LANDSTAR SYSTEM INC

Previous wording

Landstar System, Inc. 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. 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 over 1,000 independent commission sales agents and over 77,000 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.

Current wording

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

Previous wording

The transportation logistics segment provides a wide range of integrated transportation management solutions. 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. 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, 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. The independent commission sales agents market services provided by the transportation logistics segment. 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 thetwenty-six weeks ended June 28, 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 thetwenty-six period ended June 28, 2025.

Current wording

The transportation logistics segment provides a wide range of integrated transportation management solutions. 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. 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. The independent commission sales agents market services provided by the transportation logistics segment. 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.

Previous wording

The insurance segment is comprised of Signature Insurance Company (“Signature”), a wholly owned offshore insurance subsidiary, and Risk Management Claim Services, Inc. The insurance segment provides risk and claims management services to certain of Landstar’s operating subsidiaries. In addition, it reinsures certain risks of the Company’s BCO Independent Contractors and provides certain property and casualty insurance and reinsurance to certain of Landstar’s operating subsidiaries. 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 thetwenty-six period ended June 28, 2025.

Current wording

The insurance segment is comprised of Signature Insurance Company (“Signature”), a wholly owned offshore insurance subsidiary, and Risk Management Claim Services, Inc. The insurance segment provides risk and claims management services to certain of Landstar’s operating subsidiaries. In addition, it reinsures certain risks of the Company’s BCO Independent Contractors and provides certain property and casualty insurance and reinsurance to certain of Landstar’s operating subsidiaries. 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.

Previous wording

As further described in Note 15 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 thetwenty-six-week period ended June 28, 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.

Current wording

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.

Previous wording

As previously disclosed in the Company’s Quarterly Report on Form 10-Q for the 2025 first quarter, 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 provide for a refund of premium in the event of favorable loss experience. 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 $9,000,000 of an anticipated $12,000,000 cash payment 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 June 28, 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. On the first business day of the 2025 third fiscal quarter, the Company received the remaining $3,000,000 cash payment. A substantial verdict resulting from the Trial could result in the Company not meeting the requirements relating to the “no claims bonus”. No assurances can be provided regarding whether the Company will be able to recognize a gain with respect to the “no claims bonus.”

Current wording

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.”

Previous wording

During thetwenty-six-week period ended June 28, 2025, employee compensation and benefits accounted for approximately 62% 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.

Current wording

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. 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.

Previous wording

In general, variable contribution margin on revenue generated by BCO Independent Contractors represents a fixed percentage due to the nature of the contracts that pay a fixed percentage of revenue to both the BCO Independent Contractors and independent commission sales agents. For revenue generated by Truck Brokerage Carriers, variable contribution margin may be either a fixed or variable percentage, depending on the contract with each individual independent commission sales agent. 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 thetwenty-six-week period ended June 28, 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.

Current wording

In general, variable contribution margin on revenue generated by BCO Independent Contractors represents a fixed percentage due to the nature of the contracts that pay a fixed percentage of revenue to both the BCO Independent Contractors and independent commission sales agents. For revenue generated by Truck Brokerage Carriers, variable contribution margin may be either a fixed or variable percentage, depending on the contract with each individual independent commission sales agent. 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.

Previous wording

The decrease in operating income as a percentage of gross profit from the 2024 twenty-six-week period to the 2025 twenty-six-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 Company’s fixed cost infrastructure, principally certain components of selling, general and administrative costs, in comparison to a smaller gross profit base.

Current wording

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.

Previous wording

The decrease in operating income as a percentage of variable contribution from the 2024 twenty-six-week period to the 2025 twenty-six-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 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.

Current wording

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.

Previous wording

Revenue for the 2025 twenty-six-week period was $2,363,885,000, a decrease of $32,163,000, or 1%, compared to the 2024 twenty-six-week period. Transportation revenue decreased $29,175,000, 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 twenty-six-week period. Reinsurance premiums were $29,453,000 and $32,441,000 for the 2025 and 2024 twenty-six-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 twenty-six-week period compared to the 2024 twenty-six-week period.

Current wording

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.

Previous wording

Truck transportation revenue generated by BCO Independent Contractors and Truck Brokerage Carriers (together, the “third party truck capacity providers”) for the 2025 twenty-six-week period was $2,167,856,000, representing 92% of total revenue, a decrease of $6,765,000, or less than 1%, compared to the 2024 twenty-six-week period. The number of loads hauled by third party truck capacity providers decreased approximately 1% compared to the 2024 twenty-six-week period, while revenue per load on loads hauled by third party truck capacity providers increased approximately 1% in the 2025 twenty-six-week period compared to the 2024 twenty-six-week period.

Current wording

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.

Previous wording

The decrease in the number of loads hauled via truck compared to the 2024 thirteen-week period was primarily due to decreased demand from the 2024 thirteen-week period for the Company’s van and less-than-truckload transportation services. Loads hauled via van equipment decreased 6% and loads hauled via less-than-truckload loadings decreased 3%, while loads hauled via other truck transportation services increased 22% and loaded hauled via unsided/platform equipment increased 2% as compared to the 2024 thirteen-week period.

Current wording

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.

Previous wording

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 2% and on loads hauled via other truck transportation services increased 2%, while revenue per load on less-than-truckload loadings decreased 4%. Revenue per load on loads hauled via van equipment was approximately the same as compared to the 2024 twenty-six-week period.

Current wording

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.

Previous wording

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 $54,016,000 and $60,302,000 in the 2025 and 2024 twenty-six-week periods, respectively. It should be noted that billings to many customers of the Company’s truck brokerage services include a singleall-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.

Current wording

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 singleall-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.

Previous wording

Transportation revenue generated by rail intermodal, air cargo and ocean cargo carriers (collectively, the “multimode capacity providers”) for the 2025 twenty-six-week period was $155,941,000, or 7% of total revenue, a decrease of $14,441,000, or 8%, compared to the 2024 twenty-six-week period. Revenue per load on revenue generated by multimode capacity providers decreased approximately 5% in the 2025 twenty-six-week period compared to the 2024 twenty-six-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 10% and 5%, respectively, while revenue per load on loads hauled via air increased approximately 12% during the 2025 twenty-six-week period as compared to the 2024 twenty-six-week period. The decrease in revenue per load on loads hauled by rail intermodal carriers was broad-based with decreases at several customers during the 2025 twenty-six-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 twenty-six-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 one specific customer during the 2025 twenty-six-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 5% decrease in air loadings, a 4% decrease in ocean loadings and a 3% decrease in rail loadings. The 5% decrease in air loadings was broad-based with decreases at several customers. The 4% decrease in ocean loadings was broad-based with decreases at several customers. The 3% decrease in rail loadings was primarily attributable to decreased loadings at one specific customer.

Current wording

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.

Previous wording

Purchased transportation was 77.8% and 77.4% of revenue in the 2025 and 2024 twenty-six-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. Commissions to agents were 8.2% of revenue in both the 2025 and 2024 twenty-six-week periods.

Current wording

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.

Previous wording

Investment income was $7,327,000 and $7,066,000 in the 2025 and 2024 twenty-six-week periods, respectively. The increase in investment income was attributable to a higher average investment balance held by the insurance segment during the 2025 twenty-six-week period, partially offset by lower average rates of return on investments in the 2025 twenty-six-week period.

Current wording

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.

Previous wording

Other operating costs increased $2,430,000 in the 2025 twenty-six-week period compared to the 2024 twenty-six-week period. The increase in other operating costs compared to the prior year was primarily due to an approximately $4,800,000 expense relating to the supply chain fraud matter referenced above under “Expenses - Other operating costs, net of gains on asset sales/dispositions” and increased trailer equipment maintenance costs, partially offset by increased gains on sales of operating property.

Current wording

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.

Previous wording

Insurance and claims increased $16,869,000 in the 2025 twenty-six-week period compared to the 2024 twenty-six-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 twenty-six-week period and increased severity of current year trucking and cargo claims during the 2025 twenty-six-week period, partially offset by decreased BCO miles traveled during the 2025 twenty-six-week period. During the 2025 and 2024 twenty-six-week periods, insurance and claims costs included $13,641,000 and $2,116,000 of net unfavorable adjustments to prior years’ claims estimates, respectively.

Current wording

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.

Previous wording

Selling, general and administrative costs increased $5,927,000 in the 2025 twenty-six-week period compared to the 2024 twenty-six-week period. The increase in selling, general and administrative costs compared to prior year was primarily attributable to increased project consulting fees, increased wages, 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 annual agent convention costs, partially offset by the impact of Chief Executive Officer (“CEO”) transition costs on the 2024 twenty-six-week period.

Current wording

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.

Previous wording

Depreciation and amortization decreased $4,255,000 in the 2025 twenty-six-week period compared to the 2024 twenty-six-week period. The decrease in depreciation and amortization expense was primarily due to decreased depreciation on information technology software in the 2025 twenty-six-week period.

Current wording

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.

Previous wording

The year-over-prior-year change in interest and debt expense (income) was $3,825,000, with net interest and debt expense of $539,000 in the 2025 twenty-six-week period compared to net interest and debt income of $3,286,000 in the 2024 twenty-six-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.

Current wording

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.

Previous wording

The provisions for income taxes for the 2025 and 2024 twenty-six-week periods were based on estimated annual effective income tax rates of 24.3% and 24.5%, respectively, adjusted for discrete events, such as benefits resulting from stock-based awards. 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. The effective income tax rate for the 2024 twenty-six-week period was 24.1%. 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.

Current wording

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.

Previous wording

Revenue for the 2025 thirteen-week period was $1,211,383,000, a decrease of $13,622,000, or 1%, compared to the 2024 thirteen-week period. Transportation revenue decreased $12,388,000, or 1%. The decrease in transportation revenue was attributable to a decreased number of loads hauled of approximately 2%, partially offset by an increased revenue per load of approximately 1% as compared to the 2024 thirteen-week period. Reinsurance premiums were $14,696,000 and $15,930,000 for the 2025 and 2024 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 2025 thirteen-week period compared to the 2024 thirteen-week period.

Current wording

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. Reinsurance premiums were $14,604,000 and $15,533,000 for the 2025 and 2024 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 2025 thirteen-week period compared to the 2024 thirteen-week period.

Previous wording

Truck transportation revenue generated by third party truck capacity providers for the 2025 thirteen-week period was $1,118,138,000, representing 92% of total revenue, an increase of $12,449,000, or 1%, compared to the 2024 thirteen-week period. Revenue per load on loads hauled by third party truck capacity providers increased approximately 3%, while the number of loads hauled by third party truck capacity providers decreased approximately 1% in the 2025 thirteen-week period compared to the 2024 thirteen-week period.

Current wording

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.

Previous wording

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 $27,091,000 and $30,269,000 in the 2025 and 2024 thirteen-week periods, respectively.

Current wording

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 $28,216,000 and $29,560,000 in the 2025 and 2024 thirteen-week periods, respectively.

Previous wording

Transportation revenue generated by multimode capacity providers for the 2025 thirteen-week period was $72,817,000, or 6% of total revenue, a decrease of $20,796,000, or 22%, compared to the 2024 thirteen-week period. Revenue per load on revenue generated by multimode capacity providers decreased approximately 20% in the 2025 thirteen-week period compared to the 2024 thirteen-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 ocean and rail intermodal decreased 20% and 9%, respectively, while revenue per load on loads hauled via air increased approximately 5% during the 2025 thirteen-week period as compared to the 2024 thirteen-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 thirteen-week period. The decrease in revenue per load on loads hauled by rail intermodal carriers was primarily attributable to one specific agency 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. 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 14% decrease in ocean loadings and an 8% decrease in air loadings, partially offset by an 8% increase in rail loadings. The 14% decrease in ocean loadings was broad-based with decreases at several customers. The 8% decrease in air loadings was primarily attributable to decreased loadings at one specific customer. The 8% increase in rail loadings was primarily attributable to increased loadings at one specific agency.

Current wording

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. The number of loads hauled by multimode capacity providers decreased approximately 1% in the 2025 thirteen-week period compared to the 2024 thirteen-week period, and revenue per load on revenue generated by multimode capacity providers decreased approximately 1% over the same period. The decrease in the number of loads hauled by multimode capacity providers was due to a 14% decrease in ocean loadings and a 6% decrease in air loadings, while rail loadings increased 13%. 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 13% 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 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.

Previous wording

Purchased transportation was 77.7% and 77.6% of revenue in the 2025 and 2024 thirteen-week periods, respectively. The increase in purchased transportation as a percentage of revenue was primarily due to an increased rate of purchased transportation on revenue generated by Truck Brokerage Carriers. Commissions to agents were 8.2% and 8.1% of revenue in the 2025 and 2024 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 multimode capacity providers.

Current wording

Purchased transportation was 77.7% and 77.8% of revenue in the 2025 and 2024 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. Commissions to agents were 8.2% and 8.1% of revenue in the 2025 and 2024 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.

Previous wording

Investment income was $3,729,000 and $3,654,000 in the 2025 and 2024 thirteen-week periods, respectively. The increase in investment income was attributable to a higher average investment balance held by the insurance segment during the 2025 thirteen-week period, partially offset by lower average rates of return on investments in the 2025 thirteen-week period.

Current wording

Investment income was $3,293,000 and $3,922,000 in the 2025 and 2024 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.

Previous wording

Other operating costs increased $5,460,000 in the 2025 thirteen-week period compared to the 2024 thirteen-week period. The increase in other operating costs compared to the prior year was primarily due to the reclassification of the approximately $4,800,000 expense relating to the supply chain fraud matter referenced above under “Expenses -Other operating costs, net of gains on asset sales/dispositions” from selling, general and administrative costs and increased trailer equipment maintenance costs, partially offset by gains on sales of operating property.

Current wording

Other operating costs increased $428,000 in the 2025 thirteen-week period compared to the 2024 thirteen-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.

Previous wording

Insurance and claims increased $3,285,000 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 severity of current year trucking and cargo claims during the 2025 thirteen-week period and increased net unfavorable development of prior years’ claims in the 2025 thirteen-week period, partially offset by decreased BCO miles traveled during the 2025 thirteen-week period. During the 2025 and 2024 thirteen-week periods, insurance and claims costs included $2,289,000 and $989,000 of net unfavorable adjustments to prior years’ claims estimates, respectively.

Current wording

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. During the 2025 and 2024 thirteen-week periods, insurance and claims costs included $9,219,000 and $4,550,000 of net unfavorable adjustments to prior years’ claims estimates, respectively.

Previous wording

Selling, general and administrative costs increased $767,000 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 an increased provision for incentive compensation, increased project consulting fees, increased employee benefit costs, primarily attributable to increased medical and pharmacy costs under the self-insured portion of the Company’s medical plan, increased wages and increased costs associated with the Company’s annual agent convention, mostly offset by the reclassification of the approximately $4,800,000 expense relating to the supply chain fraud matter referenced above under “Expenses - Other operating costs, net of gains on asset sales/dispositions” to other operating costs. Included in selling, general and administrative costs was incentive compensation expense of $950,000 and a reduction to the Company’s provision for incentive compensation of $1,398,000 for the 2025 and 2024 thirteen-week periods, respectively.

Current wording

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.

Previous wording

Depreciation and amortization decreased $2,339,000 in the 2025 thirteen-week period compared to the 2024 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.

Current wording

Depreciation and amortization decreased $3,862,000 in the 2025 thirteen-week period compared to the 2024 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.

Previous wording

The year-over-prior-year change in interest and debt expense (income) was $2,373,000, with net interest and debt expense of $698,000 in the 2025 thirteen-week period compared to net interest and debt income of $1,675,000 in the 2024 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 and increased interest expense related to finance lease obligations.

Current wording

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 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.

Previous wording

The provisions for income taxes for the 2025 and 2024 thirteen-week periods were based on estimated annual effective income tax rates of 24.3% and 24.5%, respectively, adjusted for discrete events, such as benefits resulting from stock-based awards. The effective income tax rate for the 2025 thirteen-week period was 24.6%. 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 thirteen-week period was 24.5%. 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.

Current wording

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 effective income tax rate for the 2025 thirteen-week period was 25.8%. 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 thirteen-week period was 22.2%. 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.

Previous wording

Net income was $41,893,000, or $1.20 per basic and diluted share, in the 2025 thirteen-week period. Net income was $52,624,000, or $1.48 per basic and diluted share, in the 2024 thirteen-week period.

Current wording

Net income was $19,364,000, or $0.56 per basic and diluted share, in the 2025 thirteen-week period. Net income was $50,033,000, or $1.41 per basic and diluted share, in the 2024 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.

Previous wording

Working capital and the ratio of current assets to current liabilities were $618,207,000 and 2.0 to 1, respectively, at June 28, 2025, compared with $646,713,000 and 2.0 to 1, respectively, at December 28, 2024. 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 $62,836,000 in the 2025 twenty-six-week period compared with $142,343,000 in the 2024 twenty-six-week period. The decrease in cash flow provided by operating activities was primarily attributable to the unfavorable impact of net working capital in connection with increased net receivables, defined as accounts receivable less accounts payable, and decreased net income.

Current wording

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. 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.

Previous wording

The Company declared and paid $0.76 per share, or $26,604,000 in the aggregate, in cash dividends during thetwenty-six-week period ended June 28, 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 $0.66 per share, or $23,579,000 in the aggregate, in cash dividends during thetwenty-six-week period ended June 29, 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 thetwenty-six-week period ended June 28, 2025, the Company purchased 686,459 shares of 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 is included in other current liabilities in the consolidated balance sheet at June 28, 2025. During thetwenty-six-week period ended June 29, 2024, the Company purchased 315,649 shares of its common stock at a total cost of $56,995,000, including $56,515,000 in cash purchases and accrued excise tax of $480,000, which was included in other current liabilities in the consolidated balance sheet at June 29, 2024. As of June 28, 2025, the Company may purchase in the aggregate up to 1,861,522 shares of its common stock under its authorized stock purchase programs. Long-term debt, including current maturities, was $85,424,000 at June 28, 2025, $16,883,000 lower than at December 28, 2024.

Current wording

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.

Previous wording

Shareholders’ equity was $921,826,000, or 92% of total capitalization (defined as long-term debt including current maturities plus equity), at June 28, 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 twenty-six-week period.

Current wording

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.

Previous wording

At June 28, 2025, the Company had no borrowings outstanding and $35,415,000 of letters of credit outstanding under the Credit Agreement. At June 28, 2025, there was $264,585,000 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 $74,321,000 in letters of credit outstanding as collateral for insurance claims that are secured by investments totaling $82,579,000 at June 28, 2025. Investments, all of which are carried at fair value, include primarily investment-grade bonds, asset-backed securities, commercial paper and U.S. Treasury obligations having maturities of up to five years. Fair value of investments is based primarily on quoted market prices. See “Notes to Consolidated Financial Statements” included herein for further discussion on measurement of fair value of investments.

Current wording

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. Investments, all of which are carried at fair value, include primarily investment-grade bonds, asset-backed securities, commercial paper and U.S. Treasury obligations having maturities of up to five years. Fair value of investments is based primarily on quoted market prices. See “Notes to Consolidated Financial Statements” included herein for further discussion on measurement of fair value of investments.