LANDSTAR SYSTEM INC

Previous wording

The following discussion should be read in conjunction with the interim consolidated financial statements and notes thereto included herein, and with the Company’s audited financial statements and notes thereto for the fiscal year ended December 27, 2025 and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the 2025 Annual Report on Form

Current wording

The following discussion should be read in conjunction with the interim consolidated financial statements and notes thereto included herein, and with the Company’s audited financial statements and notes thereto for the fiscal year ended December 27, 2025 and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the 2025 Annual Report on Form 10-K.

Previous wording

contain forward-looking statements, such as statements which relate to Landstar’s business objectives, plans, strategies and expectations. Terms such as “anticipates,” “believes,” “estimates,” “intention,” “expects,” “plans,” “predicts,” “may,” “should,” “could,” “would,” “will,” the negative thereof and similar expressions are intended to identify forward-looking statements. Such statements are by nature subject to uncertainties and risks, including but not limited to: decreased demand for transportation services; U.S. trade relationships and potential or imposed tariffs; an increase in the frequency or severity of accidents or other claims; unfavorable development of existing accident claims; substantial verdicts or settlements rendered in connection with accidents or other claims; dependence on third party insurance companies; dependence on independent commission sales agents; dependence on third party capacity providers; the impact of the Russian conflict with Ukraine on the operations of certain independent commission sales agents, including the Company’s second largest such agent by revenue in the 2025 fiscal year; substantial industry competition; disruptions or failures in the Company’s computer systems; cyber and other information security incidents; dependence on key vendors; potential changes in taxes; status of independent contractors; regulatory and legislative changes; regulations focused on diesel emissions and other air quality matters; regulations requiring the purchase and use of

Current wording

The following is a “safe harbor” statement under the Private Securities Litigation Reform Act of 1995. Statements contained in this document that are not based on historical facts are “forward-looking statements.” This Management’s Discussion and Analysis of Financial Condition and Results of Operations and other sections of this Form 10-Q contain forward-looking statements, such as statements which relate to Landstar’s business objectives, plans, strategies and expectations. Terms such as “anticipates,” “believes,” “estimates,” “intention,” “expects,” “plans,” “predicts,” “may,” “should,” “could,” “would,” “will,” the negative thereof and similar expressions are intended to identify forward-looking statements. Such statements are by nature subject to uncertainties and risks, including but not limited to: decreased demand for transportation services; U.S. trade relationships and potential or imposed tariffs; an increase in the frequency or severity of accidents or other claims; unfavorable development of existing accident claims; substantial verdicts or settlements rendered in connection with accidents or other claims; dependence on third party insurance companies; dependence on independent commission sales agents; dependence on third party capacity providers; the impact of the Russian conflict with Ukraine on the operations of certain independent commission sales agents, including the Company’s second largest such agent by revenue in the 2025 fiscal year; substantial industry competition; disruptions or failures in the Company’s computer systems; cyber and other information security incidents; dependence on key vendors; potential changes in taxes; status of independent contractors; regulatory and legislative changes; regulations focused on diesel emissions and other air quality matters; regulations requiring the purchase and use ofzero-emission vehicles; intellectual property; acquisitions and investments; increased exposure to broker liability claims; and other operational, financial or legal risks or uncertainties detailed in Landstar’s Form 10-K for the 2025 fiscal year, described in Item 1A “Risk Factors;” Landstar’s Form 10-Q for the 2026 second quarter, described in Item 1A “Risk Factors;” in this report or in Landstar’s other Securities and Exchange Commission filings from time to time. These risks and uncertainties could cause actual results or events to differ materially from historical results or those anticipated. Investors should not place undue reliance on such forward-looking statements and the Company undertakes no obligation to publicly update or revise any forward-looking statements.

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 freight transportation and logistics solutions focused on safety, security and service to a broad range of customers utilizing a network of agents, third party capacity providers and employees. The Company offers services to its customers across multiple transportation modes, with the ability to arrange for individual shipments of freight to comprehensive third party logistics solutions to meet all of a customer’s transportation needs. Landstar provides services principally throughout the United States and to a lesser extent in Canada and Mexico, and between the United States and Canada, Mexico and other countries around the world. The Company’s services emphasize information coordination and are delivered through a network of approximately 990 independent commission sales agents and over 72,000 third party capacity providers, primarily truck capacity providers, linked together by a series of digital technologies which are provided and coordinated by the Company. The nature of the Company’s business is such that a significant portion of its operating costs varies directly with revenue.

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 freight transportation and logistics solutions focused on safety, security and service to a broad range of customers utilizing a network of agents, third party capacity providers and employees. The Company offers services to its customers across multiple transportation modes, with the ability to arrange for individual shipments of freight to comprehensive third party logistics solutions to meet all of a customer’s transportation needs. Landstar provides services principally throughout the United States and to a lesser extent in Canada and Mexico, and between the United States and Canada, Mexico and other countries around the world. The Company’s services emphasize information coordination and are delivered through a network of approximately 980 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

“BCO Independent Contractors”), unrelated trucking companies who provide truck capacity to the Company undernon-exclusive contractual arrangements (the “Truck Brokerage Carriers”), air cargo carriers, ocean cargo carriers and railroads. Through this network of agents and capacity providers linked together by Landstar’s ecosystem of digital technologies, Landstar operates a freight transportation and logistics business primarily throughout North America with revenue of $4.7 billion during the most recently completed fiscal year. The Company reports the results of two operating segments: the transportation logistics segment and the insurance segment.

Current wording

Landstar markets its freight transportation and logistics services primarily through independent commission sales agents and exclusively utilizes third party capacity providers to transport customers’ freight. Landstar’s independent commission sales agents enter into contractual arrangements with the Company and are responsible for locating freight, making that freight available to Landstar’s capacity providers and coordinating the transportation of the freight with customers and capacity providers. The Company’s third party capacity providers consist of independent contractors who provide truck capacity to the Company under exclusive lease arrangements (the “BCO Independent Contractors”), unrelated trucking companies who provide truck capacity to the Company undernon-exclusive contractual arrangements (the “Truck Brokerage Carriers”), air cargo carriers, ocean cargo carriers and railroads. Through this network of agents and capacity providers linked together by Landstar’s ecosystem of digital technologies, Landstar operates a freight transportation and logistics business primarily throughout North America with revenue of $4.7 billion during the most recently completed fiscal year. The Company reports the results of two operating segments: the transportation logistics segment and the insurance segment.

Previous wording

The transportation logistics segment provides a wide range of freight transportation and logistics services. Transportation services are provided by Landstar’s “Operating Subsidiaries”: Landstar Ranger, Inc., Landstar Inway, Inc., Landstar Ligon, Inc., Landstar Gemini, Inc., Landstar Transportation Logistics, Inc., Landstar Global Logistics, Inc., Landstar Express America, Inc., Landstar Canada, Inc., Landstar Metro, S.A.P.I. 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, 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, 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 27, 2026, revenue generated by BCO Independent Contractors, Truck Brokerage Carriers and railroads represented approximately 40%, 53% and 2%, respectively, of the Company’s consolidated revenue. Collectively, revenue generated by air and ocean cargo carriers represented approximately 4% of the Company’s consolidated revenue in thetwenty-six-week period ended June 27, 2026.

Current wording

The transportation logistics segment provides a wide range of freight transportation and logistics services. Transportation services are provided by Landstar’s “Operating Subsidiaries”: Landstar Ranger, Inc., Landstar Inway, Inc., Landstar Ligon, Inc., Landstar Gemini, Inc., Landstar Transportation Logistics, Inc., Landstar Global Logistics, Inc., Landstar Express America, Inc., Landstar Canada, Inc., Landstar Metro, S.A.P.I. 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, 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, 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 26, 2026, revenue generated by BCO Independent Contractors, Truck Brokerage Carriers and railroads represented approximately 40%, 53% and 2%, respectively, of the Company’s consolidated revenue. Collectively, revenue generated by air and ocean cargo carriers represented approximately 4% of the Company’s consolidated revenue in the thirty-nine-week period ended September 26, 2026.

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-week period ended June 27, 2026.

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 26, 2026.

Previous wording

As previously disclosed by the Company in current and periodic reports filed with the SEC, during the last week of the Company’s 2025 first quarter, the Company identified a supply chain fraud relating to the Company’s international freight forwarding operations. Other operating costs during thetwenty-six-week period ended June 28, 2025 included a $4.8 million expense relating to this matter.

Current wording

As previously disclosed by the Company in current and periodic reports filed with the SEC, during the last week of the Company’s 2025 first quarter, the Company identified a supply chain fraud relating to the Company’s international freight forwarding operations. Other operating costs during the thirty-nine-week period ended September 27, 2025 included a $4.8 million expense relating to this matter.

Previous wording

Further, the Company retains liability of up to $2,000,000 for each general liability claim, $250,000 for each workers’ compensation claim and $250,000 for each cargo claim. In addition, under reinsurance arrangements by Signature of certain risks of the Company’s BCO Independent Contractors, the Company retains liability of up to $500,000, $1,000,000 or $2,000,000 with respect to certain occupational accident claims and up to $750,000 with respect to certain workers’ compensation claims. The Company’s exposure to liability associated with accidents incurred by Truck Brokerage Carriers, railroads and air and ocean cargo carriers who transport freight on behalf of the Company may be reduced by various legal defenses and other factors including the extent to which such carriers maintain their own insurance coverage. However, Montgomery v. Caribe Transport II, LLC has narrowed our ability to rely on Federal Aviation Administration Authorization Act of 1994 (the “FAAAA”) preemption as a defense by holding that state-law negligent selection claims against freight brokers fall within the statute’s motor vehicle safety exception, which could have an adverse impact on our claims experience. A material increase in the frequency or severity of accidents, cargo claims or workers’ compensation claims or the material unfavorable development of existing claims could have a material adverse effect on Landstar’s cost of insurance and claims and its results of operations. For more information, see Part II, Item 1A, “Risk Factors—Increased exposure to Broker Liability Claims” in this Quarterly Report on Form 10-Q and Part I, Item 1A, “Risk Factors—Increased severity or frequency of accidents and other claims or a material unfavorable development of existing claims” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 27, 2025.

Current wording

Further, the Company retains liability of up to $2,000,000 for each general liability claim, $250,000 for each workers’ compensation claim and $250,000 for each cargo claim. In addition, under reinsurance arrangements by Signature of certain risks of the Company’s BCO Independent Contractors, the Company retains liability of up to $500,000, $1,000,000 or $2,000,000 with respect to certain occupational accident claims and up to $750,000 with respect to certain workers’ compensation claims. The Company’s exposure to liability associated with accidents incurred by Truck Brokerage Carriers, railroads and air and ocean cargo carriers who transport freight on behalf of the Company may be reduced by various legal defenses and other factors including the extent to which such carriers maintain their own insurance coverage. However, Montgomery v. Caribe Transport II, LLC has narrowed our ability to rely on Federal Aviation Administration Authorization Act of 1994 (the “FAAAA”) preemption as a defense by holding that state-law negligent selection claims against freight brokers fall within the statute’s motor vehicle safety exception, which could have an adverse impact on our claims experience. A material increase in the frequency or severity of accidents, cargo claims or workers’ compensation claims or the material unfavorable development of existing claims could have a material adverse effect on Landstar’s cost of insurance and claims and its results of operations. For more information, see Part II, Item 1A, “Risk Factors—Increased exposure to Broker Liability Claims” in the Quarterly Report on Form 10-Q for the quarterly period ended June 27, 2026 and Part I, Item 1A, “Risk Factors—Increased severity or frequency of accidents and other claims or a material unfavorable development of existing claims” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 27, 2025.

Previous wording

During thetwenty-six-week period ended June 27, 2026, employee compensation and benefits accounted for approximately 64% 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 26, 2026, employee compensation and benefits accounted for approximately 65% 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

The Company incurs costs of revenue related to the transportation of freight and, to a much lesser extent, to reinsurance premiums received by Signature. Costs of revenue include variable costs of revenue and other costs of revenue. Variable costs of revenue include purchased transportation and commissions to agents, as these costs are entirely variable on ashipment-by-shipment basis. Other costs of revenue include fixed costs of revenue and semi-variable costs of revenue, where such costs may vary over time based on certain economic factors or operational metrics such as the number of Company-controlled trailers, the number of BCO Independent Contractors, the frequency and severity of insurance claims, the number of miles traveled by BCO Independent Contractors, or the number and/or scale of information technology projects in process orin-service to support revenue generating activities, rather than on ashipment-by-shipment basis. Other costs of revenue associated with the transportation of freight include: (i) other operating costs, primarily consisting of trailer maintenance, the provision for uncollectible advances and other receivables due from BCO Independent Contractors and independent commission sales agents and BCO Independent Contractor recruiting and qualification costs, as reported in the Company’s Consolidated Statements of Income, (ii) transportation-related insurance premiums paid and claim costs incurred, included as a portion of insurance and claims in the Company’s Consolidated Statements of Income, (iii) costs incurred related to internally developed software including ASC 350-40 amortization, implementation costs, hosting costs and other support costs utilized to support the Company’s independent commission sales agents, third party capacity providers, and customers, included as a portion of depreciation and amortization and of selling, general and administrative in the Company’s Consolidated Statements of Income; and (iv) depreciation on Company-owned trailing equipment, included as a portion of depreciation and amortization in the Company’s Consolidated Statements of Income. Other costs of revenue associated with reinsurance premiums received by Signature are comprised of broker commissions and other fees paid related to the administration of insurance programs to BCO Independent Contractors and are included in selling, general and administrative in the Company’s Consolidated Statements of Income. In addition to costs of revenue, the Company incurs various other costs relating to its business, including most selling, general and administrative costs and portions of costs attributable to insurance and claims and depreciation and amortization. Management continually monitors all components of the costs incurred by the Company and establishes annual cost budgets that, in general, are used to benchmark costs incurred on a monthly basis.

Current wording

Statements of Income, (ii) transportation-related insurance premiums paid and claim costs incurred, included as a portion of insurance and claims in the Company’s Consolidated Statements of Income, (iii) costs incurred related to internally developed software including ASC 350-40 amortization, implementation costs, hosting costs and other support costs utilized to support the Company’s independent commission sales agents, third party capacity providers, and customers, included as a portion of depreciation and amortization and of selling, general and administrative in the Company’s Consolidated Statements of Income; and (iv) depreciation on Company-owned trailing equipment, included as a portion of depreciation and amortization in the Company’s Consolidated Statements of Income. Other costs of revenue associated with reinsurance premiums received by Signature are comprised of broker commissions and other fees paid related to the administration of insurance programs to BCO Independent Contractors and are included in selling, general and administrative in the Company’s Consolidated Statements of Income. In addition to costs of revenue, the Company incurs various other costs relating to its business, including most selling, general and administrative costs and portions of costs attributable to insurance and claims and depreciation and amortization. Management continually monitors all components of the costs incurred by the Company and establishes annual cost budgets that, in general, are used to benchmark costs incurred on a monthly basis.

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 44% of the Company’s consolidated revenue in thetwenty-six-week period ended June 27, 2026 was generated under transactions that pay a fixed percentage of revenue to the third party capacity provider and/or agents while approximately 56% 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 44% of the Company’s consolidated revenue in the thirty-nine-week period ended September 26, 2026 was generated under transactions that pay a fixed percentage of revenue to the third party capacity provider and/or agents while approximately 56% was generated under transactions that pay a variable percentage of revenue to the third party capacity provider and/or agents.

Previous wording

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

Current wording

The increase in operating income as a percentage of gross profit from the thirty-nine-week period ended September 27, 2025 to the thirty-nine-week period ended September 26, 2026 resulted from the increase of operating income at a more rapid percentage rate than the increase in gross profit, primarily due to the impact of the impairment of certain intangible and other assets in the 2025 thirty-nine-week period and the Company’s ability to scale its fixed cost infrastructure, primarily certain components of selling, general and administrative costs, across a larger gross profit base, and the impact of the supply chain fraud matter in the 2025 thirty-nine-week period. The increase in operating income as a percentage of gross profit from the 2025 thirteen-week period to the 2026 thirteen-week period was primarily due to the impact of the impairment of certain intangible and other assets in the 2025 thirteen-week period.

Previous wording

The increase in operating income as a percentage of variable contribution from the 2025 twenty-six-week period to the 2026 twenty-six-week period resulted from the increase of operating income at a more rapid percentage rate than the increase in variable contribution, as the Company was able to scale its fixed cost infrastructure, primarily certain components of selling, general and administrative costs across a larger variable contribution base, and the impact of the supply chain fraud matter in the 2025 twenty-six-week period. The slight increase in operating income as a percentage of variable contribution from the 2025 thirteen-week period to the 2026 thirteen-week period resulted from the increase in operating income occurring at a slightly more rapid percentage rate than the increase in variable contribution, as the Company was able to scale its fixed cost infrastructure, primarily certain components of selling, general and administrative costs, across a larger variable contribution base, almost entirely offset by increased insurance and claims costs and an increased provision for incentive compensation in the 2026 thirteen-week period.

Current wording

The increase in operating income as a percentage of variable contribution from the thirty-nine-week period ended September 27, 2025 to the thirty-nine-week period ended September 26, 2026 and from the 2025 thirteen-week period to the 2026 thirteen-week period resulted from the increase of operating income at a more rapid percentage rate than the increase in variable contribution, primarily due to the impact of the impairment of certain intangible and other assets in the 2025 thirty-nine-week and thirteen-week periods and the Company’s ability to scale its fixed cost infrastructure, primarily certain components of selling, general and administrative costs across a larger variable contribution base, partially offset by increased insurance and claims costs and an increased provision for incentive compensation in the 2026 thirty-nine-week and thirteen-week periods.

Previous wording

Revenue for the 2026 thirteen-week period was $1,432,264,000, an increase of $220,881,000, or 18%, compared to the 2025 thirteen-week period. Transportation revenue increased $221,078,000, or 18%. The increase in transportation revenue was attributable to an increased revenue per load of approximately 16% and an increased number of loads hauled of approximately 2% as compared to the 2025 thirteen-week period. Reinsurance premiums were $14,499,000 and $14,696,000 for the 2026 and 2025 thirteen-week periods, respectively. The decrease in revenue from reinsurance premiums was primarily attributable to a decrease in the average number of trucks provided by BCO Independent Contractors in the 2026 thirteen-week period compared to the 2025 thirteen-week period.

Current wording

Revenue for the 2026 thirty-nine-week period was $4,115,342,000, an increase of $546,051,000, or 15%, compared to the 2025 thirty-nine-week period. Transportation revenue increased $546,590,000, or 16%. The increase in transportation revenue was attributable to an increased revenue per load of approximately 15% and an increased number of loads of approximately 1% as compared to the 2025 thirty-nine-week period. Reinsurance premiums were $43,518,000 and $44,057,000 for the 2026 and 2025 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 2026 thirty-nine-week period compared to the 2025 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 2026 twenty-six-week period was $2,416,159,000, representing 93% of total revenue, an increase of $248,303,000, or 11%, compared to the 2025 twenty-six-week period. Revenue per load on loads hauled by third party truck capacity providers increased approximately 12% in the 2026 twenty-six-week period compared to the 2025 twenty-six-week period, while the number of loads hauled by third party truck capacity providers was relatively flat in the 2026 twenty-six-week period compared to the 2025 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 2026 thirty-nine-week period was $3,823,330,000, representing 93% of total revenue, an increase of $565,578,000, or 17%, compared to the 2025 thirty-nine-week period. Revenue per load on loads hauled by third party truck capacity providers increased approximately 16% in the 2026 thirty-nine-week period compared to the 2025 thirty-nine-week period, and the number of loads hauled by third party truck capacity providers increased approximately 1% in the 2026 thirty-nine-week period compared to the 2025 thirty-nine-week period.

Previous wording

The increase in revenue per load on loads hauled via truck was primarily due to a tightening truck capacity environment in the 2026 twenty-six-week period and the impact of higher diesel fuel costs on loads hauled via Truck Brokerage Carrier. During the 2026 twenty-six-week period, revenue per load on less-than-truckload loadings increased 19%, on loads hauled via unsided/platform equipment increased 16%, and on loads hauled via van equipment increased 11%, while revenue per load on other truck transportation services decreased 9%, in each case, as compared to the 2025 twenty-six-week period.

Current wording

The increase in revenue per load on loads hauled via truck was primarily due to a tightening truck capacity environment in the 2026 thirty-nine-week period and the impact of higher diesel fuel costs on loads hauled via Truck Brokerage Carrier, partially offset by the impact of a lower average length of haul. During the 2026 thirty-nine-week period, revenue per load on less-than-truckload loadings increased 24%, on loads hauled via unsided/platform equipment increased 21%, and on loads hauled via van equipment increased 15%, while revenue per load on other truck transportation services decreased 5%, in each case, as compared to the 2025 thirty-nine-week period.

Previous wording

The number of loads hauled via truck for the 2026 twenty-six-week period compared to the 2025 twenty-six-week period was relatively flat. Loads hauled via other truck transportation services increased 6%, loads hauled via van equipment increased 1% and loads hauled via unsided/platform equipment were relatively flat, while less-than-truckload loadings decreased 14%, in each case, as compared to the 2025 twenty-six-week period.

Current wording

The increase in the number of loads hauled via truck for the 2026 thirty-nine-week period compared to the 2025 thirty-nine-week period was primarily due to increased demand from the 2025 thirty-nine-week period for the Company’s van, unsided/platform and other truck transportation services. Loads hauled via other truck transportation services increased 6%, loads hauled via van equipment increased 2% and loads hauled via unsided/platform equipment increased 2%, while less-than-truckload loadings decreased 17%, in each case, as compared to the 2025 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 $71,237,000 and $54,016,000 in the 2026 and 2025 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 $115,563,000 and $82,232,000 in the 2026 and 2025 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 2026 twenty-six-week period was $144,788,000, or 6% of total revenue, a decrease of $11,153,000, or 7%, compared to the 2025 twenty-six-week period. The number of loads hauled by multimode capacity providers decreased approximately 5% in the 2026 twenty-six-week period compared to the 2025 twenty-six-week period, and revenue per load on revenue generated by multimode capacity providers decreased approximately 2% over the same period. The decrease in the number of loads hauled by multimode capacity providers was due to a 19% decrease in ocean loadings and an 8% decrease in air loadings, while rail loadings increased 8%. The 19% decrease in ocean loadings was broad-based with decreases at several customers. The 8% decrease in air loadings was primarily attributable to decreases at two specific agencies. The 8% increase in rail loadings was primarily attributable to increased loadings at one specific agency. Revenue per load on loads hauled via ocean decreased approximately 1%, while air and rail intermodal revenue per load increased approximately 23% and 10%, respectively, during the 2026 twenty-six-week period as compared to the 2025 twenty-six-week period. The decrease in revenue per load on loads hauled by ocean cargo carriers was primarily attributable to decreases at several customers during the 2026 twenty-six-week period. The increase in revenue per load on loads hauled by air cargo carriers was primarily attributable to increases at several specific customers during the 2026 twenty-six-week period. The increase in revenue per load on loads hauled by rail intermodal carriers was attributable to increases at several specific customers during the 2026 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.

Current wording

Transportation revenue generated by rail intermodal, air cargo and ocean cargo carriers (collectively, the “multimode capacity providers”) for the 2026 thirty-nine-week period was $227,928,000, or 6% of total revenue, a decrease of $23,951,000, or 10%, compared to the 2025 thirty-nine-week period. Revenue per load on revenue generated by multimode capacity providers decreased approximately 6% in the 2026 thirty-nine-week period compared to the 2025 thirty-nine-week period, and the number of loads hauled by multimode capacity providers decreased approximately 4% over the same period. Revenue per load on loads hauled via ocean decreased approximately 7%, while air and rail intermodal revenue per load increased approximately 19% and 10%, respectively, during the 2026 thirty-nine-week period as compared to the 2025 thirty-nine-week period. The decrease in revenue per load on loads hauled by ocean cargo carriers was primarily attributable to decreases at several customers during the 2026 thirty-nine-week period. The increase in revenue per load on loads hauled by air cargo carriers was primarily attributable to increases at several specific customers during the 2026 thirty-nine-week period. The increase in revenue per load on loads hauled by rail intermodal carriers was attributable to the tighter truck capacity environment positively impacting intermodal revenue per load and the impact of higher diesel fuel costs during the 2026 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 16% decrease in ocean loadings and a 10% decrease in air loadings, while rail intermodal loadings increased 7%. The 16% decrease in ocean loadings was broad-based with decreases at several customers. The 10% decrease in air loadings was primarily attributable to decreases at two specific agencies. The 7% increase in rail loadings was primarily attributable to increased loadings at one specific agency.

Previous wording

Purchased transportation was 78.0% and 77.8% of revenue in the 2026 and 2025 twenty-six-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, partially offset by favorable mix. Commissions to agents were 7.7% and 8.2% of revenue in the 2026 and 2025 twenty-six-week periods, respectively. The decrease in commissions to agents as a percentage of revenue was primarily attributable to an increased cost of purchased transportation as a percentage of revenue on revenue generated by Truck Brokerage Carriers.

Current wording

Purchased transportation was 78.1% and 77.8% of revenue in the 2026 and 2025 thirty-nine-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, partially offset by favorable mix. Commissions to agents were 7.8% and 8.2% of revenue in the 2026 and 2025 thirty-nine-week periods, respectively. The decrease in commissions to agents as a percentage of revenue was primarily attributable to an increased cost of purchased transportation as a percentage of revenue on revenue generated by Truck Brokerage Carriers.

Previous wording

Investment income was $5,679,000 and $7,327,000 in the 2026 and 2025 twenty-six-week periods, respectively. The decrease in investment income was attributable to a lower average investment balance held by the insurance segment in the 2026 twenty-six-week period and lower average rates of return on investments during the 2026 twenty-six-week period.

Current wording

Investment income was $7,943,000 and $10,620,000 in the 2026 and 2025 thirty-nine-week periods, respectively. The decrease in investment income was attributable to a lower average investment balance held by the insurance segment in the 2026 thirty-nine-week period and lower average rates of return on investments during the 2026 thirty-nine-week period.

Previous wording

Other operating costs increased $1,321,000 in the 2026 twenty-six-week period compared to the 2025 twenty-six-week period. The increase in other operating costs compared to the prior year was primarily due to increased trailer equipment maintenance costs, increased trailer rental costs and decreased gains on sales of operating property, partially offset by an approximately $4,800,000 expense relating to the supply chain fraud matter in the 2025 twenty-six-week period referenced above under “Expenses - Other operating costs, net of gains on asset sales/dispositions.”

Current wording

Other operating costs increased $6,975,000 in the 2026 thirty-nine-week period compared to the 2025 thirty-nine-week period. The increase in other operating costs compared to the prior year was primarily due to increased trailer equipment maintenance costs, increased trailer rental costs and decreased gains on sales of operating property, partially offset by an approximately $4,800,000 expense relating to the supply chain fraud matter in the 2025 thirty-nine-week period referenced above under “Expenses - Other operating costs, net of gains on asset sales/dispositions.”

Previous wording

Insurance and claims increased $4,622,000 in the 2026 twenty-six-week period compared to the 2025 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 2026 twenty-six-week period and increased BCO miles traveled during the 2026 twenty-six-week period, partially offset by decreased frequency of both current year trucking and current year cargo claims during the 2026 twenty-six-week period. During the 2026 and 2025 twenty-six-week periods, insurance and claims costs included $15,393,000 and $13,641,000 of net unfavorable adjustments to prior years’ claims estimates, respectively.

Current wording

Insurance and claims increased $26,884,000 in the 2026 thirty-nine-week period compared to the 2025 thirty-nine-week period. The increase in insurance and claims expense compared to the prior year was primarily attributable to (a) increased net unfavorable development of prior years’ claims in the 2026 thirty-nine-week period, which was driven by (i) an increase in the Company’s actuarially determined claim reserves; (ii) several specific commercial trucking claims involving BCO Independent Contractors leased on with motor carrier subsidiaries of the Company; (iii) several specific truck brokerage claims; and (iv) cargo loss experience as a result of fraud and theft in the supply chain and (b) an increase in the Company’s actuarially determined claim reserves relating to current year trucking claims during the 2026 thirty-nine-week period as compared to the 2025 period. During the 2026 and 2025 thirty-nine-week periods, insurance and claims costs included $37,317,000 and $22,860,000 of net unfavorable adjustments to prior years’ claims estimates, respectively.

Previous wording

Selling, general and administrative costs increased $12,487,000 in the 2026 thirteen-week period compared to the 2025 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, 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 in the 2025 thirteen-week period, increased stock-based compensation expense and increased information technology project consulting fees, partially offset by decreased employee benefit costs, primarily attributable to decreased medical and pharmacy costs under the self-insured portion of the Company’s medical plan, in the 2026 thirteen-week period. Included in selling, general and administrative costs was incentive compensation expense of $6,436,000 and $950,000, respectively, and stock-based compensation expense of $2,933,000 and $1,619,000, respectively, for the 2026 and 2025 thirteen-week periods.

Current wording

Selling, general and administrative costs increased $17,231,000 in the 2026 thirty-nine-week period compared to the 2025 thirty-nine-week period. The increase in selling, general and administrative costs compared to prior year was primarily attributable to an increased provision for incentive compensation and increased stock-based compensation expense, partially offset by a decreased provision for customer bad debt in the 2026 thirty-nine-week period. Included in selling, general and administrative costs was incentive compensation expense of $16,738,000 and $2,925,000, respectively, and stock-based compensation expense of $8,443,000 and $5,243,000, respectively, for the 2026 and 2025 thirty-nine-week periods.

Previous wording

Depreciation and amortization decreased $3,406,000 in the 2026 twenty-six-week period compared to the 2025 twenty-six-week period. The decrease in depreciation and amortization expense was primarily due to decreased depreciation on information technology software and decreased trailing equipment depreciation in the 2026 twenty-six-week period.

Current wording

Depreciation and amortization decreased $4,997,000 in the 2026 thirty-nine-week period compared to the 2025 thirty-nine-week period. The decrease in depreciation and amortization expense was primarily due to decreased depreciation on information technology software and decreased trailing equipment depreciation in the 2026 thirty-nine-week period.

Previous wording

Interest and debt expense increased $114,000 in the 2026 thirteen-week period compared to the 2025 thirteen-week period. The increase in interest and debt expense was primarily attributable to decreased interest income earned on cash balances held by the transportation logistics segment, partially offset by decreased interest expense related to finance lease obligations.

Current wording

Interest and debt expense increased $936,000 in the 2026 thirty-nine-week period compared to the 2025 thirty-nine-week period. The increase in interest and debt expense was primarily attributable to decreased interest income earned on cash balances held by the transportation logistics segment, partially offset by decreased interest expense related to finance lease obligations.

Previous wording

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.

Current wording

The provisions for income taxes for the 2026 and 2025 thirty-nine-week periods were based on estimated annual effective income tax rates of 25.4% and 24.6%, 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 thirty-nine-week period was 25.6%. 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 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.

Previous wording

Revenue for the 2026 twenty-six-week period was $2,603,555,000, an increase of $239,670,000, or 10%, compared to the 2025 twenty-six-week period. Transportation revenue increased $240,334,000, or 10%. The increase in transportation revenue was attributable to an increased revenue per load of approximately 11%, while the number of loads was relatively flat as compared to the 2025 twenty-six-week period. Reinsurance premiums were $28,789,000 and $29,453,000 for the 2026 and 2025 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 2026 twenty-six-week period compared to the 2025 twenty-six-week period.

Current wording

Revenue for the 2026 thirteen-week period was $1,511,787,000, an increase of $306,381,000, or 25%, compared to the 2025 thirteen-week period. Transportation revenue increased $306,256,000, or 26%. The increase in transportation revenue was attributable to an increased revenue per load of approximately 22% and an increased number of loads hauled of approximately 3% as compared to the 2025 thirteen-week period. Reinsurance premiums were $14,729,000 and $14,604,000 for the 2026 and 2025 thirteen-week periods, respectively.

Previous wording

Truck transportation revenue generated by third party truck capacity providers for the 2026 thirteen-week period was $1,333,878,000, representing 93% of total revenue, an increase of $215,740,000, or 19%, compared to the 2025 thirteen-week period. Revenue per load on loads hauled by third party truck capacity providers increased approximately 17% in the 2026 thirteen-week period compared to the 2025 thirteen-week period, and the number of loads hauled by third party truck capacity providers increased approximately 2% in the 2026 thirteen-week period compared to the 2025 thirteen-week period.

Current wording

Truck transportation revenue generated by third party truck capacity providers for the 2026 thirteen-week period was $1,407,171,000, representing 93% of total revenue, an increase of $317,275,000, or 29%, compared to the 2025 thirteen-week period. Revenue per load on loads hauled by third party truck capacity providers increased approximately 25% in the 2026 thirteen-week period compared to the 2025 thirteen-week period, and the number of loads hauled by third party truck capacity providers increased approximately 3% in the 2026 thirteen-week period compared to the 2025 thirteen-week period.

Previous wording

The increase in revenue per load on loads hauled via truck was primarily due to a tightening truck capacity environment in the 2026 thirteen-week period and the impact of higher diesel fuel costs on loads hauled via Truck Brokerage Carriers. During the 2026 thirteen-week period, revenue per load on less-than-truckload loadings increased 32%, via unsided/platform equipment increased 20% and on loads hauled via van equipment increased 16%, while revenue per load on other truck transportation services decreased 8%, in each case, as compared to the 2025 thirteen-week period.

Current wording

The increase in revenue per load on loads hauled via truck was primarily due to a tightening truck capacity environment in the 2026 thirteen-week period and the impact of higher diesel fuel costs on loads hauled via Truck Brokerage Carriers, partially offset by the impact of a lower average length of haul. During the 2026 thirteen-week period, revenue per load on less-than-truckload loadings increased 33%, on loads hauled via unsided/platform equipment increased 29%, on loads hauled via van equipment increased 23% and on other truck transportation services increased 3% as compared to the 2025 thirteen-week period.

Previous wording

The increase in the number of loads hauled via truck for the 2026 thirteen-week period compared to the 2025 thirteen-week period was primarily due to increased demand from the 2025 thirteen-week period for the Company’s van, unsided/platform and other truck transportation services and, secondarily, due to efforts by customers in the 2025 first quarter to “pull-forward” shipments typically scheduled to occur later in the year in an effort to avoid the potential impact of tariffs that subsequently may have become effective in fiscal year 2025. Loads hauled via other truck transportation services increased 7%, loads hauled via van equipment increased 5% and loads hauled via unsided/platform equipment increased 2%, while less-than-truckload loadings decreased 25%, in each case, as compared to the 2025 thirteen-week period.

Current wording

The increase in the number of loads hauled via truck for the 2026 thirteen-week period compared to the 2025 thirteen-week period was primarily due to increased demand from the 2025 thirteen-week period for the Company’s van, unsided/platform and other truck transportation services. Loads hauled via van equipment increased 6%, loads hauled via other truck transportation services increased 5% and loads hauled via unsided/platform equipment increased 4%, while less-than-truckload loadings decreased 23%, in each case, as compared to the 2025 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 $44,546,000 and $27,091,000 in the 2026 and 2025 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 $44,326,000 and $28,216,000 in the 2026 and 2025 thirteen-week periods, respectively.

Previous wording

Transportation revenue generated by multimode capacity providers for the 2026 thirteen-week period was $77,505,000, or 5% of total revenue, an increase of $4,688,000, or 6%, compared to the 2025 thirteen-week period. Revenue per load on revenue generated by multimode capacity providers increased approximately 4% in the 2026 thirteen-week period compared to the 2025 thirteen-week period, and the number of loads hauled by multimode capacity providers increased approximately 3% over the same period. Revenue per load on loads hauled via air and rail intermodal increased approximately 50% and 16%, respectively, while ocean revenue per load decreased approximately 5% during the 2026 thirteen-week period as compared to the 2025 thirteen-week period. The increase in revenue per load on loads hauled by air cargo carriers was primarily attributable to increases at several specific customers during the 2026 thirteen-week period. The increase in revenue per load on loads hauled by rail intermodal carriers was broad-based with increases at multiple customers during the 2026 thirteen-week period. The decrease in revenue per load on loads hauled by ocean was primarily attributable to decreases at several customers during the 2026 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 increase in the number of loads hauled by multimode capacity providers was due to a 9% increase in rail loadings, while air loadings decreased 5% and ocean loadings decreased 3%. The 9% increase in rail loadings was primarily attributable to increased loadings at one specific agency. The 5% decrease in air loadings was primarily attributable to decreases at one specific agency. The 3% decrease in ocean loadings was broad-based with decreases at several customers.

Current wording

Transportation revenue generated by multimode capacity providers for the 2026 thirteen-week period was $83,140,000, or 5% of total revenue, a decrease of $12,798,000, or 13%, compared to the 2025 thirteen-week period. Revenue per load on revenue generated by multimode capacity providers decreased approximately 11% in the 2026 thirteen-week period compared to the 2025 thirteen-week period, and the number of loads hauled by multimode capacity providers decreased approximately 2% over the same period. Revenue per load on loads hauled via ocean decreased approximately 18%, while air and rail intermodal revenue per load increased approximately 13% and 11%, respectively, during the 2026 thirteen-week period as compared to the 2025 thirteen-week period. The decrease in revenue per load on loads hauled by ocean was primarily attributable to decreases at one specific customer during the 2026 thirteen-week period. The increase in revenue per load on loads hauled by air cargo carriers was broad-based with increases at multiple customers during the 2026 thirteen-week period. The increase in revenue per load on loads hauled by rail intermodal carriers was attributable to the tighter truck capacity environment positively impacting intermodal revenue per load and the impact of higher diesel fuel costs during the 2026 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 air loadings and a 9% decrease in ocean loadings, while rail intermodal loadings increased 6%. The 14% decrease in air loadings was primarily attributable to decreases at one specific agency. The 9% decrease in ocean loadings was broad-based with decreases at several customers. The 6% increase in rail loadings was primarily attributable to increased loadings at one specific agency.

Previous wording

Purchased transportation was 78.4% and 77.7% of revenue in the 2026 and 2025 thirteen-week periods, respectively. The increase in purchased transportation as a percentage of revenue was primarily due to an increased cost of purchased transportation as a percentage of revenue on revenue generated by Truck Brokerage Carriers, partially offset by favorable mix. Commissions to agents were 7.6% and 8.2% of revenue in the 2026 and 2025 thirteen-week periods, respectively. The decrease in commissions to agents as a percentage of revenue was primarily attributable to an increased cost of purchased transportation as a percentage of revenue on revenue generated by Truck Brokerage Carriers.

Current wording

Purchased transportation was 78.2% and 77.7% of revenue in the 2026 and 2025 thirteen-week periods, respectively. The increase in purchased transportation as a percentage of revenue was primarily due to an increased cost of purchased transportation as a percentage of revenue on revenue generated by Truck Brokerage Carriers, partially offset by favorable mix. Commissions to agents were 7.8% and 8.2% of revenue in the 2026 and 2025 thirteen-week periods, respectively. The decrease in commissions to agents as a percentage of revenue was primarily attributable to an increased cost of purchased transportation as a percentage of revenue on revenue generated by Truck Brokerage Carriers.

Previous wording

Investment income was $2,705,000 and $3,729,000 in the 2026 and 2025 thirteen-week periods, respectively. The decrease in investment income was attributable to a lower average investment balance held by the insurance segment in the 2026 thirteen-week period and lower average rates of return on investments during the 2026 thirteen-week period.

Current wording

Investment income was $2,264,000 and $3,293,000 in the 2026 and 2025 thirteen-week periods, respectively. The decrease in investment income was attributable to a lower average investment balance held by the insurance segment in the 2026 thirteen-week period, partially offset by slightly higher average rates of return on investments during the 2026 thirteen-week period.

Previous wording

Other operating costs decreased $1,650,000 in the 2026 thirteen-week period compared to the 2025 thirteen-week period. The decrease 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 in the 2025 thirteen-week period, partially offset by increased trailer equipment maintenance costs, increased trailer rental costs and decreased gains on sales of operating property in the 2026 thirteen-week period.

Current wording

Other operating costs increased $5,654,000 in the 2026 thirteen-week period compared to the 2025 thirteen-week period. The increase in other operating costs compared to the prior year was primarily due to increased trailer equipment maintenance costs and increased trailer rental costs in the 2026 thirteen-week period and the impact of a favorable resolution of a multiyear foreign sales tax matter during the 2025 thirteen-week period.

Previous wording

Insurance and claims increased $8,910,000 in the 2026 thirteen-week period compared to the 2025 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 2026 thirteen-week period, increased BCO miles traveled during the 2026 thirteen-week period and increased severity of current year trucking claims during the 2026 thirteen-week period, partially offset by decreased frequency of both current year trucking and current year cargo claims during the 2026 thirteen-week period. During the 2026 and 2025 thirteen-week periods, insurance and claims costs included $10,505,000 and $2,289,000 of net unfavorable adjustments to prior years’ claims estimates, respectively.

Current wording

Insurance and claims increased $22,262,000 in the 2026 thirteen-week period compared to the 2025 thirteen-week period. The increase in insurance and claims expense compared to the prior year was primarily attributable to (a) increased net unfavorable development of prior years’ claims in the 2026 thirteen-week period, which was driven by (i) an increase in the Company’s actuarially determined claim reserves; (ii) several specific commercial trucking claims involving BCO Independent Contractors leased on with motor carrier subsidiaries of the Company; (iii) several specific truck brokerage claims; and (iv) cargo loss experience as a result of fraud and theft in the supply chain and (b) an increase in the Company’s actuarially determined claim reserves relating to current year trucking claims during the 2026 thirteen-week period. During the 2026 and 2025 thirteen-week periods, insurance and claims costs included $21,924,000 and $9,219,000 of net unfavorable adjustments to prior years’ claims estimates, respectively.

Previous wording

Selling, general and administrative costs increased $11,870,000 in the 2026 twenty-six-week period compared to the 2025 twenty-six-week period. The increase in selling, general and administrative costs compared to prior year was primarily attributable to increased provisions for incentive compensation and stock-based compensation expense and increased wages, partially offset by a decreased provision for customer bad debt in the 2026 twenty-six-week period. Included in selling, general and administrative costs was incentive compensation expense of $9,832,000 and $1,950,000, respectively, and stock-based compensation expense of $5,420,000 and $3,657,000, respectively, for the 2026 and 2025 twenty-six-week periods.

Current wording

Selling, general and administrative costs increased $5,361,000 in the 2026 thirteen-week period compared to the 2025 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 and increased stock-based compensation expense, partially offset by a decreased provision for customer bad debt in the 2026 thirteen-week period. Included in selling, general and administrative costs was incentive compensation expense of $6,906,000 and $975,000, respectively, and stock-based compensation expense of $3,023,000 and $1,586,000, respectively, for the 2026 and 2025 thirteen-week periods.

Previous wording

Depreciation and amortization decreased $1,740,000 in the 2026 thirteen-week period compared to the 2025 thirteen-week period. The decrease in depreciation and amortization expense was primarily due to decreased depreciation on information technology software and decreased trailing equipment depreciation in the 2026 thirteen-week period.

Current wording

Depreciation and amortization decreased $1,591,000 in the 2026 thirteen-week period compared to the 2025 thirteen-week period. The decrease in depreciation and amortization expense was primarily due to decreased depreciation on information technology software and decreased trailing equipment depreciation in the 2026 thirteen-week period.

Previous wording

Interest and debt expense increased $791,000 in the 2026 twenty-six-week period compared to the 2025 twenty-six-week period. The increase in interest and debt expense was primarily attributable to decreased interest income earned on cash balances held by the transportation logistics segment, partially offset by decreased interest expense related to finance lease obligations.

Current wording

Interest and debt expense increased $145,000 in the 2026 thirteen-week period compared to the 2025 thirteen-week period.