SOURCE: Saia, Inc.

Saia, Inc.

February 03, 2017 07:30 ET

Saia Reports Fourth Quarter Earnings per Share of $0.40

JOHNS CREEK, GA--(Marketwired - Feb 3, 2017) - 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 2016 financial results.

Fourth Quarter 2016 Compared to Fourth Quarter 2015 Results

  • Revenues were $300.2 million, a 4.4% increase despite one less workday
  • Operating income decreased 2.4% to $17.2 million
  • Net income fell 9.1% to $10.3 million
  • Diluted earnings per share were $0.40 compared to $0.45
  • Operating ratio deteriorated by 40 basis points to 94.3
  • LTL shipments per workday increased 2.1%
  • LTL tonnage per workday increased 1.4%
  • LTL revenue per hundredweight increased 5.1%

2016 Results Compared to 2015 Results

  • Revenues were essentially flat at $1.2 billion
  • Operating income fell by 12.0% to $79.1 million
  • Net income of $48.0 million was 12.7% lower than the prior year
  • Diluted earnings per share were $1.87 versus the $2.16 earned in 2015 
  • Operating ratio of 93.5 compares to 92.6 last year
  • LTL shipments were down 0.7%
  • LTL tonnage declined 2.4%
  • LTL revenue per hundredweight increased 3.2%

"We were encouraged by shipment and tonnage per workday trends in the fourth quarter and our results reflected some of the same themes we saw in the business all year," said Saia President and Chief Executive Officer, Rick O'Dell. "We continued our very positive pricing actions and saw fourth quarter contractual renewals average 5.2%. Customer service standards remain very high and we achieved a cargo claims ratio of 0.74% in the fourth quarter compared to 0.97% in the fourth quarter last year. It is with our customers in mind that we turn our sights towards opportunities in 2017 and beyond. We at Saia are all excited about the prospects of serving our customers in an expanded geography. We are moving forward with plans to begin service in select markets in Pennsylvania and New Jersey in the second quarter. These are the first steps in our multi-year strategy of becoming a 48-state LTL service provider," O'Dell continued.

"We continue to see productivity improvements across the network offset some of the ongoing cost challenges in the business. On the cost side, the year-over results were impacted by a couple of trends. First of all, depreciation and amortization expense was up 17.2% in the fourth quarter, a reflection of the significant investments we are making in our fleet, real estate and information technology. The benefits of a newer fleet accrue to us in the form of lower maintenance costs, better reliability, advanced safety technology in our tractors and better fuel mileage. The other significant expense item was our claims and insurance line, which increased by more than $4 million in the fourth quarter versus the prior year. The increase was not the result of one or two major accidents, rather it reflects the general inflationary trends in the costs of settlement and litigation in the trucking industry," O'Dell concluded.

Financial Position and Capital Expenditures

Total debt was $73.8 million at December 31, 2016 and inclusive of the cash on-hand, net debt to total capital was 13.0% at year end. This compares to total debt of $69.0 million and net debt to total capital of 13.9% at December 31, 2015.

Net capital expenditures in 2016 were $152 million including equipment acquired with capital leases. This compares to $113 million in net capital expenditures in 2015, which included equipment acquired with capital leases, but excluded the acquisition of LinkEx. The Company currently plans net capital expenditures in 2017 of approximately $200 million.

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 888-724-9518 or 913-312-1496 referencing conference ID #4025429. 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 Friday, March 31, 2017 at 1:00 p.m. Eastern Time. The replay will be available by dialing 1-888-203-1112 or 719-457-0820.

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 148 terminals in 34 states. For more information on Saia, Inc. visit the Investor Relations section at www.saiacorp.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 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, assumptions and uncertainties 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 and other assets; (15) governmental regulations, including but not limited to Hours of Service, engine emissions, the Compliance, Safety, Accountability (CSA) initiative, compliance with legislation requiring companies to evaluate their internal control over financial reporting, Homeland Security, environmental regulations and the Food and Drug Administration; (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; (23) increased costs of healthcare and prescription drugs, including as a result of healthcare reform legislation; (24) social media risks; (25) cyber security risk; and (26) 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.

   
Saia, Inc. and Subsidiaries  
Condensed Consolidated Balance Sheets  
(Amounts in thousands)  
(Unaudited)  
             
    December 31,
2016
    December 31,
2015
 
ASSETS            
             
CURRENT ASSETS:            
  Cash and cash equivalents   $ 1,539     $ 124  
  Accounts receivable, net     135,083       124,222  
  Prepaid expenses and other     29,857       34,643  
    Total current assets     166,479       158,989  
                 
PROPERTY AND EQUIPMENT:                
  Cost     1,101,946       995,514  
  Less: accumulated depreciation     497,827       456,335  
    Net property and equipment     604,119       539,179  
OTHER ASSETS     29,772       31,025  
    Total assets   $ 800,370     $ 729,193  
                 
LIABILITIES AND STOCKHOLDERS' EQUITY                
                 
CURRENT LIABILITIES:                
  Accounts payable   $ 45,149     $ 54,754  
  Wages and employees' benefits     31,700       27,834  
  Other current liabilities     51,333       46,360  
  Current portion of long-term debt     16,762       12,432  
    Total current liabilities     144,944       141,380  
                 
OTHER LIABILITIES:                
  Long-term debt, less current portion     57,041       56,540  
  Deferred income taxes     80,199       67,417  
  Claims, insurance and other     35,108       35,967  
    Total other liabilities     172,348       159,924  
                 
STOCKHOLDERS' EQUITY:                
  Common stock     25       25  
  Additional paid-in capital     237,846       230,593  
  Deferred compensation trust     (3,190 )     (3,102 )
  Retained earnings     248,397       200,373  
    Total stockholders' equity     483,078       427,889  
    Total liabilities and stockholders' equity   $ 800,370     $ 729,193  
                 
                 
Saia, Inc. and Subsidiaries  
Consolidated Statements of Operations  
For the Quarters and Years Ended December 31, 2016 and 2015  
(Amounts in thousands, except per share data)  
(Unaudited)  
             
    Fourth Quarter     Years  
    2016     2015     2016     2015  
OPERATING REVENUE   $ 300,223     $ 287,610     $ 1,218,481     $ 1,221,311  
                                 
OPERATING EXPENSES:                                
  Salaries, wages and employees' benefits     171,169       164,356       696,046       670,173  
  Purchased transportation     13,890       13,399       56,329       70,611  
  Fuel, operating expenses and supplies     57,953       59,955       230,364       261,387  
  Operating taxes and licenses     9,798       9,238       40,025       37,003  
  Claims and insurance     10,676       6,488       39,625       26,832  
  Depreciation and amortization     19,330       16,495       76,240       65,020  
  Operating loss, net     220       63       716       310  
    Total operating expenses     283,036       269,994       1,139,345       1,131,336  
                                 
OPERATING INCOME     17,187       17,616       79,136       89,975  
                                 
NONOPERATING EXPENSES (INCOME):                                
  Interest expense     984       981       4,394       4,107  
  Other, net     (30 )     (76 )     (177 )     (95 )
    Nonoperating expenses, net     954       905       4,217       4,012  
                                 
INCOME BEFORE INCOME TAXES     16,233       16,711       74,919       85,963  
Income tax expense     5,885       5,324       26,895       30,947  
NET INCOME   $ 10,348     $ 11,387     $ 48,024     $ 55,016  
                                 
Average common shares outstanding - basic     25,084       24,972       25,038       24,919  
Average common shares outstanding - diluted     25,782       25,483       25,680       25,471  
                                 
Basic earnings per share   $ 0.41     $ 0.46     $ 1.92     $ 2.21  
Diluted earnings per share   $ 0.40     $ 0.45     $ 1.87     $ 2.16  
                                 
                                 
Saia, Inc. and Subsidiaries  
Condensed Consolidated Statements of Cash Flows  
For the Years Ended December 31, 2016 and 2015  
(Amounts in thousands)  
(Unaudited)  
    Years  
    2016     2015  
OPERATING ACTIVITIES:            
Net cash provided by operating activities   $ 145,776     $ 142,714  
    Net cash provided by operating activities     145,776       142,714  
                 
INVESTING ACTIVITIES:                
  Acquisition of business, net of cash received     -       (22,238 )
  Acquisition of property and equipment     (119,365 )     (86,499 )
  Proceeds from disposal of property and equipment     1,682       818  
    Net cash used in investing activities     (117,683 )     (107,919 )
                 
FINANCING ACTIVITIES:                
  Repayment of long-term debt     (7,143 )     (7,143 )
  Repayment of revolving credit agreement, net     (14,534 )     (30,466 )
  Proceeds from stock option exercises     3,173       2,533  
  Other financing activity     (8,174 )     (3,962 )
    Net cash used in financing activities     (26,678 )     (39,038 )
                 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS     1,415       (4,243 )
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD     124       4,367  
CASH AND CASH EQUIVALENTS, END OF PERIOD   $ 1,539     $ 124  
                 
NON-CASH ITEMS:                
  Equipment financed with capital leases   $ 34,683     $ 27,054  
                 
                 
Saia, Inc. and Subsidiaries
Financial Information
For the Quarters Ended December 31, 2016 and 2015
(Unaudited)
                                   
                          Fourth Quarter    
        Fourth Quarter     %     Amount/Workday   %
        2016     2015     Change     2016   2015   Change
Workdays                         61   62    
                                   
Operating ratio         94.3 %     93.9 %                  
                                       
Tonnage (1)   LTL     842       844     (0.2 )   13.80   13.61   1.4
    TL     172       165     4.3     2.83   2.67   6.0
                                       
Shipments (1)   LTL     1,506       1,499     0.5     24.69   24.18   2.1
    TL     24       24     2.3     0.40   0.38   4.0
                                       
Revenue/cwt. (2)   LTL   $ 16.45     $ 15.66     5.1              
    TL   $ 5.61     $ 5.84     (3.9 )            
                                       
Revenue/shipment (2)   LTL   $ 183.91     $ 176.23     4.4              
    TL   $ 798.53     $ 815.23     (2.0 )            
                                       
Pounds/shipment   LTL     1,118       1,125     (0.7 )            
    TL     14,237       13,969     1.9              
                                       
Length of Haul (3)         792       775     2.2              
   
(1) In thousands
   
(2) Revenue does not include the adjustment required for financial statement purposes in accordance with the Company's revenue recognition policy and other revenue.
   
(3) In miles
   
   
Saia, Inc. and Subsidiaries  
Financial Information  
For the Years Ended December 31, 2016 and 2015  
(Unaudited)  
                                     
                          Year Over Year      
        Year Over Year     %     Amount/Workday   %  
        2016     2015     Change     2016   2015   Change  
Workdays                         253   253      
                                     
Operating ratio         93.5 %     92.6 %                    
                                         
Tonnage (1)   LTL     3,541       3,628     (2.4 )   14.00   14.34   (2.4 )
    TL     705       741     (4.9 )   2.79   2.93   (4.9 )
                                         
Shipments (1)   LTL     6,335       6,381     (0.7 )   25.04   25.22   (0.7 )
    TL     100       106     (5.7 )   0.39   0.42   (5.7 )
                                         
Revenue/cwt. (2)   LTL   $ 15.93     $ 15.44     3.2                
    TL   $ 5.56     $ 5.88     (5.5 )              
                                         
Revenue/shipment (2)   LTL   $ 178.13     $ 175.55     1.5                
    TL   $ 785.65     $ 823.86     (4.6 )              
                                         
Pounds/shipment   LTL     1,118       1,137     (1.7 )              
    TL     14,126       14,003     0.9                
                                         
Length of Haul (3)         787       775     1.5                
   
(1) In thousands
   
(2) Revenue does not include the adjustment required for financial statement purposes in accordance with the Company's revenue recognition policy and other revenue.
   
(3) In miles
   

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