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SEC Filings, Earing Reports, Press Releases
Saia Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 3, 2012 04:24PM
Saia Inc. (SAIA) filed Quarterly Report for the period ended 2012-03-31.
Highlight of Business Operations:Consolidated operating income was $11.0 million for the first quarter of 2012 compared to consolidated operating income of $4.1 million in the first quarter of 2011. In the first quarter of 2012, less-than-truckload (LTL) tonnage per workday was up 2.6 percent versus the prior year quarter while LTL yield improved 7.9 percent. Diluted earnings per share was $0.34 in the first quarter of 2012, compared to earnings per share of $0.04 in the prior year quarter. The operating ratio (operating expenses divided by operating revenue) was 95.9 percent in the first quarter of 2012. This compares to 98.3 percent in the first quarter of 2011.
Consolidated operating income was $11.0 million in the first quarter of 2012 compared to operating income of $4.1 million in the prior year quarter. Overall, the operations were favorably impacted by higher yield combined with continued cost optimization initiatives throughout our network and milder winter weather in 2012. Salaries, wages and benefits increased $9.0 million over the first quarter of 2011 largely due to increased tonnage and headcount, a 2.5 percent wage increase in December 2011 and increased healthcare costs. The first quarter 2012 operating ratio (operating expenses divided by operating revenue) was 95.9 compared to 98.3 for the same period in 2011. Higher fuel prices and fuel volumes resulted in $5.3 million of the increase in fuel, operating expenses and supplies. Additionally, an increase in fleet maintenance costs contributed to the increase in fuel, operating expenses and supplies. During the first quarter of 2012, accident expense was $1.4 million lower than the previous year quarter due to decreased accident severity. The Company can experience volatility in accident expense as a result of its self-insurance structure and $2.0 million retention limits per occurrence. Depreciation expense increased $2.8 million in the first quarter of 2012 compared to the first quarter of 2011 largely due to revenue equipment and technology investments in 2011 and the first quarter of 2012.
Working capital at March 31, 2012 was $6.2 million which decreased from working capital at March 31, 2011 of $54.3 million. Current assets decreased by $13.3 million and includes decreases in cash and cash equivalents partially offset by increases in accounts receivable. The decrease in cash and cash equivalents over the last year reflects the significant amount of capital expenditures during that time. The decrease in current assets was more than offset by an increase in current liabilities of $34.7 million and included an increase in accounts payable, current portion of long-term debt and other liabilities. Cash flows provided by operating activities for continuing operations were $24.0 million for the three months ended March 31, 2012 versus $1.0 million used in operating activities for the three months ended March 31, 2011. For the three months ended March 31, 2012, cash used in investing activities was $39.2 million versus $6.0 million in the prior year period due to higher property and equipment purchases, primarily revenue equipment. For the three months ended March 31, 2012, net cash provided by financing activities was $13.9 million compared to zero in the prior year period.
The Company has historically generated cash flows from operations that have funded its capital expenditure requirements. Cash flows from operating activities were $59.3 million for the year ended December 31, 2011, while net cash used in investing activities was $67.9 million. Cash flows provided by operating activities were $24.0 million for the three months ended March 31, 2012; $25.0 million higher than the prior year and were used to fund the replacement of tractor and trailers along with continued investment in technology. 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 primarily through availability under the Restated Credit Agreement, subject to the Companys borrowing base and satisfaction of existing debt covenants and to a lesser extent its cash and cash equivalents of $60 thousand at March 31, 2012. Future operating cash flows are primarily dependent upon the Companys 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 March 31, 2012.
Revenue is recognized in a systematic process whereby estimates of shipments in transit are based upon actual shipments picked up, scheduled day of delivery and current trend in average rates charged to customers. Since the cycle for pick up and delivery of shipments is generally 1-3 days, typically less than 5 percent of a total months revenue is in transit at the end of any month. Estimates for credit losses and billing adjustments are based upon historical experience of credit losses, adjustments processed and trends of collections. Billing adjustments are primarily made for discounts and billing corrections. These estimates are continuously evaluated and updated; however, changes in economic conditions, pricing arrangements and other factors can significantly impact these estimates.