Saia(US:SAIA)2023-02-03 19:04Financial Data and Key Metrics Changes - Fourth quarter revenue increased by $38.6 million to $655.7 million, with a year-over-year revenue growth of 6.3% [22][26] - Operating ratio increased by 170 basis points to 85.9%, compared to 84.2% a year ago [26][41] - Diluted earnings per share were $2.65, down from $2.76 in the fourth quarter of the previous year [26] Business Line Data and Key Metrics Changes - Yield excluding fuel surcharge improved by 6.5%, while yield including fuel surcharge increased by 14.3% [22][57] - Revenue per shipment excluding fuel surcharge rose by 7.1% to $288.34, and including fuel surcharge, it increased by 15% to $364.44 [23][57] - Tonnage decreased by 7.7%, attributed to an 8.2% decline in shipments, slightly offset by a 0.5% increase in average weight per shipment [23][57] Market Data and Key Metrics Changes - Shipments in December were down 12.3%, and tonnage was down 13.2%, with weight per shipment turning negative [24] - January shipments were down 3.9%, and tonnage was down 3.7%, with a slight increase in weight per shipment [24] Company Strategy and Development Direction - The company plans to open five terminals over the next three to four months to expand service and presence [9][30] - The focus remains on maintaining customer service and optimizing labor costs to match service delivery needs [33][34] - The company is working through a pipeline of more than 30 real estate projects for potential openings in the coming years [30] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating environment is influenced by weather disruptions and economic conditions, with expectations for a gradual recovery in volumes [29][47] - The company remains optimistic about the future, despite a tempered environment, and is focused on maintaining service levels and cost optimization [47][56] - Management indicated that pricing remains stable, with a contractual renewal increase of 7.4% in the fourth quarter [53][41] Other Important Information - Total operating expenses increased by 8.3% in the quarter, with fuel expenses rising by 41.5% due to higher diesel prices [25][26] - The company experienced a 5.3% increase in salaries, wages, and benefits, driven by wage increases and a growing employee count [46] Q&A Session Summary Question: Can you provide insights on January trends and staffing management? - Management indicated a historical step-up in shipments from December to January, with a 5.5% to 6% increase this year, and emphasized the importance of managing labor costs to match service delivery needs [13][32] Question: What are the expectations for margin improvement in 2023? - Management stated that margin improvement will depend on economic conditions and volume trends, with historical examples showing potential for margin improvement even in down years [16][17] Question: How is the company managing cost inflation? - Management noted that wage inflation is expected to remain around 4.3%, with depreciation costs also increasing due to ongoing investments [38][40] Question: What is the outlook for pricing in the current environment? - Management expressed confidence in maintaining pricing power due to strong service performance, despite a softer volume environment [116][117] Question: How does the company view the industrial and retail customer outlook? - Management noted that trends have been consistent across both sectors, with no significant differences observed in customer behavior [94][95]