Freight broker Landstar System disclosed several charges that it expects to incur during the third quarter, including $3.4 million in damages stemming from an accident involving its subsidiary, Landstar Ranger.
A Wednesday filing with the Securities and Exchange Commission said a Texas jury found Landstar Ranger acted as a broker, not a motor carrier in a 2021 “tragic vehicular accident.” The verdict assigned 15% of the $22.8 million in total monetary damages to Landstar. The remaining 85% of the damages were attributed to truckload carrier MyUniverse, the motor carrier hauling the brokered load.
Landstar (NASDAQ: LSTR) previously disclosed the accident in its second-quarter report at the end of July. The company noted the shipment was conducted under “a non-exclusive truck brokerage contractual arrangement,” and didn’t involve one of its business capacity owners, who haul almost exclusively for Landstar.
The company said it had already included an “immaterial accrual” for the accident on its balance sheet in the second quarter and that there is “no anticipated change to the previously recorded immaterial accrual.”
Landstar said all parties are expected to file post-trial motions and that a potential appeals process looms.
“No assurances can be provided as to the probability of success with respect to any potential post-trial motions or appeals relating to the Verdict or the ultimate outcome of any such appeals,” the filing stated.
The company also said the decision is unlikely to impact a $12 million “no claims bonus” program it has in place with third-party insurers. It received the remaining $3 million of the bonus allotment at the beginning of the third quarter “due to favorable loss experience.”
Landstar also disclosed on Wednesday other charges that will be incurred in the third quarter following an annual strategic review.
It plans to sell or otherwise dispose of its Mexican subsidiary, Landstar Metro, as the unit “has not been able to meet the Company’s strategic or operational goals and expectations.” It formed the unit in 2017 in conjunction with the acquisition of Fletes Avella. An initial investment of $8.5 million, along with additional investments, pushed the unit’s carrying value to approximately $26 million at the close of the 2025 second quarter.
Landstar expects to record a noncash impairment charge of $13 million to $17 million, or 28 cents to 37 cents per share, in the third quarter. However, it said the disposition won’t adversely affect its cross-border offering.
Landstar will also see a $9 million noncash impairment charge (20 cents per share) as it unwinds its Blue TMS platform. The company has decided to conduct TL brokerage services exclusively through its Landstar TMS.
It is also writing down a $5 million minority stake (up to an 11-cent-per-share noncash impairment) in Cavnue, a startup focused on improving road infrastructure for autonomous vehicles. Landstar cited previously disclosed risk factors for Cavnue, like its ability to meet performance objectives, raise capital, potential declines in valuation or the business not becoming commercially viable, as reasons that could adversely affect the investment.
Shares of LSTR were up 0.6% at 12:04 p.m. EDT on Wednesday compared to the S&P 500, which was up 0.2%.
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