments are as follows at March 28, 2026 and December 27, 2025 (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value March 28, 2026 Money market investments $ 8,571 $ —   $ —   $ 8,571 Asset-backed securities 17,442 15 1,116 16,341 Corporate bonds, commercial paper and direct obligations of government agencies 105,269 369 755 104,883 U.S. Treasury obligations 17,658 —   11 17,647 Total $ 148,940 $ 384 $ 1,882 $ 147,442 December 27, 2025 Money market investments $ 15,046 $ —   $ — $ 15,046 Asset-backed securities 19,380 43 1,128 18,295 Corporate bonds, commercial paper and direct obligations of government agencies 103,425 1,097 523 103,999 U.S. Treasury obligations 9,666 7 — 9,673 Total $ 147,517 $ 1,147 $ 1,651 $ 147,013 For those available-for-sale 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 Total Fair Value Unrealized Loss Fair Value Unrealized Loss Fair Value Unrealized Loss March 28, 2026 Asset-backed securities $ 4,078 $ 532 $ 8,342 $ 584 $ 12,420 $ 1,116 Corporate bonds, commercial paper, and direct obligations of government agencies 49,810 327 11,536 428 61,346 755 U.S. Treasury obligations 17,647 11 —   —   17,647 11 Total $ 71,535 $ 870 $ 19,878 $ 1,012 $ 91,413 $ 1,882 December 27, 2025 Asset-backed securities $ 2,768 $ 386 $ 10,425 $ 742 $ 13,193 $ 1,128 Corporate bonds, commercial paper, and direct obligations of government agencies 16,772 56 13,818 467 30,590 523 Total $ 19,540 $ 442 $ 24,243 $ 1,209 $ 43,783 $ 1,651 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. For these reasons, no losses have been recognized in the Company’s consolidated statements of income. (9) Leases Landstar’s noncancelable leases are primarily comprised of finance leases for the acquisition of new trailing equipment. 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 assets and operating lease liabilities represent leases for facilities maintained in support of the Company’s network of BCO Independent Contractors and office space used to conduct Landstar’s business. 1 4 Table of Contents These leases do not have significant rent escalation holidays, concessions, leasehold improvement incentives or other build-out clauses. Further, the leases do not contain contingent rent provisions. Landstar also rents certain trailing equipment to supplement the Company-owned trailer fleet under “month-to-month” lease terms, which are not required to be recorded on the balance sheet due to the less than twelve month lease term exemption. Sublease income is primarily comprised of weekly trailing equipment rentals to BCO Independent Contractors. Most of Landstar’s operating leases include one or more options to renew. The exercise of lease renewal options is typically at Landstar’s sole discretion, and, as such, the majority of renewals to extend the lease terms are not included in the right-of-use assets and lease liabilities as they are not reasonably certain of exercise. Landstar regularly evaluates the renewal options, and when they are reasonably certain of exercise, Landstar includes the renewal period in the lease term. As most of Landstar’s operating leases do not provide an implicit rate, Landstar utilized its incremental borrowing rate based on the information available at the lease commencement date in determining the present value of the lease payments. Landstar has a centrally managed treasury function; therefore, based on the applicable lease terms and the current economic environment, the Company applies a portfolio approach for determining the incremental borrowing rate. The components of lease cost for finance leases and operating leases for the thirteen weeks ended March 28, 2026 were (in thousands): Finance leases: Amortization of right-of-use assets $ 4,127 Interest on lease liability 976 Total finance lease cost 5,103 Operating leases: Lease cost 1,532 Variable lease cost —   Sublease income ( 1,411 ) Total net operating lease income 121 Total net lease cost $ 5,224 1 5 Table of Contents A summary of the lease classification on the Company’s consolidated balance sheet as of March 28, 2026 is as follows (in thousands): Assets: Operating lease right-of-use assets Other assets $ 552 Finance lease assets Operating property, less accumulated depreciation and amortization 104,258 Total lease assets $ 104,810 Liabilities: 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): Finance Leases Operating Leases 2026 Remainder $ 23,274 $ 225 2027 20,980 265 2028 17,071 94 2029 12,684 —   2030 1,760 —   Thereafter —   —   Total future minimum lease payments 75,769 584 Less amount representing interest ( 1.6 % to 6.4 %) 6,503 32 Present value of minimum lease payments $ 69,266 $ 552 Current maturities of long-term debt 26,121 Long-term debt, excluding current maturities 43,145 Other current liabilities 291 Deferred income taxes and other noncurrent liabilities 261 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) 3.2 2.0 Weighted average discount rate 5.3 % 5.5 % (10) Debt 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 also includes an “accordion” feature providing for a possible increase of up to an aggregate amount of borrowing capacity of $ 600,000,000 . As of March 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. 1 6 Table of Contents The Credit Agreement contains a number of covenants that limit, among other things, the incurrence of additional indebtedness. The Company is required to, among other things, maintain a minimum fixed charge coverage ratio, as described in the Credit Agreement, and maintain a Leverage Ratio, as defined in the Credit Agreement, below a specified maximum. 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. 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. None of these covenants are presently considered by management to be materially restrictive to the Company’s operations, capital resources or liquidity. The Company is currently in compliance with all of the debt covenants under the Credit Agreement. The interest rates on borrowings under the revolving credit facility are typically tied to short-term interest rates and, as such, carrying value approximates fair value. Interest rates on borrowings under finance leases approximate the interest rates that would currently be available to the Company under similar terms and, as such, carrying value approximates fair value. (11) Commitments and Contingencies 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 $ 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 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. (12) Change in Accounting Estimate for Self-Insured Claims Landstar provides for the estimated costs of self-insured claims primarily on an actuarial basis. The amount recorded for the estimated liability for claims incurred is based upon the facts and circumstances known on the applicable balance sheet date. The ultimate resolution of these claims may be for an amount greater or less than the amount estimated by management. The Company continually revises its existing claim estimates as new or revised information becomes available on the status of each claim. Historically, the Company has experienced both favorable and unfavorable development of prior years’ claims estimates within its various programs. The following table summarizes the adverse effect of the increase in the cost of insurance claims resulting from unfavorable development of prior year self-insured claims estimates on operating income, net income and basic and diluted earnings per share set forth in the consolidated statements of income for the thirteen-week periods ended March 28, 2026 and March 29, 2025 (in thousands, except per share amounts): Thirteen Weeks Ended March 28, 2026 March 29, 2025 Operating income $ 4,888 $ 11,352 Net income $ 3,671 $ 8,548 Basic and diluted earnings per share $ 0.11 $ 0.24 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. 17 Table of Contents (13) Held for Sale Subsidiary 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. de C.V. (“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. The Company determined that this planned divestiture does not represent a strategic shift that would be expected to have a significant effect on our consolidated results of operations, and therefore the results of Landstar Metro are not reported as discontinued operations. 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. 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 $ 10,678,000 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 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 March 28, 2026 Assets held for sale: Cash and cash equivalents $ 315 Trade and other receivables 9,096 Operating property 8,167 Other assets 5,942 Less: valuation allowance ( 11,732 ) Total assets held for sale (1) $ 11,788 Liabilities held for sale: Accounts payable $ 3,756 Deferred income taxes and other liabilities 4,712 Total liabilities held for sale (1) $ 8,468 Cumulative translation loss of foreign entities held for sale (2) $ 1,205 (1) Assets and liabilities held for sale are separately presented on the consolidated balance sheets. (2) Cumulative translation loss of foreign entities held for sale is included within accumulated other comprehensive loss on the consolidated balance sheets. (14) Recent Accounting Pronouncements Accounting Standards Issued But Not Yet Adopted In November 2024, the FASB issued ASU 2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which expands disclosures about certain categories of expenses. ASU 2024-03 is effective for annual periods beginning after December 15, 2026. The Company is currently evaluating the impact of ASU 2024-03 on its consolidated financial statements and disclosures. 18 Table of Contents