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Saia Inc. Reports Operating Results (10-Q)

October 29, 2010 | About:
10qk

10qk

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Saia Inc. (SAIA) filed Quarterly Report for the period ended 2010-09-30.

Saia Inc. has a market cap of $217.6 million; its shares were traded at around $13.97 with and P/S ratio of 0.3. SAIA is in the portfolios of Diamond Hill Capital of Diamond Hill Capital Management Inc, Charles Brandes of Brandes Investment.

Highlight of Business Operations:

Consolidated operating income was $6.5 million for the third quarter of 2010 compared to consolidated operating income of $7.8 million in the third quarter of 2009. The third quarter of 2009 included an $8.4 million favorable adjustment to reflect a change in the Companys vacation policy. In the third quarter of 2010, LTL tonnage was up 1.2 percent versus the prior-year quarter. Diluted earnings per share were $0.16 in the third quarter of 2010. This compares to diluted earnings per share of $0.24 in the prior-year quarter. Excluding the adjustment to reflect the change in the Companys vacation policy, the loss per share for the quarter ended September 2009 would have been $0.16. The operating ratio (operating expenses divided by operating revenue) was 97.2 percent in the third quarter of 2010. This compares to 96.5 percent, or 100.3 percent excluding the vacation adjustment, in the third quarter of 2009.

The Company generated $19.5 million in cash provided by operating activities through the first nine months of the year compared with cash provided in the amount of $20.0 million in the prior-year period. The Company had net cash used in investing activities of $1.2 million during the first nine months of 2010 for the purchase of property compared to $6.2 million in the first nine months of 2009. The Companys cash provided by financing activities during the first nine months of 2010 was $0.1 million compared to cash used in financing activities of first nine months of 2009, which included $20.3 million for debt repayments and $2.6 million for debt issuance costs. The Company had no borrowings under its revolving credit agreement, outstanding letters of credit of $55.1 million and cash and cash equivalents balance of $27.2 million as of September 30, 2010. The Company was in compliance with the debt covenants under its debt agreements at September 30, 2010.

Consolidated operating income was $6.5 million in the third quarter of 2010, compared to operating income of $7.8 million in the prior year quarter. The third quarter of 2009 includes a favorable adjustment of $8.4 million to reflect a change in the Companys vacation policy. Overall, the operations were favorably impacted by increased tonnage and cost reductions. The third quarter 2010 operating ratio (operating expenses divided by operating revenue) was 97.2 percent, compared to 96.5 percent or 100.3 percent excluding the adjustment to reflect the change in the Companys vacation policy, for the same period in 2009. Salaries, wages and benefit expense increased $5.2 million due to the effect of the $8.4 million vacation adjustment in prior year. Higher fuel prices and fuel volumes resulted in $4.3 million of the increase in fuel, operating expenses and supplies with the majority of the remaining increase due to higher maintenance costs. Claims and insurance in the third quarter of 2010 was $1.3 million less than the third quarter of 2009 reflecting favorable trends in the severity of accidents and reduced cargo claims. Purchased transportation expense increased $3.6 million reflecting increased utilization due to higher volumes and adjustments to changes in freight flow.

For the nine months ended September 30, 2010, operating income was $10.3 million with an operating ratio of 98.5 percent, compared to an operating loss of $0.1 million with an operating ratio of 100.0 percent for the nine months ended September 30, 2009. The reductions-in-force and the first quarter 2010 impact of the 2009 wage reductions, along with productivity improvement initiatives and decreased health insurance costs, resulted in a $9.2 million decrease in salaries, wages and benefit expense for the nine months ended September 30, 2010. Higher fuel prices and fuel volumes resulted in $20.9 million of the increase in fuel, operating expenses and supplies with the majority of the remaining increase due to higher maintenance costs. Claims and insurance decreased $7.5 million for the nine month period due to favorable trends in the severity of accidents incurred and reduced cargo claims. Purchased transportation expenses increased $11.7 million due to increased utilization as a result of increased tonnage and adjustments to changes in freight flow.

Net income was $2.5 million or $0.16 per diluted share in the third quarter of 2010 compared to a net income of $3.3 million, or $0.24 per share, in the third quarter of 2009. Net income of $1.3 million or $0.08 per diluted share for the first nine months of 2010 compared to a net loss of $4.7 million or $0.36 per diluted share in the prior year period. Due to the issuance of 2.3 million shares of common stock in December 2009, the number of shares outstanding has increased to 15.7 million for the third quarter of 2010 compared to 13.4 million for prior year quarter. This change impacts the comparative earnings per share calculation.

which included decreases in accounts payable and claims and insurance. Cash flows provided by operating activities for continuing operations were $19.5 million for the nine months ended September 30, 2010 versus $19.9 million provided by operating activities for the nine months ended September 30, 2009. For the nine months ended September 30, 2010, cash used in investing activities was $1.2 million versus $6.2 million in the prior-year period, due to lower property and equipment purchases. For the nine months ended September 30, 2010, cash provided by financing activities was $0.1 million versus $22.6 million of cash used in financing activities for the prior-year period. The $20.3 million used for financing activities in third quarter 2009 for debt repayments included $11.5 million for the redemption of subordinated debentures and debt issuance costs.

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