Saia, Inc. Reports Third Quarter 2009 Results

October 23, 2009 7:30 AM EDT

Revenues Were $222 Million with Earnings Per Share of $0.24

JOHNS CREEK, Ga.--(BUSINESS WIRE)-- Saia, Inc. (NASDAQ: SAIA), a leading multi-regional less-than-truckload (LTL) carrier, today reported third quarter 2009 results.

Third Quarter 2009 Compared to Third Quarter 2008 Results from Continuing Operations

    --  Revenues were $222 million, a decrease of 19 percent from the prior year
        quarter.
    --  Operating income was $7.8 million compared to operating income of $7.5
        million in the prior year quarter. Results included $8.4 million in
        reduced expenses due to a change in vacation policy.
    --  Earnings per share were $0.24 vs. earnings per share of $0.21 in the
        prior year quarter.
    --  Operating ratio was 96.5 vs. 97.3 in the prior year quarter.
    --  LTL tonnage was down 4.4 percent from the prior year quarter as LTL
        shipments per workday were down 2.3 percent with a 2.2 percent decrease
        in weight per shipment.
    --  LTL yield was down 14.2 percent from the prior year quarter primarily
        due to the impact of reduced fuel surcharges and competitive pricing.

"As in prior periods, our results continue to be affected by a weak shipping environment and lower yields driven by continued pricing pressure. The quarterly results included favorable effects from our change in vacation policy as well as other prudent cost actions taken this year such as multiple reductions in force, a salary and wage reduction and other cost control measures. Unfavorable costs in the quarter included workers' compensation and group health insurance. We continue to address the challenging environment by taking aggressive actions to control costs and improve productivity through focused engineered initiatives," said Rick O'Dell, president and chief executive officer.

"While our results remain affected by the economy and overcapacity in the industry, we continue to focus on Saia specific initiatives to improve customer service, invest in technology to enhance efficiency and take prudent balance sheet management actions. We believe that Saia is taking the appropriate measures to be well positioned to take advantage of any future industry consolidations and improvements in the economy. Saia's dedicated employees remain focused on cost efficiencies to improve profits while providing a strong customer experience delivering over 97% on-time service again this quarter," O'Dell said.

Year to Date 2009 Compared to Year to Date 2008 Results from Continuing Operations

    --  Revenues were $647 million compared to $800 million in the prior year
        period.
    --  Operating loss was $100 thousand compared to operating income of $20.4
        million in the prior year period.
    --  Net loss was $4.7 million compared to net income of $8.3 million in the
        prior year period.
    --  Losses per share were $0.36 compared to earnings per share of $0.61 in
        the prior year period.

Financial Position and Capital Expenditures

Total debt was $116.3 million at September 30, 2009. Net of the Company's $18.2 million cash balance at quarter-end, net debt to total capital was 35.2 percent. Total debt has been reduced by $20.1 million during the first nine months from $136.4 million at December 31, 2008.

Net capital expenditures for the first nine months of 2009 were $6.2 million. This compares to $20.5 million in the prior year period. The Company is planning net capital expenditures in 2009 of approximately $10 million. This reduced level is due to the uncertain economic environment and will be reevaluated as tonnage improves.

Conference Call

The Company will hold a conference call to discuss these results today at 11:00 a.m. Eastern Time. To participate in the call, please dial 1-877-558-9192 or dial 706-758-1748 for international calls and using conference ID #34026406. Callers should dial in five to 10 minutes in advance of the conference call. This call will be webcast live via the Company web site at www.saia.com and will be archived on the site. A replay of the call will be available two hours after the completion of the call through October 30, 2009. The replay is available by dialing 1-800-642-1687 or 706-645-9291.

The webcast is also being distributed through the Thomson StreetEvents Network. Individual investors can listen to the call at www.earnings.com, Thomson's individual investor portal, powered by StreetEvents. Institutional investors can access the call via Thomson StreetEvents (www.streetevents.com), a password-protected event management site.

Saia, Inc. (NASDAQ: SAIA) is a less-than-truckload provider of regional, interregional and guaranteed services covering 34 states. With headquarters in Georgia and a network of 148 terminals, Saia employs 7,700 people. For more information, visit the Investor Relations section at www.saia.com.

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 contains 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 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 and risks include, but are not limited to, general economic conditions including downturns in the business cycle; the creditworthiness of our customers and their ability to pay for services; competitive initiatives and pricing pressures, including in connection with fuel surcharge; the Company's need for capital and uncertainty of the current credit markets; the possibility of defaults under the Company's debt agreements (including violation of financial covenants); the possibility that a reduction of our credit rating would result in an increase in interest rates; potential issuance of equity which would dilute stock ownership; indemnification obligations associated with the 2006 sale of Jevic Transportation, Inc.; the effect of ongoing litigation including class action lawsuits; cost and availability of qualified drivers, fuel, purchased transportation, property, revenue equipment and other operating assets; governmental regulations, including but not limited to Hours of Service, engine emissions, compliance with legislation requiring companies to evaluate their internal control over financial reporting, changes in interpretation of accounting principles and Homeland Security; dependence on key employees; inclement weather; labor relations, including the adverse impact should a portion of the Company's workforce become unionized; effectiveness of company-specific performance improvement initiatives; terrorism risks; self-insurance claims and other expense volatility; and other financial, operational and legal risks and uncertainties detailed from time to time in the Company's SEC filings.

Saia, Inc.
Condensed Consolidated Balance Sheets
(Amounts in thousands)
(Unaudited)

                                            September 30,  December 31,

                                            2009           2008

ASSETS

CURRENT ASSETS:

Cash and cash equivalents                   $ 18,203       $ 27,061

Accounts receivable, net                      97,444         93,691

Prepaid expenses and other                    41,546         35,282

Total current assets                          157,193        156,034

PROPERTY AND EQUIPMENT:

Cost                                          617,323        615,212

Less: accumulated depreciation                284,593        259,410

Net property and equipment                    332,730        355,802

OTHER ASSETS                                  6,618          3,916

Total assets                                $ 496,541      $ 515,752

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

Accounts payable                            $ 51,164       $ 46,572

Wages and employees' benefits                 25,718         28,148

Other current liabilities                     43,522         43,262

Current portion of long-term debt             17,500         28,899

Total current liabilities                     137,904        146,881

OTHER LIABILITIES:

Long-term debt, less current portion          98,750         107,500

Deferred income taxes                         50,967         50,584

Claims, insurance and other                   28,367         27,215

Total other liabilities                       178,084        185,299

SHAREHOLDERS' EQUITY:

Common stock                                  14             14

Additional paid-in capital                    175,770        174,079

Deferred compensation trust                   (2,723  )      (2,757  )

Retained earnings                             7,492          12,236

Total shareholders' equity                    180,553        183,572

Total liabilities and shareholders' equity  $ 496,541      $ 515,752

Saia, Inc.
Consolidated Statements of Operations
For the Quarters and Nine Months Ended September 30, 2009 and 2008
(Amounts in thousands, except per share data)
(Unaudited)

                              Third Quarter             Nine Months

                              2009         2008         2009         2008

OPERATING REVENUE             $ 222,205    $ 274,181    $ 646,740    $ 799,560

OPERATING EXPENSES:

Salaries, wages and             118,053      139,745      371,367      409,963
employees' benefits

Purchased transportation        18,004       21,026       49,370       61,714

Fuel, operating expenses and    52,340       78,895       145,560      225,308
supplies

Operating taxes and licenses    8,905        8,970        26,757       27,015

Claims and insurance            7,343        7,824        24,017       24,743

Depreciation and                9,797        10,299       29,819       30,841
amortization

Operating (gains) loss, net     11           (112    )    (50     )    (410    )

Total operating expenses        214,453      266,647      646,840      779,174

OPERATING INCOME (LOSS)         7,752        7,534        (100    )    20,386

NONOPERATING EXPENSES:

Interest expense                3,053        2,892        8,369        9,180

Other, net                      (106    )    155          (160    )    222

Nonoperating expenses, net      2,947        3,047        8,209        9,402

INCOME (LOSS) BEFORE INCOME     4,805        4,487        (8,309  )    10,984
TAXES

Income tax expense (benefit)    1,513        1,592        (3,565  )    2,718

INCOME (LOSS) FROM              3,292        2,895        (4,744  )    8,266
CONTINUING OPERATIONS

Loss from discontinued          -            (123    )    -            (994    )
operations, net

NET INCOME (LOSS)             $ 3,292      $ 2,772      $ (4,744  )  $ 7,272

Average common shares           13,363       13,328       13,351       13,306
outstanding - basic

Average common shares           13,867       13,561       13,351       13,528
outstanding - diluted

Basic earnings (loss) per     $ 0.25       $ 0.22       $ (0.36   )  $ 0.62
share-continuing operations

Basic loss per
share-discontinued              -            (0.01   )    -            (0.07   )
operations

Basic earnings (loss) per     $ 0.25       $ 0.21       $ (0.36   )  $ 0.55
share

Diluted earnings (loss) per   $ 0.24       $ 0.21       $ (0.36   )  $ 0.61
share-continuing operations

Diluted loss per
share-discontinued              -            (0.01   )    -            (0.07   )
operations

Diluted earnings (loss) per   $ 0.24       $ 0.20       $ (0.36   )  $ 0.54
share

Saia, Inc.
Condensed Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2009 and 2008
(Amounts in thousands)
(Unaudited)

                                                        2009         2008

OPERATING ACTIVITIES:

Net cash provided by operating activities - continuing  $ 23,413     $ 56,627
operations

Net cash from (used in) discontinued operations           (3,444  )    12,868

Net cash provided by operating activities                 19,969       69,495

INVESTING ACTIVITIES:

Acquisition of property and equipment                     (6,812  )    (21,908 )

Proceeds from disposal of property and equipment          579          1,397

Net cash used in investing activities                     (6,233  )    (20,511 )

FINANCING ACTIVITIES:

Proceeds from long-term debt                              -            25,000

Repayment of long-term debt                               (20,250 )    (60,094 )

Payment of debt issuance costs                            (2,638  )    -

Proceeds from stock option exercises                      294          588

Net cash used in financing activities                     (22,594 )    (34,506 )

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS      (8,858  )    14,478

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD            27,061       6,656

CASH AND CASH EQUIVALENTS, END OF PERIOD                $ 18,203     $ 21,134

Saia, Inc.

Financial Information

For the Quarters Ended September 30, 2009 and 2008

(Amounts in thousands)

(Unaudited)

                                                       Third Quarter

                            Third Quarter     %        Amount/Workday    %

                            2009     2008     Change   2009     2008     Change

Workdays                                               64       64

Operating ratio             96.5     97.3

F/S Revenue          LTL    208,062  254,134  (18.1 )  3,251.0  3,970.8  (18.1 )

                     TL     14,143   20,047   (29.4 )  221.0    313.2    (29.4 )

                     Total  222,205  274,181  (19.0 )  3,472.0  4,284.1  (19.0 )

Revenue excluding    LTL    207,940  253,610  (18.0 )  3,249.1  3,962.7  (18.0 )

revenue recognition  TL     14,135   20,005   (29.3 )  220.9    312.6    (29.3 )

adjustment           Total  222,075  273,615  (18.8 )  3,469.9  4,275.2  (18.8 )

Tonnage              LTL    912      955      (4.4  )  14.26    14.92    (4.4  )

                     TL     162      192      (15.8 )  2.53     3.00     (15.8 )

                     Total  1,074    1,147    (6.3  )  16.79    17.92    (6.3  )

Shipments            LTL    1,687    1,726    (2.3  )  26.36    26.97    (2.3  )

                     TL     23       26       (12.5 )  0.36     0.41     (12.5 )

                     Total  1,710    1,752    (2.4  )  26.71    27.38    (2.4  )

Revenue/cwt.         LTL    11.39    13.28    (14.2 )

                     TL     4.37     5.21     (16.1 )

                     Total  10.34    11.93    (13.4 )

Revenue/shipment     LTL    123.27   146.93   (16.1 )

                     TL     616.69   763.92   (19.3 )

                     Total  129.89   156.15   (16.8 )

Pounds/shipment      LTL    1,082    1,106    (2.2  )

                     TL     14,121   14,672   (3.8  )

                     Total  1,257    1,309    (4.0  )

    Source: Saia, Inc.

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