Saia Reports Second Quarter Results

JOHNS CREEK, Ga., July 29, 2020 (GLOBE NEWSWIRE) -- Saia, Inc. (Nasdaq: SAIA), a leading transportation provider offering multi-regional less-than-truckload (LTL), non-asset truckload, expedited and logistics services, today reported second quarter 2020 financial results. Diluted earnings per share in the quarter were $1.07 compared to $1.40 in the second quarter of 2019.

Highlights from the second quarter operating results were as follows:

Second Quarter 2020 Compared to Second Quarter 2019 Results

• Revenue was $418.1 million, a 9.9% decrease

• Operating income was $35.7 million, a 30.3% decrease

• Operating ratio of 91.5 compared to 89.0

• LTL shipments per workday decreased 9.7%

• LTL tonnage per workday decreased by 8.9%

• LTL revenue per hundredweight decreased 0.6%

• LTL revenue per shipment rose 0.3% to $235.08

“Our second quarter results were achieved during one of the most volatile operating backdrops our company has ever faced,” said Saia President and Chief Executive Officer, Fritz Holzgrefe. “I have been gratified that our employees responded to the challenge by adapting to new operating procedures and practices, to provide not only for their safety, but that of our customers and vendors. Their willingness to do so allowed us to continuously fulfill our essential role in servicing our customers' critical needs,” continued Holzgrefe.

“After a dramatic drop in shipment volume in mid-March, we began to see a bottoming process in mid-April and then shipment trends continued to improve in May and June,” stated Holzgrefe. “Our second quarter results reflect both a difficult April and the subsequent improved volumes thereafter, combined with the prudent cost measures adopted quickly. As volumes improved through the quarter we were able to begin returning furloughed staff back to full-time hours and we were also able to award a special a one-time bonus of $250 per employee to those employees who worked through the difficult conditions created by the pandemic. While our operating ratio of 91.5 was higher than our record operating ratio last year, I was pleased that we were able to maintain margins similar to our record first quarter results this year,” added Holzgrefe.

“The COVID-19 pandemic has created unprecedented disruption and uncertainty for our business and our customers over the last few months. Though the outlook remains uncertain, we have demonstrated our ability to pivot and adapt to this increased volatility,” said Holzgrefe. “We are pleased to demonstrate that with solid execution of our strategy, we are in a position to be successful even when faced with an unprecedented situation in our country,” concluded Holzgrefe.

Saia Executive Vice President and Chief Financial Officer, Douglas Col added, “Despite the volatility in business levels we have experienced this year, revenue is only down 1.2% through the first six months compared to last year and net debt year-to-date is actually down 3.4%. With a strong balance sheet and the flexibility of our dedicated non-union workforce, we believe we are well-positioned to continue building upon our 96-year history of growth,” Col concluded.

Financial Position and Capital Expenditures

Total debt was $160.8 million at June 30, 2020 and inclusive of the cash on-hand, net debt to total capital was 13.1%. This compares to total debt of $179.9 million and net debt to total capital of 19.1% at June 30, 2019.

Net capital expenditures in the first half of 2020 were $142.7 million. This compares to $171.1 million in net capital expenditures during the first half of 2019, which included equipment acquired with finance leases. In 2020, we anticipate net capital expenditures will be less than the $250 million previously planned.

Conference Call

Management will hold a conference call to discuss quarterly results today at 10:00 a.m. Eastern Time. To participate in the call, please dial 800-367-2403 or 334-777-6978 referencing conference ID #1964358. Callers should dial in five to ten minutes in advance of the conference call. This call will be webcast live via the Company website at www.saiacorp.com. A replay of the call will be offered two hours after the completion of the call through August 26 at 1:00 p.m. Eastern Time. The replay will be available by dialing 888-203-1112.

Saia, Inc. (SAIA) offers customers a wide range of less-than-truckload, non-asset truckload, expedited and logistics services. With headquarters in Georgia, Saia LTL Freight operates 169 terminals across 44 states. For more information on Saia, Inc. visit the Investor Relations section at www.saiacorp.com.

Cautionary Note Regarding Forward-Looking Statements

The Securities and Exchange Commission encourages companies to disclose forward-looking information so that investors can better understand the future prospects of a company and make informed investment decisions. This news release may contain these types of statements, which are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.

Words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “may,” “plan,” “predict,” “believe,” “should” and similar words or expressions are intended to identify forward-looking statements. Investors should not place undue reliance on forward-looking statements and the Company undertakes no obligation to publicly update or revise any forward-looking statements. All forward-looking statements reflect the present expectation of future events of our management as of the date of this news release and are subject to a number of important factors, risks, uncertainties and assumptions that could cause actual results to differ materially from those described in any forward-looking statements. These factors, risks, uncertainties and assumptions include, but are not limited to, (1) general economic conditions including downturns in the business cycle; (2) effectiveness of Company-specific performance improvement initiatives, including management of the cost structure to match shifts in customer volume levels; (3) the creditworthiness of our customers and their ability to pay for services; (4) widespread outbreak of an illness or any other communicable disease, including the COVID-19 pandemic, or any other health crisis or business disruptions that may arise from the COVID-19 pandemic in the future; (5) failure to achieve acquisition synergies; (6) failure to operate and grow acquired businesses in a manner that supports the value allocated to these acquired businesses; (7) economic declines in the geographic regions or industries in which our customers operate; (8) competitive initiatives and pricing pressures, including in connection with fuel surcharge; (9) loss of significant customers; (10) the Company’s need for capital and uncertainty of the credit markets; (11) the possibility of defaults under the Company’s debt agreements (including violation of financial covenants); (12) possible issuance of equity which would dilute stock ownership; (13) integration risks; (14) the effect of litigation including class action lawsuits; (15) cost and availability of qualified drivers, fuel, purchased transportation, real property, revenue equipment, technology and other assets; (16) the effect of governmental regulations, including but not limited to Hours of Service, engine emissions, the Compliance, Safety, Accountability (CSA) initiative, the Food and Drug Administration, compliance with legislation requiring companies to evaluate their internal control over financial reporting, Homeland Security, environmental regulations, tax law changes and changes to international trade agreements and tariffs; (17) changes in interpretation of accounting principles; (18) dependence on key employees; (19) inclement weather; (20) labor relations, including the adverse impact should a portion of the Company’s workforce become unionized; (21) terrorism risks; (22) self-insurance claims and other expense volatility; (23) risks arising from international business operations and relationships; (24) recent increases in the severity of auto liability claims against trucking companies and sharply higher costs of settlements and verdicts; (25) cost and availability of insurance coverage including the possibility the Company may be required to pay additional premiums, may be required to assume additional liability under its auto policy or be unable to obtain coverage; (26) increased costs of healthcare and prescription drugs, including as a result of healthcare reform legislation; (27) social media risks; (28) disruption in or failure of the Company’s technology or equipment including services essential to operations of the Company and/or cyber security risk; (29) failure to successfully execute the strategy to expand the Company’s service geography into the Northeastern United States; and (30) other financial, operational and legal risks and uncertainties detailed from time to time in the Company’s SEC filings.

As a result of these and other factors, no assurance can be given as to our future results and achievements. Accordingly, a forward-looking statement is neither a prediction nor a guarantee of future events or circumstances and those future events or circumstances may not occur. You should not place undue reliance on the forward-looking statements, which speak only as of the date of this press release. We are under no obligation, and we expressly disclaim any obligation, to update or alter any forward-looking statements, whether as a result of new information, future events or otherwise.

CONTACT: Saia, Inc.
Investor Relations
investors@saia.com
770.232.4088

Saia, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Amounts in thousands)
(Unaudited)
		June 30, 2020				December 31, 2019
ASSETS
CURRENT ASSETS:
Cash and cash equivalents		$	29,280			$	248
Accounts receivable, net			205,131				196,119
Prepaid expenses and other			35,232				36,012
Total current assets			269,643				232,379
PROPERTY AND EQUIPMENT:
Cost			1,862,048				1,739,222
Less: accumulated depreciation			743,345				686,623
Net property and equipment			1,118,703				1,052,599
OPERATING LEASE RIGHT-OF-USE ASSETS			122,401				103,890
OTHER ASSETS			27,453				26,825
Total assets		$	1,538,200			$	1,415,693
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable		$	81,516			$	83,621
Wages and employees' benefits			55,355				49,668
Other current liabilities			72,580				69,532
Current portion of long-term debt			19,727				19,405
Current portion of operating lease liability			18,916				19,020
Total current liabilities			248,094				241,246
OTHER LIABILITIES:
Long-term debt, less current portion			141,112				117,025
Operating lease liability, less current portion			104,958				86,239
Deferred income taxes			119,125				111,555
Claims, insurance and other			49,821				44,402
Total other liabilities			415,016				359,221
STOCKHOLDERS' EQUITY:
Common stock			26				26
Additional paid-in capital			265,264				260,871
Deferred compensation trust			(4,965	)			(3,871	)
Retained earnings			614,765				558,200
Total stockholders' equity			875,090				815,226
Total liabilities and stockholders' equity		$	1,538,200			$	1,415,693

Saia, Inc. and Subsidiaries
Consolidated Statements of Operations
For the Quarters and Six Months Ended June 30, 2020 and 2019
(Amounts in thousands, except per share data)
(Unaudited)
		Second Quarter								Six Months
			2020				2019				2020				2019
OPERATING REVENUE		$	418,114			$	464,195			$	864,510			$	874,779
OPERATING EXPENSES:
Salaries, wages and employees' benefits			224,277				237,689				462,922				458,041
Purchased transportation			26,406				34,154				56,465				62,572
Fuel, operating expenses and supplies			65,902				85,328				148,801				168,871
Operating taxes and licenses			13,743				13,529				28,139				26,731
Claims and insurance			18,293				13,156				28,714				22,686
Depreciation and amortization			33,664				29,143				66,254				55,925
Loss (gain) from property disposals, net			148				30				(1,242	)			156
Total operating expenses			382,433				413,029				790,053				794,982
OPERATING INCOME			35,681				51,166				74,457				79,797
NONOPERATING EXPENSES (INCOME):
Interest expense			1,594				1,903				2,996				3,286
Other, net			(751	)			(140	)			(204	)			(474	)
Nonoperating expenses, net			843				1,763				2,792				2,812
INCOME BEFORE INCOME TAXES			34,838				49,403				71,665				76,985
Income tax expense			6,384				12,330				15,100				17,653
NET INCOME		$	28,454			$	37,073			$	56,565			$	59,332
Average common shares outstanding - basic			26,134				25,958				26,102				25,915
Average common shares outstanding - diluted			26,569				26,406				26,543				26,373
Basic earnings per share		$	1.09			$	1.43			$	2.17			$	2.29
Diluted earnings per share		$	1.07			$	1.40			$	2.13			$	2.25

Saia, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
For the six months ended June 30, 2020 and 2019
(Amounts in thousands)
(Unaudited)
		Six Months
			2020				2019
OPERATING ACTIVITIES:
Net cash provided by operating activities		$	148,233			$	113,574
Net cash provided by operating activities			148,233				113,574
INVESTING ACTIVITIES:
Acquisition of property and equipment			(148,865	)			(166,434	)
Proceeds from disposal of property and equipment			6,143				380
Net cash used in investing activities			(142,722	)			(166,054	)
FINANCING ACTIVITIES:
Borrowing of revolving credit agreement, net			34,071				60,998
Proceeds from stock option exercises			2,591				2,154
Shares withheld for taxes			(3,479	)			(3,304	)
Other financing activity			(9,662	)			(9,059	)
Net cash provided by financing activities			23,521				50,789
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS			29,032				(1,691	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD			248				2,194
CASH AND CASH EQUIVALENTS, END OF PERIOD		$	29,280			$	503
NON-CASH ITEMS:
Equipment financed with finance leases		$	–			$	5,058

Saia, Inc. and Subsidiaries
Financial Information
For the Quarters Ended June 30, 2020 and 2019
(Unaudited)
														Second Quarter
			Second Quarter								%			Amount/Workday				%
				2020				2019			Change			2020		2019		Change
Workdays														64		64
Operating ratio				91.5	%			89.0	%
LTL tonnage (1)				1,142				1,254			(8.9	)		17.85		19.60		(8.9	)
LTL shipments (1)				1,745				1,933			(9.7	)		27.26		30.20		(9.7	)
LTL revenue/cwt.			$	17.95			$	18.05			(0.6	)
LTL revenue/shipment			$	235.08			$	234.33			0.3
LTL pounds/shipment				1,309				1,298			0.8
LTL length of haul (2)				876				841			4.2
(1) In thousands.
(2) In miles.
Note: LTL operating statistics exclude transportation and logistics services where pricing is generally not determined by weight. The LTL operating statistics also exclude the adjustment required for financial statement purposes in accordance with the Company's revenue recognition policy.