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 twenty-six weeks ended June 27, 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. 4 Table of Contents LANDSTAR SYSTEM, INC. AND SUBSIDIARY CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except per share amounts) (Unaudited) June 27, 2026 December 27, 2025 ASSETS Current Assets Cash and cash equivalents $ 294,350 $ 396,694 Short-term investments 53,352 55,531 Trade accounts receivable, less allowance of $ 9,135 and $ 12,490 866,879 670,137 Other receivables, including advances to independent contractors, less allowance of $ 14,727 and $ 18,759 47,306 52,784 Assets held for sale —   12,231 Other current assets 59,159 28,949 Total current assets 1,321,046 1,216,326 Operating property, less accumulated depreciation and amortization of $ 488,271 and $ 473,642 252,963 261,322 Goodwill 34,005 34,005 Other assets 134,521 124,282 Total assets $ 1,742,535 $ 1,635,935 LIABILITIES AND SHAREHOLDERS’ EQUITY Current Liabilities Cash overdraft $ 71,849 $ 56,654 Accounts payable 468,780 369,567 Current maturities of long-term debt 24,686 28,342 Insurance claims 59,020 87,343 Dividends payable —   68,117 Liabilities held for sale —   6,961 Other current liabilities 99,588 78,856 Total current liabilities 723,923 695,840 Long-term debt, excluding current maturities 42,088 48,480 Insurance claims 98,686 62,706 Deferred income taxes and other noncurrent liabilities 41,108 33,244 Shareholders’ Equity Common stock, $ 0.01 par value, authorized 160,000,000 shares, issued 68,631,174 and 68,590,708 shares 686 686 Additional paid-in capital 266,673 261,256 Retained earnings 2,913,890 2,852,680 Cost of 34,694,249 and 34,531,982 shares of common stock in treasury ( 2,336,862 ) ( 2,313,245 ) Accumulated other comprehensive loss ( 7,657 ) ( 5,712 ) Total shareholders’ equity 836,730 795,665 Total liabilities and shareholders’ equity $ 1,742,535 $ 1,635,935 See accompanying notes to consolidated financial statements. 5 Table of Contents LANDSTAR SYSTEM, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share amounts) (Unaudited) Twenty-Six Weeks Ended Thirteen Weeks Ended June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 Revenue $ 2,603,555 $ 2,363,885 $ 1,432,264 $ 1,211,383 Investment income 5,679 7,327 2,705 3,729 Costs and expenses: Purchased transportation 2,030,397 1,839,289 1,123,400 941,411 Commissions to agents 201,578 192,836 109,435 99,522 Other operating costs, net of gains on asset sales/dispositions 32,745 31,424 17,945 19,595 Insurance and claims 74,923 70,301 39,359 30,449 Selling, general and administrative 129,158 117,288 68,193 55,706 Depreciation and amortization 20,969 24,375 10,409 12,149 Total costs and expenses 2,489,770 2,275,513 1,368,741 1,158,832 Operating income 119,464 95,699 66,228 56,280 Interest and debt expense 1,330 539 812 698 Income before income taxes 118,134 95,160 65,416 55,582 Income taxes 29,743 23,461 16,465 13,689 Net income $ 88,391 $ 71,699 $ 48,951 $ 41,893 Basic and diluted earnings per share $ 2.60 $ 2.05 $ 1.44 $ 1.20 Average basic and diluted shares outstanding 33,979,000 35,037,000 33,935,000 34,870,000 Dividends per common share $ 0.80 $ 0.76 $ 0.40 $ 0.40 See accompanying notes to consolidated financial statements. 6 Table of Contents LANDSTAR SYSTEM, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Dollars in thousands) (Unaudited) Twenty-Six Weeks Ended Thirteen Weeks Ended June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 Net income $ 88,391 $ 71,699 $ 48,951 $ 41,893 Other comprehensive (loss) income: Unrealized holding (losses) gains on available-for-sale investments, net of tax (benefit) expense of ($ 184 ), $ 424 , $ 30 and $ 160 ( 667 ) 1,546 113 582 Foreign currency translation (losses) gains ( 1,278 ) 3,300 ( 683 ) 3,250 Other comprehensive (loss) income ( 1,945 ) 4,846 ( 570 ) 3,832 Comprehensive income $ 86,446 $ 76,545 $ 48,381 $ 45,725 See accompanying notes to consolidated financial statements. 7 Table of Contents LANDSTAR SYSTEM, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (Unaudited) Twenty-Six Weeks Ended June 27, 2026 June 28, 2025 OPERATING ACTIVITIES Net income $ 88,391 $ 71,699 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 20,969 24,375 Non-cash interest charges 132 132 Provisions for losses on trade and other accounts receivable 2,785 9,912 Gains on sales/disposals of operating property ( 368 ) ( 1,389 ) Deferred income taxes, net 7,671 ( 5,904 ) Stock-based compensation 5,420 3,657 Changes in operating assets and liabilities: Increase in trade and other accounts receivable ( 194,049 ) ( 44,941 ) Increase in other assets ( 25,744 ) ( 26,544 ) Increase in accounts payable 99,213 18,224 Increase in other liabilities 15,733 6,903 Increase in insurance claims 7,657 6,712 NET CASH PROVIDED BY OPERATING ACTIVITIES 27,810 62,836 INVESTING ACTIVITIES Sales and maturities of investments 78,673 84,755 Purchases of investments ( 80,970 ) ( 86,838 ) Purchases of operating property ( 8,714 ) ( 4,383 ) Proceeds from sales of operating property 2,851 5,690 NET CASH USED BY INVESTING ACTIVITIES ( 8,160 ) ( 776 ) FINANCING ACTIVITIES Increase (decrease) in cash overdraft 15,195 ( 2,892 ) Dividends paid ( 95,298 ) ( 97,236 ) Taxes paid in lieu of shares issued related to stock-based compensation plans ( 1,057 ) ( 916 ) Purchases of common stock ( 24,149 ) ( 102,300 ) Principal payments on finance lease obligations ( 15,245 ) ( 16,883 ) NET CASH USED BY FINANCING ACTIVITIES ( 120,554 ) ( 220,227 ) Effect of exchange rate changes on cash and cash equivalents ( 1,619 ) 2,386 Decrease in cash and cash equivalents, including cash and cash equivalents classified as assets held for sale ( 102,523 ) ( 155,781 ) Plus: Net change in cash and cash equivalents classified as assets held for sale 179 —   Net change in cash and cash equivalents ( 102,344 ) ( 155,781 ) Cash and cash equivalents at beginning of period 396,694 515,018 Cash and cash equivalents at end of period $ 294,350 $ 359,237 See accompanying notes to consolidated financial statements. 8 Table of Contents LANDSTAR SYSTEM, INC. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY Twenty-Six and Thirteen Weeks Ended June 27, 2026 and June 28, 2025 (Dollars in thousands) (Unaudited) Common Stock Additional Paid-In Capital Retained Earnings Treasury Stock at Cost Accumulated Other Comprehensive Loss Total Shares Amount Shares Amount 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 Net income 48,951 48,951 Dividends ($ 0.40 per share) ( 13,567 ) ( 13,567 ) Purchases of common stock 24 24 Issuance of stock related to stock-based compensation plans 11,934 3,219 ( 17 ) ( 17 ) Stock-based compensation 2,933 2,933 Other comprehensive loss ( 570 ) ( 570 ) Balance June 27, 2026 68,631,174 $ 686 $ 266,673 $ 2,913,890 34,694,249 $ ( 2,336,862 ) $ ( 7,657 ) $ 836,730 9 Table of Contents 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 Net income 41,893 41,893 Dividends ($ 0.40 per share) ( 13,916 ) ( 13,916 ) Purchases of common stock 300,141 ( 42,350 ) ( 42,350 ) Issuance of stock related to stock-based compensation plans 7,646 146 ( 7 ) ( 7 ) Stock-based compensation 1,619 1,619 Other comprehensive income 3,832 3,832 Balance June 28, 2025 68,589,418 $ 686 $ 258,915 $ 2,905,011 33,935,882 $ ( 2,235,622 ) $ ( 7,164 ) $ 921,826 See accompanying notes to consolidated financial statements. 10 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 twenty-six-week and thirteen-week periods ended June 27, 2026 and June 28, 2025 (dollars in thousands): Twenty-Six Weeks Ended Thirteen Weeks Ended Mode June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 Truck – BCO Independent Contractors 40 % 38 % 39 % 38 % Truck – Truck Brokerage Carriers 53 % 54 % 54 % 54 % Rail intermodal 2 % 2 % 2 % 2 % Ocean and air cargo carriers 4 % 5 % 3 % 4 % Truck Equipment Type Van equipment $ 1,320,919 $ 1,186,071 $ 717,513 $ 591,276 Unsided/platform equipment $ 860,737 $ 741,270 $ 492,168 $ 400,862 Less-than-truckload $ 48,912 $ 47,749 $ 25,124 $ 25,313 Other truck transportation (1) $ 185,591 $ 192,766 $ 99,073 $ 100,687 (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. 11 Table of Contents (2) Share-based Payment Arrangements As of June 27, 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): Twenty-Six Weeks Ended Thirteen Weeks Ended June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 Total cost of the Plans during the period $ 5,420 $ 3,657 $ 2,933 $ 1,619 Amount of related income tax benefit recognized during the period ( 1,341 ) ( 792 ) ( 883 ) ( 344 ) Net cost of the Plans during the period $ 4,079 $ 2,865 $ 2,050 $ 1,275 Included in income tax benefits recognized in the twenty-six-week periods ended June 27, 2026 and June 28, 2025 were tax (benefits) deficiencies from stock-based awards of ($ 14,000 ) and $ 104,000 , respectively. As of June 27, 2026, there were 161,928 shares of the Company’s common stock reserved for issuance under the 2022 DSCP and 2,600,923 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 61,940 $ 134.35 Forfeited ( 42,744 ) $ 154.46 Outstanding at June 27, 2026 222,908 $ 139.27 During the twenty-six-week period ended June 27, 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 June 27, 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 twenty-six-week period ended June 27, 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. 12 Table of Contents The Company recognized approximately $ 3,022,000 and $ 1,253,000 of share-based compensation expense related to RSU awards in the twenty-six-week periods ended June 27, 2026 and June 28, 2025, respectively. As of June 27, 2026, there was a maximum of $ 47.9 million of total unrecognized compensation cost related to RSU awards granted under the Plans with an expected average remaining life of approximately 3.1 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 WeightedAverage Grant Date Fair Value Non-vested at December 27, 2025 53,776 $ 168.95 Granted 36,135 $ 155.77 Vested ( 31,570 ) $ 167.44 Forfeited ( 4,354 ) $ 164.93 Non-vested at June 27, 2026 53,987 $ 161.33 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 June 27, 2026, there was $ 7,061,000 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 2.0 years. (3) Income Taxes The provisions for income taxes for the 2026 and 2025 twenty-six-week periods were based on estimated annual effective income tax rates of 25.1 % 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 twenty-six-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 twenty-six-week period was 24.7 %. The effective income tax rate was higher than the statutory federal income tax rate of 21 % in the 2025 period primarily attributable to state taxes. (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 twenty-six-week periods. 1 3 Table of Contents (5) Additional Cash Flow Information During the 2026 twenty-six-week period, Landstar paid income taxes and interest of $ 22,188,000 and $ 2,449,000 , respectively. During the 2025 twenty-six-week period, Landstar paid income taxes and interest of $ 33,972,000 and $ 2,816,000 , respectively. Landstar acquired operating property by entering into finance leases in the amount of $ 5,197,000 in the 2026 twenty-six-week period. Landstar did not acquire any operating property by entering into finance leases in the 2025 twenty-six-week period. During the 2026 twenty-six-week period, the Company purchased its common stock at a total cost of $ 22,563,000 , including $ 22,387,000 in cash purchases and accrued excise tax of $ 176,000 , which is included in other current liabilities in the consolidated balance sheet at June 27, 2026. The Company also paid $ 1,762,000 in excise tax on its common stock purchases, which was included in other current liabilities in the consolidated balance sheet at December 27, 2025. During the 2025 twenty-six-week period, the Company purchased its common stock at a total cost of $ 103,295,000 , including $ 102,300,000 in cash purchases and accrued excise tax of $ 995,000 , which was included in other current liabilities in the consolidated balance sheet at June 28, 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. 1 4 Table of Contents The following tables summarize information about the Company’s reportable business segments as of and for the twenty-six-week and thirteen-week periods ended June 27, 2026 and June 28, 2025 (in thousands): Twenty-Six Weeks Ended June 27, 2026 June 28, 2025 Transportation Logistics Insurance Total Transportation Logistics Insurance Total External revenue $ 2,574,766 $ 28,789 $ 2,603,555 $ 2,334,432 $ 29,453 $ 2,363,885 Internal revenue 51,623 51,623 53,093 53,093 Total revenue 2,574,766 80,412 2,655,178 2,334,432 82,546 2,416,978 Investment income 5,679 5,679 7,327 7,327 Purchased transportation 2,030,397 2,030,397 1,839,289 1,839,289 Commissions to agents 201,578 201,578 192,836 192,836 Other operating costs, net of gains on asset sales/dispositions 32,745 32,745 31,424 31,424 Insurance and claims 61,461 65,085 126,546 63,373 60,021 123,394 Selling, general and administrative 122,742 6,416 129,158 111,985 5,303 117,288 Depreciation and amortization 20,969 20,969 24,375 24,375 Operating income 104,874 14,590 119,464 71,150 24,549 95,699 Goodwill 34,005 34,005 41,399 41,399 Operating income 119,464 95,699 Interest and debt expense (1) 1,330 539 Income before income taxes 118,134 95,160 Thirteen Weeks Ended June 27, 2026 June 28, 2025 Transportation Logistics Insurance Total Transportation Logistics Insurance Total External revenue $ 1,417,765 $ 14,499 $ 1,432,264 $ 1,196,687 $ 14,696 $ 1,211,383 Internal revenue 40,329 40,329 41,514 41,514 Total revenue 1,417,765 54,828 1,472,593 1,196,687 56,210 1,252,897 Investment income 2,705 2,705 3,729 3,729 Purchased transportation 1,123,400 1,123,400 941,411 941,411 Commissions to agents 109,435 109,435 99,522 99,522 Other operating costs, net of gains on asset sales/dispositions 17,945 17,945 19,595 19,595 Insurance and claims 30,835 48,853 79,688 29,517 42,446 71,963 Selling, general and administrative 64,956 3,237 68,193 52,559 3,147 55,706 Depreciation and amortization 10,409 10,409 12,149 12,149 Operating income 60,785 5,443 66,228 41,934 14,346 56,280 Operating income 66,228 56,280 Interest and debt expense (1) 812 698 Income before income taxes 65,416 55,582 (1) Interest and debt expense includes (i) interest income earned on cash balances held by the transportation logistics segment of $ 1,251 and $ 2,409 in the 2026 and 2025 twenty-six-week periods, respectively, and $ 473 and $ 741 in the 2026 and 2025 thirteen-week periods, respectively, and (ii) consolidated total interest expense of $ 2,581 and $ 2,948 in the 2026 and 2025 twenty-six-week periods, respectively, and $ 1,285 and $ 1,439 in the 2026 and 2025 thirteen-week periods, respectively. In the twenty-six-week periods ended June 27, 2026 and June 28, 2025, no single customer accounted for more than 10 % of the Company’s consolidated revenue. 1 5 Table of Contents (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 twenty-six-week period ended June 27, 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 ( 667 ) ( 1,278 ) ( 1,945 ) Balance as of June 27, 2026 $ ( 1,063 ) $ ( 6,594 ) $ ( 7,657 ) 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 twenty-six-week period ended June 27, 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 $ 1,355,000 and $ 504,000 at June 27, 2026 and December 27, 2025, respectively. 1 6 Table of Contents The amortized cost and fair values of available-for-sale investments are as follows at June 27, 2026 and December 27, 2025 (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value June 27, 2026 Money market investments $ 8,886 $ —   $ —   $ 8,886 Asset-backed securities 14,690 13 1,025 13,678 Corporate bonds, commercial paper and direct obligations of government agencies 104,156 323 659 103,820 U.S. Treasury obligations 22,723 —   7 22,716 Total $ 150,455 $ 336 $ 1,691 $ 149,100 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 June 27, 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 June 27, 2026 Asset-backed securities $ 3,757 $ 500 $ 6,481 $ 525 $ 10,238 $ 1,025 Corporate bonds, commercial paper, and direct obligations of government agencies 56,411 272 1,691 387 58,102 659 U.S. Treasury obligations 12,726 7 —   —   12,726 7 Total $ 72,894 $ 779 $ 8,172 $ 912 $ 81,066 $ 1,691 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 7 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 twenty-six weeks ended June 27, 2026 were (in thousands): Finance leases: Amortization of right-of-use assets $ 8,325 Interest on lease liability 1,896 Total finance lease cost 10,221 Operating leases: Lease cost 3,191 Variable lease cost —   Sublease income ( 3,124 ) Total net operating lease cost 67 Total net lease cost $ 10,288 A summary of the lease classification on the Company’s consolidated balance sheet as of June 27, 2026 is as follows (in thousands): Assets: Operating lease right-of-use assets Other assets $ 482 Finance lease assets Operating property, less accumulated depreciation and amortization 105,257 Total lease assets $ 105,739 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 June 27, 2026 (in thousands): Finance Leases Operating Leases 2026 Remainder $ 15,803 $ 150 2027 22,718 263 2028 18,814 94 2029 14,345 —   2030 2,949 —   Thereafter 496 —   Total future minimum lease payments 75,125 507 Less amount representing interest ( 1.6 % to 6.4 %) 8,351 25 Present value of minimum lease payments $ 66,774 $ 482 1 8 Table of Contents Current maturities of long-term debt 24,686 Long-term debt, excluding current maturities 42,088 Other current liabilities 286 Deferred income taxes and other noncurrent liabilities 196 The weighted average remaining lease term and the weighted average discount rate for finance and operating leases as of June 27, 2026 were: Finance Leases Operating Leases Weighted average remaining lease term (years) 3.2 1.8 Weighted average discount rate 5.5 % 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 June 27, 2026 and December 27, 2025. On June 30, 2026, and as previously disclosed in a Form 8-K filed with the SEC on July 6, 2026, Landstar entered into a third amended and restated credit agreement, dated June 30, 2026 , with a bank syndicate led by JPMorgan Chase Bank, N.A., as administrative agent (the “Third Amended and Restated Credit Agreement”), which amended and restated the existing second amended and restated credit agreement. The Third Amended and Restated Credit Agreement, which matures June 30, 2031 , provides for borrowing capacity in the form of a revolving credit facility of $ 300,000,000 , $ 100,000,000 of which may be utilized in the form of letters of credit. The Third Amended and Restated Credit Agreement also includes an uncommitted “accordion” feature permitting up to an additional $ 500,000,000 in increases to the revolving credit facility. The Third Amended and Restated Credit Agreement is referred to herein as the “Credit Agreement.” As of June 27, 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 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 Net 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 0.175 % to 0.25 %, based on the Company’s Net Leverage Ratio at the end of the most recent applicable fiscal quarter for which financial statements have been delivered. 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 interest coverage ratio, as described in the Credit Agreement, and maintain a Net 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 Net 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. 19 Table of Contents (11) Commitments and Contingencies Short-term investments include $ 53,352,000 in current maturities of investments held by the Company’s insurance segment at June 27, 2026. The non-current portion of the bond portfolio of $ 95,748,000 is included in other assets. The short-term investments, together with $ 30,349,000 of non-current investments, provide collateral for the $ 75,331,000 of letters of credit issued to guarantee payment of insurance claims. As of June 27, 2026, Landstar also had $ 34,886,000 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 twenty-six-week and thirteen-week periods ended June 27, 2026 and June 28, 2025 (in thousands, except per share amounts): Twenty-Six Weeks Ended Thirteen Weeks Ended June 27, 2026 June 28, 2025 June 27, 2026 June 28, 2025 Operating income $ 15,393 $ 13,641 $ 10,505 $ 2,289 Net income $ 11,529 $ 10,272 $ 7,868 $ 1,726 Basic and diluted earnings per share $ 0.34 $ 0.29 $ 0.23 $ 0.05 The unfavorable development of prior years’ claims during the twenty-six-week period ended June 27, 2026 was primarily attributable to several specific commercial trucking claims and cargo loss experience as a result of fraud and theft in the supply chain. (13) Subsidiary Wind Down 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. During the second fiscal quarter of 2026, the Company stopped actively marketing Landstar Metro and initiated a wind-down of its operations and sales of certain assets. As such, the assets and liabilities of Landstar Metro are no longer presented as held for sale within the consolidated balance sheet at June 27, 2026. It is not anticipated that the disposition of Landstar Metro will adversely affect the Company’s ability to provide U.S.-Mexico cross-border services, given that Landstar Metro was principally engaged in intra-Mexico truck transportation services. In the 2026 twenty-six-week period, the Company recognized an impairment of $ 679,000 included in selling, general and administrative costs within the Company’s consolidated statements of income related to Landstar Metro. While the Company does not currently anticipate any further charges to be incurred as a result of the wind-down process, no assurances can be provided that there will not be additional charges and expenses incurred by the Company in connection with any ultimate dissolution of Landstar Metro. 20 Table of Contents (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 disclosures, but this standard update is not expected to impact the Company’s results of operations or financial condition.