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 March 27, 2021

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

For the transition period from_________________ to _____________________

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 April 19, 2021 was 38,408,570.

Index


PART I – Financial Information

Item 1. Financial Statements (unaudited)

Consolidated Balance Sheets as of March 27, 2021 and December 26, 2020			Page 4

Consolidated Statements of Income for the Thirteen Weeks Ended March 27, 2021 and March 28, 2020			Page 5

Consolidated Statements of Comprehensive Income for the Thirteen Weeks Ended March 27, 2021 and March 28, 2020			Page 6

Consolidated Statements of Cash Flows for the Thirteen Weeks Ended March 27, 2021 and March 28, 2020			Page 7

Consolidated Statements of Changes in Shareholders’ Equity for the Thirteen Weeks Ended March 27, 2021 and March 28, 2020			Page 8

Notes to Consolidated Financial Statements			Page 9

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			Page 16

Item 3. Quantitative and Qualitative Disclosures About Market Risk			Page 26

Item 4. Controls and Procedures			Page 27

PART II – Other Information

Item 1. Legal Proceedings			Page 27

Item 1A. Risk Factors			Page 27

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			Page 27

Item 6. Exhibits			Page 28

Signatures			Page 30
EX – 31.1 Section 302 CEO Certification
EX – 32.1 Section 906 CEO 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 thirteen weeks ended March 27, 2021 are not necessarily indicative of the results that may be expected for the entire fiscal year ending December 25, 2021.

These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 2020 Annual Report on Form

10-K.

LANDSTAR SYSTEM, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except per share amounts)

(Unaudited)


	March 27, 2021			December 26, 2020
ASSETS
Current Assets
Cash and cash equivalents	$	219,389		$	249,354
Short-term investments		41,407			41,375
Trade accounts receivable, less allowance of $7,095 and $8,670		824,872			764,169
Other receivables, including advances to independent contractors, less allowance of $6,711 and $7,239		40,067			134,757
Other current assets		11,584			18,520

Total current assets		1,137,319			1,208,175

Operating property, less accumulated depreciation and amortization of $309,464 and $299,407		288,041			296,996
Goodwill		40,732			40,949
Other assets		108,373			107,679

Total assets	$	1,574,465		$	1,653,799

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities
Cash overdraft	$	74,754		$	74,748
Accounts payable		414,440			380,505
Current maturities of long-term debt		32,800			35,415
Insurance claims		39,229			149,774
Dividends payable		—			76,770
Other current liabilities		101,442			88,925

Total current liabilities		662,665			806,137

Long-term debt, excluding current maturities		58,196			65,359
Insurance claims		39,850			38,867
Deferred income taxes and other noncurrent liabilities		50,835			51,601
Shareholders’ Equity
Common stock, $0.01 par value, authorized 160,000,000 shares, issued 68,212,296 and 68,183,702 shares		682			682
Additional paid-in capital		232,597			228,875
Retained earnings		2,115,411			2,046,238
Cost of 29,803,726 and 29,797,639 shares of common stock in treasury		(1,582,818	)		(1,581,961	)
Accumulated other comprehensive loss		(2,953	)		(1,999	)

Total shareholders’ equity		762,919			691,835

Total liabilities and shareholders’ equity	$	1,574,465		$	1,653,799

See accompanying notes to consolidated financial statements.

LANDSTAR SYSTEM, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

(Dollars in thousands, except per share amounts)

(Unaudited)


	Thirteen Weeks Ended
	March 27, 2021		March 28, 2020
Revenue	$	1,287,534	$	927,566
Investment income		684		1,167
Costs and expenses:
Purchased transportation		998,285		709,257
Commissions to agents		100,009		75,376
Other operating costs, net of gains on asset sales/dispositions		7,642		8,306
Insurance and claims		21,505		24,957
Selling, general and administrative		45,408		45,327
Depreciation and amortization		12,101		11,505

Total costs and expenses		1,184,950		874,728

Operating income		103,268		54,005
Interest and debt expense		1,042		952

Income before income taxes		102,226		53,053
Income taxes		24,986		12,158

Net income	$	77,240	$	40,895

Diluted earnings per share	$	2.01	$	1.04

Average diluted shares outstanding		38,404,000		39,254,000

Dividends per common share	$	0.210	$	0.185

See accompanying notes to consolidated financial statements.

LANDSTAR SYSTEM, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in thousands)

(Unaudited)


	Thirteen Weeks Ended
	March 27, 2021			March 28, 2020
Net income	$	77,240		$	40,895
Other comprehensive loss:
Unrealized holding losses on available-for-sale investments, net of tax benefits of $147 and $432		(534	)		(1,579	)
Foreign currency translation losses		(420	)		(7,902	)

Other comprehensive loss		(954	)		(9,481	)

Comprehensive income	$	76,286		$	31,414

See accompanying notes to consolidated financial statements.

LANDSTAR SYSTEM, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)


	Thirteen Weeks Ended
	March 27, 2021			March 28, 2020
OPERATING ACTIVITIES
Net income	$	77,240		$	40,895
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of operating property and intangible assets		12,101			11,505
Non-cash interest charges		112			63
Provisions for losses on trade and other accounts receivable		547			4,122
Gains on sales/disposals of operating property		(24	)		(858	)
Deferred income taxes, net		(1,110	)		797
Stock-based compensation		4,029			631
Changes in operating assets and liabilities:
Decrease in trade and other accounts receivable		33,440			21,369
Decrease in other assets		6,175			9,987
Increase in accounts payable		33,935			179
Increase in other liabilities		13,008			4,404
(Decrease) increase in insurance claims		(109,562	)		6,122

NET CASH PROVIDED BY OPERATING ACTIVITIES		69,891			99,216

INVESTING ACTIVITIES
Net changes in other short-term investments		—			131
Sales and maturities of investments		7,957			7,963
Purchases of investments		(8,716	)		(8,830	)
Purchases of operating property		(4,076	)		(5,799	)
Proceeds from sales of operating property		500			2,081

NET CASH USED BY INVESTING ACTIVITIES		(4,335	)		(4,454	)

FINANCING ACTIVITIES
Increase (decrease) in cash overdraft		6			(17,876	)
Dividends paid		(84,837	)		(86,283	)
Proceeds from exercises of stock options		77			575
Taxes paid in lieu of shares issued related to stock-based compensation plans		(1,241	)		(2,994	)
Purchases of common stock		—			(115,962	)
Principal payments on finance lease obligations		(9,778	)		(10,923	)

NET CASH USED BY FINANCING ACTIVITIES		(95,773	)		(233,463	)

Effect of exchange rate changes on cash and cash equivalents		252			(3,590	)

Decrease in cash and cash equivalents		(29,965	)		(142,291	)
Cash and cash equivalents at beginning of period		249,354			319,515

Cash and cash equivalents at end of period	$	219,389		$	177,224

See accompanying notes to consolidated financial statements.

LANDSTAR SYSTEM, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Thirteen Weeks Ended March 27, 2021 and March 28, 2020

(Dollars in thousands)

(Unaudited)


	Common Stock				Additional Paid-In Capital			Retained Earnings			Treasury Stock at Cost					Accumulated Other Comprehensive Loss			Total
	Shares		Amount		Additional Paid-In Capital			Retained Earnings			Shares		Amount			Accumulated Other Comprehensive Loss			Total
Balance December 26, 2020		68,183,702	$	682	$	228,875		$	2,046,238			29,797,639	$	(1,581,961	)	$	(1,999	)	$	691,835
Net income									77,240											77,240
Dividends ($0.21 per share)									(8,067	)										(8,067	)
Issuance of stock related to stock-based compensation plans		28,594		—		(307	)					6,087		(857	)					(1,164	)
Stock-based compensation						4,029														4,029
Other comprehensive loss																	(954	)		(954	)

Balance March 27, 2021		68,212,296	$	682	$	232,597		$	2,115,411			29,803,726	$	(1,582,818	)	$	(2,953	)	$	762,919


	Common Stock				Additional Paid-In			Retained			Treasury Stock at Cost					Accumulated Other Comprehensive
	Shares		Amount		Capital			Earnings			Shares		Amount			Loss			Total
Balance December 28, 2019		68,083,419	$	681	$	226,123		$	1,962,161			28,609,926	$	(1,465,284	)	$	(2,212	)	$	721,469
Adoption of accounting standard									(702	)										(702	)
Net income									40,895											40,895
Dividends ($0.185 per share)									(7,336	)										(7,336	)
Purchases of common stock												1,178,970		(115,962	)					(115,962	)
Issuance of stock related to stock-based compensation plans		84,063		1		(1,781	)					8,078		(639	)					(2,419	)
Stock-based compensation						631														631
Other comprehensive loss																	(9,481	)		(9,481	)

Balance March 28, 2020		68,167,482	$	682	$	224,973		$	1,995,018			29,796,974	$	(1,581,885	)	$	(11,693	)	$	627,095

See accompanying notes to consolidated financial statements.

LANDSTAR SYSTEM, INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The consolidated financial statements include the accounts of Landstar System, Inc. and its subsidiary, Landstar System Holdings, Inc., and reflect all adjustments (all of a normal, recurring nature) which are, in the opinion of management, necessary for a fair statement of the results for the periods presented. The preparation of the consolidated financial statements requires the use of management’s estimates. Actual results could differ from those estimates. Landstar System, Inc. and its subsidiary are herein referred to as “Landstar” or the “Company.” Significant intercompany accounts have been eliminated in consolidation.

(1)	Significant Accounting Policies

Revenue from Contracts with Customers – Disaggregation of Revenue

The following table summarizes (i) the percentage of consolidated revenue generated by mode of transportation and (ii) the total amount of truck transportation revenue hauled by BCO Independent Contractors and Truck Brokerage

Carriers

generated by equipment type during the thirteen-week periods ended

March 27, 2021

and

March 28, 2020

(dollars in thousands):


	Thirteen Weeks Ended
	March 27, 2021			March 28, 2020
Mode
Truck – BCO Independent Contractors		44	%		46	%
Truck – Truck Brokerage Carriers		49	%		46	%
Rail intermodal		2	%		3	%
Ocean and air cargo carriers		4	%		3	%
Truck Equipment Type
Van equipment	$	827,187		$	545,307
Unsided/platform equipment	$	340,632		$	286,328
Less-than-truckload	$	25,670		$	22,941

(2)	Share-based Payment Arrangements

As of March 27, 2021, the Company had two

employee equity incentive plans, the 2002 employee stock option and stock incentive plan (the “ESOSIP”) and the 2011 equity incentive plan (the “2011 EIP”). No further grants can be made under the ESOSIP and no stock options previously

granted under the ESOSIP are unvested or unexercised as of March 27, 2021. The Company also has a stock compensation plan for members of its Board of Directors, the Amended and Restated 2013 Directors Stock Compensation Plan (as amended and restated as of May 17, 2016, the “2013

DSCP”).

6,000,000

shares of the Company’s common stock were authorized for issuance under the 2011 EIP and

115,000

shares of the Company’s common stock were authorized for issuance under the 2013 DSCP. The ESOSIP, 2011 EIP and 2013 DSCP are each referred to herein as a “Plan,” and, collectively, as the “Plans.”

Amounts recognized in the financial statements with respect to these Plans are as follows (in thousands):


	Thirteen Weeks Ended
	March 27, 2021			March 28, 2020
Total cost of the Plans during the period	$	4,029		$	631
Amount of related income tax benefit recognized during the period		(1,341	)		(873	)

Net cost of the Plans during the period	$	2,688		$	(242	)

Included in income tax benefits recognized in the thirteen-week periods ended March 27, 2021 and March 28, 2020 were excess tax benefits from stock-based awards of $343,000 and $706,000, respectively.

As of March 27, 2021, there were 60,586 shares of the Company’s common stock reserved for issuance under the 2013 DSCP and 3,521,140 shares of the Company’s common stock reserved for issuance under the

2011

EIP.

Restricted Stock Units

The following table summarizes information regarding the Company’s outstanding restricted stock unit (“RSU”) awards with either a performance condition or a market condition under the Plans:


	Number of RSUs			Weighted Average Grant Date Fair Value
Outstanding at December 26, 2020		183,213		$	93.44
Granted		45,707		$	129.03
Vested shares		(9,247	)	$	106.14

Outstanding at March 27, 2021		219,673		$	100.31

During the thirteen-week period ended March 27, 2021, the Company granted RSUs with a performance condition. Outstanding RSUs at both December 26, 2020 and March 27, 2021 include RSUs with a performance condition and RSUs with a market condition, as further described below and in the Company’s 2020 Annual Report on Form 10-K.

RSUs with a performance condition granted on January 29, 2021 may vest on January 31 of 2024, 2025 and 2026 based on growth in operating income and

pre-tax

income per diluted share from continuing operations as compared to the results from the 2020 fiscal year, adjusted to reflect the add back of

non-cash

impairment charges recorded in the Company’s 2020 fiscal year related to certain assets, primarily customer contract and related customer relationship intangible assets, held by the Company’s Mexican subsidiaries.

The Company recognized approximately $3,223,000 and ($136,000) of share-based compensation expense/(benefit) related to RSU awards in the thirteen-week periods ended

March 27, 2021

and March 28, 2020, respectively. As of

March 27, 2021

, there was a maximum of $39.8 million of total unrecognized compensation cost related to RSU awards granted under the Plans with an expected average remaining life of approximately 3.4 years. With respect to RSU awards with a performance condition, the amount of future compensation expense to be recognized will be determined based on future operating results.

Non-vested

Restricted Stock and Deferred Stock Units

The following table summarizes information regarding the Company’s outstanding shares of

non-vested

restricted stock and Deferred Stock Units (defined below) under the Plans:


	Number of Shares and Deferred Stock Units			Weighted Average Grant Date Fair Value
Non-vested at December 26, 2020		60,440		$	103.65
Granted		18,078		$	140.97
Vested		(21,733	)	$	103.39

Non-vested at March 27, 2021		56,785		$	115.63

The fair value of each share of non-vested restricted stock issued and Deferred Stock Unit granted under the Plans is based on the fair value of a share of the Company’s common stock on the date of grant. Shares of non-vested restricted stock are generally subject to vesting in three equal annual installments either on the first, second and third anniversary of the date of the grant or the third, fourth and fifth anniversary of the date of the grant, or 100% on the first or fifth anniversary of the date of the grant. For restricted stock awards granted under the 2013 DSCP plan, each recipient may elect to defer receipt of shares and instead receive restricted stock units (“Deferred Stock Units”), which represent contingent rights to receive shares of the Company’s common stock on the date of recipient separation from service from the Board of Directors, or, if earlier, upon a change in control event of the Company. Deferred Stock Units become vested 100% on the first anniversary of the date of the grant. Deferred Stock Units do not represent actual ownership in shares of the Company’s common stock and the recipient does not have voting rights or other incidents of ownership until the shares are issued. However, Deferred Stock Units do contain the right to receive dividend equivalent payments prior to settlement into shares.

As of March 27, 2021, there was $5,054,000

of total unrecognized compensation cost related to non-vested shares of restricted stock and Deferred

Stock Units granted under the Plans. The unrecognized compensation cost related to these non-vested shares of restricted stock and Deferred Stock Units is expected to be recognized over a weighted average period of 2.4 years.

Stock Options

The following table summarizes information regarding the Company’s outstanding stock options under the Plans:


	Number of Options			Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value (000s)
Options outstanding at December 26, 2020		17,650		$	54.16
Exercised		(5,280	)	$	51.83

Options outstanding at March 27, 2021		12,370		$	55.15		1.6	$	1,411

Options exercisable at March 27, 2021		12,370		$	55.15		1.6	$	1,411

The total intrinsic value of stock options exercised during the thirteen-week periods ended March 27, 2021 and March 28, 2020 was $521,000 and $1,023,000, respectively.

As of March 27, 2021, there was no unrecognized compensation cost related to stock options granted under the Plans.

(3)	Income Taxes

The provisions for income taxes for the 2021 and 2020 thirteen-week periods were based on estimated annual effective income tax rates of 24.4% and 24.2%, respectively, adjusted for discrete events, such as benefits resulting from stock-based awards. The increase in the estimated annual effective income tax rate was primarily attributable to increased anticipated nondeductible executive compensation during the 2021 period. The effective income tax rate for the 2021 thirteen-week period was 24.4%, which was higher than the statutory federal income tax rate of 21% primarily attributable to state taxes and

non-deductible

executive compensation, partially offset by excess tax benefits realized on stock based awards. The effective income tax rate for the 2020 thirteen-week period was 22.9%, which was higher than the statutory federal income tax rate of 21% primarily attributable to state taxes and the meals and entertainment exclusion, partially offset by excess tax benefits realized on stock based awards.

(4)	Earnings Per Share

Earnings per common share are based on the weighted average number of shares outstanding, including outstanding

non-vested

restricted stock and outstanding Deferred Stock Units. Diluted earnings per share are based on the weighted average number of common shares and Deferred Stock Units outstanding plus the incremental shares that would have been outstanding upon the assumed exercise of all dilutive stock options. During the 2021 and 2020 thirteen-week periods, in reference to the determination of diluted earnings per share, the future compensation cost attributable to outstanding shares of

non-vested

restricted stock exceeded the impact of incremental shares that would have been outstanding upon the assumed exercise of all dilutive stock options.

For each of the thirteen-week periods ended March 27, 2021 and March 28, 2020, no options outstanding to purchase shares of common stock were antidilutive. Outstanding RSUs were excluded from the calculation of diluted earnings per share for all periods because the performance metric requirements or market condition for vesting had not been satisfied.

(5)	Additional Cash Flow Information

During the 2021 thirteen-week period, Landstar paid income taxes and interest of $353,000 and $983,000, respectively. During the 2020 thirteen-week period, Landstar paid income taxes and interest of $7,000 and $1,079,000, respectively. Landstar did not acquire any operating property by entering into finance leases in either the 2021 or 2020 thirteen-week periods.

(6)	Segment Information

The following table summarizes information about the Company’s reportable business segments as of and for the thirteen-week periods ended March 27, 2021 and March 28, 2020 (in thousands):


	Thirteen Weeks Ended
	March 27, 2021						March 28, 2020
	Transportation Logistics		Insurance		Total		Transportation Logistics		Insurance			Total
External revenue	$	1,270,499	$	17,035	$	1,287,534	$	913,884	$	13,682		$	927,566
Internal revenue				9,534		9,534				9,079			9,079
Investment income				684		684				1,167			1,167
Operating income		89,732		13,536		103,268		55,044		(1,039	)		54,005
Expenditures on long-lived assets		4,076				4,076		5,799					5,799
Goodwill		40,732				40,732		37,182					37,182

In the thirteen-week periods ended March 27, 2021 and March 28, 2020, no single customer accounted for more than 10% of the Company’s consolidated revenue.

(7)	Other Comprehensive Income

The following table presents the components of and changes in accumulated other comprehensive income (loss), net of related income taxes, as of and for the thirteen-week period ended March 27, 2021 (in thousands):


	Unrealized Holding Gains (Losses) on Available-for-Sale Securities			Foreign Currency Translation			Total
Balance as of December 26, 2020	$	2,808		$	(4,807	)	$	(1,999	)
Other comprehensive loss		(534	)		(420	)		(954	)

Balance as of March 27, 2021	$	2,274		$	(5,227	)	$	(2,953	)

Amounts reclassified from accumulated other comprehensive income to investment income due to the realization of previously unrealized gains and losses in the accompanying consolidated statements of income were not significant for the thirteen-week period ended March 27, 2021.

(8)	Investments

Investments include primarily investment-grade corporate bonds and U.S. Treasury obligations having maturities of up to five years (the “bond portfolio”) and money market investments. Investments in the bond portfolio are reported as

available-for-sale

and are carried at fair value. Investments maturing less than one year from the balance sheet date are included in short-term investments and investments maturing more than one year from the balance sheet date are included in other assets in the consolidated balance sheets. Management performs an analysis of the nature of the unrealized losses on

available-for-sale

investments to determine whether an allowance for credit loss is necessary. Unrealized losses, representing the excess of the purchase price of an investment over its fair value as of the end of a period, considered to be a result of credit-related factors, are to be included as a charge in the statement of income, while unrealized losses considered to be a result of noncredit-related factors are to be included as a component of shareholders’ equity. Investments whose values are based on quoted market prices in active markets are classified within Level 1. Investments that trade in markets that are not considered to be active, but are valued based on quoted market prices, are classified within Level 2. As Level 2 investments include positions that are not traded in active markets, valuations may be adjusted to reflect illiquidity and/or

non-transferability,

which are generally based on available market information. Any transfers between levels are recognized as of the beginning of any reporting period. Fair value of the

bond portfolio was determined using Level 1 inputs related to U.S. Treasury obligations and money market investments and Level 2 inputs related to

investment-grade corporate bonds, asset-backed securities and direct obligations of government agencies. Unrealized gains, net of unrealized losses, on the investments in the bond portfolio were $2,897,000 at March 27, 2021 and $3,578,000 at December 26, 2020, respectively.

The amortized cost and fair values of

available-for-sale

investments are as follows at March 27, 2021 and December 26, 2020 (in thousands):


			Gross		Gross
	Amortized Cost		Unrealized Gains		Unrealized Losses		Fair Value
March 27, 2021
Money market investments	$	14,731	$	—	$	—	$	14,731
Asset-backed securities		566		—		11		555
Corporate bonds and direct obligations of government agencies		102,075		2,950		144		104,881
U.S. Treasury obligations		2,339		102		—		2,441

Total	$	119,711	$	3,052	$	155	$	122,608

December 26, 2020
Money market investments	$	17,867	$	—	$	—	$	17,867
Asset-backed securities		567		—		26		541
Corporate bonds and direct obligations of government agencies		98,241		3,551		72		101,720
U.S. Treasury obligations		2,338		125		—		2,463

Total	$	119,013	$	3,676	$	98	$	122,591

For those

available-for-sale

investments with unrealized losses at March 27, 2021 and December 26, 2020, the following table summarizes the duration of the unrealized loss (in thousands):


	Less than 12 months				12 months or longer				Total
	Fair Value		Unrealized Loss		Fair Value		Unrealized Loss		Fair Value		Unrealized Loss
March 27, 2021
Asset-backed securities	$	—	$	—	$	555	$	11	$	555	$	11
Corporate bonds and direct obligations of government agencies		8,596		123		1,255		21		9,851		144

Total	$	8,596	$	123	$	1,810	$	32	$	10,406	$	155

December 26, 2020
Asset-backed securities	$	541	$	26	$	—	$	—	$	541	$	26
Corporate bonds and direct obligations of government agencies		2,681		72		—		—		2,681		72

Total	$	3,222	$	98	$	—	$	—	$	3,222	$	98

SEC Form 10-Q filed by Landstar System, Inc.