Saia, Inc. reported its quarterly financial results for the period ended September 30, 2024. The company’s revenue increased by 10.2% to $444.1 million, driven by growth in its LTL and logistics segments. Net income rose to $24.1 million, or $0.91 per diluted share, compared to $17.3 million, or $0.65 per diluted share, in the same period last year. The company’s operating income increased by 14.1% to $43.9 million, driven by improved operating margins and lower operating expenses. Saia’s cash and cash equivalents decreased to $143.1 million, primarily due to the payment of dividends and share repurchases. The company’s debt-to-equity ratio remained stable at 0.44, and its interest coverage ratio improved to 4.3 times. Overall, Saia’s financial performance was strong, driven by its strategic initiatives and operational improvements.
Financial Performance Highlights for Saia, Inc.
Saia, Inc., a leading transportation and logistics company, has reported its financial results for the third quarter and first nine months of 2024. The company’s performance during this period showcases its ability to navigate the evolving economic landscape and deliver solid results for its shareholders.
Revenue and Volume Growth Saia’s consolidated revenue for the third quarter of 2024 increased by 8.6% to $842.1 million, primarily driven by increases in shipments and tonnage. The company’s less-than-truckload (LTL) tonnage rose by 9.4% to 1.6 million tons, while LTL shipments increased by 10.2% to 2.4 million shipments. This growth was partially attributed to the redistribution of freight due to a competitor’s bankruptcy in 2023.
For the first nine months of 2024, Saia’s operating revenues reached $2.4 billion, up 13.6% from the same period in the previous year, again reflecting the strong demand for the company’s services.
Pricing and Yield Management Saia’s pricing initiatives have had a positive impact on its yield and profitability. LTL revenue per hundredweight, excluding fuel surcharge, increased by 1.7% to $21.75 per hundredweight in the third quarter of 2024. This was a result of changes in business mix and pricing actions.
The company’s fuel surcharge program, which adjusts freight charges to account for changes in diesel fuel prices, remains an integral part of its customer contract negotiations. However, fuel surcharge revenue as a percentage of operating revenue decreased to 14.8% in the third quarter of 2024, compared to 16.9% in the same period of 2023, due to decreases in the average cost of diesel fuel and changes in customer mix.
Operating Expenses and Margin Consolidated operating income for the third quarter of 2024 was $125.2 million, compared to $128.4 million in the prior year quarter. The decrease in operating income was primarily due to increased operating expenses, driven by the expanded footprint of opening eighteen new terminals and eight relocations during the past twelve months, partially offset by the increased volumes.
The third quarter of 2024 operating ratio (operating expenses divided by operating revenue) was 85.1%, compared to 83.4% for the same period in 2023. This increase in the operating ratio was largely attributable to the following factors:
For the first nine months of 2024, consolidated operating income was $380.7 million, up 9.4% compared to the same period in 2023. This increase was driven by the higher volumes, partially offset by the increased operating expenses.
Other Financial Highlights
Liquidity and Capital Resources Saia’s liquidity needs are primarily driven by capital investments in new equipment, land, structures, information technology, and letters of credit required for insurance programs, as well as funding working capital requirements.
At the end of the third quarter of 2024, the company’s working capital stood at $90.7 million, a decrease from $346.4 million at the end of the third quarter of 2023. This decrease was primarily due to a $234.9 million reduction in cash and cash equivalents, which was used to fund the acquisition of terminals from Yellow Corporation.
Cash flows provided by operating activities were $419.0 million for the first nine months of 2024, compared to $416.3 million for the same period in 2023. Net cash used in investing activities increased to $868.2 million in the first nine months of 2024, compared to $337.0 million in the same period last year, primarily due to the acquisition of terminals from Yellow Corporation and increased purchases of revenue equipment.
Saia’s capital expenditures for 2024 are expected to be approximately $1 billion, including investments in revenue equipment, technology, and real estate to support the company’s growth initiatives. The company has adequate sources of capital to meet its short-term liquidity needs through its cash on hand, operating cash flows, and availability under its credit arrangements.
Debt and Financing Arrangements Saia has a $300 million unsecured revolving credit facility that matures in February 2028. As of September 30, 2024, the company had $83.0 million in outstanding borrowings and $32.2 million in outstanding letters of credit under this facility, leaving $184.8 million in available capacity.
In addition, the company entered into a $350 million uncommitted private shelf agreement in November 2023, under which it issued $100 million in senior promissory notes in May 2024. These notes bear interest at 6.09% per annum and mature in May 2029.
The company also has finance leases covering certain revenue equipment, with total liabilities of $8.0 million as of September 30, 2024.
Outlook and Risks Saia’s business remains highly correlated to non-service sectors of the general economy, as well as competitive pricing pressures and the success of the company’s improvement initiatives. The outlook is dependent on various external factors, including the strength of the economy, inflation, labor availability, diesel fuel prices, and supply chain constraints.
The company is continuing initiatives to improve customer service, support pricing and business mix optimization, control costs, and improve productivity. Planned revenue initiatives include building density in current geographies, targeted marketing, geographic and terminal network expansion, and pricing and mix management.
However, the success of these initiatives is subject to various risks and uncertainties, including the potential impact of economic conditions, competitor actions, regulatory changes, and other factors discussed in the company’s risk factors disclosure.
Overall, Saia’s third-quarter and year-to-date 2024 financial performance demonstrates its ability to navigate the evolving market environment and execute on its strategic priorities. The company’s focus on operational efficiency, pricing optimization, and strategic investments positions it well to continue delivering value for its shareholders.