10-Q

Large accelerated filer

Accelerated filer

Non-accelerated
filer

Smaller reporting company

Emerging growth company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM

10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June

28, 2025

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission File Number:

0-21238

LANDSTAR SYSTEM, INC.

(Exact name of registrant as specified in its charter)


Delaware		06-1313069
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

13410 Sutton Park Drive South, Jacksonville, Florida

(Address of principal executive offices)

32224

(Zip Code)

(904)

398-9400

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	LSTR	NASDAQ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:

Yes

☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation

S-T

(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files):

Yes

☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a

non-accelerated

filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule

12b-2

of the Exchange Act. (Check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule

12b-2

of the Exchange Act). Yes ☐ No

☑

The number of shares of the registrant’s common stock, par value $0.01 per share, outstanding as of the close of business on July 21, 2025 was 34,653,536.

Index



PART I – Financial Information
Item 1. Financial Statements (unaudited)

Consolidated Balance Sheets as of June 28, 2025 and December 28, 2024			Page 4

Consolidated Statements of Income for the Twenty-Six and Thirteen Weeks Ended June 28, 2025 and June 29, 2024			Page 5

Consolidated Statements of Comprehensive Income for the Twenty-Six and Thirteen Weeks Ended June 28, 2025 and June 29, 2024			Page 6

Consolidated Statements of Cash Flows for the Twenty-Six Weeks Ended June 28, 2025 and June 29, 2024			Page 7

Consolidated Statements of Changes in Shareholders’ Equity for the Twenty-Six and Thirteen Weeks Ended June 28, 2025 and June 29, 2024			Page 8

Notes to Consolidated Financial Statements			Page 10

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			Page 21

Item 3. Quantitative and Qualitative Disclosures About Market Risk			Page 34

Item 4. Controls and Procedures			Page 35

PART II – Other Information

Item 1. Legal Proceedings			Page 36

Item 1A. Risk Factors			Page 36

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			Page 36

Item 5. Other Information			Page 37

Item 6. Exhibits			Page 38

Signatures			Page 39

EX – 31.1 Section 302 CEO Certification

EX – 31.2 Section 302 CFO Certification

EX – 32.1 Section 906 CEO Certification

EX – 32.2 Section 906 CFO Certification

PART I -

FINANCIAL INFORMATION

Item 1. Financial Statements

The interim consolidated financial statements contained herein reflect all adjustments (all of a normal, recurring nature) which, in the opinion of management, are necessary for a fair statement of the financial condition, results of operations, cash flows and changes in shareholders’ equity for the periods presented. They have been prepared in accordance with Rule

10-01

of Regulation

S-X

and do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. Operating results for the

twenty-six

weeks ended June 28, 2025 are not necessarily indicative of the results that may be expected for the entire fiscal year ending December 27, 2025.

These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 2024 Annual Report on Form

10-K.

Table of Contents

LANDSTAR SYSTEM, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share amounts)

(Unaudited)


	June 28, 2025			December 28, 2024
ASSETS
Current Assets
Cash and cash equivalents	$	359,237		$	515,018
Short-term investments		66,935			51,619
Trade accounts receivable, less allowance of $12,284 and $12,904		717,249			683,841
Other receivables, including advances to independent contractors, less allowance of $21,995 and $17,812		48,781			47,160
Other current assets		45,144			22,229

Total current assets		1,237,346			1,319,867

Operating property, less accumulated depreciation and amortization of $464,538 and $456,547		287,500			311,345
Goodwill		41,399			40,933
Other assets		133,399			141,166

Total assets	$	1,699,644		$	1,813,311

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Cash overdraft	$	58,141		$	61,033
Accounts payable		401,849			383,625
Current maturities of long-term debt		30,747			33,116
Insurance claims		36,797			40,511
Dividends payable		—			70,632
Other current liabilities		91,605			84,237

Total current liabilities		619,139			673,154

Long-term debt, excluding current maturities		54,677			69,191
Insurance claims		73,268			62,842
Deferred income taxes and other noncurrent liabilities		30,734			35,685
Shareholders’ Equity
Common stock, $0.01 par value, authorized 160,000,000 shares, issued 68,589,418 and 68,559,269 shares		686			686
Additional paid-in capital		258,915			255,260
Retained earnings		2,905,011			2,859,916
Cost of 33,935,882 and 33,243,196 shares of common stock in treasury		(2,235,622	)		(2,131,413	)
Accumulated other comprehensive loss		(7,164	)		(12,010	)

Total shareholders’ equity		921,826			972,439

Total liabilities and shareholders’ equity	$	1,699,644		$	1,813,311

See accompanying notes to consolidated financial statements.

Table of Contents

LANDSTAR SYSTEM, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share amounts)

(Unaudited)


	Twenty-Six Weeks Ended					Thirteen Weeks Ended
	June 28, 2025		June 29, 2024			June 28, 2025		June 29, 2024
Revenue	$	2,363,885	$	2,396,048		$	1,211,383	$	1,225,005
Investment income		7,327		7,066			3,729		3,654
Costs and expenses:
Purchased transportation		1,839,289		1,855,579			941,411		950,058
Commissions to agents		192,836		197,098			99,522		99,816
Other operating costs, net of gains on asset sales/dispositions		31,424		28,994			19,595		14,135
Insurance and claims		70,301		53,432			30,449		27,164
Selling, general and administrative		117,288		111,361			55,706		54,939
Depreciation and amortization		24,375		28,630			12,149		14,488

Total costs and expenses		2,275,513		2,275,094			1,158,832		1,160,600

Operating income		95,699		128,020			56,280		68,059
Interest and debt expense (income)		539		(3,286	)		698		(1,675	)

Income before income taxes		95,160		131,306			55,582		69,734
Income taxes		23,461		31,586			13,689		17,110

Net income	$	71,699	$	99,720		$	41,893	$	52,624

Basic and diluted earnings per share	$	2.05	$	2.79		$	1.20	$	1.48

Average basic and diluted shares outstanding		35,037,000		35,702,000			34,870,000		35,654,000

Dividends per common share	$	0.76	$	0.66		$	0.40	$	0.33

See accompanying notes to consolidated financial statements.

Table of Contents

LANDSTAR SYSTEM, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in thousands)

(Unaudited)


	Twenty-Six Weeks Ended					Thirteen Weeks Ended
	June 28, 2025		June 29, 2024			June 28, 2025		June 29, 2024
Net income	$	71,699	$	99,720		$	41,893	$	52,624
Other comprehensive income (loss):
Unrealized holding gains on available-for-sale investments, net of tax expense of $424, $204, $160 and $112		1,546		746			582		410
Foreign currency translation gains (losses)		3,300		(3,359	)		3,250		(3,053	)

Other comprehensive income (loss)		4,846		(2,613	)		3,832		(2,643	)

Comprehensive income	$	76,545	$	97,107		$	45,725	$	49,981

See accompanying notes to consolidated financial statements.

Table of Contents

LANDSTAR SYSTEM, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)


	Twenty-Six Weeks Ended
	June 28, 2025			June 29, 2024
OPERATING ACTIVITIES
Net income	$	71,699		$	99,720
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		24,375			28,630
Non-cash interest charges		132			132
Provisions for losses on trade and other accounts receivable		9,912			8,840
Gains on sales/disposals of operating property		(1,389	)		(555	)
Deferred income taxes, net		(5,904	)		1,752
Stock-based compensation		3,657			3,616
Changes in operating assets and liabilities:
(Increase) decrease in trade and other accounts receivable		(44,941	)		11,665
Increase in other assets		(26,544	)		(17,869	)
Increase in accounts payable		18,224			5,555
Increase (decrease) in other liabilities		6,903			(935	)
Increase in insurance claims		6,712			1,792

NET CASH PROVIDED BY OPERATING ACTIVITIES		62,836			142,343

INVESTING ACTIVITIES
Sales and maturities of investments		84,755			59,791
Purchases of investments		(86,838	)		(56,921	)
Purchases of operating property		(4,383	)		(16,778	)
Proceeds from sales of operating property		5,690			3,431

NET CASH USED BY INVESTING ACTIVITIES		(776	)		(10,477	)

FINANCING ACTIVITIES
Decrease in cash overdraft		(2,892	)		(3,183	)
Dividends paid		(97,236	)		(95,012	)
Taxes paid in lieu of shares issued related to stock-based compensation plans		(916	)		(3,260	)
Purchases of common stock		(102,300	)		(56,515	)
Principal payments on finance lease obligations		(16,883	)		(14,907	)

NET CASH USED BY FINANCING ACTIVITIES		(220,227	)		(172,877	)

Effect of exchange rate changes on cash and cash equivalents		2,386			(1,970	)

Decrease in cash and cash equivalents		(155,781	)		(42,981	)
Cash and cash equivalents at beginning of period		515,018			481,043

Cash and cash equivalents at end of period	$	359,237		$	438,062

See accompanying notes to consolidated financial statements.

Table of Contents

LANDSTAR SYSTEM, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Twenty-Six

and Thirteen Weeks Ended June 28, 2025 and June 29, 2024

(Dollars in thousands)

(Unaudited)


	Common Stock				Additional Paid-In			Retained			Treasury Stock at Cost					Accumulated Other Comprehensive			Total
	Shares		Amount		Capital			Earnings			Shares		Amount			(Loss) Income			Total
Balance December 28, 2024		68,559,269	$	686	$	255,260		$	2,859,916			33,243,196	$	(2,131,413	)	$	(12,010	)	$	972,439
Net income									29,806											29,806
Dividends ($0.36 per share)									(12,688	)										(12,688	)
Purchases of common stock												386,318		(60,945	)					(60,945	)
Issuance of stock related to stock-based compensation plans		22,503				(2	)					6,081		(907	)					(909	)
Stock-based compensation						2,038														2,038
Other comprehensive income																	1,014			1,014

Balance March 29, 2025		68,581,772	$	686	$	257,296		$	2,877,034			33,635,595	$	(2,193,265	)	$	(10,996	)	$	930,755

Net income									41,893											41,893
Dividends ($ 0.40 per share)									(13,916	)										(13,916	)
Purchases of common stock												300,141		(42,350	)					(42,350	)
Issuance of stock related to stock-based compensation plans		7,646										146		(7	)					(7	)
Stock-based compensation						1,619														1,619
Other comprehensive income																	3,832

SEC Form 10-Q filed by Landstar System Inc.