Saia(SAIA) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements for Saia, Inc, including balance sheets, statements of operations, and cash flows Condensed Consolidated Balance Sheets | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Total Assets | $3,457,726 | $3,166,857 | | Total Current Assets | $451,150 | $435,769 | | Net Property and Equipment | $2,811,601 | $2,556,935 | | Total Liabilities | $1,021,204 | $855,586 | | Total Current Liabilities | $302,809 | $278,360 | | Total Stockholders' Equity | $2,436,522 | $2,311,271 | Condensed Consolidated Statements of Operations | Metric (in thousands, except per share data) | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | $817,115 | $823,244 | $1,604,690 | $1,578,019 | | Operating Income | $99,399 | $137,593 | $169,567 | $255,505 | | Net Income | $71,391 | $102,519 | $121,201 | $193,214 | | Basic Earnings Per Share | $2.67 | $3.84 | $4.53 | $7.24 | | Diluted Earnings Per Share | $2.67 | $3.83 | $4.53 | $7.21 | Condensed Consolidated Statements of Stockholders' Equity | Metric (in thousands) | Balance at Dec 31, 2024 | Balance at Jun 30, 2025 | | :--- | :--- | :--- | | Common Stock | $27 | $27 | | Additional Paid-in-Capital | $295,106 | $300,593 | | Deferred Compensation Trust | $(7,981) | $(9,418) | | Retained Earnings | $2,024,119 | $2,145,320 | | Total Stockholders' Equity | $2,311,271 | $2,436,522 | - Net income contributed $49.8 million in Q1 2025 and $71.4 million in Q2 2025 to retained earnings[15] Condensed Consolidated Statements of Cash Flows | Cash Flow Activity (in thousands) | 6 Months 2025 | 6 Months 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $279,815 | $237,242 | | Net cash used in investing activities | $(383,967) | $(676,277) | | Net cash provided by financing activities | $103,516 | $153,989 | | Net Decrease in Cash and Cash Equivalents | $(636) | $(285,046) | | Cash and Cash Equivalents, end of period | $18,837 | $11,169 | Notes to Condensed Consolidated Financial Statements Provides essential context for the financial statements, covering accounting policies, EPS, contingencies, and debt arrangements (1) Summary of Significant Accounting Policies - Saia, Inc provides national less-than-truckload (LTL) services, with over 97% of revenue from LTL shipments across the contiguous U.S, and also offers non-asset truckload, expedited transportation, and logistics services[21] - Revenue from transportation services is recognized over the transit time of the shipment, based on transit status at the end of each reporting period[23] - During Q2 2024, the estimated useful lives of certain trailers and dollies were extended from 14 to 20 years, increasing income from continuing operations by approximately $2.9 million for the six months ended June 30, 2025[26] - The Company operates as a single reportable segment focused on transportation services[27] (2) Computation of Earnings Per Share | Metric (in thousands, except per share amounts) | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net income | $71,391 | $102,519 | $121,201 | $193,214 | | Weighted average common shares outstanding – basic | 26,739 | 26,691 | 26,730 | 26,682 | | Dilutive effect of share-based awards | 46 | 111 | 52 | 116 | | Basic Earnings Per Share | $2.67 | $3.84 | $4.53 | $7.24 | | Diluted Earnings Per Share | $2.67 | $3.83 | $4.53 | $7.21 | - There were 13,937 and 11,917 anti-dilutive share-based awards for the quarter and six months ended June 30, 2025, respectively, compared to none in the prior year periods[30] (3) Commitments and Contingencies - The Company is involved in legal proceedings in the ordinary course of business, with management believing adequate provisions have been made for probable and estimable losses, though outcomes could materially affect results in a given period[31] (4) Fair Value of Financial Instruments - The carrying amounts of cash, receivables, payables, and short-term debt approximated fair value due to their short maturity[32] | Metric (in millions) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Estimated Fair Value of Total Debt | $309.8 | $200.5 | | Carrying Value of Total Debt | $309.1 | $200.3 | (5) Debt and Financing Arrangements | Debt Type (in thousands) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Credit Arrangements | $307,000 | $194,000 | | Finance Leases | $2,091 | $6,294 | | Total Debt | $309,091 | $200,294 | | Less: Current Portion | $1,967 | $5,313 | | Long-term Debt, less current portion | $307,124 | $194,981 | - The Revolving Credit Facility was amended on December 9, 2024, increasing commitments to $600 million, expanding the accordion feature to $300 million, and extending the maturity to December 9, 2029[34] - As of June 30, 2025, the Company had $207.0 million in outstanding borrowings and $36.4 million in outstanding letters of credit under the Revolving Credit Facility, with $356.6 million in availability[35] - The Company entered into a $350 million uncommitted Private Shelf Agreement on November 9, 2023, and issued $100 million in senior promissory notes on May 1, 2024, bearing 6.09% interest and maturing May 1, 2029[36][37] - The Company was in compliance with all debt covenants under both the Revolving Credit Facility and the Shelf Agreement at June 30, 2025[39] | Year | Principal Maturities of Long-Term Debt (in thousands) | | :--- | :--- | | 2025 | $1,138 | | 2026 | $991 | | 2027 | — | | 2028 | — | | 2029 | $307,000 | | Thereafter | — | | Total | $309,129 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Provides management's analysis of financial performance, condition, liquidity, and capital resources for the period Executive Overview - The Company's business is highly correlated to non-service sectors of the general economy[47] - The core strategy is to improve profitability by increasing revenue per shipment and volumes through building density, geographic expansion, and terminal growth[47] - Key focus areas include improving safety, cost effectiveness, asset utilization, and investing in technology for customer experience and operational efficiencies[47] Second Quarter Overview | Metric | Q2 2025 | Q2 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | $817.1 million | $823.2 million | (0.7)% | | LTL Shipments per workday | Down 2.8% | - | - | | LTL Revenue per shipment (excl. fuel surcharge) | $298.71 | $290.72 | 2.7% | | Consolidated Operating Income | $99.4 million | $137.6 million | (27.8)% | | Diluted Earnings Per Share | $2.67 | $3.83 | (30.3)% | | Operating Ratio | 87.8% | 83.3% | 4.5 ppt | - Net cash provided by operating activities for the first six months of 2025 increased to $279.8 million from $237.2 million in the same period last year[49] General - Saia is a transportation company providing national less-than-truckload (LTL) services, with over 97% of revenue from LTL shipments, and also offers non-asset truckload, expedited transportation, and logistics services[52] - Key factors affecting operating results include shipment volumes, service pricing (revenue per shipment/hundredweight), cost structure management (salaries, purchased transportation, claims, fuel, maintenance), and matching operating costs to volume levels[53] Results of Operations Operating revenue and income declined in Q2 2025 due to lower LTL shipments and increased operating expenses from network expansion and higher claims Revenue and volume | Metric | Q2 2025 | Q2 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Consolidated Revenue | $817.1 million | $823.2 million | (0.7)% | | LTL Shipments | 2.3 million | 2.327 million | (2.8)% | | LTL Tonnage | 1.6 million | 1.559 million | 1.1% | | LTL Revenue per shipment (excl. fuel surcharge) | $298.71 | $290.72 | 2.7% | - For the six months ended June 30, 2025, operating revenues were $1.6 billion, up 1.7% from the prior year, driven by business mix changes and pricing actions[58] - Fuel surcharge revenue as a percentage of operating revenue decreased to 14.6% in Q2 2025 (from 15.4% in Q2 2024) and to 14.8% for the six months (from 15.5%), primarily due to lower average diesel fuel costs[57][58] - Saia implemented a 7.9% general rate increase on October 21, 2024, affecting approximately 25% of operating revenue[56] Operating expenses and margin | Operating Expense (in thousands) | Q2 2025 | Q2 2024 | Change ($) | | :--- | :--- | :--- | :--- | | Salaries, wages and employees' benefits | $390,975 | $372,240 | $18,735 | | Purchased transportation | $57,699 | $61,047 | $(3,348) | | Fuel, operating expenses and supplies | $161,634 | $160,877 | $757 | | Claims and insurance | $22,826 | $18,828 | $3,998 | | Depreciation and amortization | $62,546 | $52,536 | $10,010 | - Consolidated operating income for Q2 2025 was $99.4 million, down from $137.6 million in Q2 2024, resulting in an operating ratio of 87.8% (vs 83.3% in Q2 2024)[59] - The increase in salaries, wages, and benefits was driven by a 4.1% wage increase in July 2024 and an $8.1 million increase in group insurance costs due to elevated claims activity[60] - For the six months ended June 30, 2025, consolidated operating income decreased 33.6% to $169.6 million, primarily due to lower-than-expected revenues and increased labor and depreciation expenses from network expansion[61] - Six-month increases in expenses include $66.3 million in salaries, wages and benefits (due to wage increase and headcount for new terminals), $11.1 million in fuel, operating expenses and supplies (facility, vehicle maintenance, IT costs), and $8.1 million in claims and insurance[62][63] Other - Interest expense increased for both the quarter and six months ended June 30, 2025, due to higher average balances under credit arrangements[64] - Interest income decreased due to lower average interest-bearing deposit balances[64] | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Effective Tax Rate | 25.3% | 24.4% | 24.8% | 24.1% | | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Income | $71.4 million | $102.5 million | $121.2 million | $193.2 million | | Diluted EPS | $2.67 | $3.83 | $4.53 | $7.21 | Outlook - The Company's outlook is highly dependent on general economic conditions, competitive pricing pressures, and the success of internal improvement initiatives[67] - Planned revenue initiatives include building density, targeted marketing, geographic and terminal expansion, and pricing/mix management[68] - The strategic objective is to build market share through customer service, operating efficiencies, and expansion, with plans to match resources to shifting volume levels if the economy softens[68] - A market competitive salary and wage increase of approximately 4.1% was implemented in July 2024 for all non-executive employees, with anticipated partial offset from productivity gains[69] Financial Condition, Liquidity and Capital Resources | Metric (in millions) | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Working Capital | $148.3 | $118.2 | - Working capital increased due to a $17.7 million increase in income tax receivable (from reduced pre-tax income) and a $25.0 million decrease in current liabilities (mainly accounts payable, partially offset by claims and insurance accruals)[73] | Cash Flow Activity (in thousands) | 6 Months 2025 | 6 Months 2024 | | :--- | :--- | :--- | | Net Cash flows provided by operating activities | $279,815 | $237,242 | | Net Cash used in investing activities | $(383,967) | $(676,277) | | Net Cash provided by financing activities | $103,516 | $153,989 | | Net Decrease in Cash and Cash Equivalents | $(636) | $(285,046) | | Cash and Cash Equivalents, end of period | $18,837 | $11,169 | - The decrease in net cash used in investing activities by $292.3 million was primarily due to the acquisition of terminals from Yellow Corporation in January 2024[73] - Net cash provided by financing activities decreased due to higher borrowings in the first six months of 2024 to fund capital expenditures[73] - Anticipated net capital expenditures for 2025 are approximately $600 million to $650 million, with $375.6 million spent in the first six months and $84.0 million committed as of June 30, 2025[75] - The Revolving Credit Facility was amended to increase commitments to $600 million and extend maturity to December 9, 2029. As of June 30, 2025, $207.0 million was outstanding, with $356.6 million available[76][79] - The Private Shelf Agreement allows for up to $350 million in senior notes, with $100 million issued on May 1, 2024, bearing 6.09% interest and maturing May 1, 2029[80][81] | Contractual Obligation (in millions) | Amount at June 30, 2025 | | :--- | :--- | | Operating Leases | $150.2 | | Finance Leases | $2.1 | | Purchase Obligations | $84.2 | | Revolving Credit Facility (outstanding) | $207.0 | | Shelf Agreement (outstanding) | $100.0 | | Letters of Credit | $36.4 | | Surety Bonds | $59.1 | Critical Accounting Policies and Estimates - There have been no significant changes to the application of critical accounting policies and estimates since the Annual Report on Form 10-K for the year ended December 31, 2024[88] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section outlines the Company's exposure to market risks from interest rates and diesel fuel prices - The Company is exposed to market risks from interest rates and diesel fuel prices, mitigated by an established fuel surcharge program[89] | Debt Type | 2025 (millions) | 2026 (millions) | 2027 (millions) | 2028 (millions) | 2029 (millions) | Total (millions) | Fair Value (millions) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Fixed rate debt | $1.1 | $1.0 | $— | $— | $100.0 | $102.1 | $102.8 | | Average interest rate | 4.3% | 3.5% | — | — | 6.1% | 6.0% | | | Variable rate debt | $— | $— | $— | $— | $207.0 | $207.0 | $207.0 | | Average interest rate | — | — | — | — | 5.7% | 5.7% | | Item 4. Controls and Procedures This section confirms the effectiveness of the Company's disclosure controls and procedures as of June 30, 2025 - The CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025[93] - There were no material changes in internal control over financial reporting during the period covered by this report[94] - Disclosure Controls are designed to ensure timely recording, processing, summarizing, and reporting of information required under the Exchange Act[96] - Management acknowledges that control systems provide only reasonable, not absolute, assurance and have inherent limitations, including potential for errors, fraud, or management override[97] PART II. OTHER INFORMATION Item 1. Legal Proceedings This section refers to Note 3 of the condensed consolidated financial statements for a description of legal proceedings - For a description of legal proceedings, refer to Note 3 'Commitments and Contingencies' in the accompanying unaudited condensed consolidated financial statements[99] Item 1A. Risk Factors This section directs readers to the Company's Annual Report for a comprehensive list of risk factors - Readers should carefully consider the risk factors discussed in Part I, Item 1A 'Risk Factors' of the Company's Annual Report on Form 10-K for the year ended December 31, 2024[100] - A new risk factor replaces a previous one, detailing how changes in U.S. trade policy and tariffs may continue to adversely impact customers, the industry, and the business, potentially decreasing demand for services or increasing costs[101][102] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details shares purchased by the Saia, Inc Executive Capital Accumulation Plan during Q2 2025 | Period | Total Number of Shares Purchased (1) | Average Price Paid per Share (or Unit) | | :--- | :--- | :--- | | April 1, 2025 through April 30, 2025 | 1,300 | $241.44 | | May 1, 2025 through May 31, 2025 | — | $— | | June 1, 2025 through June 30, 2025 | 950 | $264.62 | | Total | 2,250 | | - The Saia, Inc Executive Capital Accumulation Plan made open market purchases of shares[105] - The Plan sold 1,076 shares at an average price of $254.53 during May 2025[106] Item 5. Other Information This section states no directors or Section 16 officers adopted or terminated Rule 10b5-1(c) trading arrangements - During the three months ended June 30, 2025, none of the Company's directors or Section 16 officers adopted or terminated any Rule 10b5-1(c) trading arrangements[107] Item 6. Exhibits This section lists all exhibits filed with the Quarterly Report on Form 10-Q - Exhibits include the Second Amended and Restated Certificate of Incorporation, Amended and Restated By-laws, and certifications from the Principal Executive Officer and Principal Financial Officer (Exhibits 31.1, 31.2, 32.1, 32.2)[108] - Financial information for the quarter ended June 30, 2025, is provided in iXBRL format (Exhibit 101), including condensed consolidated financial statements and notes[108] Signature This section contains the signature of the authorized representative of Saia, Inc, certifying the filing of the report - The report was duly signed on behalf of Saia, Inc by Matthew J Batteh, Executive Vice President and Chief Financial Officer, on July 25, 2025[110][112]