SCST SCS Transport (MM)

SCS Transportation, Inc. (NASDAQ: SCST), today reported full-year 2005 revenue of $1.1 billion, an increase of 12 percent from 2004. Consolidated 2005 operating income improved significantly to $54.6 million, including a pretax real estate gain of $7.0 million, compared with 2004 operating income of $40.8 million. Net income was $27.5 million, including $4.4 million after tax from the real estate gain, up from $19.3 million in 2004. Earnings per share were $1.82, including the real estate gain of $0.29, up from $1.26 in 2004. "For the third consecutive year, SCS Transportation delivered significantly improved earnings," said Bert Trucksess, chairman, president and chief executive officer. "Revenue surpassed $1 billion in 2005 and we achieved record results in earnings per share, even excluding a large real estate gain. We further strengthened our financial position, providing flexibility to take advantage of future opportunities. As we enter 2006, we are also encouraged by the strength of our consolidated fourth-quarter trends." Fourth-quarter revenue grew 14 percent to $288.3 million, from $251.9 million in the fourth quarter of 2004. Consolidated fourth-quarter operating income was $19.3 million, including the real estate gain, up from $9.1 million in the prior-year quarter. Net income was $10.7 million, up from $4.6 million in the fourth quarter of 2004. Earnings per share were $0.73, including the real estate gain, compared with earnings per share of $0.30 a year earlier. Saia Fourth-Quarter Operations -- Revenue increased 22 percent to $202.4 million versus the prior-year quarter. -- LTL tonnage increased 13 percent and LTL yield grew 8 percent from a year earlier. -- Operating income increased 33 percent and Saia's operating ratio improved to 93.4 percent, both excluding the real estate gain. "Saia, a leading multi-region LTL carrier and our largest subsidiary, continues to excel in serving customers across its 30-state territory, delivering top-line growth and increased profitability," Trucksess said. "We believe Saia's prospects are very favorable and we expect to build upon the positive momentum of this business. We continue to evaluate geographic expansion opportunities and we believe the business is well-positioned to benefit from industry consolidation." Jevic Fourth-Quarter Operations -- Revenue was $87.2 million, up 1 percent from the prior-year quarter. -- Total tonnage was down 2 percent and overall yields were up 4 percent from a year earlier. -- Operating income was $0.7 million and Jevic's operating ratio was 99.2 percent. Jevic's fourth-quarter 2004 operating income was $0.6 million, which included a charge of $3.8 million for an increase in estimated liability for workers' compensation claims. "Profitability at Jevic, our hybrid LTL and truckload carrier business, has not been acceptable in recent years and, in August 2005, we gave Dave Gorman a mandate for change as the new President and CEO of Jevic. He is leading the evaluation and implementation of initiatives designed to improve current operations and profitability while maintaining high and consistent levels of service performance. We remain focused on growing Jevic's LTL tonnage, improving cost effectiveness and enhancing revenue quality, all with the goal of significantly improving profitability," Trucksess said. Financial Position and Outlook Based on consensus economic forecasts for 2006 and 2007 and ongoing consolidation in the LTL trucking industry, SCS Transportation expects to continue to benefit from a favorable supply-demand environment. The Company's operational priorities for 2006 include, among others, continued revenue growth and profit improvement in the current Saia geography, potential expansion of Saia's geographic reach, and progress on the profit improvement program being implemented at Jevic. Total debt at December 31, 2005, was $114.9 million, compared with $122.8 million at December 31, 2004. Debt to total capital stood at 33.5 percent at year-end, compared with 36.6 percent a year earlier. Net capital expenditures in 2005 were $53.7 million, including net proceeds of $8.8 million from the real estate sale. Including the delay of several originally planned 2005 expenditures, the company is planning net capital expenditures in 2006 of approximately $85 million plus up to an additional $25 million for real estate projects in Saia's existing geography. Conference Call SCST will hold a conference call to discuss annual and fourth-quarter results on Wednesday, January 25, 2006, at 9:30 a.m. Eastern Time (8:30 a.m. Central Time). To participate in the call, please dial 1-800-275-8866 or dial 1-706-634-4936 for international calls. 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.scstransportation.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 February 1, 2006. The replay is available by dialing 1-800-642-1687 and using conference code 3703389. 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. SCS Transportation, Inc. provides trucking transportation and supply chain solutions to a broad base of customers across the United States. With annual revenue of $1.1 billion, the Company focuses on regional and interregional less-than-truckload (LTL), and selected truckload (TL) and time-definite services. Operating subsidiaries are Saia, a multi-region LTL carrier based in Duluth, Ga., and Jevic, a hybrid LTL and truckload carrier based in Delanco, N.J. Headquartered in Kansas City, Mo., SCST has approximately 9,000 employees nationwide. 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" and similar words or expressions are intended to identify forward-looking statements. We use such forward-looking statements regarding our future financial condition and results of operations and our business operations in this release. Investors should not place undue reliance on such 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 the forward-looking statements. These factors and risks include, but are not limited to, general economic conditions; the effects and outcomes of strategic evaluations; 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 recent legislation requiring companies to evaluate their internal control over financial reporting and Homeland Security; dependence on key employees; inclement weather; labor relations; integration risks; effectiveness of company-specific performance improvement initiatives; competitive initiatives and pricing pressures; terrorism risks; self-insurance claims, equity-based compensation and other expense volatility; the Company's determination from time to time whether to purchase any shares under the repurchase program; and other financial, operational and legal risks and uncertainties detailed from time to time in the Company's SEC filings. -0- *T SCS Transportation, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Amounts in thousands) (Unaudited) December December 31, 31, 2005 2004 --------- --------- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 16,865 $ 7,499 Accounts receivable 126,823 110,044 Prepaid expenses and other 30,557 35,721 --------- --------- Total current assets 174,245 153,264 PROPERTY AND EQUIPMENT: Cost 620,899 569,526 Less: Accumulated depreciation 275,366 248,914 --------- --------- Net property and equipment 345,533 320,612 GOODWILL AND OTHER ASSETS 34,963 34,862 --------- --------- Total assets $554,741 $508,738 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable and checks outstanding $ 54,941 $ 33,193 Wages and employees' benefits 43,490 35,761 Other current liabilities 33,156 28,981 Current portion of long-term debt 5,000 1,263 --------- --------- Total current liabilities 136,587 99,198 OTHER LIABILITIES: Long-term debt 109,913 121,547 Deferred income taxes 58,062 57,662 Claims, insurance and other 21,787 17,789 --------- --------- Total other liabilities 189,762 196,998 SHAREHOLDERS' EQUITY: Common stock 14 15 Additional paid-in capital 194,398 205,800 Deferred compensation trust (1,322) (1,116) Retained earnings 35,302 7,843 --------- --------- Total shareholders' equity 228,392 212,542 --------- --------- Total liabilities and shareholders' equity $554,741 $508,738 ========= ========= SCS Transportation, Inc. and Subsidiaries Consolidated Income Statements For the Quarter and Year Ended December 31, 2005 and 2004 (Amounts in thousands, except per share data) (Unaudited) Fourth Quarter Year Ended ------------------- --------------------- 2005 2004 2005 2004 --------- --------- ----------- --------- OPERATING REVENUE $288,320 $251,938 $1,098,031 $982,270 OPERATING EXPENSES: Salaries, wages and employees' benefits 154,475 141,211 594,644 549,511 Purchased transportation 27,661 23,282 99,134 92,099 Operating expenses and supplies 64,767 51,000 235,292 187,096 Operating taxes and licenses 10,580 9,941 42,146 38,017 Claims and insurance 6,855 6,687 32,645 27,758 Depreciation and amortization 12,075 12,011 48,204 47,968 Operating (gains) and losses (7,381) (1,333) (8,676) (3,067) Integration charges - - - 2,054 --------- --------- ----------- --------- Total operating expenses 269,032 242,799 1,043,389 941,436 --------- --------- ----------- --------- OPERATING INCOME 19,288 9,139 54,642 40,834 NONOPERATING EXPENSES: Interest expense 2,535 2,439 9,773 9,735 Other, net (399) (166) (519) (312) --------- --------- ----------- --------- Nonoperating expenses, net 2,136 2,273 9,254 9,423 INCOME BEFORE INCOME TAXES 17,152 6,866 45,388 31,411 Income tax provision 6,437 2,239 17,929 12,152 --------- --------- ----------- --------- NET INCOME $ 10,715 $ 4,627 $ 27,459 $ 19,259 ========= ========= =========== ========= Average common shares outstanding - basic 14,386 14,940 14,707 14,858 ========= ========= =========== ========= Average common shares outstanding - diluted 14,724 15,347 15,048 15,312 ========= ========= =========== ========= Basic earnings per share $ 0.74 $ 0.31 $ 1.87 $ 1.30 ========= ========= =========== ========= Diluted earnings per share $ 0.73 $ 0.30 $ 1.82 $ 1.26 ========= ========= =========== ========= SCS Transportation, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows For the Year Ended December 31, 2005 and 2004 (Amounts in thousands) (Unaudited) 2005 2004 -------- -------- OPERATING ACTIVITIES: Net cash from operating activities $83,353 $54,894 INVESTING ACTIVITIES: Acquisition of property and equipment (67,596) (67,113) Proceeds from disposal of property and equipment 13,895 10,670 Acquisition of subsidiary, net of cash received - (23,549) -------- -------- Net cash used in investing activities (53,701) (79,992) FINANCING ACTIVITIES: Repayment of long-term debt (8,002) - Repurchase of common stock (12,903) - Proceeds from stock option exercises 619 1,727 -------- -------- Net cash from (used in) financing activities (20,286) 1,727 -------- -------- NET INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS 9,366 (23,371) CASH & CASH EQUIVALENTS, BEGINNING OF PERIOD 7,499 30,870 -------- -------- CASH & CASH EQUIVALENTS, END OF PERIOD $16,865 $ 7,499 ======== ======== Saia Motor Freight Line, Inc. Financial Information For the Quarter and Year Ended December 31, 2005 and 2004 (Amounts in thousands) Fourth Quarter Year Ended ---------------- % ---------------- % 2005 2004 Change 2005 2004 Change ---------------- ------ ---------------- ------ Operating revenue (excluding fuel surcharge) 178,508 152,747 16.9 679,906 607,810 11.9 Operating revenue 202,438 165,647 22.2 754,038 645,374 16.8 Operating income 20,419 10,090 55,294 35,823 Real estate (gain) and integration charges(a) (7,036) - (7,036) 2,054 Operating ratio 89.9 93.9 92.7 94.4 Operating ratio excluding real estate gain and integration charges(a) 93.4 93.9 93.6 94.1 Fourth Quarter --------------------- % 2005 2004 Change --------------------- -------- Workdays F/S Revenue LTL 186,544 153,440 21.6 TL 15,894 12,207 30.2 Total 202,438 165,647 22.2 Revenue excluding LTL 186,090 153,018 21.6 revenue recognition TL 15,855 12,173 30.2 adjustment Total 201,945 165,191 22.2 Tonnage LTL 806 715 12.7 TL 174 148 18.0 Total 980 863 13.6 Shipments LTL 1,436 1,285 11.7 TL 24 20 20.5 Total 1,460 1,305 11.9 Revenue/cwt. LTL 11.55 10.70 7.9 TL 4.55 4.13 10.3 Total 10.30 9.58 7.6 Revenue/cwt. LTL 10.08 9.81 2.8 (excluding fuel TL 4.46 4.08 9.2 surcharge) Total 9.08 8.83 2.9 Revenue/shipment LTL 129.62 119.10 8.8 TL 660.71 611.25 8.1 Total 138.35 126.61 9.3 Pounds/shipment LTL 1,123 1,113 0.9 TL 14,513 14,815 (2.0) Total 1,343 1,322 1.6 Fourth Quarter ------------------- Amount/Workday ------------------- % 2005 2004 Change ------------------- ---------- Workdays 61 61 F/S Revenue LTL 3,058.1 2,515.4 21.6 TL 260.6 200.1 30.2 Total 3,318.7 2,715.5 22.2 Revenue excluding LTL 3,050.7 2,508.5 21.6 revenue recognition TL 259.9 199.6 30.2 adjustment Total 3,310.6 2,708.1 22.2 Tonnage LTL 13.21 11.72 12.7 TL 2.85 2.42 18.0 Total 16.06 14.14 13.6 Shipments LTL 23.54 21.06 11.7 TL 0.39 0.33 20.5 Total 23.93 21.39 11.9 Revenue/cwt. LTL TL Total Revenue/cwt. LTL (excluding fuel TL surcharge) Total Revenue/shipment LTL TL Total Pounds/shipment LTL TL Total (a) - Integration charges of $2.1 million incurred in the first half of 2004 consist of employee retention and stay bonuses, communications, re-logoing the fleet of Clark Bros., technology integration and other items in connection with the integration of the operations of Clark Bros. A $7.0 million gain was recognized on the sale of real estate in 4Q05. Management believes that excluding these charges and the real estate gain more accurately reflects the core operating performance of Saia. Jevic Transportation, Inc. Financial Information For the Quarter and Year Ended December 31, 2005 and 2004 (Amounts in thousands) Fourth Quarter Year Ended --------------- % ---------------- % 2005 2004 Change 2005 2004 Change -------------- ------ ---------------- ------ Operating revenue (excluding fuel surcharge) 76,113 79,404 (4.1) 309,779 316,722 (2.2) Operating revenue 87,161 86,291 1.0 345,272 336,896 2.5 Operating income 666 586 3,127 8,886 Actuarial workers' compensation charge(a) - 3,800 - 4,400 Operating ratio 99.2 99.3 99.1 97.4 Operating ratio excluding actuarial charge(a) 99.2 94.9 99.1 96.1 Fourth Quarter --------------- % 2005 2004 Change -------------- ------ Workdays F/S Revenue LTL 54,436 55,525 (2.0) TL 30,190 27,520 9.7 Other 2,535 3,246 (21.9) Total 87,161 86,291 1.0 Revenue excluding LTL 54,121 55,364 (2.2) revenue recognition TL 30,016 27,440 9.4 adjustment Other 2,535 3,246 (21.9) Total 86,672 86,050 0.7 Tonnage LTL 242 257 (5.5) TL 301 300 0.4 Total 543 557 (2.3) Shipments LTL 199 217 (8.0) TL 35 35 0.7 Total 234 252 (6.8) Revenue/cwt. LTL 11.16 10.79 3.5 TL 4.99 4.58 9.0 Total 7.74 7.44 4.0 Revenue/cwt. LTL 9.70 9.89 (2.0) (excl. fuel TL 4.33 4.19 3.2 surcharge) Total 6.72 6.82 (1.4) Revenue/shipment LTL 271.40 255.34 6.3 TL 848.10 780.72 8.6 Total 358.32 328.62 9.0 Pounds/shipment LTL 2,431 2,367 2.7 TL 17,012 17,065 (0.3) Total 4,641 4,421 5.0 Fourth Quarter ----------------- Amount/Workday ----------------- % 2005 2004 Change ---------------- ------ Workdays 61 62 F/S Revenue LTL 892.4 895.6 (0.4) TL 494.9 443.9 11.5 Other 41.6 52.4 (20.6) Total 1,428.9 1,391.9 2.7 Revenue excluding LTL 887.2 893.0 (0.6) revenue recognition TL 492.1 442.6 11.2 adjustment Other 41.6 52.4 (20.6) Total 1,420.9 1,388.0 2.4 Tonnage LTL 3.97 4.14 (4.0) TL 4.94 4.84 2.0 Total 8.91 8.98 (0.7) Shipments LTL 3.27 3.50 (6.5) TL 0.58 0.57 2.3 Total 3.85 4.07 (5.3) Revenue/cwt. LTL TL Total Revenue/cwt. LTL (excl. fuel TL surcharge) Total Revenue/shipment LTL TL Total Pounds/shipment LTL TL Total (a) Charges of $3.8 million in 4Q04 and $1.9 million in 3Q04 recorded to reflect actuarially estimated liability of workers' compensation claims, of which $4.4 million relates to increases in actuarial estimates for prior-year claims. *T