Saia(SAIA) - 2023 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION ITEM 1: Financial Statements The Q2 and six-month financial statements for June 30, 2023, show decreased operating revenue and net income, increased assets and equity, and improved operating cash flow, with notes detailing accounting policies and debt Condensed Consolidated Balance Sheets Total assets increased to $2.337 billion at June 30, 2023, driven by higher cash and property, while liabilities slightly decreased and stockholders' equity rose | Metric | June 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | Change | | :-------------------------------- | :--------------------------- | :-------------------------- | :----- | | Total Assets | $2,337,111 | $2,174,710 | +$162,401 | | Cash and cash equivalents | $234,997 | $187,390 | +$47,607 | | Net property and equipment | $1,607,553 | $1,482,620 | +$124,933 | | Total Liabilities | $590,889 | $595,369 | -$4,480 | | Total Stockholders' Equity | $1,746,222 | $1,579,341 | +$166,881 | Condensed Consolidated Statements of Operations Q2 2023 saw a 6.8% YoY decrease in operating revenue, leading to a 17.6% drop in operating income and a 16.4% decline in net income, with similar trends for the six-month period | Metric | Q2 2023 (in thousands) | Q2 2022 (in thousands) | Change (%) | 6M 2023 (in thousands) | 6M 2022 (in thousands) | Change (%) | | :-------------------------------- | :--------------------- | :--------------------- | :--------- | :--------------------- | :--------------------- | :--------- | | Operating Revenue | $694,622 | $745,554 | (6.8)% | $1,355,157 | $1,406,770 | (3.7)% | | Operating Income | $120,255 | $145,993 | (17.6)% | $219,398 | $249,442 | (12.0)% | | Net Income | $91,319 | $109,245 | (16.4)% | $167,416 | $188,669 | (11.2)% | | Diluted Earnings Per Share | $3.42 | $4.10 | (16.7)% | $6.27 | $7.08 | (11.5)% | Condensed Consolidated Statements of Stockholders' Equity Total stockholders' equity increased to $1.746 billion by June 30, 2023, primarily due to net income for the periods, with stock compensation also contributing | Metric | Dec 31, 2022 (in thousands) | Mar 31, 2023 (in thousands) | Jun 30, 2023 (in thousands) | | :--------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total Stockholders' Equity | $1,579,341 | $1,650,940 | $1,746,222 | | Net Income (Q1 2023) | N/A | $76,097 | N/A | | Net Income (Q2 2023) | N/A | N/A | $91,319 | Condensed Consolidated Statements of Cash Flows Net cash provided by operating activities significantly increased to $291.4 million for the six months ended June 30, 2023, while investing activities used more cash due to higher capital expenditures | Metric | 6M 2023 (in thousands) | 6M 2022 (in thousands) | Change | | :-------------------------------- | :--------------------- | :--------------------- | :----- | | Net cash provided by operating activities | $291,405 | $207,905 | +$83,500 | | Net cash used in investing activities | $(226,493) | $(155,291) | -$(71,202) | | Net cash used in financing activities | $(17,305) | $(21,331) | +$4,026 | | Net Increase in Cash and Cash Equivalents | $47,607 | $31,283 | +$16,324 | | Cash and Cash Equivalents, end of period | $234,997 | $137,871 | +$97,126 | Notes to Condensed Consolidated Financial Statements These notes provide essential context and detail for the condensed consolidated financial statements, covering significant accounting policies, earnings per share, commitments, fair value measurements, and debt arrangements Summary of Significant Accounting Policies The company primarily provides national less-than-truckload (LTL) services, accounting for over 97% of its revenue, with revenue recognized over shipment transit time - Saia, Inc. primarily offers national less-than-truckload (LTL) services, accounting for over 97% of its revenue, and also provides non-asset truckload, expedited transportation, and logistics services[23] - Revenue is recognized over the transit time of shipments (1-5 days) as performance obligations are satisfied, with billing typically occurring after service completion[25] Computation of Earnings Per Share Basic EPS for Q2 2023 was $3.43 and diluted EPS was $3.42, both lower than Q2 2022, with similar declines for the six-month period | Metric | Q2 2023 | Q2 2022 | 6M 2023 | 6M 2022 | | :--------------------------- | :------ | :------ | :------ | :------ | | Basic Earnings Per Share | $3.43 | $4.12 | $6.29 | $7.12 | | Diluted Earnings Per Share | $3.42 | $4.10 | $6.27 | $7.08 | - Options and restricted stock for 14,854 shares (Q2 2023) and 38,437 shares (Q2 2022) were excluded from diluted EPS calculations due to their anti-dilutive effect[28] Commitments and Contingencies Management believes adequate provisions have been made for legal contingencies, expecting no material adverse effect on financial condition, though operating results could be affected - Management believes adequate provisions have been made for legal contingencies, claims, and pending litigation, expecting no material adverse effect on financial condition, but acknowledging potential impact on quarterly or annual operating results[29] Fair Value of Financial Instruments The estimated fair value of total debt at June 30, 2023, was $21.5 million, closely aligning with its carrying value of $21.4 million | Metric | June 30, 2023 (in millions) | Dec 31, 2022 (in millions) | | :--------------------------- | :-------------------------- | :-------------------------- | | Estimated Fair Value of Total Debt | $21.5 | $31.2 | | Carrying Value of Total Debt | $21.4 | $31.0 | Debt and Financing Arrangements Total debt, primarily finance leases, decreased to $21.4 million at June 30, 2023, and the company entered a new unsecured $300 million credit agreement with no outstanding borrowings | Metric | June 30, 2023 (in thousands) | Dec 31, 2022 (in thousands) | Change | | :--------------------------- | :--------------------------- | :-------------------------- | :----- | | Total Debt | $21,358 | $31,008 | -$9,650 | | Long-term debt, less current portion | $9,677 | $16,489 | -$6,812 | - On February 3, 2023, the Company entered into a new unsecured credit agreement for $300 million, extending the term to February 2028 and increasing the accordion feature to $150 million, replacing the previous secured agreement[33] - As of June 30, 2023, the Company had no outstanding borrowings under its credit agreements but had $33.1 million in outstanding letters of credit[34] Credit Agreement The company replaced its secured $300 million credit agreement with a new unsecured one in February 2023, extending the term to 2028 and increasing the accordion feature to $150 million, with no outstanding borrowings at June 30, 2023 - The 2023 Credit Agreement provides a $300 million revolving line of credit, extends