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Saia Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 8, 2012 05:29PM
Saia Inc. (SAIA) filed Quarterly Report for the period ended 2012-06-30.
Highlight of Business Operations:Consolidated operating income from continuing operations was $21.2 million for the second quarter of 2012 compared to consolidated operating income of $8.3 million in the second quarter of 2011. In the second quarter of 2012, LTL tonnage was up 1.1 percent versus the prior-year quarter. Diluted earnings per share were $0.72 in the second quarter of 2012. This compares to diluted earnings per share of $0.21 in the prior-year quarter. The operating ratio (operating expenses divided by operating revenue) was 92.6 percent in the second quarter of 2012. This compares to 96.9 percent in the second quarter of 2011.
For the six months ended June 30, 2012, operating revenues were $556.2 million up 9.3 percent from $508.9 million for the six months ended June 30, 2011, primarily due to higher yield, which reflects increases in rates and fuel surcharge, plus an increase in tonnage.
Salaries, wages and benefits increased $9.6 million over the second quarter of 2011 largely due to increased tonnage and headcount, a 2.5 percent wage increase in December 2011 and accruals for estimated annual incentives. The increase in fuel, operating expenses and supplies resulted from investments in our Quality Matters program and increased professional fees partially offset by a $2.1 million decrease in fuel costs due to improved fuel efficiencies. During the second quarter of 2012, claims and insurance expense was $1.7 million lower than the previous year quarter due to decreased cargo claims and accident frequency and 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 $3.1 million in the second quarter of 2012 compared to the second quarter of 2011 largely due to revenue equipment and technology investments in late 2011 and year-to-date in 2012. Purchased Transportation decreased $3.6 million from the second quarter of 2011 primarily due to more in-house miles.
Current assets decreased by $3.7 million due to 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 working capital is also due to an increase in current liabilities of $26.2 million consisting of increases in accounts payable, wages and employee benefits, current portion of long-term debt and other liabilities. Cash flows provided by operating activities were $50.3 million for the six months ended June 30, 2012 versus $10.7 million provided by operating activities for the six months ended June 30, 2011. For the six months ended June 30, 2012, cash used in investing activities was $69.3 million versus $20.6 million in the prior year period due to higher property and equipment purchases, primarily for revenue equipment. For the six months ended June 30, 2012, net cash provided by financing activities was $18.5 million compared cash used in financing activities of $8.4 million 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 $50.3 million for the six months ending June 30, 2012, which is $39.6 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 $0.8 million at June 30, 2012 and availability under the Restated Credit Agreement, subject to the Companys borrowing base and satisfaction of existing debt covenants. 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 June 30, 2012.
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