Core Insights - Soapstone Management sold its entire stake in Saia, amounting to 23,750 shares valued at $6.51 million, during the third quarter of 2025, resulting in a complete exit from the stock [2][3] - The sale reduced Soapstone's exposure to Saia by 4.4% of its reportable assets, and as of September 30, 2025, Saia no longer contributed to the fund's assets under management (AUM) [3] Company Overview - Saia, Inc. is a prominent North American provider of less-than-truckload (LTL) freight transportation, operating a large fleet and extensive terminal network [5][8] - As of December 5, 2025, Saia's stock price was $330.91, with a market capitalization of $8.81 billion, revenue of $3.23 billion, and net income of $283.62 million for the trailing twelve months (TTM) [4] Market Performance - Saia shares experienced a one-year decline of 36%, underperforming the S&P 500 by 49 percentage points [3] - Despite recent challenges, Saia has been acquiring terminals from former competitor Yellow, positioning itself for potential recovery as market conditions improve [11] Investment Perspective - The LTL industry is currently in a cyclical trough, and while Soapstone's exit may reflect a search for better short-term opportunities, Saia is viewed as a long-term buy-and-hold investment, still 45% below its all-time high [10][12]

Core Insights - Madison Small Cap Fund experienced a challenging third quarter in 2025, with a decline of 1.3%, underperforming its benchmarks due to stock selection and a speculative market environment [1] Company Performance - Saia, Inc. (NASDAQ:SAIA) reported a one-month return of -13.67% and a 52-week loss of 53.76%, closing at $250.48 per share with a market capitalization of $6.673 billion as of November 20, 2025 [2] - In Q3 2025, Saia, Inc. announced revenue of $839.6 million, which remained relatively flat compared to Q3 2024 [4] Investment Strategy - Madison Small Cap Fund exited its position in Saia, Inc. during the third quarter due to a challenging macroeconomic environment for LTL pricing and operational issues related to geographic expansion [3] - The fund expressed a willingness to revisit the investment in the future if operating rates improve, highlighting the company's strong customer service focus and excellent business moat [3]

Core Viewpoint - The Zacks Transportation-Truck industry is currently facing significant challenges due to supply-chain disruptions, high inflation-driven interest rates, and a shortage of truck drivers, yet some companies are demonstrating resilience through growth strategies and operational efficiency [1]. Industry Overview - The Zacks Transportation-Truck industry consists of truck operators that transport freight across North America, offering various services including full-truckload and less-than-truckload (LTL) services, as well as logistics and intermodal services [2]. Current Trends - Supply-chain disruptions and weak freight rates are negatively impacting the industry, with the Cass Freight Shipments Index declining by 5.4% year over year in September, marking a continuous decline for seven months [3]. - Companies are focusing on cost-cutting measures to improve productivity and efficiency in response to high material, labor, and transportation costs, as well as tariffs that pressure margins [4]. - The trucking industry is projected to face a shortage of over 160,000 drivers by 2030, exacerbating supply-chain challenges [5]. - Tariff policies from the current administration are increasing costs and disrupting supply chains, creating uncertainty for investors [6]. Industry Performance - The Zacks Transportation-Truck industry ranks 239 out of 244 Zacks industries, placing it in the bottom 2% and indicating poor near-term prospects [7][8]. - The industry's earnings estimate for 2025 has decreased by 30.9% year over year, reflecting a loss of confidence among analysts regarding earnings growth potential [9]. - Over the past year, the industry has declined by 31.4%, underperforming the S&P 500's increase of 14.2% and the broader transportation sector's decline of 13.9% [10]. Valuation Metrics - The industry is currently trading at an EV-to-EBITDA ratio of 11.82X, compared to the S&P 500's 18.24X and the sector's 10.03X, with historical trading ranges between 7.86X and 16.3X over the past five years [13]. Notable Companies - J.B. Hunt Transport Services (JBHT) is recognized for its diverse transportation services and has seen a year-over-year share price increase of 14.5%, currently holding a Zacks Rank of 3 (Hold) [16][17]. - Saia, which provides regional and interregional LTL services, also holds a Zacks Rank of 3, with a 2% upward revision in the Zacks Consensus Estimate for 2025 earnings over the past 60 days [19].

Core Insights - Saia, Inc. (SAIA) continues to exhibit weakness, contrasting with previous bullish outlooks, attributed to valid market caution amid macroeconomic volatility [1] Company Analysis - The logistics sector has been a focus for nearly two decades, with significant experience in stock investing and macroeconomic analysis [1] - The company has diversified investments across various industries and market capitalizations, including banks, telecommunications, logistics, and hotels [1] - The analyst has been trading in the US market for four years, with holdings in US banks, hotels, shipping, and logistics companies [1] Market Context - The cautious market stance is influenced by ongoing macroeconomic volatility, impacting investor sentiment towards Saia, Inc. [1]

Financial Performance - Operating revenue for Q3 2025 was $839,644,000, a slight decrease of 0.5% compared to $842,103,000 in Q3 2024[14] - Net income for Q3 2025 was $86,316,000, down 6.2% from $92,748,000 in Q3 2024[14] - Basic earnings per share for Q3 2025 was $3.23, down from $3.47 in Q3 2024, reflecting a decrease of 6.9%[14] - Net income for the nine months ended September 30, 2025, was $207,517,000, a decrease of 27.5% compared to $285,962,000 for the same period in 2024[32] - Revenue for the nine months ended September 30, 2025, increased to $2,444,334,000, up 1.0% from $2,420,122,000 in 2024[32] - Basic earnings per share for the nine months ended September 30, 2025, was $7.76, down 27.5% from $10.72 in 2024[34] - Operating revenues for the nine months ended September 30, 2025, were $2.4 billion, up 1.0% from the same period in 2024[64] - Consolidated operating income for the third quarter of 2025 was $118.6 million, down from $125.2 million in the prior year quarter, resulting in an operating ratio of 85.9%[65] - Net income for the third quarter of 2025 was $86.3 million, or $3.22 per diluted share, compared to $92.7 million, or $3.46 per diluted share, in the third quarter of 2024[72] Assets and Liabilities - Total current assets increased to $496,994,000 as of September 30, 2025, up 14.0% from $435,769,000 at December 31, 2024[12] - Total assets reached $3,500,960,000, representing a 10.5% increase from $3,166,857,000 at December 31, 2024[12] - Long-term debt, less current portion, increased to $218,000,000 as of September 30, 2025, compared to $194,981,000 at December 31, 2024[12] - The company’s total debt increased to $219,199,000 as of September 30, 2025, from $200,294,000 at December 31, 2024[37] - Total stockholders' equity increased to $2,526,027,000 as of September 30, 2025, up 9.3% from $2,311,271,000 at December 31, 2024[12] Cash Flow and Investments - Net cash provided by operating activities was $457,665,000 for the nine months ended September 30, 2025, compared to $418,963,000 in 2024, reflecting a 9.2% increase[21] - The company reported a net cash used in investing activities of $(454,472,000) for the nine months ended September 30, 2025, a decrease of 47.8% from $(868,224,000) in 2024[21] - Cash and cash equivalents at the end of the period were $35,500,000, compared to $14,405,000 at the end of the same period in 2024[21] - Net cash used in investing activities decreased by $413.7 million to $454.5 million for the nine months ended September 30, 2025, compared to $868.2 million in the prior year, primarily due to the acquisition of terminals from Yellow Corporation[86] Operational Metrics - Operating expenses for Q3 2025 totaled $721,034,000, a marginal increase of 0.2% from $716,932,000 in Q3 2024[14] - LTL shipments decreased by 1.9% to 2.3 million shipments in Q3 2025, while LTL tonnage was down 1.5% to 1.6 million tons[62] - LTL revenue per shipment, excluding fuel surcharge, increased by 0.3% to $294.35 in Q3 2025[62] - The operating ratio for Q3 2025 was 85.9%, compared to 85.1% in Q3 2024[54] - Salaries, wages, and employee benefits increased by $2.9 million in the third quarter of 2025, primarily due to higher group health insurance costs[66] Debt and Financing - The company had outstanding borrowings of $118,000,000 under the Revolving Credit Facility as of September 30, 2025, compared to $94,000,000 at December 31, 2024[39] - The company’s liquidity needs primarily arise from capital investments and working capital requirements, with $445,600,000 available under the Revolving Credit Facility as of September 30, 2025[39] - The Company entered into a $350 million uncommitted Private Shelf Agreement with PGIM, Inc., allowing the issuance of senior notes through November 9, 2026[40] - The Company issued senior promissory notes totaling $100 million under a Private Shelf Agreement, bearing interest at 6.09% per annum, maturing on May 1, 2029[92] - The Revolving Credit Facility was amended to increase commitments by $300 million to a total of $600 million, with a maturity date extended to December 9, 2029[89] Compliance and Risk Management - As of September 30, 2025, the Company maintained compliance with a consolidated net lease adjusted leverage ratio of less than 3.50 to 1.00[43] - The Company was in compliance with its debt covenants under both the Revolving Credit Facility and the Private Shelf Agreement as of September 30, 2025[94] - The Company is exposed to market risks including interest rates and diesel fuel prices, with a fuel surcharge program in place to mitigate risks from rising diesel prices[100] Miscellaneous - The effective tax rate was 24.8% for the quarters ended September 30, 2025, and 2024[71] - Working capital at September 30, 2025, was $201.1 million, an increase from $90.7 million at September 30, 2024[84] - The company implemented a 5.9% general rate increase on October 1, 2025, affecting approximately 25% of operating revenue[80] - The company anticipates a 3.0% salary and wage increase for all employees, excluding executives, effective October 1, 2025[81] - Contractual obligations for operating leases totaled $152.9 million as of September 30, 2025, with purchase obligations amounting to $39.7 million[96] - The Company has accrued approximately $3.5 million for uncertain tax positions and $99.0 million for claims and insurance liabilities as of September 30, 2025[98]

Core Viewpoint - Saia is focusing on cost controls and efficiency initiatives to navigate through current challenges while awaiting a market recovery [1] Financial Performance - Saia reported third-quarter adjusted earnings per share of $2.81, exceeding consensus estimates by 25 cents but down 65 cents year-over-year [1] - Revenue for the quarter was $840 million, slightly down year-over-year but $11 million above consensus estimates [2] - Tonnage declined 1.5% year-over-year, with daily shipments down 2% year-over-year but up 3% from the second quarter [4][5] Tonnage Trends - Tonnage showed a deteriorating trend throughout the quarter, with a 0.9% increase in July followed by declines of 2.2% and 3.3% in August and September, respectively [3] - October tonnage is down 4% year-over-year, with management noting weaker performance in the first weeks of the month [3] Operational Efficiency - The adjusted operating ratio was reported at 87.6%, which is 250 basis points worse year-over-year but 20 basis points better than the second quarter [7] - New terminals showed a 100 basis points improvement in operating ratio and are now operating below a 95% average [8] Pricing Environment - Management indicated that the pricing environment remains rational, with contractual rate increases averaging 5.1% in the quarter and a new general rate increase of 5.9% implemented on October 1 [6]

Core Insights - Saia reported revenue of $839.64 million for the quarter ended September 2025, reflecting a decrease of 0.3% year-over-year, but a positive surprise of +0.75% compared to the Zacks Consensus Estimate of $833.38 million [1] - The company's EPS was $2.81, down from $3.46 in the same quarter last year, but exceeded the consensus estimate of $2.54 by +10.63% [1] Financial Performance Metrics - Operating Ratio was reported at 85.9%, better than the estimated 88.7% by analysts [4] - LTL (Less-Than-Truckload) Shipments totaled 2,333, surpassing the estimate of 2,320 [4] - LTL pounds per shipment were 1,355, slightly below the average estimate of 1,363 [4] - LTL revenue per hundredweight (CWT), excluding fuel surcharge, was $21.72, compared to the estimated $21.86 [4] - LTL Tonnage was reported at 1,581.00 KTon, marginally above the estimate of 1,580.35 KTon [4] - LTL Revenue Per Hundredweight (CWT) was $25.76, in line with the average estimate of $25.75 [4] Stock Performance - Saia's shares have returned -5.6% over the past month, contrasting with the Zacks S&P 500 composite's +3.6% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3]

Financial Data and Key Metrics Changes - The third quarter revenue was $839.6 million, a decrease of 0.3% compared to the previous year, reflecting the macroeconomic landscape [12][18] - The adjusted operating ratio increased to 87.6%, up from 85.1% a year ago, primarily due to a decrease in adjusted cost per shipment [18] - The diluted earnings per share were $3.22, down from $3.46 in the same quarter last year, while adjusted diluted earnings per share were $2.81 [18] Business Line Data and Key Metrics Changes - The ramping markets, consisting of 39 terminals opened since early 2022, improved their operating ratio by over 100 basis points compared to the second quarter, now operating at a sub-95 [4][5] - Shipments per workday decreased by 1.9% year-over-year but improved by 3.2% sequentially [8][12] - The cargo claims ratio was 0.54%, marking the fourth consecutive quarter below 0.6%, indicating strong service performance [7] Market Data and Key Metrics Changes - The company experienced a 3% sequential increase in shipments, but a 4.8% decrease compared to the third quarter of 2024 [9] - The fuel surcharge revenue increased by 2.1%, accounting for 15.2% of total revenue compared to 14.8% a year ago [12] - The overall freight market has shown softer trends in 2025, impacting shipment volumes [8][19] Company Strategy and Development Direction - The company is focused on customer service, network optimization, and cost control, with an emphasis on expanding its national footprint to enhance customer relationships [4][5] - A general rate increase of 5.9% was implemented on October 1, impacting approximately 25% of operating revenue [11] - The company aims to leverage its investments in network expansion to become a significant player in the less-than-truckload (LTL) industry [20][21] Management's Comments on Operating Environment and Future Outlook - Management noted that the economic backdrop remains uncertain, but the company is well-positioned to adapt and leverage its network investments [20][21] - The company anticipates that the current market conditions are in the early stages of realizing its full potential, with expectations for improved performance as the market stabilizes [21] - Management expressed confidence in the company's ability to maintain high service levels while managing costs effectively [19][20] Other Important Information - The company recorded a $14.5 million net operating expense reduction from a gain on real estate disposal and impairment [2] - Salaries, wages, and benefits increased by 0.7% year-over-year, driven by higher employee-related costs [13] - Accident claims and insurance expenses rose by 22.5% year-over-year, primarily due to existing claims development and inflation [17] Q&A Session Summary Question: Trends in October regarding tonnage and shipments - Management reported that shipments in October are down around 3.5%, with tonnage down about 4%, indicating a softer start to the month compared to expectations [24][25] Question: Updates on new terminals and their performance - Management highlighted that the new terminals are showing improved productivity and cost efficiency, with expectations for continued improvement as they mature [32][34] Question: Pricing environment and yield metrics - Management noted that the pricing environment remains disciplined, with a focus on maintaining yield metrics despite challenges in the market [40][41] Question: Network optimization efforts - Management discussed ongoing network optimization initiatives, emphasizing the importance of AI tools in improving operational efficiency [48][50] Question: Capacity and technology investments - Management indicated that the company has ample capacity across its network and continues to invest in technology to drive efficiencies [63][64] Question: Growth opportunities in a down year - Management expressed confidence in the ability to grow share-of-wallet with existing customers, even in a challenging economic environment [90][91]

Financial Performance & Growth - Saia's estimated total market share in 2024 was 6.8%, up from 4.0% in 2017[21] - Saia's 7-year annual revenue CAGR of 13% vs the Top 10 LTL Peers average of 9% and LTL industry average of 5.9%[17] - Q3 2025 revenue was $839.6 million, a decrease of 0.3% compared to $842.1 million in Q3 2024[41] - Adjusted operating income for Q3 2025 was $104.1 million, a decrease of 16.8% compared to $125.2 million in Q3 2024[41] - Adjusted diluted earnings per share for Q3 2025 was $2.81, a decrease of 18.8% compared to $3.46 in Q3 2024[41] Investments & Expansion - Over $2 billion has been invested in the business since 2021, largely driven by operating cash flow[12] - Approximately $550 million to $600 million is planned for investment in 2025 to better support customer needs[12] - 69 terminals have been opened since the start of 2017, including in the Great Plains region, expanding Saia's footprint to a national network[12] - Approximately 61% of zip codes are within 50 miles of a Saia facility, up from approximately 35% in 2017[34] Operational Metrics - Revenue per shipment in Q3 2025 was $349.07[40] - Pounds per shipment in Q3 2025 was 1,355[40] - Length of haul in Q3 2025 was 894 miles[40]

Core Insights - Saia (SAIA) reported quarterly earnings of $2.81 per share, exceeding the Zacks Consensus Estimate of $2.54 per share, but down from $3.46 per share a year ago, indicating an earnings surprise of +10.63% [1] - The company achieved revenues of $839.64 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.75%, although this is a decrease from $842.1 million in the same quarter last year [2] - Saia has outperformed consensus EPS estimates three times in the last four quarters and has also topped revenue estimates three times during the same period [2] Earnings Outlook - The future performance of Saia's stock will largely depend on management's commentary during the earnings call and the revisions of earnings estimates [3][4] - The current consensus EPS estimate for the upcoming quarter is $1.97 on revenues of $796.41 million, while for the current fiscal year, the estimate is $9.05 on revenues of $3.23 billion [7] Industry Context - The Transportation - Truck industry, to which Saia belongs, is currently ranked in the bottom 3% of over 250 Zacks industries, which may negatively impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that the industry outlook can significantly affect Saia's stock performance [5][8]