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Saia Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 1, 2011 05:13PM

Saia Inc. (SAIA) filed Quarterly Report for the period ended 2011-09-30. Saia Inc. has a market cap of $212.6 million; its shares were traded at around $13.35 with a P/E ratio of 22.6 and P/S ratio of 0.2.



Highlight of Business Operations:

Consolidated operating income was $9.6 million for the third quarter of 2011 compared to consolidated operating income of $6.5 million in the third quarter of 2010. In the third quarter of 2011, LTL tonnage was up 2.6 percent versus the prior-year quarter. Diluted earnings per share were $0.30 in the third quarter of 2011. This compares to diluted earnings per share of $0.16 in the prior-year quarter. The operating ratio (operating expenses divided by operating revenue) was 96.4 percent in the third quarter of 2011. This compares to 97.2 percent in the third quarter of 2010.

The Company generated $34.7 million in cash provided by operating activities through the first nine months of the year compared with cash provided in the amount of $19.5 million in the prior-year period. The Company had net cash used in investing activities of $51.8 million during the first nine months of 2011 virtually all for the purchase of revenue equipment compared to $1.2 million in the first nine months of 2010. The Company’s cash used in financing activities during the first nine months of 2011 was $8.4 million compared to cash provided by financing activities in the first nine months of 2010 of less than $0.1 million. The Company had no borrowings under its revolving credit agreement, outstanding letters of credit of $49.7 million and cash and cash equivalents balance of $3.5 million as of September 30, 2011. The Company was in compliance with the debt covenants under its debt agreements at September 30, 2011.

Consolidated operating income was $9.6 million in the third quarter of 2011, compared to operating income of $6.5 million in the prior year quarter. Overall, the operations were favorably impacted by increased tonnage and measured pricing actions. The third quarter 2011 operating ratio (operating expenses divided by operating revenue) was 96.4 percent compared to 97.2 percent for the same period in 2010. Salaries, wages and benefit expense increased $10.2 million due to greater headcount, higher health care and workers’ compensation costs and reinstatement of one-half of the Company’s 401(k) match. Increased mileage and higher fuel prices resulted in $13.5 million of the increase in the Fuel, operating expenses and supplies line. Additionally, a $1.9 million increase in fleet maintenance costs contributed to the increase in the Fuel, operating expense and supplies line. Claims and insurance in the third quarter of 2011 was $0.8 million more than the third quarter of 2010 reflecting unfavorable trends in self-insurance claims. Purchased transportation expense increased $1.7 million primarily due to higher fuel surcharge.

Working capital at September 30, 2011 was $27.4 million which decreased from working capital at September 30, 2010 of $50.7 million. This decrease was primarily due to a decrease in cash and cash equivalents of $23.7 million which was used to purchase revenue equipment. Also, an $11.1 million increase in the current portion of long-term debt was partially offset by a $10.7 million increase in accounts receivable. Cash flows provided by operating activities were $34.7 million for the nine months ended September 30, 2011 versus $19.5 million provided by operating activities for the nine months ended September 30, 2010. For the nine months ended September 30, 2011, cash used in investing activities was $51.8 million versus $1.2 million in the prior-year period, due to higher equipment purchases. For the nine months ended September 30, 2011, cash used in financing activities was $8.4 million versus less than $0.1 million of cash provided by financing activities for the prior-year period due to the repayment of long-term debt during 2011.

The Company had historically generated cash flows from operations that have funded its capital expenditure requirements. Cash flows from operating activities were $23.4 million for the year ended December 31, 2010, while net cash used in investing activities was $3.3 million. Cash flows provided by operating activities were $34.7 million for the nine months ended September 30, 2011 which is $15.1 million higher than the prior year period. The timing of capital expenditures can largely be managed around the seasonal working capital requirements of the Company. The Company believes it has adequate sources of capital to meet short-term liquidity needs through its cash and cash equivalents of $3.5 million at September 30, 2011 and availability under the Restated Credit Agreement, subject to the Company’s borrowing base and satisfaction of existing debt covenants. Future operating cash flows are primarily dependent upon the Company’s profitability and its ability to manage its working capital requirements, primarily accounts receivable, accounts payable and wage and benefit accruals. The Company was in compliance with its debt covenants at September 30, 2011.

Read the The complete Report



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