Saia, Inc. (NASDAQ: SAIA), a leading transportation provider
offering multi-regional less-than-truckload (LTL), non-asset
truckload, expedited and logistics services, today reported fourth
quarter and year-end 2018 financial results.
Fourth quarter 2018 revenue and operating income increased 12.9%
and 45.4%, respectively, compared to the fourth quarter of
2017. Diluted earnings per share in the quarter were $0.97
compared to $1.82 in the fourth quarter 2017. Fourth quarter
2017 adjusted diluted earnings per share1 were $0.53.
For the full year 2018, revenue and operating income rose 17.7%
and 49.1%, respectively. Annual diluted earnings per share in
2018 were $3.99 compared to $3.49 in 2017. Full year adjusted
diluted earnings per share1 were $2.19 in 2017.
During the fourth quarter of 2017, the Company recorded a
reduction in deferred income tax liability that was required as a
result of the passage of the Tax Cuts and Jobs Act. The 2017
adjusted EPS for the fourth quarter and full year excludes the gain
associated with the reduction of this liability.
Highlights from our fourth quarter and full year operating
results were as follows:
Fourth Quarter 2018 Compared to Fourth Quarter 2017
Results
- Revenues were $407 million, a 12.9% increase
- Operating income was $33.3 million, a 45.4% increase
- Operating ratio improved by 180 basis points to 91.8
- LTL shipments per workday decreased 0.2%
- LTL tonnage per workday decreased 0.6%
- LTL revenue per hundredweight increased 12.0%
- LTL revenue per shipment rose 11.6% to $234.33
Full Year 2018 Results Compared to Full
Year 2017 Results
- Revenue rose 17.7% to a record $1.65 billion
- Operating income was another record at $141.2 million, a 49.1%
increase
- Operating ratio improved 180 basis points to a record 91.5 from
93.3
- LTL shipments per workday increased 4.4%
- LTL tonnage per workday increased 6.6%
- LTL revenue per hundredweight increased 10.2%
- LTL revenue per shipment 12.5% to $227.08
“2018 was a record year for our company and our value
proposition was supported by our consistent approach to pricing for
profitability and supplemented by our growing presence in new
markets in the Northeast”, said Saia Chief Executive Officer, Rick
O’Dell. “Business to and from the Northeast is running at an
annualized rate of approximately $150 million exiting 2018 and we
have four to six new terminal openings scheduled in new
Northeastern markets in 2019”, O’Dell continued.
“Approximately 75% of the freight moves we are handling in the
Northeast are for customers who were already using Saia in other
markets and understand the value proposition we offer. In the
fourth quarter our on-time service metric averaged 98% and our
cargo claims ratio was .75%”, stated O’Dell.
“Our yield in the fourth quarter improved by 12.0%, marking the
34th consecutive quarter of year-over-year improvement. As we
are able to offer a more complete coverage map to customers, we add
value to their supply chain and we are in a good position to grow
with the customer”, concluded O’Dell.
Financial Position and Capital Expenditures
Total debt was $122.9 million at December 31, 2018 and inclusive
of the cash on-hand, net debt to total capital was 14.8%.
This compares to total debt of $132.9 million and net debt to total
capital of 18.0% at December 31, 2017.
Net capital expenditures in 2018 were $251.7 million including
equipment acquired with capital leases. This compares to
$217.0 million in net capital expenditures in 2017. In 2019,
we anticipate net capital expenditures of approximately $300
million.
Conference CallManagement will hold a
conference call to discuss quarterly results today at 10:00 a.m.
Eastern Time. To participate in the call, please dial
888-394-8218 or 323-794-2588 referencing conference ID
#9174082. Callers should dial in five to ten minutes in
advance of the conference call. This call will be webcast
live via the Company web site at www.saiacorp.com. A replay
of the call will be offered two hours after the completion of the
call through March 4, 2019 at 1:00 p.m. Eastern Time. The
replay will be available by dialing 888-203-1112.
Saia, Inc. (NASDAQ: 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 160 terminals in 41 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) failure to
achieve acquisition synergies; (5) failure to operate and grow
acquired businesses in a manner that supports the value allocated
to these acquired businesses, including their goodwill; (6)
economic declines in the geographic regions or industries in which
our customers operate; (7) competitive initiatives and pricing
pressures, including in connection with fuel surcharge; (8) loss of
significant customers; (9) the Company’s need for capital and
uncertainty of the credit markets; (10) the possibility of defaults
under the Company’s debt agreements (including violation of
financial covenants); (11) possible issuance of equity which would
dilute stock ownership; (12) integration risks; (13) the effect of
litigation including class action lawsuits; (14) cost and
availability of qualified drivers, fuel, purchased transportation,
real property, revenue equipment, technology and other assets; (15)
the effect of governmental regulations, including but not limited
to Hours of Service, engine emissions, the Compliance, Safety,
Accountability (CSA) initiative, regulations of 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 potential
changes to the North American Free Trade Agreement and to certain
international tariffs; (16) changes in interpretation of accounting
principles; (17) dependence on key employees; (18) inclement
weather; (19) labor relations, including the adverse impact should
a portion of the Company’s workforce become unionized; (20)
terrorism risks; (21) self-insurance claims and other expense
volatility; (22) cost and availability of insurance coverage,
including the possibility the Company may be required to pay
additional premiums under its auto liability policy; (23) increased
costs of healthcare and prescription drugs, including as a result
of healthcare reform legislation; (24) social media risks; (25)
disruption in or failure of the Company’s technology including
services essential to operations of the Company and/or cyber
security risk; (26) failure to successfully execute the strategy to
expand the Company’s service geography into the Northeastern United
States; and (27) 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. 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.
FOOTNOTE
1Non-GAAP Financial Disclosure and
Reconciliation:The Tax Cuts and Jobs Act (the “Tax Act”)
was enacted on December 22, 2017 and lowers U.S. corporate income
tax rates as of January 1, 2018, among other changes. The
impact of the Tax Act for 2017 was a reduction of deferred income
tax liability due to the effects of the remeasurement of deferred
tax assets at lower enacted corporate tax rates. Management
believes that presenting the Company’s 2017 results excluding the
Tax Act is meaningful as excluding this item increases the
comparability of period-to-period results. Diluted earnings
per common share excluding the impact of the Tax Act for 2017 is a
non-GAAP financial measure. Non-GAAP financial measures do
not have definitions under GAAP and may be defined differently by
and not be comparable to similar non-GAAP measures used by other
companies. The table below presents the calculation of
diluted earnings per common share, excluding the impact of the Tax
Act from 2017:
Saia, Inc. and Subsidiaries |
Non-GAAP Diluted Earnings Per Share and
Reconciliation to GAAP |
For the Quarters and Years Ended December 31,
2018 and 2017 |
(Unaudited) |
|
|
|
|
|
|
|
Fourth Quarter |
|
Years |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Diluted earnings per
share |
|
$ |
0.97 |
|
$ |
1.82 |
|
$ |
3.99 |
|
$ |
3.49 |
Less: Diluted
earnings per share impact of Tax Cuts and Jobs Act |
|
- |
|
(1.29 |
) |
- |
|
(1.30) |
Adjusted diluted
earnings per share |
|
$ |
0.97 |
|
$ |
0.53 |
|
$ |
3.99 |
|
$ |
2.19 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Saia, Inc. and Subsidiaries |
|
Condensed Consolidated Balance
Sheets |
|
(Amounts in thousands) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
December 31,2018 |
|
December 31,2017 |
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
2,194 |
|
|
$ |
4,720 |
|
|
Accounts
receivable, net (1) |
|
|
181,612 |
|
|
|
170,278 |
|
|
Prepaid
expenses and other |
|
|
29,567 |
|
|
|
28,251 |
|
|
Total current assets |
|
|
213,373 |
|
|
|
203,249 |
|
|
|
|
|
|
|
|
PROPERTY AND
EQUIPMENT: |
|
|
|
|
|
Cost |
|
|
1,521,341 |
|
|
|
1,289,994 |
|
|
Less:
accumulated depreciation |
|
|
628,283 |
|
|
|
554,214 |
|
|
Net property and equipment |
|
|
893,058 |
|
|
|
735,780 |
|
|
OTHER ASSETS |
|
|
27,312 |
|
|
|
28,286 |
|
|
Total assets |
|
$ |
1,133,743 |
|
|
$ |
967,315 |
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES: |
|
|
|
|
|
Accounts
payable (1) |
|
$ |
78,994 |
|
|
$ |
57,438 |
|
|
Wages and
employees' benefits |
|
|
48,116 |
|
|
|
39,748 |
|
|
Other
current liabilities |
|
|
64,118 |
|
|
|
55,657 |
|
|
Current
portion of long-term debt |
|
|
18,082 |
|
|
|
14,083 |
|
|
Total current liabilities |
|
|
209,310 |
|
|
|
166,926 |
|
|
|
|
|
|
|
|
OTHER LIABILITIES: |
|
|
|
|
|
Long-term
debt, less current portion |
|
|
104,777 |
|
|
|
118,833 |
|
|
Deferred
income taxes |
|
|
86,893 |
|
|
|
59,423 |
|
|
Claims,
insurance and other |
|
|
36,899 |
|
|
|
39,639 |
|
|
Total other liabilities |
|
|
228,569 |
|
|
|
217,895 |
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY: |
|
|
|
|
|
Common
stock |
|
|
26 |
|
|
|
26 |
|
|
Additional paid-in capital |
|
|
254,738 |
|
|
|
246,454 |
|
|
Deferred
compensation trust |
|
|
(3,381 |
) |
|
|
(3,486 |
) |
|
Retained
earnings (1) |
|
|
444,481 |
|
|
|
339,500 |
|
|
Total stockholders' equity |
|
|
695,864 |
|
|
|
582,494 |
|
|
Total liabilities and stockholders' equity |
|
$ |
1,133,743 |
|
|
$ |
967,315 |
|
|
|
|
|
|
|
|
(1) - These
accounts have been retrospectively adjusted for the January 1, 2018
adoption of the Financial Accounting Standards Board ("FASB")
Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts
with Customers. |
|
|
|
|
|
|
|
Saia, Inc. and Subsidiaries |
|
Consolidated Statements of
Operations |
|
For the Quarters and Years Ended December 31,
2018 and 2017 |
|
(Amounts in thousands, except per share
data) |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
Fourth Quarter |
|
Years |
|
|
|
2018 |
|
2017 (1) |
|
2018 |
|
2017 (1) |
|
OPERATING REVENUE |
|
$ |
406,750 |
|
$ |
360,196 |
|
|
$ |
1,653,849 |
|
|
$ |
1,404,703 |
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES: |
|
|
|
|
|
|
|
|
|
Salaries,
wages and employees' benefits |
|
|
216,557 |
|
|
194,579 |
|
|
|
872,722 |
|
|
|
766,790 |
|
|
Purchased
transportation |
|
|
28,659 |
|
|
28,185 |
|
|
|
123,904 |
|
|
|
107,702 |
|
|
Fuel,
operating expenses and supplies |
|
|
79,818 |
|
|
71,329 |
|
|
|
325,000 |
|
|
|
268,090 |
|
|
Operating
taxes and licenses |
|
|
12,779 |
|
|
11,242 |
|
|
|
50,089 |
|
|
|
43,330 |
|
|
Claims
and insurance |
|
|
8,339 |
|
|
9,152 |
|
|
|
38,425 |
|
|
|
37,162 |
|
|
Depreciation and amortization |
|
|
27,188 |
|
|
22,495 |
|
|
|
102,153 |
|
|
|
87,102 |
|
|
Loss
(gain) from property disposals, net |
|
|
74 |
|
|
286 |
|
|
|
379 |
|
|
|
(183 |
) |
|
Total operating expenses |
|
|
373,414 |
|
|
337,268 |
|
|
|
1,512,672 |
|
|
|
1,309,993 |
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING
INCOME |
|
|
33,336 |
|
|
22,928 |
|
|
|
141,177 |
|
|
|
94,710 |
|
|
|
|
|
|
|
|
|
|
|
|
NONOPERATING EXPENSES
(INCOME): |
|
|
|
|
|
|
|
|
|
Interest
expense |
|
|
1,328 |
|
|
1,289 |
|
|
|
5,418 |
|
|
|
5,051 |
|
|
Other,
net |
|
|
310 |
|
|
(149 |
) |
|
|
(74 |
) |
|
|
(92 |
) |
|
Nonoperating expenses, net |
|
|
1,638 |
|
|
1,140 |
|
|
|
5,344 |
|
|
|
4,959 |
|
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME
TAXES |
|
|
31,698 |
|
|
21,788 |
|
|
|
135,833 |
|
|
|
89,751 |
|
|
Income tax expense
(benefit) |
|
|
6,318 |
|
|
(26,001 |
) |
|
|
30,852 |
|
|
|
(1,378 |
) |
|
NET INCOME |
|
$ |
25,380 |
|
$ |
47,789 |
|
|
$ |
104,981 |
|
|
$ |
91,129 |
|
|
|
|
|
|
|
|
|
|
|
|
Average common shares
outstanding - basic |
|
|
25,791 |
|
|
25,589 |
|
|
|
25,762 |
|
|
|
25,518 |
|
|
Average common shares
outstanding - diluted |
|
|
26,289 |
|
|
26,189 |
|
|
|
26,291 |
|
|
|
26,086 |
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share |
|
$ |
0.98 |
|
$ |
1.87 |
|
|
$ |
4.08 |
|
|
$ |
3.57 |
|
|
Diluted earnings per
share |
|
$ |
0.97 |
|
$ |
1.82 |
|
|
$ |
3.99 |
|
|
$ |
3.49 |
|
|
|
|
|
|
|
|
|
|
|
|
(1) -
Fourth quarter and year ended 2017 amounts have been
retrospectively adjusted for the January 1, 2018 adoption of the
FASB ASU 2014-09, Revenue from Contracts with Customers. |
|
|
|
Saia, Inc. and Subsidiaries |
|
Condensed Consolidated Statements of Cash
Flows |
|
For the Years Ended December 31, 2018 and
2017 |
|
(Amounts in thousands) |
|
(Unaudited) |
|
|
|
Years |
|
|
|
|
2018 |
|
|
|
2017 |
|
|
OPERATING ACTIVITIES: |
|
|
|
|
|
Net cash
provided by operating activities |
|
$ |
256,436 |
|
|
$ |
157,846 |
|
|
Net cash
provided by operating activities |
|
|
256,436 |
|
|
|
157,846 |
|
|
|
|
|
|
|
|
INVESTING ACTIVITIES: |
|
|
|
|
|
Acquisition of property and equipment |
|
|
(223,672 |
) |
|
|
(186,696 |
) |
|
Proceeds
from disposal of property and equipment |
|
|
1,088 |
|
|
|
5,172 |
|
|
Net cash
used in investing activities |
|
|
(222,584 |
) |
|
|
(181,524 |
) |
|
|
|
|
|
|
|
FINANCING ACTIVITIES: |
|
|
|
|
|
Repayment
of long-term debt |
|
|
– |
|
|
|
(7,143 |
) |
|
Borrowing
(repayment) of revolving credit agreement, net |
|
|
(23,000 |
) |
|
|
43,000 |
|
|
Proceeds
from stock option exercises |
|
|
4,165 |
|
|
|
4,480 |
|
|
Shares
withheld for taxes |
|
|
(1,396 |
) |
|
|
(1,250 |
) |
|
Other
financing activity |
|
|
(16,147 |
) |
|
|
(12,228 |
) |
|
Net cash provided by (used in) financing activities |
|
|
(36,378 |
) |
|
|
26,859 |
|
|
|
|
|
|
|
|
NET
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS |
|
|
(2,526 |
) |
|
|
3,181 |
|
|
CASH AND
CASH EQUIVALENTS, BEGINNING OF YEAR |
|
|
4,720 |
|
|
|
1,539 |
|
|
CASH AND
CASH EQUIVALENTS, END OF YEAR |
|
$ |
2,194 |
|
|
$ |
4,720 |
|
|
|
|
|
|
|
|
NON-CASH
ITEMS: |
|
|
|
|
|
Equipment
financed with capital leases |
|
$ |
29,090 |
|
|
$ |
35,483 |
|
|
|
|
|
|
|
|
Saia, Inc. and Subsidiaries |
|
Financial
Information |
|
For the Quarters Ended December 31, 2018 and
2017 |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter |
|
|
|
|
|
Fourth Quarter |
|
% |
|
Amount/Workday |
|
% |
|
|
|
|
2018 |
|
|
|
2017 |
|
|
Change |
|
2018 |
|
2017 |
|
Change |
|
Workdays |
|
|
|
|
|
|
62 |
|
61 |
|
|
|
Operating
ratio (1) |
|
91.8 |
% |
|
|
93.6 |
% |
|
|
|
|
|
|
|
|
|
LTL tonnage (2) |
|
1,115 |
|
|
|
1,104 |
|
|
1.0 |
|
|
17.99 |
|
18.10 |
|
(0.6 |
) |
|
LTL
shipments (2) |
|
1,687 |
|
|
|
1,663 |
|
|
1.4 |
|
|
27.22 |
|
27.27 |
|
(0.2 |
) |
|
LTL
revenue/cwt. |
$ |
17.72 |
|
|
$ |
15.82 |
|
|
12.0 |
|
|
|
|
|
|
|
|
LTL
revenue/shipment |
$ |
234.33 |
|
|
$ |
210.02 |
|
|
11.6 |
|
|
|
|
|
|
|
|
LTL
pounds/shipment |
|
1,322 |
|
|
|
1,327 |
|
|
(0.4 |
) |
|
|
|
|
|
|
|
LTL length
of haul (3) |
|
837 |
|
|
|
828 |
|
|
1.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1 |
) |
Fourth quarter 2017 operating ratio has been retrospectively
adjusted for the January 1, 2018 adoption of the FASB ASU 2014-09,
Revenue from Contracts with Customers. |
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(2 |
) |
In thousands. |
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(3 |
) |
In miles. |
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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. 2017 LTL operating statistics
have been restated to reflect this presentation. |
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Saia, Inc. and Subsidiaries |
|
Financial
Information |
|
For the Years Ended December 31, 2018 and
2017 |
|
(Unaudited) |
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Year Over Year |
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Year Over Year |
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% |
|
Amount/Workday |
|
% |
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2018 |
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2017 |
|
|
Change |
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2018 |
|
2017 |
|
Change |
|
Workdays |
|
|
|
|
|
|
253 |
|
252 |
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|
Operating ratio (1) |
|
91.5 |
% |
|
|
93.3 |
% |
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|
LTL tonnage (2) |
|
4,801 |
|
|
|
4,485 |
|
|
7.0 |
|
18.97 |
|
17.80 |
|
6.6 |
|
LTL shipments (2) |
|
7,103 |
|
|
|
6,775 |
|
|
4.9 |
|
28.08 |
|
26.88 |
|
4.4 |
|
LTL revenue/cwt. |
$ |
16.80 |
|
|
$ |
15.24 |
|
|
10.2 |
|
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|
LTL revenue/shipment |
$ |
227.08 |
|
|
$ |
201.81 |
|
|
12.5 |
|
|
|
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|
LTL pounds/shipment |
|
1,352 |
|
|
|
1,324 |
|
|
2.1 |
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|
LTL length of haul (3) |
|
837 |
|
|
|
811 |
|
|
3.2 |
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|
(1 |
) |
2017
operating ratio has been retrospectively adjusted for the January
1, 2018 adoption of the FASB ASU 2014-09, Revenue from Contracts
with Customers. |
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(2 |
) |
In
thousands. |
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|
(3 |
) |
In miles. |
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CONTACT:Saia, Inc.Doug
Coldcol@saia.com678.542.3910
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