SEC Form 10-Q filed by Saia Inc.

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024

OR

 

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 0-49983

 

Saia, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware		48-1229851
(State of incorporation)		(I.R.S. Employer Identification No.)
11465 Johns Creek Parkway, Suite 400
Johns Creek, GA		30097
(Address of principal executive offices)		(Zip Code)

(770) 232-5067

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $.001 per share		SAIA		The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer	☒	Accelerated filer	☐	Non-accelerated filer	☐	Smaller reporting company	☐	Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

There were 26,588,162 shares of Common Stock outstanding at April 24, 2024.

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SAIA, INC. AND SUBSIDIARIES

INDEX

			PAGE
PART I. FINANCIAL INFORMATION
ITEM 1:	Financial Statements		3
	Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023		3
	Condensed Consolidated Statements of Operations for the quarters ended March 31, 2024 and 2023		4
	Condensed Consolidated Statements of Stockholders’ Equity for the quarters ended March 31, 2024 and 2023		5
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023		6
	Notes to Condensed Consolidated Financial Statements		7
ITEM 2:	Management's Discussion and Analysis of Financial Condition and Results of Operations		11
ITEM 3:	Quantitative and Qualitative Disclosures About Market Risk		17
ITEM 4:	Controls and Procedures		18
PART II. OTHER INFORMATION
ITEM 1:	Legal Proceedings		19
ITEM 1A:	Risk Factors		19
ITEM 2:	Unregistered Sales of Equity Securities and Use of Proceeds		19
ITEM 5:	Other Information		19
ITEM 6:	Exhibits		20
Signature			21

 

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PART I. FINANCIAL INFORMATION

 

Item 1. Financial Statements

Saia, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(unaudited)

		March 31, 2024				December 31, 2023
Assets		(in thousands, except share and per share data)
Current Assets:
Cash and cash equivalents		$	12,308			$	296,215
Accounts receivable, net			345,808				311,742
Prepaid expenses			51,231				32,648
Other current assets			6,913				8,089
Total current assets			416,260				648,694
Property and Equipment, at cost			3,336,493				2,881,800
Less: accumulated depreciation and amortization			1,159,629				1,118,492
Net property and equipment			2,176,864				1,763,308
Operating Lease Right-of-Use Assets			129,520				118,734
Goodwill and Identifiable Intangibles, net			17,082				17,296
Other Noncurrent Assets			25,988				35,533
Total assets		$	2,765,714			$	2,583,565
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable		$	153,487			$	141,877
Wages, vacation and employees’ benefits			55,318				75,514
Claims and insurance accruals			36,612				41,641
Other current liabilities			58,331				27,094
Current portion of long-term debt			7,498				10,173
Current portion of operating lease liability			26,526				25,757
Total current liabilities			337,772				322,056
Other Liabilities:
Long-term debt, less current portion			76,553				6,315
Operating lease liability, less current portion			98,190				96,462
Deferred income taxes			157,626				155,841
Claims, insurance and other			66,635				61,397
Total other liabilities			399,004				320,015
Commitments and Contingencies (Note 3)
Stockholders’ Equity:
Preferred stock, $0.001 par value, 50,000 shares authorized,      none issued and outstanding			-				-
Common stock, $0.001 par value, 100,000,000 shares authorized,      26,588,162 and 26,549,372 shares issued and outstanding at      March 31, 2024 and December 31, 2023, respectively			27				27
Additional paid-in-capital			282,090				285,092
Deferred compensation trust, 69,412 and 69,672 shares of common      stock at cost at March 31, 2024 and December 31, 2023, respectively			(5,928	)			(5,679	)
Retained earnings			1,752,749				1,662,054
Total stockholders’ equity			2,028,938				1,941,494
Total liabilities and stockholders’ equity		$	2,765,714			$	2,583,565

See accompanying notes to condensed consolidated financial statements.

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Saia, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

For the quarters ended March 31, 2024 and 2023

(unaudited)

		First Quarter
		2024				2023
		(in thousands, except per share data)
Operating Revenue		$	754,775			$	660,535
Operating Expenses:
Salaries, wages and employees' benefits			341,713				298,956
Purchased transportation			52,507				46,727
Fuel, operating expenses and supplies			156,325				141,625
Operating taxes and licenses			19,766				17,065
Claims and insurance			17,463				14,059
Depreciation and amortization			48,849				42,880
Other operating, net			240				80
Total operating expenses			636,863				561,392
Operating Income			117,912				99,143
Nonoperating (Income) Expenses:
Interest expense			542				688
Interest income			(755	)			(140	)
Other, net			(788	)			(503	)
Nonoperating (income) expenses, net			(1,001	)			45
Income Before Income Taxes			118,913				99,098
Income Tax Provision			28,218				23,001
Net Income		$	90,695			$	76,097
Weighted average common shares outstanding – basic			26,672				26,600
Weighted average common shares outstanding – diluted			26,794				26,702
Basic Earnings Per Share		$	3.40			$	2.86
Diluted Earnings Per Share		$	3.38			$	2.85

See accompanying notes to condensed consolidated financial statements.

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Saia, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity

For the quarters ended March 31, 2024 and 2023

(unaudited)

 

		Common Shares				Common Stock				Additional Paid-in Capital				Deferred Compensation Trust				Retained Earnings				Total
		(in thousands)
Balance at December 31, 2023			26,549			$	27			$	285,092			$	(5,679	)		$	1,662,054			$	1,941,494
Stock compensation, including options and long-term incentives			—				—				2,724				—				—				2,724
Exercise of stock options, less shares withheld for taxes			17				—				1,993				—				—				1,993
Shares issued for long-term incentive awards, net of shares withheld for taxes			22				—				(7,968	)			—				—				(7,968	)
Purchase of shares by Deferred Compensation Trust			—				—				314				(314	)			—				—
Sale of shares by Deferred Compensation Trust			—				—				(65	)			65				—				—
Net income			—				—				—				—				90,695				90,695
Balance at March 31, 2024			26,588			$	27			$	282,090			$	(5,928	)		$	1,752,749			$	2,028,938

 

 

		Common Shares				Common Stock				Additional Paid-in Capital				Deferred Compensation Trust				Retained Earnings				Total
		(in thousands)
Balance at December 31, 2022			26,464			$	26			$	277,366			$	(5,248	)		$	1,307,197			$	1,579,341
Stock compensation, including options and long-term incentives			—				—				2,225				—				—				2,225
Exercise of stock options, less shares withheld for taxes			21				—				2,204				—				—				2,204
Shares issued for long-term incentive awards, net of shares withheld for taxes			48				1				(8,928	)			—				—				(8,927	)
Purchase of shares by Deferred Compensation Trust			—				—				474				(474	)			—				—
Sale of shares by Deferred Compensation Trust			—				—				(67	)			67				—				—
Net income			—				—				—				—				76,097				76,097
Balance at March 31, 2023			26,533			$	27			$	273,274			$	(5,655	)		$	1,383,294			$	1,650,940

 

See accompanying notes to condensed consolidated financial statements.

 

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Saia, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

For the three months ended March 31, 2024 and 2023

(unaudited)

		First Quarter
		2024				2023
		(in thousands)
Operating Activities:
Net income		$	90,695			$	76,097
Noncash items included in net income:
Depreciation and amortization			48,849				42,880
Deferred income taxes			1,785				5,738
Other, net			3,624				2,968
Changes in operating assets and liabilities:
Accounts receivable			(34,371	)			(5,276	)
Accounts payable			3,457				7,008
Change in other assets and liabilities, net			(7,571	)			(10,145	)
Net cash provided by operating activities			106,468				119,270
Investing Activities:
Acquisition of property and equipment			(457,164	)			(128,415	)
Proceeds from disposal of property and equipment			343				360
Other			4,999				—
Net cash used in investing activities			(451,822	)			(128,055	)
Financing Activities:
Repayments of revolving credit facility			(48,100	)			—
Borrowings of revolving credit facility			120,100				—
Proceeds from stock option exercises			1,993				2,204
Shares withheld for taxes			(7,968	)			(8,927	)
Repayment of finance leases			(4,437	)			(4,504	)
Other financing activity			(141	)			(953	)
Net cash provided by (used in) financing activities			61,447				(12,180	)
Net Decrease in Cash and Cash Equivalents			(283,907	)			(20,965	)
Cash and Cash Equivalents, beginning of period			296,215				187,390
Cash and Cash Equivalents, end of period		$	12,308			$	166,425

 

 

See accompanying notes to condensed consolidated financial statements.

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Saia, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements

(unaudited)

 

 

 

 

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

This Management’s Discussion and Analysis should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and our 2023 audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. Those consolidated financial statements include additional information about our significant accounting policies, practices and the transactions that underlie our financial results.

Cautionary Note Regarding Forward-Looking Statements

The Securities and Exchange Commission (the SEC) 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 Quarterly Report on Form 10-Q, including "Management's Discussion and Analysis of Financial Condition and Results of Operations,” contains these types of statements, which are forward-looking 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, except as otherwise required by applicable law. All forward-looking statements reflect the present expectation of future events of our management as of the date of this Quarterly Report on Form 10-Q 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, the following:

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These factors and risks are described in Part I, Item 1A. “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as updated by Part II, Item 1A. of this Quarterly Report on Form 10-Q.

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 Form 10-Q. 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, except as otherwise required by applicable law.

Executive Overview

The Company’s business is highly correlated to non-service sectors of the general economy. The Company’s strategy is to improve profitability by increasing yield while also increasing volumes. Components of this strategy include building density in existing geography and pursuing geographic and terminal expansion in an effort to promote profitable growth and improve our customer value proposition over time. The Company’s business is labor intensive, capital intensive and service sensitive. The Company looks for opportunities to improve safety, cost effectiveness and asset utilization (primarily tractors and trailers). Pricing initiatives have had a positive impact on yield and profitability. The Company continues to execute targeted sales and marketing programs along with initiatives to align costs with volumes and improve customer satisfaction. Technology continues to be an important investment as we work towards improving customer experience, operational efficiencies and Company image.

First Quarter Overview

The Company’s operating revenue increased by 14.3 percent in the first quarter of 2024 compared to the same period in 2023. The increase resulted primarily from increases in shipments and tonnage partially as a result of the redistribution of freight due to industry consolidation. In the first quarter of 2024, LTL shipments were up 15.7 percent and LTL tonnage was up 6.2 percent compared to the prior year quarter. Additionally, increases in revenue were driven by improved revenue per hundredweight due to pricing and changes in business mix.

Consolidated operating income was $117.9 million for the first quarter of 2024 compared to $99.1 million for the first quarter of 2023. Diluted earnings per share were $3.38 in the first quarter of 2024 compared to diluted earnings per share of $2.85 in the prior year quarter. The operating ratio (operating expenses divided by operating revenue) was 84.4 percent in the first quarter of 2024 compared to 85.0 percent in the first quarter of 2023. The Company generated $106.5 million in net cash provided by operating activities in the first three months of 2024 compared with $119.3 million in the same period last year.

On January 17, 2024, the Company completed the purchase of 17 freight terminals of Yellow Corporation for an aggregate purchase price of $235.7 million in cash. In addition, the Company completed the acquisition of Yellow Corporation’s interests in leases for 11

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freight terminals for an aggregate purchase price of $7.9 million in cash, plus the assumption of certain liabilities under the leases and the payment of cure costs.

General

The following Management’s Discussion and Analysis describes the principal factors affecting the results of operations, financial condition, liquidity and capital resources, as well as the critical accounting policies and estimates of Saia, Inc. and its wholly-owned subsidiaries (together, the Company or Saia).

Saia is a transportation company headquartered in Johns Creek, Georgia that provides national less-than-truckload (LTL) services through a single integrated organization. While more than 97 percent of revenue is historically derived from transporting LTL shipments across 46 states, the Company also offers customers a wide range of other value-added services, including non-asset truckload, expedited transportation and logistics services across North America.

Our business is highly correlated to non-service sectors of the general economy. Our business also is impacted by a number of other factors as discussed under “Cautionary Note Regarding Forward Looking Statements” and Part II, Item 1A. “Risk Factors.” The key factors that affect our operating results are the volumes of shipments transported through our network, as measured by our average daily shipments and tonnage; the prices we obtain for our services, as measured by revenue per hundredweight (a measure of yield) and revenue per shipment; our ability to manage our cost structure for capital expenditures and operating expenses such as salaries, wages and benefits; purchased transportation; claims and insurance expense; fuel and maintenance; and our ability to match operating costs to shifting volume levels.

Results of Operations

Saia, Inc. and Subsidiaries

Selected Results of Operations and Operating Statistics

For the quarters ended March 31, 2024 and 2023

(unaudited)

										Percent
										Variance
		2024				2023				'24 v. '23
		(in thousands, except ratios, workdays, revenue per hundredweight, revenue per shipment, pounds per shipment and length of haul)
Operating Revenue		$	754,775			$	660,535				14.3		%
Operating Expenses:
Salaries, wages and employees’ benefits			341,713				298,956				14.3
Purchased transportation			52,507				46,727				12.4
Fuel and other operating expenses			193,794				172,829				12.1
Depreciation and amortization			48,849				42,880				13.9
Operating Income			117,912				99,143				18.9
Operating Ratio			84.4	%			85.0	%
Nonoperating (Income) Expense			(1,001	)			45				(2,324.4	)
Working Capital (as of March 31, 2024 and 2023)			78,488				242,983
Cash Flows provided by Operating Activities (year to date)			106,468				119,270
Net Acquisitions of Property and Equipment (year to date)			456,821				128,055
Saia Motor Freight Operating Statistics:
Workdays			64				64
LTL Tonnage			1,392				1,311				6.2
LTL Shipments			2,108				1,822				15.7
LTL Revenue per hundredweight		$	26.51			$	24.63				7.6
LTL Revenue per hundredweight, excluding fuel surcharge		$	22.26			$	20.15				10.5
LTL Revenue per shipment		$	350.18			$	354.37				(1.2	)
LTL Revenue per shipment, excluding fuel surcharge		$	293.96			$	289.87				1.4
LTL Pounds per shipment			1,321				1,439				(8.2	)
LTL Length of haul			888				892				(0.4	)

 

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Quarter ended March 31, 2024 compared to quarter ended March 31, 2023

Revenue and volume

Consolidated revenue for the quarter ended March 31, 2024 increased 14.3 percent to $754.8 million primarily as a result of increases in shipments and tonnage partially as a result of the redistribution of freight due to industry consolidation. For the first quarter of 2024, Saia’s LTL tonnage was up 6.2 percent to 1.4 million tons, and LTL shipments increased 15.7 percent to 2.1 million shipments. LTL revenue per hundredweight, excluding fuel surcharge, increased 10.5 percent to $22.26 per hundredweight for the first quarter of 2024 as a result of changes in business mix and pricing actions. For the first quarter of 2024, approximately 75 percent of the Company’s operating revenue was subject to specific customer price negotiations that occur throughout the year. The remaining 25 percent of operating revenue was subject to a general rate increase. For customers subject to a general rate increase, Saia implemented 6.5 and 7.5 percent general rate increases on January 30, 2023 and December 4, 2023, respectively. Competitive factors, customer turnover and mix changes impact the extent to which customer rate increases are retained over time.

Operating revenue includes revenue recognized from the Company’s fuel surcharge program, which is designed to reduce exposure to fluctuations in diesel fuel prices by adjusting total freight charges to account for changes in the price of diesel fuel. The Company’s fuel surcharge is generally based on the average national price for diesel fuel (as published by the United States Energy Information Administration) and is typically reset weekly. Fuel surcharges are widely accepted in the industry and are a significant component of revenue and pricing. Fuel surcharges are an integral part of customer contract negotiations, but represent only one portion of overall customer price negotiations, as customers may negotiate increases in base rates instead of increases in fuel surcharges or vice versa. Fuel surcharge revenue as a percentage of operating revenue decreased to 15.7 percent for the quarter ended March 31, 2024 compared to 17.8 percent for the quarter ended March 31, 2023, as a result of decreases in the average cost of diesel fuel for the quarter compared to the prior year.

Operating expenses and margin

Consolidated operating income was $117.9 million in the first quarter of 2024 compared to $99.1 million in the prior year quarter. Overall, the increase in consolidated operating income was the result of increased volumes during the first quarter of 2024. The first quarter of 2024 operating ratio (operating expenses divided by operating revenue) was 84.4 percent compared to 85.0 percent for the same period in 2023.

Salaries, wages and employees’ benefits increased $42.8 million in the first quarter of 2024 compared to the first quarter of 2023. This change was primarily driven by increases during the quarter in employee hours and headcount in response to overall increased volumes, expanded footprint and by a Company-wide wage increase in July 2023 of approximately 4.1 percent. Purchased transportation increased $5.8 million in the first quarter of 2024 compared to the first quarter of 2023 primarily due to increased volumes. Fuel, operating expenses and supplies increased by $14.7 million compared to the first quarter of 2023 largely due to increased administrative costs and facility costs due to increased volumes and expanded footprint. Claims and insurance expense in the first quarter of 2024 was $3.4 million higher than the first quarter of 2023 primarily due to increased activity and premiums. Depreciation and amortization expense increased $6.0 million in the first quarter of 2024 compared to the same period in 2023 primarily due to ongoing investments in revenue equipment, real estate and technology.

Other

Interest expense in the first quarter of 2024 was lower than the same period in 2023 as the Company continued to pay down finance lease obligations, partially offset by interest expense related to borrowings on the Revolving Credit Facility that occurred late in the quarter.

Interest income for the first quarter of 2024 was higher than the same period in 2023 due to increased interest rates on deposit balances during the period.

The effective tax rate was 23.7 percent and 23.2 percent for the quarters ended March 31, 2024 and 2023, respectively.

Net income was $90.7 million, or $3.38 per diluted share, in the first quarter of 2024 compared to net income of $76.1 million, or $2.85 per diluted share, in the first quarter of 2023.

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Outlook

Our business remains highly correlated to non-service sectors of the general economy and competitive pricing pressures, as well as the success of Company-specific improvement initiatives. Our outlook is dependent on a number of external factors, including strength of the economy, inflation, labor availability, diesel fuel prices and supply chain constraints. The potential impact of these factors on our operations, financial performance and financial condition, as well as the impact on our ability to successfully execute our business strategies and initiatives, remains uncertain and difficult to predict. We are continuing initiatives to improve and enhance customer service in an effort to support our ongoing pricing and business mix optimization, while seeking to control costs and improve productivity. Planned revenue initiatives include building density in our current geography, targeted marketing initiatives to grow revenue in more profitable areas, further expanding our geographic and terminal network, as well as pricing and yield management. On January 30, 2023 and December 4, 2023 Saia implemented 6.5 and 7.5 percent general rate increases, respectively, for customers comprising approximately 25 percent of Saia’s operating revenue. The extent of success of these revenue initiatives is impacted by what proves to be the underlying economic trends, competitor initiatives and other factors discussed under “Cautionary Note Regarding Forward-Looking Statements” and Part II, Item 1A. “Risk Factors.”

If we build market share, including through our geographic and terminal expansion, we expect there to be numerous operating leverage cost benefits. Conversely, should the economy soften, we plan to match resources and capacity to shifting volume levels to lessen unfavorable operating leverage. The success of cost improvement initiatives is impacted by a number of factors, including the cost and availability of drivers, dock workers and personnel, and purchased transportation, diesel fuel and insurance costs and inflation.

See “Cautionary Note Regarding Forward-Looking Statements” and Part II, Item 1A. “Risk Factors” for a more complete discussion of potential risks and uncertainties that could materially adversely affect our financial condition, results of operations, cash flows and prospects.

Financial Condition, Liquidity and Capital Resources

The Company’s liquidity needs arise primarily from capital investment in new equipment, land and structures, information technology and letters of credit required under insurance programs, as well as funding working capital requirements.

Working capital/capital expenditures

Working capital at March 31, 2024 was $78.5 million, a decrease from $243.0 million at March 31, 2023.

Current assets at March 31, 2024 decreased by $97.3 million as compared to March 31, 2023, driven by a decrease in cash and cash equivalents of $154.1 million to fund the Yellow Corporation real estate acquisitions, partially offset by an increase in accounts receivable of $50.9 million. Current liabilities increased by $67.2 million at March 31, 2024 compared to March 31, 2023 largely due to an increase in accounts payable and other current liabilities.

A summary of our cash activity is presented below:

		First Quarter
		2024		2023
		(in thousands)
Cash and Cash Equivalents, beginning of period		$296,215		$187,390
Net Cash flows provided by (used in):
Operating activities		106,468		119,270
Investing activities		(451,822)		(128,055)
Financing activities		61,447		(12,180)
Net Decrease in Cash and Cash Equivalents		(283,907)		(20,965)
Cash and Cash Equivalents, end of period		$12,308		$166,425

Cash flows provided by operating activities were $106.5 million for the three months ended March 31, 2024 versus $119.3 million for the three months ended March 31, 2023. The decrease is primarily due to an increase in accounts receivable, partially offset by changes in other assets and liabilities and additional net income. For the three months ended March 31, 2024, net cash used in investing activities was $451.8 million compared to $128.1 million in the same period last year, a $323.7 million increase. This increase resulted from the acquisition of terminals from Yellow Corporation in January 2024 in addition to increased revenue equipment purchases to support higher volumes. For the three months ended March 31, 2024, net cash provided by financing activities was $61.4 million compared to $12.2 million net cash used in financing activities during the same period last year, as a result of borrowings to help fund capital expenditures during the first three months of 2024.

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The Company has historically generated cash flows from operations to fund a large portion of its capital expenditure requirements. The timing of capital expenditures can largely be managed around the seasonal working capital requirements of the Company. The Company believes it has adequate sources of capital to meet short-term liquidity needs through its cash on hand, operating cash flows and availability under its credit agreements, discussed below. Future operating cash flows are primarily dependent upon the Company’s profitability and its ability to manage its working capital requirements, primarily accounts receivable, accounts payable and wage and benefit accruals.

The Company currently anticipates that net capital expenditures in 2024 will be in excess of $1 billion, subject to ongoing evaluation of market conditions. Anticipated capital expenditures for the year include normal replacement cycles of revenue equipment, investments in technology, and revenue equipment and real estate investments to support our growth initiatives. Net capital expenditures were $456.8 million in the first three months of 2024 and include $235.7 million for the acquisition of Yellow Corporation terminals. Additionally, $7.9 million was used to fund the acquisition of the rights of leased properties from Yellow Corporation. Approximately $330.4 million of the 2024 remaining capital budget was committed as of March 31, 2024.

Credit Agreements

Revolving Credit Facility

The Company is a party to a credit agreement with its banking group (the Revolving Credit Facility), which provides up to a $300 million revolving line of credit through February 2028. The Revolving Credit Facility contains an accordion feature that allows the Company to increase the size of the facility by up to $150 million, subject to certain conditions and availability of lender commitments. Borrowings under the Revolving Credit Facility bear interest at the Company’s election at a variable rate equal to (a) one, three or six month term SOFR (the forward-looking secured overnight financing rate) plus 0.10%, or (b) an alternate base rate, in each case plus an applicable margin. The applicable margin is between 1.00% and 1.75% per annum for term SOFR loans and between 0.00% and 0.75% per annum for alternate base rate loans, in each case based on the Company’s consolidated net lease adjusted leverage ratio. The Company also accrues fees based on the daily unused portion of the credit facility, which is between 0.0125% and 0.025% based on the Company’s consolidated net lease adjusted leverage ratio. Under the Revolving Credit Facility, the Company is subject to a maximum consolidated net lease adjusted leverage ratio of less than 3.50 to 1.00 with the potential to be temporarily increased in the event the Company makes an acquisition that meets certain criteria. The Revolving Credit Facility contains certain customary representations and warranties, affirmative and negative covenants and provisions relating to events of default. Under the Revolving Credit Facility, if an event of default occurs, the banks will be entitled to take various actions, including the acceleration of amounts due. The Company was in compliance with its debt covenants at March 31, 2024.

At March 31, 2024 the Company had outstanding borrowings of $72.0 million and outstanding letters of credit $32.4 million under this Revolving Credit Facility. As of December 31, 2023, the Company had no outstanding borrowings and outstanding letters of credit of $32.1 million under this Revolving Credit Facility. At March 31, 2024, the Company had $195.6 million in availability under the Revolving Credit Facility.

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Private Shelf Agreement

On November 9, 2023, the Company entered into a $350 million uncommitted Private Shelf Agreement (the Shelf Agreement), by and among the Company, PGIM, Inc. (Prudential), and certain affiliates and managed accounts of Prudential (the Note Purchasers) which allows the Company, from time to time, to offer for sale to Prudential and its affiliates, in one or a series of transactions, senior notes of the Company, through November 9, 2026.

Pursuant to the Shelf Agreement, the Company agreed to sell up to $100 million aggregate principal amount of senior notes (the Initial Notes) to the Note Purchasers. The Initial Notes will bear interest at 6.09% per annum and will mature five years after the date on which the Initial Notes are issued, unless repaid earlier by the Company. The funding date for the Initial Notes may occur at any time on or prior to August 2, 2024. The Initial Notes will be senior unsecured obligations and rank pari passu with borrowings under the Revolving Credit Facility or other senior promissory notes issued pursuant to the Shelf Agreement.

Additional notes issued under the Shelf Agreement, if any, would bear interest at a rate per annum, and would have such other terms, as would be set forth in a confirmation of acceptance executed by the parties prior to the closing of the applicable sale transaction.

The Shelf Agreement requires that the Company maintain a consolidated net lease adjusted leverage ratio of less than 3.50 to 1.00, with limited exceptions. The Shelf Agreement also contains certain customary representations and warranties, affirmative and negative covenants and provisions related to events of default. Upon the occurrence and continuance of an event of default, the holders of notes issued under the Shelf Agreement may require immediate payment of all amounts owing under such notes.

At March 31, 2024 and December 31, 2023, respectively, the Company had no outstanding borrowings under its Shelf Agreement.

Finance Leases

The Company is obligated under finance leases with seven-year original terms covering revenue equipment. Total liabilities recognized under finance leases were $12.1 million and $16.5 million as of March 31, 2024 and December 31, 2023, respectively. Amortization of assets held under the finance leases is included in depreciation and amortization expense. The weighted average interest rates for the finance leases at March 31, 2024 and December 31, 2023 were each 4.0 percent.

Contractual Obligations

Contractual obligations for the Company are comprised of lease agreements, purchase obligations and long-term debt obligations related to any outstanding balance under the credit agreements. Contractual obligations for operating leases at March 31, 2024 totaled $149.0 million, including operating leases with original maturities of less than one year, which are not recorded in our consolidated balance sheet in accordance with U.S. generally accepted accounting principles. Contractual obligations in the form of finance leases were $12.5 million at March 31, 2024, which includes both principal and interest amounts. For the remainder of 2024, $5.7 million of interest payments are anticipated based on borrowings and commitments outstanding at March 31, 2024. See Note 5 to the accompanying unaudited condensed consolidated financial statements in this Current Report on Form 10-Q. Purchase obligations at March 31, 2024 were $330.7 million, including commitments of $330.4 million for capital expenditures. As of March 31, 2024, the Revolving Credit Facility had $72.0 million outstanding principal balance and the Shelf Agreement had no outstanding principal balance.

Other commercial commitments of the Company typically include letters of credit and surety bonds required for collateral towards insurance agreements. As of March 31, 2024 the Company had total outstanding letters of credit of $32.4 million and $59.6 million in surety bonds.

The Company has accrued approximately $5.0 million for uncertain tax positions and $0.5 million for interest and penalties related to the uncertain tax positions as of March 31, 2024. At March 31, 2024, the Company has accrued $83.3 million for claims and insurance liabilities.

Critical Accounting Policies and Estimates

There have been no significant changes to the application of the critical accounting policies and estimates contained in our Annual Report on Form 10-K for the year ended December 31, 2023. The reader should refer to our 2023 Annual Report on Form 10-K for a full disclosure of all critical accounting policies and estimates of amounts recorded in certain assets, liabilities, revenue and expenses.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to a variety of market risks including the effects of interest rates and diesel fuel prices. To help mitigate our risk to rising diesel fuel prices, the Company has an established fuel surcharge program. The detail of the Company’s debt structure is

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more fully described in Note 5 “Debt and Financing Arrangements” of the accompanying unaudited condensed financial statements in this Form 10-Q.

The following table provides information about the Company’s third-party financial instruments as of March 31, 2024. The table presents principal cash flows (in millions) and related weighted average interest rates by contractual maturity dates. The fair value of fixed rate debt (finance leases) is based on current market interest rates for similar types of financial instruments, reflective of level two inputs. The carrying amount of the Company’s variable rate debt approximates fair value as interest rates approximate the current rates available to the Company.

		Expected maturity date												2024
		2024		2025		2026		2027		2028		Thereafter		Total		Fair Value
Fixed rate debt		$5.7		$5.4		$1.0		$—		$—		$—		$12.1		$11.8
Average interest rate		4.0%		4.1%		3.5%		—		—		—		4.0%
Variable rate debt		$—		$—		$—		$—		$72.0		$—		$72.0		$72.0
Average interest rate		—		—		—		—		8.5%		—		8.5%

 

Item 4. Controls and Procedures

Quarterly Controls Evaluation and Related CEO and CFO Certifications

As of the end of the period covered by this Quarterly Report on Form 10-Q, the Company conducted an evaluation of the effectiveness of the design and operation of its “disclosure controls and procedures” (Disclosure Controls). The Disclosure Controls evaluation was performed under the supervision and with the participation of management, including the Company’s Chief Executive Officer (CEO) and Chief Financial Officer (CFO).

Based upon the controls evaluation, the Company’s CEO and CFO have concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, the Company’s Disclosure Controls are effective to ensure that information the Company is required to disclose in reports that the Company files or submits under the Securities Exchange Act of 1934, as amended (the Exchange Act), is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.

During the period covered by this Quarterly Report on Form 10-Q, there were no changes in internal control over financial reporting that materially affected, or that are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Attached as Exhibits 31.1 and 31.2 to this Quarterly Report on Form 10-Q are certifications of the CEO and the CFO, which are required in accordance with Rule 13a-14 of the Exchange Act. This Controls and Procedures section includes the information concerning the controls evaluation referred to in the certifications and it should be read in conjunction with the certifications.

Definition of Disclosure Controls

Disclosure Controls are controls and procedures designed to ensure that information required to be disclosed in the Company’s reports filed under the Exchange Act is recorded, processed, summarized and reported timely. Disclosure Controls are also designed to ensure that such information is accumulated and communicated to the Company’s management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. The Company’s Disclosure Controls include components of its internal control over financial reporting which consists of control processes designed to provide reasonable assurance regarding the reliability of the Company’s financial reporting and the preparation of financial statements in accordance with U.S. generally accepted accounting principles.

Limitations on the Effectiveness of Controls

The Company’s management, including the CEO and CFO, does not expect that its Disclosure Controls or its internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings — For a description of legal proceedings, see Note 3 “Commitments and Contingencies” of the accompanying unaudited condensed consolidated financial statements.

 

Item 1A. Risk Factors — In addition to the other information included in this report and in our other reports and statements that we file with the SEC, you should carefully consider the factors discussed in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2023, which could materially affect our business, financial condition and/or operating results. The risks discussed in our Annual Report on Form 10-K are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

There have been no material changes to the risk factors identified in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10‑K for the year ended December 31, 2023.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds —

Issuer Purchases of Equity Securities
Period		(a) Total Number of Shares (or Units) Purchased (1)			(b) Average Price Paid per Share (or Unit)			(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs			(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that may Yet be Purchased under the Plans or Programs
January 1, 2024 through
January 31, 2024		—	(2)		$—	(2)		—			$—
February 1, 2024 through
February 29, 2024		—	(3)		$—	(3)		—			—
March 1, 2024 through
March 31, 2024		530	(4)		$593.24	(4)		—			—
Total		530						—

 

(1)	Any shares purchased by the Saia, Inc. Executive Capital Accumulation Plan are open market purchases. For more information on the Saia, Inc. Executive Capital Accumulation Plan, see the Registration Statement on Form S-8 (No. 333-155805) filed on December 1, 2008.
(2)	The Saia, Inc. Executive Capital Accumulation Plan had no sales of Saia stock during the period of January 1, 2024 through January 31, 2024.
(3)	The Saia, Inc. Executive Capital Accumulation Plan sold 790 shares of Saia stock at an average price of $550.79 during the period of February 1, 2024 through February 29, 2024.
(4)	The Saia, Inc. Executive Capital Accumulation Plan had no sales of Saia stock during the period of March 1, 2024 through March 31, 2024.

 

Item 5. Other Information — During the three months ended March 31, 2024, none of our directors or Section 16 officers adopted or terminated any contract, instruction, or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Securities Exchange Act or any non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K).

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Item 6. Exhibits

Exhibit
Number		Description of Exhibit
2.1		Asset Purchase Agreement dated December 5, 2023 by and among Saia, Inc., Saia Motor Freight Line, LLC, Yellow Corporation, New Penn Motor Express LLC, USF Holland LLC, USF Reddaway Inc., YRC Inc. and YRC Freight Canada Company (incorporated by reference to Exhibit 2.1 of Saia, Inc’s Form 8-K (File No. 0-49983) filed on December 11, 2023).
3.1		Restated Certificate of Incorporation of Saia, Inc., as amended (incorporated herein by reference to Exhibit 3.1 of Saia, Inc.’s Form 8-K (File No. 0-49983) filed on July 26, 2006).
3.2		Certificate of Amendment to Restated Certificate of Incorporation of Saia, Inc. (incorporated herein by reference to Exhibit 3.1 of Saia, Inc.'s Form 8-K (File No. 0-49983) filed on July 2, 2021).
3.3		Certificate of Amendment to Restated Certificate of Incorporation of Saia, Inc. (incorporated herein by reference to Exhibit 3.1 of Saia, Inc.’s Form 8-K (File No. 0-49983) filed on June 9, 2022).
3.4		Certificate of Amendment to Restated Certificate of Incorporation of Saia, Inc. (incorporated herein by reference to Exhibit 3.2 of Saia, Inc.’s Form 8-K (File No. 0-49983) filed on June 9, 2022).
3.5		Amended and Restated By-laws of Saia, Inc. (incorporated herein by reference to Exhibit 3.1 of Saia, Inc.’s Form 8-K (File No. 0-49983) filed on July 29, 2008).
3.6		Certificate of Elimination filed with the Delaware Secretary of State on December 16, 2010 (incorporated herein by reference to Exhibit 3.1 of Saia, Inc.’s Form 8-K (File No. 0-49983) filed on December 20, 2010).
31.1		Certification of Principal Executive Officer Pursuant to Exchange Act Rule 13a-15(e).
31.2		Certification of Principal Financial Officer Pursuant to Exchange Act Rule 13a-15(e).
32.1		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101		The following financial information from Saia, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in iXBRL (Inline Extensible Business Reporting Language) includes: (i) Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 (unaudited), (ii) Condensed Consolidated Statements of Operations for the quarters ended March 31, 2024 and 2023 (unaudited), (iii) Consolidated Statements of Stockholders’ Equity for the quarters ended March 31, 2024 and 2023 (unaudited), (iv) Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023 (unaudited), and (v) the Notes to Condensed Consolidated Financial Statements (unaudited). XBRL Instance Document – the XBRL Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
104		The cover page from Saia’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in Inline XBRL (included as Exhibit 101).

 

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		SAIA, INC.
Date: April 26, 2024			/s/ Douglas L. Col
			Douglas L. Col
			Executive Vice President and Chief Financial Officer

 

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