Saia, Inc. (NASDAQ:SAIA) Q2 2022 Earnings Conference Call July 27, 2022 11:00 AM ET Company Participants Doug Col - Executive Vice President & Chief Financial Officer Fritz Holzgrefe - President & Chief Executive Officer Conference Call Participants Scott Group - Wolfe Research Ravi Shanker - Morgan Stanley Todd Fowler - KeyBanc Capital Markets Amit Mehrotra - Deutsche Bank Bascome Majors - Susquehanna Ken Hoexter - Bank of America Jon Chappell - Evercore ISI Tom Wadewitz - UBS Tyler Brown - Raymond James J ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Delaware 48-1229851 Identification No.) 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 JUNE 30, 2022 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) (State of incorporation) (I.R.S. Employer 11465 John ...

Saia, Inc. (NASDAQ:SAIA) Q1 2022 Earnings Conference Call May 2, 2022 10:00 AM ET Company Participants Fritz Holzgrefe - President & Chief Executive Officer Doug Col - Executive Vice President & Chief Financial Officer Conference Call Participants Todd Fowler - KeyBanc Capital Markets Jon Chappell - Evercore ISI Amit Mehrotra - Deutsche Bank Ken Hoexter - Bank of America Allison Poliniak - Wells Fargo Scott Group - Wolfe Research Jordan Alliger - Goldman Sachs Bascome Majors - Susquehanna Chris Wetherbee - ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1: Financial Statements](index=3&type=section&id=Item%201%3A%20Financial%20Statements) The unaudited condensed consolidated financial statements for Q1 2022 show total assets of $1.93 billion, a 36.6% revenue increase to $661.2 million, net income of $79.4 million, and operating cash flow of $96.0 million [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) | Balance Sheet Items (in thousands) | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Total current assets** | $510,666 | $416,255 | | **Total assets** | **$1,932,349** | **$1,845,250** | | **Total current liabilities** | $339,121 | $321,348 | | **Total liabilities** | $640,859 | $624,917 | | **Total stockholders' equity** | **$1,291,490** | **$1,220,333** | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) | Income Statement Items (in thousands) | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | **Operating Revenue** | **$661,216** | **$484,074** | | Total operating expenses | $557,767 | $435,360 | | **Operating Income** | **$103,449** | **$48,714** | | **Net Income** | **$79,424** | **$37,291** | | **Diluted Earnings Per Share** | **$2.98** | **$1.40** | [Condensed Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) - Total stockholders' equity increased from **$1.22 billion** at December 31, 2021, to **$1.29 billion** at March 31, 2022. The growth was primarily driven by a net income of **$79.4 million** for the quarter[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) | Cash Flow Items (in thousands) | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | **$95,961** | **$60,971** | | Net cash used in investing activities | ($45,376) | ($25,388) | | Net cash used in financing activities | ($15,848) | ($7,631) | | **Net Increase in Cash and Cash Equivalents** | **$34,737** | **$27,952** | | Cash and Cash Equivalents, end of period | $141,325 | $53,260 | [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - The company's primary business is providing national less-than-truckload (LTL) services, which account for over **97%** of its revenue. Revenue is recognized over the transit time of a shipment, typically one to five days[24](index=24&type=chunk)[26](index=26&type=chunk) - The company has a **$300 million** revolving credit facility available through February 2024, with an additional **$100 million** accordion feature. As of March 31, 2022, there were no outstanding borrowings under this agreement[37](index=37&type=chunk)[38](index=38&type=chunk) - The company is obligated under finance leases for revenue equipment, with total liabilities of **$44.9 million** as of March 31, 2022, at a weighted average interest rate of **3.6%**[39](index=39&type=chunk) [Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations](index=12&type=section&id=Item%202%3A%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management's discussion highlights strong Q1 2022 performance with operating revenue up 36.6% to $661.2 million, operating income more than doubling to $103.4 million, and an improved operating ratio of 84.4% Q1 2022 vs. Q1 2021 Performance Highlights | Metric | Q1 2022 | Q1 2021 | % Change | | :--- | :--- | :--- | :--- | | Operating Revenue | $661.2 M | $484.1 M | +36.6% | | Operating Income | $103.4 M | $48.7 M | +112.4% | | Operating Ratio | 84.4% | 89.9% | -5.5 pts | | Diluted EPS | $2.98 | $1.40 | +112.9% | | LTL Tonnage (per workday) | - | - | +9.5% | | LTL Shipments (per workday) | - | - | +5.7% | - Revenue growth was primarily driven by increased revenue per shipment, higher tonnage, and a rise in fuel surcharge revenue, which constituted **16.8%** of operating revenue in Q1 2022, up from **12.9%** in Q1 2021[61](index=61&type=chunk)[62](index=62&type=chunk) - Operating expenses increased due to higher headcount to support growth, a **4.7%** wage increase in August 2021, expanded use of purchased transportation, and higher diesel fuel costs[64](index=64&type=chunk) - The company projects net capital expenditures for 2022 to be in excess of **$500 million**, a substantial increase from **$277 million** in 2021, to fund investments in equipment, real estate, and technology[69](index=69&type=chunk)[80](index=80&type=chunk) [Item 3: Quantitative and Qualitative Disclosures About Market Risk](index=19&type=section&id=Item%203%3A%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are interest rate fluctuations and fuel price volatility, with fuel risk largely mitigated by a weekly-reset surcharge program, and $44.9 million in fixed-rate debt at a 3.6% weighted average interest rate as of March 31, 2022 - The company's main market risks are interest rate fluctuations and fuel price volatility. A fuel surcharge program, which is reset weekly based on average national fuel prices, is used to mitigate exposure to fuel costs[86](index=86&type=chunk) Fixed Rate Debt Principal Cash Flows (as of March 31, 2022) | (in millions) | 2022 | 2023 | 2024 | 2025 | 2026 | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Fixed rate debt** | $14.0 | $14.5 | $10.2 | $5.3 | $0.9 | **$44.9** | | **Average interest rate** | 3.6% | 3.6% | 3.6% | 3.6% | 3.6% | **3.6%** | [Item 4: Controls and Procedures](index=21&type=section&id=Item%204%3A%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of March 31, 2022, with no material changes to internal control over financial reporting during the quarter - The company's CEO and CFO concluded that as of the end of the period, the company's disclosure controls and procedures are effective to ensure that required information is recorded, processed, summarized, and reported within the specified time periods[89](index=89&type=chunk)[90](index=90&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[91](index=91&type=chunk) [PART II. OTHER INFORMATION](index=22&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1: Legal Proceedings](index=22&type=section&id=Item%201%3A%20Legal%20Proceedings) The company is involved in routine legal proceedings, for which management believes adequate provisions have been made, and does not anticipate a material adverse effect on its financial condition - The company is subject to routine legal proceedings but believes the ultimate outcome will not materially impact its financial condition, though it could affect results in a specific period[33](index=33&type=chunk)[97](index=97&type=chunk) [Item 1A: Risk Factors](index=22&type=section&id=Item%201A%3A%20Risk%20Factors) This section confirms no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2021 - There have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2021[97](index=97&type=chunk) [Item 2: Unregistered Sales of Equity Securities and Use of Proceeds](index=22&type=section&id=Item%202%3A%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The report details the purchase of 8,137 equity shares in open market transactions during the quarter by the Saia, Inc. Executive Capital Accumulation Plan Issuer Purchases of Equity Securities (Q1 2022) | Period | Total Shares Purchased | | :--- | :--- | | Jan 2022 | 5,667 | | Feb 2022 | 2,470 | | Mar 2022 | 0 | | **Total** | **8,137** | [Other Items (3, 4, 5)](index=22&type=section&id=Other%20Items%20(3%2C%204%2C%205)) The company reported no defaults upon senior securities, no mine safety disclosures, and no other information required under Item 5 for the reporting period - The company reported "None" for Item 3 (Defaults Upon Senior Securities), Item 4 (Mine Safety Disclosures), and Item 5 (Other Information)[100](index=100&type=chunk) [Item 6: Exhibits](index=23&type=section&id=Item%206%3A%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including corporate governance documents and required CEO and CFO certifications - The exhibits filed with this report include corporate governance documents, CEO/CFO certifications pursuant to Exchange Act Rules and the Sarbanes-Oxley Act of 2002, and financial data formatted in iXBRL[101](index=101&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2021 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 ...

Financial Data and Key Metrics Changes - Fourth quarter revenue reached $617 million, an increase of 29.5% year-over-year [8][16] - Operating income grew by 92.3% to $97.4 million, with an operating ratio of 84.2%, marking a 520 basis point improvement from the previous year [8][22] - Full-year revenue crossed $2 billion for the first time, totaling $2.3 billion, up more than 25% from the prior year [13][24] - Diluted earnings per share for the fourth quarter were $2.76, compared to $1.51 in the previous year [23] - Full-year diluted earnings per share were a record $9.48, up from $5.20 in 2020 [24] Business Line Data and Key Metrics Changes - LTL revenue per hundredweight increased by 19.6% in the fourth quarter, reflecting pricing actions and improvements in business mix [11] - Revenue per shipment rose by 28.4% to $317, a record for the company [12] - Tonnage grew by 9.2%, driven by a 1.6% increase in shipments and a 7.5% increase in average weight per shipment [16] Market Data and Key Metrics Changes - On-time service was reported at 98%, with a cargo claims ratio among the best in the industry [10] - Fuel surcharge revenue increased by 80.1%, accounting for 14.6% of total revenue compared to 10.5% a year ago [17] Company Strategy and Development Direction - The company plans to add 10 to 15 new terminals in 2022 and relocate 10 existing terminals to larger facilities [29] - Capital expenditures are anticipated to exceed $500 million in 2022, focusing on real estate, equipment, and technology investments [25][32] - The company is committed to enhancing service levels and expanding its terminal network to better meet customer expectations [28][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate ongoing supply chain challenges and labor shortages while maintaining high service levels [27][30] - The company aims to continue improving its operating performance and margin potential, with a focus on sustainable growth rather than just volume [49][55] - Management acknowledged the potential for market fluctuations but emphasized the importance of quality service as a differentiator in a competitive landscape [95] Other Important Information - The company opened seven new facilities in 2021 and invested $286 million in capital expenditures to enhance service levels [13][25] - Claims and insurance expenses increased by 86.8% in the fourth quarter, reflecting higher accident frequency and premium costs [21] Q&A Session Summary Question: Update on January trends - Management reported a 1.3% increase in shipments and a 7.5% increase in tonnage for January, with some weather-related disruptions impacting operations [39][40] Question: Impact of new terminals on capacity - New terminals are expected to expand the addressable market and improve service levels, particularly in key areas like Chicago and Harrisburg [41][42] Question: Margin opportunities - Management indicated a long-term margin improvement potential of 150 to 200 basis points, with a focus on execution and customer service [46][48] Question: Pricing renewals and GRI - Contractual renewals were running at a double-digit increase of 10.4%, reflecting ongoing supply chain challenges [57] Question: Labor competition and long-term OR - The company is competing for labor not only with LTL businesses but also with warehouse operations, and management sees potential for long-term OR improvements [88][90]

Financial Data and Key Metrics Changes - The company reported a record revenue of $616 million for Q3 2021, a 28% increase from the previous year [7][12] - Operating income grew by 92% to a record $106 million, with an operating ratio of 82.8%, marking the fifth consecutive quarter below 90% [7][16] - Adjusted diluted earnings per share were $2.86, compared to $1.56 in the previous year [16] Business Line Data and Key Metrics Changes - LTL revenue per hundredweight increased by 14.9%, with a 10.2% yield improvement excluding fuel surcharge [9][12] - Revenue per shipment, including fuel surcharge, reached a record $299, reflecting a 24.8% increase [10][12] - Tonnage grew by 11%, driven by a 2.3% increase in shipments and an 8.6% rise in average weight per shipment [12] Market Data and Key Metrics Changes - The company experienced consistent demand from shipper customers despite supply chain challenges and tight labor markets [8] - The fuel surcharge revenue increased by 72%, accounting for 13.9% of total revenue compared to 10.4% a year ago [12] Company Strategy and Development Direction - The company plans to open 10 to 15 new terminals in 2022, following the successful opening of 7 terminals in 2021 [19][20] - Investments in technology and human resources are seen as critical for supporting growth and operational efficiency [20][21] - The focus remains on pricing strategies and improving service quality to enhance profitability [9][20] Management's Comments on Operating Environment and Future Outlook - Management anticipates continued supply chain disruptions and inflationary pressures in the economy, which may impact pricing and demand [35][66] - The company is optimistic about maintaining a favorable operating ratio and margin expansion in the coming year [29][30] Other Important Information - Total operating expenses increased by 19.7%, but the revenue growth outpaced this, leading to an improved operating ratio [16] - The company has a strong balance sheet with $121.7 million in cash and over $300 million available through credit facilities [17] Q&A Session Summary Question: Is the $300 revenue per bill a new baseline? - Management indicated that there is still room for improvement beyond $299, with ongoing initiatives to enhance pricing strategies [24][25] Question: What is the expectation for operating ratio in Q4? - Management expects a typical deterioration of about 150 basis points in Q4 due to seasonal factors [27][28] Question: What is the opportunity for ancillary charges in 2022? - Management believes there is significant potential for further penetration of ancillary charges, with a year-over-year increase expected [32][33] Question: How is the labor market affecting growth? - Management acknowledged challenges in the labor market but noted improvements in hiring due to targeted recruitment efforts [56][58] Question: How do new terminals impact operating ratio over time? - New terminals are expected to become more efficient over time, contributing positively to operating ratio improvements [68][70]

PART I. FINANCIAL INFORMATION This section provides the unaudited condensed consolidated financial statements and management's discussion and analysis for Saia, Inc [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents Saia, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, income statements, equity, cash flows, and detailed notes on accounting policies and debt [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet shows a significant increase in total assets and stockholders' equity from December 31, 2020, to September 30, 2021, driven primarily by higher cash and accounts receivable, and retained earnings Condensed Consolidated Balance Sheet Highlights | Metric | Sep 30, 2021 (in thousands) | Dec 31, 2020 (in thousands) | Change | | :-------------------------- | :-------------------------- | :-------------------------- | :----- | | Cash and cash equivalents | $121,702 | $25,308 | +$96,394 | | Accounts receivable, net | $295,862 | $216,899 | +$78,963 | | Total current assets | $450,609 | $271,696 | +$178,913 | | Net property and equipment | $1,202,224 | $1,136,027 | +$66,197 | | Total assets | $1,789,259 | $1,548,774 | +$240,485 | | Total current liabilities | $338,621 | $275,754 | +$62,867 | | Total other liabilities | $305,912 | $311,732 | -$5,820 | | Total stockholders' equity | $1,144,726 | $961,288 | +$183,438 | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported substantial growth in operating revenue and net income for both the third quarter and the nine months ended September 30, 2021, compared to the same periods in 2020, driven by increased revenue and improved operating efficiency Condensed Consolidated Statements of Operations Highlights | Metric | Q3 2021 (in thousands) | Q3 2020 (in thousands) | YoY Change (%) | 9M 2021 (in thousands) | 9M 2020 (in thousands) | YoY Change (%) | | :-------------------------------- | :--------------------- | :--------------------- | :------------- | :--------------------- | :--------------------- | :------------- | | Operating Revenue | $616,216 | $481,374 | 28.0% | $1,671,623 | $1,345,884 | 24.2% | | Total operating expenses | $510,099 | $426,158 | 19.7% | $1,433,867 | $1,216,211 | 17.9% | | Operating Income | $106,117 | $55,216 | 92.2% | $237,756 | $129,673 | 83.4% | | Net Income | $79,709 | $41,539 | 91.9% | $179,474 | $98,104 | 82.9% | | Basic Earnings Per Share | $3.03 | $1.59 | 90.6% | $6.82 | $3.76 | 81.4% | | Diluted Earnings Per Share | $2.98 | $1.56 | 91.0% | $6.72 | $3.69 | 82.1% | [Condensed Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Total stockholders' equity increased from $961.3 million at December 31, 2020, to $1,144.7 million at September 30, 2021, primarily due to net income contributions Stockholders' Equity Highlights | Metric | Sep 30, 2021 (in thousands) | Dec 31, 2020 (in thousands) | Change | | :----------------------- | :-------------------------- | :-------------------------- | :----- | | Total stockholders' equity | $1,144,726 | $961,288 | +$183,438 | | Retained earnings | $876,014 | $696,540 | +$179,474 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities increased for the nine months ended September 30, 2021, while net cash used in investing activities decreased due to lower capital expenditures Condensed Consolidated Statements of Cash Flows Highlights | Activity | 9M 2021 (in thousands) | 9M 2020 (in thousands) | Change | | :-------------------------------- | :--------------------- | :--------------------- | :----- | | Net cash provided by operating activities | $267,686 | $238,961 | +$28,725 | | Net cash used in investing activities | ($148,924) | ($197,510) | +$48,586 | | Net cash used in financing activities | ($18,698) | ($16,230) | -$2,468 | | Net Increase in Cash, Cash Equivalents and Restricted Cash | $100,064 | $25,221 | +$74,843 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes provide essential context to the financial statements, detailing accounting policies, EPS calculations, commitments, fair value measurements, debt structures, and the company's assessment of the COVID-19 pandemic's impact [(1) Summary of Significant Accounting Policies](index=8&type=section&id=(1)%20Summary%20of%20Significant%20Accounting%20Policies) The company primarily provides national less-than-truckload (LTL) services, recognizing revenue over transit time and self-insuring for certain claims - Saia, Inc. primarily provides national less-than-truckload (LTL) services, accounting for over **97% of its revenue** across 44 states, also offering non-asset truckload, expedited, and logistics services[24](index=24&type=chunk)[60](index=60&type=chunk) - Revenue for transportation services is recognized ratably over the transit time of the shipment, typically **1 to 5 days**, as performance obligations are satisfied[26](index=26&type=chunk)[27](index=27&type=chunk) - The company is self-insured for automobile liability, responsible for the first **$2.0 million** per occurrence, and for a 12-month period, self-insured for the first **$10 million** per occurrence[29](index=29&type=chunk)[86](index=86&type=chunk) - The company adopted ASU No. 2019-12, 'Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,' effective January 1, 2021, which did not have a material impact on its financial statements[30](index=30&type=chunk) [(2) Computation of Earnings Per Share](index=10&type=section&id=(2)%20Computation%20of%20Earnings%20Per%20Share) Diluted EPS significantly increased for both Q3 and the nine months ended September 30, 2021, reflecting higher net income Earnings Per Share Computation | Metric | Q3 2021 | Q3 2020 | 9M 2021 | 9M 2020 | | :------------------------------------------ | :------ | :------ | :------ | :------ | | Net income (in thousands) | $79,709 | $41,539 | $179,474 | $98,104 | | Weighted average common shares outstanding – basic (in thousands) | 26,334 | 26,150 | 26,317 | 26,118 | | Basic Earnings Per Share | $3.03 | $1.59 | $6.82 | $3.76 | | Weighted average common shares outstanding – diluted (in thousands) | 26,713 | 26,615 | 26,699 | 26,569 | | Diluted Earnings Per Share | $2.98 | $1.56 | $6.72 | $3.69 | - Options and restricted stock for **19,250 shares** (9M 2021) and **53,025 shares** (9M 2020) were excluded from diluted EPS calculation due to their anti-dilutive effect[32](index=32&type=chunk) [(3) Commitments and Contingencies](index=10&type=section&id=(3)%20Commitments%20and%20Contingencies) The company is subject to legal proceedings and maintains letters of credit for workers' compensation claims, with adequate provisions for probable losses - The company's pro rata share of outstanding letters of credit for workers' compensation claims was **$1.8 million** at September 30, 2021[33](index=33&type=chunk) - Management believes that provisions for legal proceedings are adequate and that the ultimate outcome will not materially adversely affect financial condition, though it could impact results in a given period[34](index=34&type=chunk) [(4) Fair Value of Financial Instruments](index=10&type=section&id=(4)%20Fair%20Value%20of%20Financial%20Instruments) Most financial instruments' carrying amounts approximated fair value, with total debt's fair value slightly above its carrying value Fair Value of Debt | Metric | Sep 30, 2021 (in millions) | Dec 31, 2020 (in millions) | | :----------------------- | :------------------------- | :------------------------- | | Estimated fair value of total debt | $55.4 | $71.2 | | Carrying value of total debt | $55.2 | $71.0 | [(5) Debt and Financing Arrangements](index=11&type=section&id=(5)%20Debt%20and%20Financing%20Arrangements) The company's debt primarily consists of finance leases, with no outstanding borrowings under its $300 million revolving credit agreement Debt Composition | Debt Type | Sep 30, 2021 (in thousands) | Dec 31, 2020 (in thousands) | | :-------------------------------- | :-------------------------- | :-------------------------- | | Finance Leases | $55,171 | $70,976 | | Total debt | $55,171 | $70,976 | | Long-term debt, less current portion | $34,926 | $50,388 | - The revolving credit agreement provides **$300 million** in availability, with an accordion feature for an additional **$100 million**, and matures in February 2024, with **$29.3 million** in outstanding letters of credit as of September 30, 2021[38](index=38&type=chunk)[39](index=39&type=chunk) - Finance leases, primarily for revenue equipment, totaled **$55.2 million** at September 30, 2021, with a weighted average interest rate of **3.5%**[40](index=40&type=chunk) Principal Maturities of Long-Term Debt | Year | Amount (in thousands) | | :--- | :-------------------- | | 2021 | $5,240 | | 2022 | $20,956 | | 2023 | $15,409 | | 2024 | $10,606 | | 2025 | $5,453 | | Thereafter | $924 | | Total | $58,588 | [(6) COVID-19](index=12&type=section&id=(6)%20COVID-19) As an essential business, Saia continued operations without significant COVID-19 disruptions, assessing no material adverse financial impacts for Q3 2021 - Saia is considered an essential and critical business, continuing to operate under state of emergency orders with safety measures in place[43](index=43&type=chunk)[52](index=52&type=chunk) - No significant disruptions in LTL network operations have been experienced due to the COVID-19 pandemic through the filing date[43](index=43&type=chunk)[53](index=53&type=chunk) - Management determined no material adverse impacts on the company's Q3 2021 financial position from COVID-19, though future changes are possible[44](index=44&type=chunk) - The company does not believe it will be able to take advantage of the provisions of the CARES Act or the American Rescue Plan Act of 2021[45](index=45&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=13&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Saia's financial performance, condition, and outlook, analyzing operating results, liquidity, capital resources, and critical accounting policies, highlighting growth and COVID-19 management [Forward-Looking Statements](index=13&type=section&id=Forward-Looking%20Statements) The company includes forward-looking statements to inform investors about future prospects, cautioning that actual results may differ materially due to various factors - Forward-looking statements are included to help investors understand future prospects, but actual results may differ due to economic conditions, competition, labor costs, claims expenses, and other industry-specific and external factors[47](index=47&type=chunk)[48](index=48&type=chunk) - The company explicitly states it is under no obligation to update or alter any forward-looking statements, except as required by applicable law[50](index=50&type=chunk) [Executive Overview](index=14&type=section&id=Executive%20Overview) Saia's business performance is tied to non-service economic sectors, with a strategy focused on improving profitability through yield, volumes, expansion, and investment - The company's business is highly correlated to non-service sectors of the general economy[51](index=51&type=chunk) - Strategy involves improving profitability by increasing yield and volumes, building density in existing geography, and pursuing geographic expansion[51](index=51&type=chunk) - Key focus areas include improving safety, cost effectiveness, asset utilization (tractors and trailers), and investing in technology to enhance customer experience and operational efficiencies[51](index=51&type=chunk) [COVID-19](index=14&type=section&id=COVID-19) As an essential business, Saia maintained operations without significant LTL network disruptions, possessing ample liquidity to manage future pandemic impacts - The company has not experienced significant disruptions in its LTL network operations due to COVID-19 through the filing date[53](index=53&type=chunk) - Lower demand and increased costs were experienced in Q1 and Q2 2020 due to COVID-19[54](index=54&type=chunk) - The company has significant liquidity, including a **$300 million** revolving credit facility (with a **$100 million** accordion feature), to address potential future disruptions[54](index=54&type=chunk) - The impact of President Biden's directive for mandatory vaccination or weekly testing for employers with **100+ employees** could adversely affect the ability to hire and retain staff, potentially leading to service disruptions and higher costs[52](index=52&type=chunk)[53](index=53&type=chunk) [Third Quarter Overview](index=15&type=section&id=Third%20Quarter%20Overview) Saia achieved strong Q3 2021 results with significant increases in operating revenue and income, driven by higher revenue per shipment, tonnage, and operational efficiencies Third Quarter 2021 Performance Highlights | Metric | Q3 2021 | Q3 2020 | Change | | :-------------------------- | :------ | :------ | :----- | | Operating Revenue | +28.0% | | | | Operating Income | $106.1M | $55.2M | +92.2% | | LTL Shipments per workday | +2.3% | | | | LTL Tonnage per workday | +11.0% | | | | Diluted EPS | $2.98 | $1.56 | +91.0% | | Operating Ratio | 82.8% | 88.5% | -5.7 ppt | - The improved operating ratio was due to continued focus on pricing initiatives, cost control, and operating efficiencies, with a real estate gain contributing **70 basis points** to the **5.7 percentage point** improvement[57](index=57&type=chunk) - Net cash provided by operating activities for the first nine months of 2021 increased to **$267.7 million**, up from **$239.0 million** in the prior year, primarily due to increased profitability[58](index=58&type=chunk) - Net cash used in investing activities decreased by **$48.6 million** to **$148.9 million** for the first nine months of 2021, mainly due to COVID-19 related manufacturing delays for revenue equipment[58](index=58&type=chunk) [General](index=15&type=section&id=General) Saia, a national LTL service provider, sees its operating results influenced by shipment volumes, pricing, and effective cost management - Saia is headquartered in Johns Creek, Georgia, and primarily offers national less-than-truckload (LTL) services, with over **97% of revenue** from LTL shipments across 44 states[60](index=60&type=chunk) - Operating results are significantly affected by average daily shipments and tonnage, revenue per hundredweight (yield), revenue per shipment, and the ability to manage operating expenses such as salaries, purchased transportation, claims, and fuel[61](index=61&type=chunk)[62](index=62&type=chunk) [Results of Operations](index=16&type=section&id=Results%20of%20Operations) The company experienced robust revenue and operating income growth in Q3 and 9M 2021, driven by strong LTL volume and yield improvements, leading to margin expansion [Revenue and volume](index=16&type=section&id=Revenue%20and%20volume) Operating revenue significantly increased in Q3 and 9M 2021 due to higher revenue per shipment and tonnage, with substantial LTL yield growth Revenue and Volume Performance | Metric | Q3 2021 | Q3 2020 | Change (%) | 9M 2021 | 9M 2020 | Change (%) | | :-------------------------- | :------ | :------ | :--------- | :------ | :------ | :--------- | | Operating Revenue | $616.2M | $481.4M | 28.0% | $1.7B | $1.3B | 24.2% | | LTL Tonnage per workday | 1.4M tons | 1.26M tons | 11.0% | | | | | LTL Shipments per workday | 2.0M | 1.96M | 2.3% | | | | | LTL Revenue per hundredweight | $21.36 | $18.59 | 14.9% | | | | | LTL Revenue per shipment | $299.02 | $239.60 | 24.8% | | | | | Fuel surcharge revenue as % of operating revenue | 13.9% | 10.4% | +3.5 ppt | 13.8% | 11.3% | +2.5 ppt | - Approximately **75-80%** of operating revenue is subject to specific customer price negotiations, while the remaining **20-25%** is subject to general rate increases (**5.9%** implemented in January 2021)[65](index=65&type=chunk) [Operating expenses and margin](index=17&type=section&id=Operating%20expenses%20and%20margin) Consolidated operating income and ratio significantly improved, driven by pricing actions, operational efficiencies, and a real estate gain, despite rising expenses Operating Expenses and Margin Performance | Expense Category | Q3 2021 (in thousands) | Q3 2020 (in thousands) | Change (in thousands) | 9M 2021 (in thousands) | 9M 2020 (in thousands) | Change (in thousands) | | :-------------------------------- | :--------------------- | :--------------------- | :-------------------- | :--------------------- | :--------------------- | :-------------------- | | Operating Income | $106,117 | $55,216 | +$50,901 | $237,756 | $129,673 | +$108,083 | | Operating Ratio | 82.8% | 88.5% | -5.7 ppt | | | | | Salaries, wages and employees' benefits | | | +$25,000 | | | +$75,300 | | Purchased transportation | | | +$32,100 | | | +$83,200 | | Fuel, operating expenses and supplies | | | +$24,700 | | | +$51,500 | | Claims and insurance | | | +$3,600 | | | +$3,700 | | Gain from property disposals, net | | | +$3,500 | | | +$2,600 | - The **5.7 percentage point** improvement in the operating ratio for Q3 2021 was partly driven by a **70 basis point** contribution from a real estate gain[69](index=69&type=chunk) - Increased purchased transportation costs were due to rising demand, internal network capacity constraints, and higher rates for purchased miles[70](index=70&type=chunk)[72](index=72&type=chunk) [Other](index=17&type=section&id=Other) Interest expense decreased in Q3 2021 due to lower borrowings, while the effective tax rate slightly increased, leading to a significant rise in net income - Interest expense decreased in Q3 2021 compared to Q3 2020 due to reduced borrowings resulting from delayed capital expenditures[73](index=73&type=chunk) Other Financial Performance | Metric | Q3 2021 | Q3 2020 | 9M 2021 | 9M 2020 | | :-------------------- | :------ | :------ | :------ | :------ | | Effective tax rate | 24.3% | 23.7% | 23.9% | 22.2% | | Net income (in millions) | $79.7 | $41.5 | $179.5 | $98.1 | | Diluted EPS | $2.98 | $1.56 | $6.72 | $3.69 | - Cash tax payments for the nine months ended September 30, 2021, were **$58.7 million**, significantly higher than **$6.6 million** in the same period of 2020[74](index=74&type=chunk) [Working capital/capital expenditures](index=18&type=section&id=Working%20capital%2Fcapital%20expenditures) Working capital significantly increased, while net cash used in investing activities decreased due to manufacturing delays, with projected capital expenditures at $275 million Working Capital Changes | Metric | Sep 30, 2021 (in millions) | Sep 30, 2020 (in millions) | Change | | :-------------------------------- | :------------------------- | :------------------------- | :----- | | Working capital | $112.0 | $4.4 | +$107.6 | | Current assets increase | $170.5 | | | | Accounts receivable increase | $69.2 | | | | Cash and cash equivalents increase | $96.2 | | | | Current liabilities increase | $62.9 | | | - Net cash used in investing activities decreased by **$48.6 million** to **$148.9 million** for the nine months ended September 30, 2021, primarily due to COVID-19 related manufacturing delays for revenue equipment[77](index=77&type=chunk) - Projected net capital expenditures for 2021 are approximately **$275 million**, an increase from **$219 million** in 2020[77](index=77&type=chunk)[87](index=87&type=chunk) [Outlook](index=18&type=section&id=Outlook) The company's outlook remains tied to economic sectors and competitive pricing, with ongoing initiatives to improve yield, reduce costs, and enhance productivity amid COVID-19 uncertainty - The business remains highly correlated to non-service sectors of the general economy and competitive pricing pressures[78](index=78&type=chunk) - Ongoing initiatives include increasing yield, improving business mix, reducing costs, improving productivity, and focusing on top-quality service and safety[78](index=78&type=chunk) - The severity, magnitude, and duration of the COVID-19 pandemic and its economic consequences remain uncertain and difficult to predict[78](index=78&type=chunk) - A market competitive salary and wage increase of approximately **five percent** was implemented in mid-August 2021, expected to be partially offset by productivity gains[78](index=78&type=chunk) - Renewal of liability insurance policies effective March 1, 2021, is expected to result in approximately **$4.3 million** in cost increases for 2021 compared to 2020[78](index=78&type=chunk) [Financial Condition](index=18&type=section&id=Financial%20Condition) Liquidity is primarily met by operating cash flows and a revolving credit agreement, with $270.7 million available and compliance with all debt covenants - Liquidity needs are primarily funded by capital investments in new equipment, land, structures, information technology, letters of credit for insurance, and working capital requirements[80](index=80&type=chunk) - As of September 30, 2021, the company had **$270.7 million** in availability under its revolving credit facility and was in compliance with all debt covenants[85](index=85&type=chunk) - Projected net capital expenditures for 2021 are approximately **$275 million**, including a normal replacement cycle of revenue equipment and technology investment[87](index=87&type=chunk) - The company is self-insured for automobile liability, with a **$10 million** per occurrence retention for the four years ended March 1, 2022, following a policy commutation[86](index=86&type=chunk) [Contractual Obligations](index=22&type=section&id=Contractual%20Obligations) The company's contractual obligations, including finance leases, operating leases, and purchase obligations, total $268.5 million, with commercial commitments at $371.1 million Contractual Cash Obligations as of September 30, 2021 | Obligation Type | 2021 (in millions) | 2022 (in millions) | 2023 (in millions) | 2024 (in millions) | 2025 (in millions) | Thereafter (in millions) | Total (in millions) | | :-------------------------- | :----------------- | :----------------- | :----------------- | :----------------- | :----------------- | :----------------------- | :------------------ | | Finance Leases | $5.2 | $21.0 | $15.4 | $10.6 | $5.5 | $0.9 | $58.6 | | Operating leases | $7.3 | $27.6 | $23.7 | $20.3 | $15.8 | $38.4 | $133.1 | | Purchase obligations | $76.8 | $0.0 | $0.0 | $0.0 | $0.0 | $0.0 | $76.8 | | Total contractual obligations | $89.3 | $48.6 | $39.1 | $30.9 | $21.3 | $39.3 | $268.5 | Other Commercial Commitments as of September 30, 2021 | Commitment Type | 2021 (in millions) | 2022 (in millions) | 2023 (in millions) | 2024 (in millions) | 2025 (in millions) | Thereafter (in millions) | Total (in millions) | | :-------------------------- | :----------------- | :----------------- | :----------------- | :----------------- | :----------------- | :----------------------- | :------------------ | | Available line of credit | $0.0 | $0.0 | $0.0 | $270.7 | $0.0 | $0.0 | $270.7 | | Letters of credit | $0.0 | $31.1 | $0.0 | $0.0 | $0.0 | $0.0 | $31.1 | | Surety bonds | $0.4 | $60.0 | $8.9 | $0.0 | $0.0 | $0.0 | $69.3 | | Total commercial commitments | $0.4 | $91.1 | $8.9 | $270.7 | $0.0 | $0.0 | $371.1 | - The company has accrued **$1.4 million** for uncertain tax positions and **$0.2 million** for related interest and penalties, which are not included in the contractual obligations table due to inability to reasonably estimate timing of cash settlements beyond one year[92](index=92&type=chunk) - Claims and insurance liabilities of **$99.8 million** are also excluded from the table as the timing of cash settlements cannot be reasonably estimated beyond one year[93](index=93&type=chunk) [Critical Accounting Policies and Estimates](index=22&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Financial statements rely on significant judgments and estimates for claims, revenue recognition, and asset depreciation, which are continuously evaluated but subject to change - Key accounting policies requiring significant estimates include **Claims and Insurance Accruals** (based on historical experience, actuarial analysis, and management evaluation), **Revenue Recognition and Related Allowances** (for in-transit shipments, billing adjustments, and collectability), and **Depreciation and Capitalization of Assets** (estimated useful lives and salvage values)[94](index=94&type=chunk)[95](index=95&type=chunk) - Estimates for claims liabilities can be affected by severity of claims, medical cost inflation, and specific case facts, leading to short-term volatility[95](index=95&type=chunk) - Revenue recognition estimates for in-transit shipments are based on actual pickups, delivery days, and current rates, with typically **less than 5%** of monthly revenue in transit[95](index=95&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=23&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks from interest rates and fuel prices, mitigated by a fuel surcharge program, with fixed-rate debt fair value estimated based on market rates - The company is exposed to market risks related to interest rates and fuel prices[97](index=97&type=chunk) - A fuel surcharge program, based on average national diesel fuel prices and reset weekly, is used to reduce exposure to fuel price fluctuations, although it may not fully offset rapid changes[97](index=97&type=chunk) Fixed Rate Debt and Average Interest Rates as of September 30, 2021 | Metric | 2021 (in millions) | 2022 (in millions) | 2023 (in millions) | 2024 (in millions) | 2025 (in millions) | Thereafter (in millions) | Total (in millions) | Fair Value (in millions) | | :---------------- | :----------------- | :----------------- | :----------------- | :----------------- | :----------------- | :----------------------- | :------------------ | :----------------------- | | Fixed rate debt | $4.8 | $19.5 | $14.5 | $10.2 | $5.3 | $0.9 | $55.2 | $55.4 | | Average interest rate | 3.5% | 3.5% | 3.5% | 3.5% | 3.5% | 3.5% | | | [Item 4. Controls and Procedures](index=24&type=section&id=Item%204.%20Controls%20and%20Procedures) The CEO and CFO concluded that disclosure controls and procedures were effective as of September 30, 2021, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of September 30, 2021[101](index=101&type=chunk) - No changes in internal control over financial reporting materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting during the quarter[102](index=102&type=chunk) - Disclosure controls are designed to ensure information required for SEC reports is recorded, processed, summarized, and reported timely, and communicated to management[104](index=104&type=chunk) - Management acknowledges that no control system can prevent all errors and fraud, providing only reasonable, not absolute, assurance due to inherent limitations like human judgment, simple error, or circumvention[105](index=105&type=chunk) PART II. OTHER INFORMATION This section provides additional information including legal proceedings, risk factors, equity sales, and other required disclosures [Item 1. Legal Proceedings](index=25&type=section&id=Item%201.%20Legal%20Proceedings) Information regarding material pending legal proceedings is referenced in Note 3, 'Commitments and Contingencies,' of the accompanying unaudited condensed consolidated financial statements - For a description of all material pending legal proceedings, refer to Note 3 'Commitments and Contingencies' in the financial statements[108](index=108&type=chunk) [Item 1A. Risk Factors](index=25&type=section&id=Item%201A.%20Risk%20Factors) Risk factors are detailed in the company's Annual Report on Form 10-K for 2020, with no material changes reported in this quarterly filing - Risk Factors are described in Item 1A. 'Risk Factors' of the Company's Annual Report on Form 10-K for the year ended December 31, 2020, and there have been no material changes[108](index=108&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=25&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q3 2021, the Executive Capital Accumulation Plan purchased 510 shares in July and sold 500 shares in August Issuer Purchases of Equity Securities | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares that may Yet be Purchased under the Plans or Programs | | :-------------------------- | :------------------------------- | :--------------------------- | :----------------------------------------------------------------------------- | :------------------------------------------------------------------------------------------------------- | | July 1, 2021 through July 31, 2021 | 510 | $193.08 | — | $— | | August 1, 2021 through August 31, 2021 | — | $— | — | $— | | September 1, 2021 through September 30, 2021 | — | $— | — | $— | | Total | 510 | | — | | - The Saia, Inc. Executive Capital Accumulation Plan sold **500 shares** of Saia stock at an average price of **$224.85** during August 2021[110](index=110&type=chunk) [Item 3. Defaults Upon Senior Securities](index=25&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities for the period - There were no defaults upon senior securities[111](index=111&type=chunk) [Item 4. Mine Safety Disclosures](index=25&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company reported no mine safety disclosures - There were no mine safety disclosures[111](index=111&type=chunk) [Item 5. Other Information](index=25&type=section&id=Item%205.%20Other%20Information) The company reported no other information for the period - There was no other information to report[111](index=111&type=chunk) [Item 6. Exhibits](index=26&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including organizational documents, certifications from the CEO and CFO, and financial information formatted in iXBRL - Exhibits include Restated Certificate of Incorporation, Amended and Restated By-laws, CEO and CFO certifications (31.1, 31.2, 32.1, 32.2), and financial information in iXBRL format (Exhibit 101)[112](index=112&type=chunk) [Signature](index=27&type=section&id=Signature) The report was duly signed on October 28, 2021, by Douglas L. Col, Executive Vice President and Chief Financial Officer of Saia, Inc - The report was signed on October 28, 2021, by Douglas L. Col, Executive Vice President and Chief Financial Officer[116](index=116&type=chunk)

Saia, Inc. (NASDAQ:SAIA) Q2 2021 Earnings Conference Call July 29, 2021 10:00 AM ET Company Participants Douglas Col - Chief Financial Officer Frederick Holzgrefe - President & Chief Executive Officer Conference Call Participants Jack Atkins - Stephens Inc. Todd Fowler - KeyBanc Capital Markets Amit Mehrotra - Deutsche Bank Jonathan Chappell - Evercore ISI Tom Wadewitz - UBS Group AG Scott Group - Wolfe Research, LLC Jason Seidl - Cowen Jordan Alliger - Goldman Sachs Stephanie Moore - Truist Securities Tyle ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section provides the unaudited condensed consolidated financial statements for Saia, Inc. as of June 30, 2021, and for the three and six-month periods then ended [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Saia, Inc. as of June 30, 2021, and for the three and six-month periods then ended [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2021, total assets increased to **$1.65 billion** from **$1.55 billion** at year-end 2020, driven by increases in current assets, particularly accounts receivable and cash, with total stockholders' equity growing to **$1.06 billion** from **$961.3 million** Condensed Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Current Assets** | $353.9 | $271.7 | | **Net Property and Equipment** | $1,156.9 | $1,136.0 | | **Total Assets** | **$1,647.4** | **$1,548.8** | | **Total Current Liabilities** | $284.9 | $275.8 | | **Total Liabilities** | $584.2 | $587.5 | | **Total Stockholders' Equity** | **$1,063.2** | **$961.3** | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2021, operating revenue increased by **36.6%** to **$571.3 million**, operating income more than doubled to **$82.9 million**, and net income was **$62.5 million**, resulting in a diluted EPS of **$2.34**, an **118.7%** increase Q2 and Six Months Statement of Operations Highlights (in millions, except per share data) | Metric | Q2 2021 | Q2 2020 | YoY Change | Six Months 2021 | Six Months 2020 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Operating Revenue** | $571.3 | $418.1 | +36.6% | $1,055.4 | $864.5 | +22.1% | | **Operating Income** | $82.9 | $35.7 | +132.4% | $131.6 | $74.5 | +76.8% | | **Net Income** | $62.5 | $28.5 | +119.6% | $99.8 | $56.6 | +76.4% | | **Diluted EPS** | $2.34 | $1.07 | +118.7% | $3.74 | $2.13 | +75.6% | [Condensed Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity) Total stockholders' equity increased from **$961.3 million** at year-end 2020 to **$1.063 billion** as of June 30, 2021, primarily due to **$99.8 million** in net income for the six-month period - Stockholders' equity grew by approximately **$101.9 million** in the first six months of 2021, mainly due to retained earnings from net income[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first six months of 2021, net cash provided by operating activities was **$140.1 million**, while net cash used in investing activities decreased significantly to **$100.0 million**, resulting in a period-end cash balance of **$52.9 million** Six Months Cash Flow Summary (in millions) | Cash Flow Activity | Six Months 2021 | Six Months 2020 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $140.1 | $148.2 | | **Net cash used in investing activities** | ($100.0) | ($142.7) | | **Net cash (used in) provided by financing activities** | ($12.6) | $23.5 | | **Net Increase in Cash** | $27.6 | $29.0 | | **Cash and cash equivalents, end of period** | $52.9 | $29.3 | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, including revenue recognition for freight transportation services, and confirm the company's primary business is national less-than-truckload (LTL) services, which accounts for over **97%** of revenue - The company's main business is providing national less-than-truckload (LTL) services, which generate over **97%** of its revenue[24](index=24&type=chunk) - Revenue from transportation services is recognized over the transit time of the shipment, which typically ranges from one to five days[26](index=26&type=chunk) - As of June 30, 2021, total debt was **$61.0 million**, consisting entirely of finance leases for revenue equipment, with no outstanding borrowings under the revolving credit agreement[36](index=36&type=chunk)[39](index=39&type=chunk) - The company is considered an essential business and has not experienced significant disruptions in its LTL network operations due to the COVID-19 pandemic[42](index=42&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=13&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes strong Q2 2021 performance to recovery, pricing initiatives, and increased freight demand, with operating revenue growing **36.6%** and the operating ratio improving to **85.5%**, while maintaining strong liquidity and planning **$275 million** in capital expenditures [Executive Overview and Second Quarter Overview](index=14&type=section&id=Executive%20Overview%20and%20Second%20Quarter%20Overview) The company's strategy focuses on improving profitability by increasing yield and volume, leading to a **36.6%** year-over-year increase in operating revenue in Q2 2021, driven by a **15.3%** increase in LTL shipments and a **23.1%** increase in LTL tonnage per workday, resulting in an **85.5%** operating ratio - The company's strategy is to improve profitability by increasing yield, building density in existing geography, and pursuing geographic expansion[51](index=51&type=chunk) Q2 2021 Key Performance Indicators vs. Q2 2020 | Metric | Change | | :--- | :--- | | Operating Revenue | +36.6% | | Operating Income | $82.9M (vs $35.7M) | | Operating Ratio | 85.5% (vs 91.5%) | | LTL Shipments per workday | +15.3% | | LTL Tonnage per workday | +23.1% | | Diluted EPS | $2.34 (vs $1.07) | [Results of Operations](index=16&type=section&id=Results%20of%20Operations) Q2 2021 revenue grew **36.6%** to **$571.3 million**, driven by a **10.5%** increase in LTL revenue per hundredweight and a **23.1%** increase in LTL tonnage, with the operating ratio improving by **600 basis points** to **85.5%** despite a **136.6%** surge in purchased transportation costs Q2 2021 vs Q2 2020 Operating Statistics | Metric | Q2 2021 | Q2 2020 | % Variance | | :--- | :--- | :--- | :--- | | LTL Tonnage (in thousands) | 1,406 | 1,142 | +23.1% | | LTL Shipments (in thousands) | 2,012 | 1,745 | +15.3% | | LTL Revenue per hundredweight | $19.84 | $17.95 | +10.5% | | LTL Revenue per shipment | $277.24 | $235.08 | +17.9% | - Fuel surcharge revenue increased to **14.4%** of operating revenue in Q2 2021 from **10.6%** in Q2 2020 due to higher fuel costs[65](index=65&type=chunk) - Purchased transportation costs surged by **$36.1 million (136.6%)** in Q2 2021 compared to Q2 2020, attributed to high demand, internal network capacity constraints, and higher rates for purchased miles[68](index=68&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=18&type=section&id=Financial%20Condition,%20Liquidity%20and%20Capital%20Resources) The company's financial condition remains strong with **$69.0 million** in working capital and **$270.7 million** available under its **$300 million** revolving credit agreement, with projected net capital expenditures of approximately **$275 million** for 2021 - The company has a **$300 million** revolving credit facility, extendable by a **$100 million** accordion feature, with no borrowings outstanding as of June 30, 2021[79](index=79&type=chunk) - Projected net capital expenditures for 2021 are approximately **$275 million**, focused on revenue equipment, technology, land, and structures[84](index=84&type=chunk) - Total liabilities under finance leases for revenue equipment were **$61.0 million** as of June 30, 2021[81](index=81&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=21&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk exposure to interest rates is minimal due to **$61.0 million** in fixed-rate finance leases, and fuel price risk is mitigated by a weekly fuel surcharge program - The company mitigates fuel price volatility through a fuel surcharge program that is reset weekly based on average national fuel prices[94](index=94&type=chunk) - As of June 30, 2021, all of the company's **$61.0 million** in debt consisted of fixed-rate finance leases, minimizing exposure to interest rate fluctuations[96](index=96&type=chunk) [Item 4. Controls and Procedures](index=22&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2021, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2021[98](index=98&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls[99](index=99&type=chunk) [PART II. OTHER INFORMATION](index=23&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, risk factors, equity security sales, and exhibits [Item 1. Legal Proceedings](index=23&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to ordinary course legal proceedings, for which management believes adequate provisions have been made, and the ultimate outcomes will not materially adversely affect its financial condition - For details on material pending legal proceedings, the report refers to Note 3, "Commitments and Contingencies"[105](index=105&type=chunk) [Item 1A. Risk Factors](index=23&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2020, were reported - No material changes to risk factors were reported for the quarter[105](index=105&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=23&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q2 2021, **540 shares** were purchased at an average price of **$207.86** per share through the Saia, Inc. Executive Capital Accumulation Plan - During the second quarter of 2021, **540 shares** were purchased by the Saia, Inc. Executive Capital Accumulation Plan at an average price of **$207.86**[106](index=106&type=chunk) [Item 6. Exhibits](index=24&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including the company's articles of incorporation, bylaws, and certifications from the CEO and CFO - Exhibits filed include CEO and CFO certifications pursuant to Exchange Act Rule 13a-15(e) and Section 906 of the Sarbanes-Oxley Act of 2002[109](index=109&type=chunk)