e10vq
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
|
|
|
þ |
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 |
FOR THE QUARTER ENDED SEPTEMBER 30, 2007
OR
|
|
|
o |
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 |
FOR THE TRANSITION PERIOD FROM to
Commission file number: 0-49983
SAIA, INC.
(Exact name of registrant as specified in its charter)
|
|
|
Delaware
|
|
48-1229851 |
(State of incorporation)
|
|
(I.R.S. Employer |
|
|
Identification No.) |
|
|
|
11465 Johns Creek Parkway, Suite 400 |
|
|
Johns Creek, GA
|
|
30097 |
(Address of principal
|
|
(Zip Code) |
executive offices) |
|
|
(770) 232-5067
(Registrants telephone number, including area code)
11465 Johns Creek Parkway, Suite 400, Duluth, Georgia 30097
(Former name or former address, if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes þ No o
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer,
or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in
Rule 12b-2 of the Exchange Act.
Large accelerated filer o Accelerated filer þ Non-accelerated filer o
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes o No þ
Indicate the number of shares outstanding of each of the issuers classes of common stock, as of
the latest practicable date.
|
|
|
|
|
Common Stock |
|
Outstanding Shares at October 29, 2007 |
Common Stock, par value $.001 per share |
|
|
13,363,602 |
|
PART I. FINANCIAL INFORMATION
Item 1: Financial Statements
Saia, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share data)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
|
December 31, |
|
|
|
2007 |
|
|
2006 |
|
Assets |
|
|
|
|
|
|
|
|
Current Assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
3,771 |
|
|
$ |
10,669 |
|
Accounts receivable, net |
|
|
118,156 |
|
|
|
95,779 |
|
Prepaid expenses and other |
|
|
33,213 |
|
|
|
27,236 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
155,140 |
|
|
|
133,684 |
|
Property and Equipment, at cost |
|
|
564,849 |
|
|
|
518,052 |
|
Less-accumulated depreciation |
|
|
221,637 |
|
|
|
203,220 |
|
|
|
|
|
|
|
|
Net property and equipment |
|
|
343,212 |
|
|
|
314,832 |
|
Goodwill, net |
|
|
36,192 |
|
|
|
36,406 |
|
Other Intangibles, net |
|
|
4,185 |
|
|
|
1,096 |
|
Other Noncurrent Assets |
|
|
921 |
|
|
|
1,382 |
|
|
|
|
|
|
|
|
Total assets |
|
$ |
539,650 |
|
|
$ |
487,400 |
|
|
|
|
|
|
|
|
Liabilities and Shareholders Equity |
|
|
|
|
|
|
|
|
Current Liabilities: |
|
|
|
|
|
|
|
|
Accounts payable and checks outstanding |
|
$ |
41,765 |
|
|
$ |
39,389 |
|
Wages, vacation and employees benefits |
|
|
37,163 |
|
|
|
45,752 |
|
Other current liabilities |
|
|
45,690 |
|
|
|
30,027 |
|
Current portion of long-term debt |
|
|
12,793 |
|
|
|
11,356 |
|
Current liabilities of discontinued operations |
|
|
|
|
|
|
117 |
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
137,411 |
|
|
|
126,641 |
|
Other Liabilities: |
|
|
|
|
|
|
|
|
Long-term debt |
|
|
138,840 |
|
|
|
98,628 |
|
Deferred income taxes |
|
|
48,891 |
|
|
|
45,259 |
|
Claims, insurance and other |
|
|
16,405 |
|
|
|
13,717 |
|
|
|
|
|
|
|
|
Total other liabilities |
|
|
204,136 |
|
|
|
157,604 |
|
Commitments and Contingencies |
|
|
|
|
|
|
|
|
Shareholders Equity: |
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par value, 50,000 shares authorized,
none issued and outstanding |
|
|
|
|
|
|
|
|
Common stock, $0.001 par value, 50,000,000 shares authorized,
14,887,402 and 14,761,072 shares issued and outstanding at
September 30, 2007 and December 31, 2006, respectively |
|
|
15 |
|
|
|
15 |
|
Additional paid-in-capital |
|
|
201,509 |
|
|
|
199,257 |
|
Treasury stock, 1,523,800 and 336,400 shares at cost at September 30,
2007 and December 31, 2006, respectively |
|
|
(32,087 |
) |
|
|
(8,861 |
) |
Deferred compensation trust, 125,317 and 106,247 shares of
common stock at cost at September 30, 2007 and
December 31, 2006, respectively |
|
|
(2,331 |
) |
|
|
(1,877 |
) |
Retained earnings |
|
|
30,997 |
|
|
|
14,621 |
|
|
|
|
|
|
|
|
Total shareholders equity |
|
|
198,103 |
|
|
|
203,155 |
|
|
|
|
|
|
|
|
Total liabilities and shareholders equity |
|
$ |
539,650 |
|
|
$ |
487,400 |
|
|
|
|
|
|
|
|
See accompanying notes to condensed consolidated financial statements.
3
Saia, Inc.
Condensed Consolidated Statements of Operations
For the quarter and nine months ended September 30, 2007 and 2006
(in thousands, except per share data)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter |
|
|
Nine Months |
|
|
|
2007 |
|
|
2006 |
|
|
2007 |
|
|
2006 |
|
Operating Revenue |
|
$ |
247,823 |
|
|
$ |
226,118 |
|
|
$ |
732,412 |
|
|
$ |
655,577 |
|
Operating Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries, wages and employees benefits |
|
|
129,261 |
|
|
|
122,421 |
|
|
|
394,302 |
|
|
|
352,988 |
|
Purchased transportation |
|
|
20,710 |
|
|
|
18,461 |
|
|
|
55,951 |
|
|
|
53,569 |
|
Fuel, operating expenses and supplies |
|
|
58,699 |
|
|
|
48,997 |
|
|
|
165,002 |
|
|
|
142,660 |
|
Operating taxes and licenses |
|
|
8,626 |
|
|
|
6,860 |
|
|
|
25,709 |
|
|
|
21,512 |
|
Claims and insurance |
|
|
10,000 |
|
|
|
7,652 |
|
|
|
28,261 |
|
|
|
20,751 |
|
Depreciation and amortization |
|
|
9,785 |
|
|
|
8,260 |
|
|
|
28,602 |
|
|
|
23,689 |
|
Operating gains, net |
|
|
(1,911 |
) |
|
|
(857 |
) |
|
|
(2,134 |
) |
|
|
(1,181 |
) |
Integration charges |
|
|
|
|
|
|
|
|
|
|
2,427 |
|
|
|
|
|
Restructuring charges |
|
|
|
|
|
|
369 |
|
|
|
|
|
|
|
2,049 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
|
235,170 |
|
|
|
212,163 |
|
|
|
698,120 |
|
|
|
616,037 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
12,653 |
|
|
|
13,955 |
|
|
|
34,292 |
|
|
|
39,540 |
|
Nonoperating Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
2,644 |
|
|
|
2,241 |
|
|
|
7,200 |
|
|
|
7,142 |
|
Other, net |
|
|
(60 |
) |
|
|
(569 |
) |
|
|
(339 |
) |
|
|
(782 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating expenses, net |
|
|
2,584 |
|
|
|
1,672 |
|
|
|
6,861 |
|
|
|
6,360 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Before Income Taxes |
|
|
10,069 |
|
|
|
12,283 |
|
|
|
27,431 |
|
|
|
33,180 |
|
Income Tax Provision |
|
|
4,120 |
|
|
|
4,602 |
|
|
|
11,055 |
|
|
|
12,616 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations |
|
|
5,949 |
|
|
|
7,681 |
|
|
|
16,376 |
|
|
|
20,564 |
|
Income (Loss) from Discontinued Operations |
|
|
|
|
|
|
2 |
|
|
|
|
|
|
|
(46,447 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss) |
|
$ |
5,949 |
|
|
$ |
7,683 |
|
|
$ |
16,376 |
|
|
$ |
(25,883 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding basic |
|
|
13,651 |
|
|
|
14,612 |
|
|
|
14,006 |
|
|
|
14,557 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding diluted |
|
|
13,861 |
|
|
|
14,906 |
|
|
|
14,242 |
|
|
|
14,874 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per Share-Continuing Operations |
|
$ |
0.44 |
|
|
$ |
0.53 |
|
|
$ |
1.17 |
|
|
$ |
1.41 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share-Continuing Operations |
|
$ |
0.43 |
|
|
$ |
0.52 |
|
|
$ |
1.15 |
|
|
$ |
1.38 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Loss Per Share-Discontinued Operations |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
(3.19 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Loss Per Share-Discontinued Operations |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
(3.12 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings (Loss) Per Share |
|
$ |
0.44 |
|
|
$ |
0.53 |
|
|
$ |
1.17 |
|
|
$ |
(1.78 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings (Loss) Per Share |
|
$ |
0.43 |
|
|
$ |
0.52 |
|
|
$ |
1.15 |
|
|
$ |
(1.74 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to condensed consolidated financial statements.
4
Saia, Inc.
Condensed Consolidated Statements of Cash Flows
For the nine months ended September 30, 2007 and 2006
(in thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months |
|
|
|
|
|
|
2007 |
|
|
2006 |
|
Operating Activities: |
|
|
|
|
|
|
|
|
Net cash from operating activitiescontinuing operations |
|
$ |
30,641 |
|
|
$ |
45,386 |
|
Net cash from operating activitiesdiscontinued operations |
|
|
|
|
|
|
16,268 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash from operating activities |
|
|
30,641 |
|
|
|
61,654 |
|
|
|
|
|
|
|
|
|
|
Investing Activities: |
|
|
|
|
|
|
|
|
Acquisition of property and equipment |
|
|
(60,148 |
) |
|
|
(69,829 |
) |
Proceeds from disposal of property and equipment |
|
|
5,674 |
|
|
|
1,959 |
|
Acquisition of business |
|
|
(2,344 |
) |
|
|
|
|
Proceeds from sale of subsidiary |
|
|
|
|
|
|
41,200 |
|
Net investment in discontinued operations |
|
|
|
|
|
|
(5,359 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
(56,818 |
) |
|
|
(32,029 |
) |
|
|
|
|
|
|
|
|
|
Financing Activities: |
|
|
|
|
|
|
|
|
Proceeds from long-term debt |
|
|
47,529 |
|
|
|
|
|
Repayment of long-term debt |
|
|
(6,402 |
) |
|
|
(2,500 |
) |
Repurchase of common stock |
|
|
(23,226 |
) |
|
|
|
|
Proceeds from stock option exercises |
|
|
1,378 |
|
|
|
3,826 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash from financing activities |
|
|
19,279 |
|
|
|
1,326 |
|
|
|
|
|
|
|
|
Net Increase (Decrease) in Cash and Cash Equivalents |
|
|
(6,898 |
) |
|
|
30,951 |
|
Cash and cash equivalents, beginning of period |
|
|
10,669 |
|
|
|
16,865 |
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period |
|
$ |
3,771 |
|
|
$ |
47,816 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Cash Flow Information: |
|
|
|
|
|
|
|
|
Income taxes paid, net |
|
$ |
8,327 |
|
|
$ |
1,890 |
|
Interest paid |
|
|
5,492 |
|
|
|
6,813 |
|
See accompanying notes to condensed consolidated financial statements.
5
Saia, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
(1) Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements include the accounts of
Saia, Inc. and its wholly owned regional transportation subsidiary, Saia Motor Freight Line, LLC
(together the Company or Saia). The financial statements include the financial position and results
of operations of The Connection Company (the Connection) since its acquisition date of November 18,
2006 and Madison Freight Systems, Inc. (Madison Freight) since its acquisition date of February 1,
2007 (See Note 3).
The condensed consolidated financial statements have been prepared by the Company, without audit by
independent registered public accountants. In the opinion of management, all normal recurring
adjustments necessary for a fair presentation of the statement of the financial position, results
of operations and cash flows for the interim periods included herein have been made. These interim
financial statements of the Company have been prepared in accordance with U.S. generally accepted
accounting principles for interim financial information, the instructions to Quarterly Report on
Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and note disclosures normally
included in financial statements prepared in accordance with U.S. generally accepted accounting
principles have been condensed or omitted from these statements. The accompanying condensed
consolidated financial statements should be read in conjunction with the Companys Annual Report on
Form 10-K for the year ended December 31, 2006. Operating results for the quarter and nine-months
ended September 30, 2007, are not necessarily indicative of the results of operations that may be
expected for the year ended December 31, 2007.
Business
The Company provides regional and interregional less-than-truckload (LTL) services and selected
national LTL, truckload (TL) and time-definite services across the United States through its wholly
owned subsidiary, Saia Motor Freight Line, LLC (Saia Motor Freight).
Integration Charges
Integration charges totaling zero and $2.4 million were expensed in the quarter and nine-months
ended September 30, 2007, respectively, in connection with the acquisitions of the Connection and
Madison Freight (See Note 3). These integration charges consist of employee retention and stay
bonuses, training, communications, fleet re-logoing, technology integration and other related
items.
New Accounting Pronouncements
In September 2006, FASB issued Statement of Financial Accounting Standards (SFAS) No. 157 (SFAS
No. 157), Fair Value Measurements. SFAS No. 157 defines fair value, establishes a framework for
measuring fair value and requires enhanced disclosures about fair value measurements. SFAS No. 157
requires companies to disclose the fair value of financial instruments according to a fair value
hierarchy. Additionally, companies are required to provide certain disclosures regarding
instruments within the hierarchy, including a reconciliation of the beginning and ending balances
for each major category of assets and liabilities. SFAS No. 157 is effective for the Companys
fiscal year beginning January 1, 2008. The Company is currently evaluating the impact of SFAS No.
157 on its consolidated financial statements
Business Segment Information
As a result of the sale of Jevic Transportation, Inc. in June 2006, the subsequent relocation of
the corporate headquarters to Johns Creek, Georgia and the move to a focus on the operations of one
company, management has modified its internal reporting whereby the Companys chief operating
decision maker now evaluates information on a consolidated basis and as a result, the Company will
no longer report separate segment information. Jevic Transportation, Inc. has been reflected as
discontinued operations.
Stock-based Compensation Expense
6
The Company amended its Amended and Restated 2003 Omnibus Incentive Plan to provide for the payment
of Performance Unit Awards granted on or after January 1, 2007 in shares instead of cash. The new
stock-based awards will be accounted for in accordance with Financial Accounting Standards Board
Statement No. 123R with the expense amortized over the three year vesting period based on the Monte
Carlo fair value at the date the awards are granted.
(2) Computation of Earnings Per Share
The calculation of basic earnings per common share and diluted earnings per common share was as
follows (in thousands, except per share amounts):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter |
|
|
Nine Months |
|
|
|
2007 |
|
|
2006 |
|
|
2007 |
|
|
2006 |
|
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations |
|
$ |
5,949 |
|
|
$ |
7,681 |
|
|
$ |
16,376 |
|
|
$ |
20,564 |
|
Income (Loss) from discontinued operations, net |
|
|
|
|
|
|
2 |
|
|
|
|
|
|
|
(46,447 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (Loss) |
|
$ |
5,949 |
|
|
$ |
7,683 |
|
|
$ |
16,376 |
|
|
$ |
(25,883 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for basic earnings per share
weighted average common shares |
|
|
13,651 |
|
|
|
14,612 |
|
|
|
14,006 |
|
|
|
14,557 |
|
Effect of dilutive stock options |
|
|
169 |
|
|
|
265 |
|
|
|
200 |
|
|
|
293 |
|
Effect of other common stock equivalents |
|
|
41 |
|
|
|
29 |
|
|
|
36 |
|
|
|
24 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for diluted earnings per share
adjusted weighted average common shares |
|
|
13,861 |
|
|
|
14,906 |
|
|
|
14,242 |
|
|
|
14,874 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per Share Continuing Operations |
|
$ |
0.44 |
|
|
$ |
0.53 |
|
|
$ |
1.17 |
|
|
$ |
1.41 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Loss Per Share Discontinued Operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3.19 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings (Loss) Per Share |
|
$ |
0.44 |
|
|
$ |
0.53 |
|
|
$ |
1.17 |
|
|
$ |
(1.78 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share Continuing Operations |
|
$ |
0.43 |
|
|
$ |
0.52 |
|
|
$ |
1.15 |
|
|
$ |
1.38 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Loss Per Share Discontinued Operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3.12 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings (Loss) Per Share |
|
$ |
0.43 |
|
|
$ |
0.52 |
|
|
$ |
1.15 |
|
|
$ |
(1.74 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(3) Acquisitions
On February 1, 2007, the Company acquired all of the outstanding common stock of Madison Freight,
an LTL carrier operating in the state of Wisconsin and parts of Illinois and Minnesota. Madison
Freight was merged and its operations integrated into Saia on March 31, 2007. The results of
operations of Madison Freight are included in the consolidated results of the Company since the
February 1 acquisition date. The total consideration of $2.3 million includes $0.9 million for the
purchase of all outstanding Madison Freight equity and the repayment of $1.4 million of existing
Madison Freight debt. The transaction was financed from cash balances and existing revolving credit
capacity.
The purchase price of Madison Freight has been allocated based on managements estimates as follows
(in thousands):
|
|
|
|
|
Goodwill |
|
$ |
1,032 |
|
Acquired net tangible assets |
|
|
1,312 |
|
|
|
|
|
Total allocation of purchase price |
|
$ |
2,344 |
|
|
|
|
|
Integration charges from the Madison Freight acquisition totaling zero and $0.9 million were
expensed in the quarter and nine months ended September 30, 2007, respectively. These integration
charges consist of employee retention and stay bonuses, training, communications, fleet re-logoing,
technology integration and other related items.
7
During the second quarter of 2007, the Company allocated the purchase price in excess of net
tangible assets between goodwill and other identifiable intangible assets related to the November
18, 2006 acquisition of the Connection. The purchase price is subject to the final adjustments with
the former owner. The cash purchase price of the Connection of $17.5 million has been allocated
based on independent appraisals and managements estimates as follows (in thousands):
|
|
|
|
|
Accounts receivable |
|
$ |
8,259 |
|
Other current assets |
|
|
552 |
|
Property and equipment |
|
|
11,338 |
|
Acquired intangible assets: |
|
|
|
|
Covenants not-to-compete (useful life of 5
years) |
|
|
644 |
|
Customer relationships (useful life of 10
years) |
|
|
2,900 |
|
Goodwill |
|
|
4,638 |
|
Other assets |
|
|
465 |
|
Current liabilities |
|
|
(8,098 |
) |
Long-term liabilities |
|
|
(3,202 |
) |
|
|
|
|
|
|
|
|
|
Total allocation of purchase price |
|
$ |
17,496 |
|
|
|
|
|
The gross amounts and accumulated amortization of identifiable intangible assets of the Company
from all acquisitions are as follows (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2007 |
|
|
December 31, 2006 |
|
|
|
Gross |
|
|
Accumulated |
|
|
Gross |
|
|
Accumulated |
|
|
|
Amount |
|
|
Amortization |
|
|
Amount |
|
|
Amortization |
|
Amortizable intangible assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer lists |
|
$ |
4,600 |
|
|
$ |
1,211 |
|
|
$ |
1,700 |
|
|
$ |
815 |
|
Covenants not-to-compete |
|
|
3,550 |
|
|
|
2,754 |
|
|
|
2,713 |
|
|
|
2,502 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
8,150 |
|
|
$ |
3,965 |
|
|
$ |
4,413 |
|
|
$ |
3,317 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization expense for intangible assets other than goodwill was $0.2 million and $0.1 million
for the quarter ended September 30, 2007 and 2006, respectively. Amortization expense for
intangible assets other than goodwill was $0.6 million and $0.4 million for the nine months ended
September 30, 2007 and 2006, respectively. Estimated amortization expense for intangible assets
other than goodwill for the five succeeding years as of September 30, 2007 follows (in thousands):
|
|
|
|
|
|
|
Amount |
Remainder of 2007 |
|
$ |
336 |
|
2008 |
|
|
846 |
|
2009 |
|
|
713 |
|
2010 |
|
|
425 |
|
2011 |
|
|
390 |
|
2012 |
|
|
290 |
|
(4) Commitments and Contingencies
Fuel Surcharge Litigation. In late July 2007, a lawsuit was filed in federal court in California
against Saia and several other major LTL freight carriers alleging that the defendants conspired to
fix fuel surcharge rates in violation of federal antitrust laws and seeking injunctive relief,
treble damages and attorneys fees. Since the filing of the original case, similar cases have been
filed against Saia and other LTL freight carriers, each with the same allegation of conspiracy to
fix fuel surcharge rates. The plaintiffs in these cases are seeking class action certification. We
believe that these claims have no merit and intend to vigorously defend ourselves. We have also
received an
indemnification claim related to the sale of Jevic Transportation arising from these lawsuits.
Given the nature and status of the claims, we cannot yet determine the amount or a reasonable range
of potential loss, if any.
8
California Labor Code Litigation. The Company is a defendant in a lawsuit filed in California state
court on behalf of California dock workers alleging various violations of state labor laws. The
claims include the alleged failure of the Company to provide rest and meal breaks and the failure
to reimburse the employees for the cost of work shoes, among other claims. The plaintiff is seeking
class action certification. We have denied any liability and intend to vigorously defend ourselves.
Given the nature and status of the claims, we cannot yet determine the amount or a reasonable range
of potential loss, if any.
Other. The Company is subject to legal proceedings that arise in the ordinary course of its
business. In the opinion of management, the aggregate liability, if any, with respect to these
actions will not materially adversely affect our financial position, results of operations or cash
flows.
(5) Income Taxes
In June 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 48
(FIN 48), Accounting for Uncertainty in Income Taxes, which defines the threshold for recognizing
the benefits of tax-filing positions in the financial statements as more-likely-than-not to be
sustained by the taxing authority. FIN 48 also prescribes a method for computing the tax benefit of
such tax positions to be recognized in the financial statements. In addition, FIN 48 provides
guidance on derecognition, classification, interest and penalties, accounting in interim periods,
disclosure and transition. The Company adopted FIN 48 as of January 1, 2007 with no cumulative
effect adjustment recorded at adoption.
The Company and its subsidiaries file income tax returns in the U.S. federal and various state
jurisdictions. The Companys uncertain tax positions are related to tax years that remain subject
to examination. For the U.S. federal jurisdiction open years are 2003 to 2006 and open years for
the majority of the various state jurisdictions range from 2000 to 2006.
As of January 1, 2007, the Company had unrecognized tax benefits of $2.8 million. If recognized,
these unrecognized tax benefits would be recorded as a component of income tax expense totaling
approximately $1.8 million, net of federal tax benefits. There have been no significant changes to
these amounts during the quarter and nine-months ended September 30, 2007. Based on the information
currently available, no significant changes in these unrecognized tax benefits are expected in the
next twelve months.
Estimated interest and penalties related to uncertain tax positions of income taxes are classified
as a component of income tax expense in the statement of operations. The balance sheet includes
cumulative accrued interest and penalties, exclusive of applicable federal tax benefits, of $1.1
million and $0.9 million as of September 30, 2007 and January 1, 2007, respectively.
Item 2. Managements Discussion and Analysis of Results of Operations and Financial Condition
Executive Overview
The Companys business is highly correlated to the general economy and, in particular, industrial
production. The Companys priorities are focused on increasing volume within existing geographies
while managing both the mix and yield of business to achieve increased profitability. The Companys
business is labor intensive, capital intensive and service sensitive. The Company looks for
opportunities to improve cost effectiveness, safety and asset utilization (primarily tractors and
trailers). Technology is important to supporting both customer service and operating management.
All of the following operating information is for continuing operations unless otherwise noted.
(See Discontinued Operations discussion below.) The Company grew operating revenue by 9.6 percent
in the third quarter of 2007 over the third quarter of 2006. Revenue growth was attributable to the
acquisition of The Connection Company (the Connection) and Madison Freight Systems (Madison
Freight) and improvement in yield (revenue per hundred weight).
Operating income was $12.7 million for the third quarter of 2007, a decrease from $14.0 million
recorded in the prior-year quarter. The prior year quarter results included restructuring costs of
$0.4 million due to the planned consolidation and relocation of the Companys corporate
headquarters to Johns Creek, Georgia. During the current quarter accident expense was $2.3 million
higher than the prior year quarter due to increased severity. The Company also recorded a pre-tax
benefit of $3.4 million in the third quarter of 2007 for equity-based compensation compared to a
pre-tax charge of $1.9 million in the third quarter 2006 as a result of the impact of stock price
changes in the
respective periods. Earnings per share from continuing operations in the third quarter of 2007 were
$0.43 per share compared to earnings per share from continuing operations in the third quarter of
2006 of $0.52 per share. Third quarter 2007 operating income was impacted by the soft freight
environment, investments in new synergy
9
lanes, increased accident severity, along with higher
healthcare costs. The operating ratio (operating expenses divided by operating revenue) of 94.9 in
the third quarter of 2007 compared to 93.8 in the third quarter of 2006.
The Company generated $30.6 million in cash from operating activities of continuing operations
through the first nine months of the year compared with $45.4 million in the prior-year period.
Cash flows from operating activities of discontinued operations were zero and $16.3 million for the
nine months ended September 30, 2007 and 2006, respectively. The Company had net cash used in
investing activities from continuing operations of $56.8 million during the first nine months of
2007 for the purchase of property and equipment and Madison Freight compared to $67.9 million from
continuing operations in the first nine months of 2006. The Company received $41.2 million from the
sale of Jevic in the first nine months of 2006 partially offset by a $5.3 million investment in
discontinued operations for the first nine months of 2006. The Companys cash from financing
activities during the first nine months of 2007 included proceeds from borrowings on long-term debt
of $47.5 million partially offset by $23.2 million of share repurchases, debt repayment of $6.4
million and $1.4 million of proceeds from stock option exercises. The Company had borrowings of
$47.5 million on its credit agreement and a cash balance of $3.7 million as of September 30, 2007.
General
The following managements discussion and analysis describes the principal factors affecting the
results of operations, liquidity and capital resources, as well as the critical accounting policies
of Saia, Inc. (also referred to as Saia and the Company). This discussion should be read in
conjunction with the accompanying unaudited condensed consolidated financial statements and our
2006 audited consolidated financial statements included in the Companys Annual Report on Form 10-K
for the year ended December 31, 2006. Those financial statements include additional information
about our significant accounting policies, practices and the transactions that underlie our
financial results.
The Company is an asset-based transportation company based in Johns Creek, Georgia providing
regional and multi-regional LTL services and selected national LTL, truckload (TL) and guaranteed
service solutions to a broad base of customers across the United States.
Our business is highly correlated to the general economy and, in particular, industrial production.
It also is impacted by a number of other factors as detailed in the Forward Looking Statements
section of this Form 10-Q. The key factors that affect our operating results are the volumes of
shipments transported through our network, as measured by our average daily shipments and tonnage;
the prices we obtain for our services, as measured by revenue per hundredweight (yield) and revenue
per shipment; our ability to manage our cost structure for capital expenditures and operating
expenses such as salaries, wages and benefits; purchased transportation; claims and insurance
expense; fuel and maintenance; and our ability to match operating costs to shifting volume levels.
The Company measures yield both including and excluding fuel surcharge. Fuel surcharges have
remained in effect for several years and are a significant component of revenue and pricing. Fuel
surcharges are a more integral part of annual customer contract renewals, blurring the distinction
between base price increases and recoveries under the fuel surcharge program.
10
Results of Operations
Selected Results of Continuing Operations and Operating Statistics
For the quarters ended September 30, 2007 and 2006
(in thousands, except ratios and revenue per hundredweight)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent |
|
|
|
|
|
|
|
|
|
|
Variance |
|
|
2007 |
|
2006 |
|
07 v. 06 |
Operating Revenue |
|
$ |
247,823 |
|
|
$ |
226,118 |
|
|
|
9.6 |
% |
Operating Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Salaries, wages and employees benefits |
|
|
129,261 |
|
|
|
122,421 |
|
|
|
5.6 |
|
Purchased transportation |
|
|
20,710 |
|
|
|
18,461 |
|
|
|
12.2 |
|
Depreciation and amortization |
|
|
9,785 |
|
|
|
8,260 |
|
|
|
18.5 |
|
Fuel and other operating expenses |
|
|
75,414 |
|
|
|
63,021 |
|
|
|
19.7 |
|
Operating Income |
|
|
12,653 |
|
|
|
13,955 |
|
|
|
(9.3 |
) |
Operating Ratio |
|
|
94.9 |
% |
|
|
93.8 |
% |
|
|
1.1 |
|
Nonoperating Expense |
|
|
2,584 |
|
|
|
1,672 |
|
|
|
54.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Working Capital |
|
|
17,729 |
|
|
|
43,424 |
|
|
|
(59.2 |
) |
Cash Flows from Continuing Operations (year to date) |
|
|
30,641 |
|
|
|
45,386 |
|
|
|
(32.5 |
) |
Net Acquisitions of Property and Equipment (year to date) |
|
|
54,474 |
|
|
|
67,870 |
|
|
|
(19.7 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Statistics: |
|
|
|
|
|
|
|
|
|
|
|
|
LTL Tonnage |
|
|
950 |
|
|
|
867 |
|
|
|
9.5 |
|
Total Tonnage |
|
|
1,135 |
|
|
|
1,042 |
|
|
|
8.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTL Shipments |
|
|
1,739 |
|
|
|
1,559 |
|
|
|
11.5 |
|
Total Shipments |
|
|
1,764 |
|
|
|
1,583 |
|
|
|
11.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTL Revenue per hundredweight |
|
$ |
12.14 |
|
|
$ |
12.09 |
|
|
|
|
|
LTL Revenue per hundredweight excluding fuel surcharge |
|
|
10.49 |
|
|
|
10.40 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenue per hundredweight |
|
$ |
10.92 |
|
|
$ |
10.85 |
|
|
|
|
|
Total Revenue per hundredweight excluding fuel surcharge |
|
|
9.52 |
|
|
|
9.43 |
|
|
|
|
|
Quarter and nine-months ended September 30, 2007 vs. quarter and nine-months ended September 30, 2006
Continuing Operations
Revenue and volume
Revenue increased 9.6 percent to $247.8 million in the third quarter of 2007 as a result of the
acquisitions of the Connection and Madison Freight which provided the basis for the tonnage
increases. Fuel surcharge revenue, which was 12.8 percent of total revenue in the third quarter of
2007 compared to 13.1 percent of total revenue in the third quarter of 2006, is intended to
mitigate the Companys exposure to rising diesel prices.
Operating revenue excluding fuel surcharge was $216.0 million in the third quarter of 2007, up 9.9
percent from $196.5 million in the third quarter of 2006. Saias revenue growth was due to the
acquisition of Connection and Madison Freight. LTL revenue per hundredweight increased 0.4 percent
to $12.14 per hundredweight for the third quarter of 2007. LTL tonnage was up 9.5 percent to 1.0
million tons and LTL shipments were up 11.5 percent to 1.7 million shipments. During the third
quarter of 2007, the majority of the growth in tonnage and shipments was also due to the
acquisitions. The LTL yield was essentially flat for the quarter primarily due to the acquired
businesses shorter average length of haul. On a pro forma basis, including the operations of the
acquired companies in the third
quarter of 2006, tonnage declined 7 percent due to a 5.3 percent drop in weight per shipment and
2.4% decline in shipment count, while yield increased 7.7 percent due to the impact of mix changes
(increasing length of haul and declining weight per shipment). Management believes that Saia will
be able to grow volume and increase yields through high quality service for its customers, growth
in value added services, like Xtreme Guarantee® and industry
11
consolidation. Approximately 70
percent of Saias revenue is subject to individual customer price adjustment negotiations that
occur intermittently throughout the year. The remaining 30 percent of revenue is subject to the
annual general rate increase. On April 2, 2007, Saia implemented a 4.95 percent general rate
increase for customers comprising this 30 percent of revenue compared to a 5.9 percent general rate
increase on April 3, 2006. Competitive factors, customer turnover and mix changes impact the extent
to which customer rate increases are retained over time.
For the nine-months ended September 30, 2007 operating revenues were $732.4 million up 11.7 percent
from $655.6 million for the nine-months ended September 30, 2006 due to increased tonnage and
higher yield including increases in fuel surcharge revenues. Fuel surcharge revenues decreased to
12.0 percent of revenue for the 2007 nine-month period compared to 12.1 percent for the prior year
period. The increase in revenue, exclusive of fuel surcharges, is a result of the acquisition of
both the Connection and Madison Freight.
Operating expenses and margin
Operating income was $12.7 million in the third quarter of 2007 compared to $14.0 million in the
third quarter of 2006. The third quarter 2007 operating ratio (operating expenses divided by
operating revenue) was 94.9 compared to 93.8 for the third quarter of 2006. Higher fuel costs, in
conjunction with volume changes, caused $2.9 million of the increase in fuel and operating expenses
and supplies. Quarter-over-quarter price and volume increases were more than offset by cost
increases in wages, health care and accident expense. Purchased transportation expenses increased
12.2 percent reflecting increased tonnage and the opening of lanes to and from the acquired
territory. Saias annual wage rate increases averaged 2.7 percent and were effective August 1,
2006. The Company has delayed its 2007 annual wage increase from August until December. During the
current quarter accident expense was $2.3 million higher than the prior year quarter due to
increased severity, although frequency improved. The Company experiences volatility in accident
expense as a result of its self insurance structure and $2.0 million retention limits per
occurrence. The third quarter 2007 results included a reversal of the accrual for annual incentive
compensation of $1.9 million. The current quarter results include $3.4 million of equity-based
compensation benefit compared to a $1.9 million expense in the prior year quarter as a result of
the impact of stock price changes in the respective quarters. Equity-based compensation expense
includes the expense for the cash-based awards under the Companys long-term incentive plans, which
is a function of the Companys stock price performance versus a peer group and the deferred
compensation plans expense which is tied to changes in the Companys stock price. The third
quarter of 2006 included restructuring charges of $0.4 million due to the consolidation and
relocation of the Companys corporate headquarters to Johns Creek, Georgia and no such charges were
incurred in 2007.
For the nine-months ended September 30, 2007, operating income was $34.3 million with an operating
ratio of 95.3 compared to operating income of $39.5 million with an operating ratio of 94.0 for the
nine-months ended September 30, 2006. The nine months ended September 30, 2007 results include
integration charges of $2.4 million due to the integration of the operations of the Connection and
Madison Freight during the first quarter of 2007. The nine-months ended September 30, 2006 include
restructuring costs of $1.5 million as well as $0.5 million of costs related to the resolution of a
proxy matter and fees associated with the strategic evaluation process that concluded in the second
quarter 2006.
Other
Substantially all non-operating expenses represent interest expense and the increase in net
non-operating expenses is a result of overall higher average debt balances during the third quarter
of 2007 versus the third quarter of 2006. The effective tax rate was 40.9 percent for the quarter
ended September 30, 2007 compared to 37.5 percent for the quarter ended September 30, 2006. The
change in the effective tax rate is primarily a result of lower forecasted income for 2007 and the
effects of a $0.7 million tax credit recognized in the nine months ended September 30, 2006.
Income from continuing operations was $5.9 million, or $0.43 per diluted share, in the third
quarter of 2007 compared to $7.7 million or $0.52 per diluted share in the third quarter of 2006.
Income from continuing operations was $16.4 million or $1.15 per diluted share in the first nine
months of 2007 compared to income from continuing operations of $20.6 million or $1.38 per diluted
share in the first nine months of 2006.
Discontinued Operations
On June 30, 2006, the Company completed the sale for cash of all of the outstanding stock of Jevic
Transportation, Inc., its hybrid less-than-truckload and truckload trucking carrier business, to a
private investment firm, pursuant to a Stock Purchase Agreement dated June 30, 2006. The
accompanying consolidated Statements of Operations for all periods presented have been adjusted to
classify Jevic Transportation, Inc. operations as discontinued operations. The Company recorded a
loss from discontinued operations of zero and $46.4 million for the quarter and nine
12
months ended September 30, 2006, respectively, compared to no activity for discontinued operations in the third quarter and nine months of 2007.
Working capital/capital expenditures
Working capital at September 30,
2007 was $17.7 million, which decreased from working capital at September 30, 2006 of
$43.4 million due to cash used for acquisitions, capital expenditures and the stock repurchase
program. Cash flows from operating activities were $30.6 million for the nine-months ended
September 30, 2007 versus cash from operations of $45.4 million for the nine-months
ended September 30, 2006. For the nine-months ended September 30, 2007 cash used in
investing activities was $56.8 million versus $26.7 million in the prior-year nine-month
period primarily due to the sale of Jevic at June 30, 2006. The 2007 acquisition of property
and equipment includes investments in real estate for terminals and in both additions and
replacement of revenue equipment and technology equipment and software. For the nine-months ended
September 30, 2007, cash from financing activities was $19.3 million versus cash from financing activities of $1.3 million for the prior-year nine months. Current year financing activities included $47.5 million net borrowings on the revolving credit facility partially offset by $23.2 million for share repurchases.
Outlook
Our business remains highly correlated to the success of Company specific improvement initiatives
as well as a variety of external factors, including the general economy. For the balance of 2007,
we plan to continue to focus on achieving top quality service and safety performance while
investing in management and infrastructure for future growth and profitability improvement. Saia
continues to evaluate opportunities to grow and further increase profitability. Given volume
trends in the first nine months of 2007, there is present uncertainty as to the extent to which the
economy is softening.
The Company plans to continue to pursue revenue and cost initiatives to improve profitability.
Planned revenue initiatives include, but are not limited to, growing market share in existing
geography and gaining associated density cost benefits; geographic expansion to adjacent states and
positioning for synergy revenue between the old and new territory; targeted marketing initiatives
to grow revenue in more profitable segments, as well as pricing and yield management. The extent of
success of these revenue initiatives is impacted by what proves to be the underlying economic
trends, competitor initiatives and other factors discussed under Risk Factors.
Planned cost management initiatives include, but are not limited to, seeking gains in cost
management, productivity and asset utilization that collectively are designed to offset anticipated
inflationary unit cost increases in salaries and wage rates, healthcare, workers compensation,
fuel and all the other expense categories. If the Company builds market share, there are numerous
operating leverage cost benefits. Conversely should the economy soften from present levels, the
Company intends to match resources and capacity to shifting volume levels to lessen unfavorable
operating leverage. Additionally, the Company has delayed its 2007 annual wage increase from
August until December. The delay in the annual wage increase is due to the challenging economic
environment and the Companys current performance. The August 2006 average wage increase was 2.7%
and the December 2007 wage increase is expected to average 2.5%. The Company had increased
accident expense of $2.3 million in the third quarter of 2007 as compared to third quarter 2006 as
a result of severity and has seen accident severity continue in the fourth quarter. The success of
cost improvement initiatives is also impacted by the cost and availability of drivers and purchased
transportation, fuel, claims, regulatory changes, successful implementation of profit improvement
initiatives and other factors discussed under Risk Factors.
See Forward-Looking Statements for a more complete discussion of potential risks and
uncertainties that could materially affect our future performance.
New Accounting Pronouncements
In September 2006, FASB issued Statement of Financial Accounting Standards (SFAS) No. 157 (SFAS
No. 157), Fair Value Measurements. SFAS No. 157 defines fair value, establishes a framework for
measuring fair value and requires enhanced disclosures about fair value measurements. SFAS No. 157
requires companies to disclose the fair value of financial instruments according to a fair value
hierarchy. Additionally, companies are required to provide certain disclosures regarding
instruments within the hierarchy, including a reconciliation of the beginning and ending balances
for each major category of assets and liabilities. SFAS No. 157 is effective for the Companys
fiscal year beginning January 1, 2008. The Company is currently evaluating the impact of SFAS No.
157 on its consolidated financial statements.
13
Effective January 1, 2007, the Company adopted the provisions of Financial Accounting Standards
Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes. See the related
disclosures in the notes to the condensed consolidated financial statements included in this Form
10-Q.
Financial Condition
The Companys liquidity needs arise primarily from capital investment in new equipment, land and
structures and information technology, letters of credit required under insurance programs, as well
as funding working capital requirements.
The Companys long-term debt at September 30, 2007 includes $90.0 million in Senior Notes, under a
$150 million Master Shelf Agreement with Prudential Investment Management, Inc. and certain of its
affiliates that are unsecured with a fixed interest rate of 7.38 percent. Payments due under the
Senior Notes are semi-annual principal and interest payments, with the final payment due December
2013. Under the terms of the Senior Notes, the Company must maintain several financial covenants
including a maximum ratio of total indebtedness to earnings before interest, taxes, depreciation,
amortization and rent (EBITDAR), a minimum interest coverage ratio and a minimum tangible net
worth, among others. At September 30, 2007, the Company was in compliance with these covenants.
In addition, the Company has third party borrowings of approximately $14.4 million in subordinated
notes.
Saia has a $110 million Agented Revolving Credit Agreement (the Credit Agreement) with Bank of
Oklahoma, N.A., as agent. The Credit Agreement is unsecured with an interest rate based on LIBOR
or prime at the Companys option, plus an applicable spread, in certain instances, and matures in
January 2009. At September 30, 2007, the Company had $47.5 million of borrowings under the Credit
Agreement, $49.4 million in letters of credit outstanding under the Credit Agreement and
availability of $13.1 million. The available portion of the Credit Agreement may be used for
future capital expenditures, working capital and letter of credit requirements as needed. Under
the terms of the Credit Agreement, the Company must maintain several financial covenants including
a maximum ratio of total indebtedness to EBITDAR, a minimum interest coverage ratio and a minimum
tangible net worth, among others. At September 30, 2007, the Company was in compliance with these
covenants.
At December 31, 2006, the Companys former parent company (Yellow) provided guarantees on behalf of
the Company primarily for open workers compensation claims and casualty claims incurred prior to
March 1, 2000. Under the Master Separation and Distribution Agreement entered into in connection
with the Spin-off, the Company pays Yellows actual cost of any collateral it provides to insurance
underwriters in support of these claims through October 2005 after which time it is cost plus 100
basis points through October 2007. At September 30, 2007, the portion of collateral allocated by
Yellow to the Company in support of these claims was $1.5 million.
Projected net capital expenditures for 2007 are approximately $99 million including several
strategic real estate opportunities within Saias existing network. This represents an
approximately $8 million increase from 2006 net capital expenditures for property and equipment.
Approximately $45 million of the remaining 2007 capital budget was committed at September 30, 2007.
Net capital expenditures pertain primarily to replacement of revenue equipment and additional
investments in information technology, land and structures. During the remainder of 2007, we
expect to purchase strategic real estate in the major market of Southern California totaling $20.8
million, which is included in the $99 million net capital expenditure projection above.
The Company has historically generated cash flows from operations that have funded its capital
expenditure requirements. Cash flows from operations were $76.1 million for the year ended
December 31, 2006, which were $3.8 million more than 2006 net cash used in investing activities.
Cash flows from operations were $30.6 million for the nine months ended September 30, 2007 which
funded a portion of the $56.8 million of cash flows used in investing activities for total net
capital expenditures and acquisition of Madison Freight. Cash flows from operating activities for
the nine months ended September 30, 2007 were $31.1 million lower than the prior year period due to
the sale of Jevic and increased accounts receivable. The timing of capital expenditures can
largely be managed around the seasonal working capital requirements of the Company. The Company
has adequate sources of capital to meet short-term liquidity needs through its cash ($3.7 million
at September 30, 2007) and availability under its revolving credit facility ($13.1 million at
September 30, 2007). In addition to these sources of liquidity, the Company has $50 million under
its long-term debt facilities, which is available to fund other longer-term strategic investments.
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 has the ability to adjust its capital expenditures in
the event of a shortfall in anticipated operating cash flows. The Company believes its current
capital structure and availability under its borrowing facilities along with anticipated cash flows
from future operations will be sufficient to fund planned replacements of revenue equipment,
investments in technology and real estate. Additional sources of capital may be needed to fund
future long-term strategic growth initiatives.
14
In accordance with U.S. generally accepted accounting principles, our operating leases are not
recorded in our balance sheet; however, the future minimum lease payments are included in the
Contractual Cash Obligations table below. See the notes to our audited consolidated financial
statements included in Form 10-K for the year ended December 31, 2006 for additional information.
Contractual Cash Obligations
The following tables set forth a summary of our contractual cash obligations and other commercial
commitments as of September 30, 2007 (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments due by year |
|
|
|
2007 |
|
|
2008 |
|
|
2009 |
|
|
2010 |
|
|
2011 |
|
|
Thereafter |
|
|
Total |
|
Contractual cash obligations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt obligations: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revolving line of credit (1) |
|
$ |
|
|
|
$ |
|
|
|
$ |
47.5 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
47.5 |
|
Long-term debt (1) |
|
|
6.4 |
|
|
|
11.4 |
|
|
|
18.9 |
|
|
|
18.9 |
|
|
|
18.6 |
|
|
|
29.9 |
|
|
|
104.1 |
|
Operating leases |
|
|
3.7 |
|
|
|
12.1 |
|
|
|
8.1 |
|
|
|
5.0 |
|
|
|
3.0 |
|
|
|
3.0 |
|
|
|
34.9 |
|
Purchase obligations (2) |
|
|
47.4 |
|
|
|
3.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total contractual obligations |
|
$ |
57.5 |
|
|
$ |
26.8 |
|
|
$ |
74.5 |
|
|
$ |
23.9 |
|
|
$ |
21.6 |
|
|
$ |
32.9 |
|
|
$ |
237.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
In addition to the principal amounts disclosed in the tables below, the Company has interest
obligations of approximately $10 million for 2007 and decreasing for each year thereafter,
based on borrowings outstanding at September 30, 2007. |
|
(2) |
|
Includes commitments of $47.9 million for capital expenditures. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of commitment expiration by year |
|
|
|
2007 |
|
|
2008 |
|
|
2009 |
|
|
2010 |
|
|
2011 |
|
|
Thereafter |
|
|
Total |
|
Other commercial commitments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available line of credit |
|
$ |
|
|
|
$ |
|
|
|
$ |
13.1 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
13.1 |
|
Letters of credit |
|
|
0.4 |
|
|
|
50.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50.7 |
|
Surety bonds |
|
|
|
|
|
|
4.4 |
|
|
|
0.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial commitments |
|
$ |
0.4 |
|
|
$ |
54.7 |
|
|
$ |
13.6 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
68.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company has unrecognized tax benefits of approximately $3.1 million and accrued interest and
penalties of $1.1 million related to the unrecognized tax benefits as of September 30, 2007. The
Company cannot reasonably estimate the timing of cash settlement with respective taxing authorities
beyond one year and accordingly has not included the amounts within the above contractual cash
obligation and other commercial commitment tables.
The Company remains a guarantor under its indemnity agreement with certain insurance underwriters
with respect to Jevics workers compensation, bodily injury and property damage and general
liability claims that were estimated to be approximately $15.3 million at the June 30, 2006
transaction date. In connection with the transaction, Jevic provided collateral in the form of a
$15.3 million letter of credit with a third party bank in favor of the Company. In addition, the
Company agreed to maintain approximately $1.0 million of surety bonds outstanding at the
transaction date of which $0.1 million remain outstanding at September 30, 2007. The buyer agreed
to use its reasonable best efforts to affect a release of the Company from this obligation or
otherwise replace these surety bonds. We do not anticipate future obligations or liabilities in
addition to those already recorded in our financial statements related to this transaction.
15
Critical Accounting Policies and Estimates
The Company makes estimates and assumptions in preparing the consolidated financial statements that
affect reported amounts and disclosures therein. In the opinion of management, the accounting
policies that generally have the most significant impact on the financial position and results of
operations of the Company include:
|
|
Claims and Insurance Accruals. The Company has self-insured retention limits
generally ranging from $250,000 to $2.0 million per claim for medical, workers compensation,
auto liability, casualty and cargo claims. For only the policy year March 2003 through
February 2004, the Company has an aggregate exposure limited to an additional $2.0 million
above its $1.0 million per claim deductible under its auto liability program. The liabilities
associated with the risk retained by the Company are estimated in part based on historical
experience, third-party actuarial analysis, demographics, nature and severity, past experience
and other assumptions. The liabilities for self-funded retention are included in claims and
insurance reserves based on claims incurred, with liabilities for unsettled claims and claims
incurred but not yet reported being actuarially determined with respect to workers
compensation claims and with respect to all other liabilities, estimated based on managements
evaluation of the nature and severity of individual claims and historical experience.
However, these estimated accruals could be significantly affected if the actual costs of the
Company differ from these assumptions. A significant number of these claims typically take
several years to develop and even longer to ultimately settle. These estimates tend to be
reasonably accurate over time; however, assumptions regarding severity of claims, medical cost
inflation, as well as specific case facts can create short-term volatility in estimates. |
|
|
|
Revenue Recognition and Related Allowances. Revenue is recognized on a
percentage-of-completion basis for shipments in transit while expenses are recognized as
incurred. In addition, estimates included in the recognition of revenue and accounts
receivable include estimates of shipments in transit and estimates of future adjustments to
revenue and accounts receivable for billing adjustments and collectibility. |
|
|
|
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. |
|
|
|
Depreciation and Capitalization of Assets. Under the Companys accounting policy
for property and equipment, management establishes appropriate depreciable lives and salvage
values for the Companys revenue equipment (tractors and trailers) based on their estimated
useful lives and estimated fair values to be received when the equipment is sold or traded in.
These estimates are routinely evaluated and updated when circumstances warrant. However,
actual depreciation and salvage values could differ from these assumptions based on market
conditions and other factors. |
|
|
|
Recovery of Goodwill. In connection with its acquisition of Clark Bros. in 2004,
the Connection in 2006 and Madison Freight in 2007, the Company allocated purchase price based
on independent appraisals of intangible assets and real property and managements estimates of
valuations of other tangible assets. Annually, the Company assesses goodwill impairment by
applying a fair value based test. This fair value based test involves assumptions regarding
the long-term future performance of the Company, fair value of the assets and liabilities of
the Company, cost of capital rates and other assumptions. However, actual recovery of
remaining goodwill could differ from these assumptions based on market conditions and other
factors. In the event remaining goodwill is determined to be impaired, a charge to earnings
would be required. |
|
|
|
Equity-based Incentive Compensation. The Company maintains long-term incentive
compensation arrangements in the form of stock options, cash-based awards and stock-based
awards. The criteria for the cash-based and stock-based awards are total shareholder return
versus a peer group of companies over a three year performance period. The Company accrues
for cash-based award expenses based on performance criteria from the beginning of the
performance period through the reporting date. This results in the potential for significant
adjustments from period to period that cannot be predicted. The Company accounts for its
stock-based awards in accordance with Financial Accounting Standards Board Statement No. 123R
with the expense amortized over the three year vesting period based on the Monte Carlo fair
value at the date the stock-based awards are granted. The Company accounts for stock options
in accordance with Financial |
16
|
|
Accounting Standards Board Statement No. 123R with option expense amortized over the three
year vesting period based on the Black-Scholes-Merton fair value at the date the options are
granted. See discussion of adoption of Statement No. 123R in Note 9 to the consolidated
financial statements included in the Companys Form 10-K for the year ended December 31, 2006
and the Saia, Inc. Amended and Restated 2003 Omnibus Incentive Plan included in the Companys
Definitive Proxy Statement on Schedule 14A filed on March 16, 2007. |
These accounting policies, and others, are described in further detail in the notes to our audited
consolidated financial statements included in the Companys Form 10-K for the year ended December
31, 2006.
The preparation of financial statements in accordance with accounting principles generally accepted
in the United States requires management to adopt accounting policies and make significant
judgments and estimates to develop amounts reflected and disclosed in the financial statements. In
many cases, there are alternative policies or estimation techniques that could be used. We maintain
a thorough process to review the application of our accounting policies and to evaluate the
appropriateness of the many estimates that are required to prepare the financial statements.
However, even under optimal circumstances, estimates routinely require adjustment based on changing
circumstances and the receipt of new or better information.
Forward-Looking Statements
Certain statements in this Report, including those contained in Results of Operations, Outlook
and Financial Condition are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 with respect to the financial condition, results of
operations, plans, objectives, and effects of the Jevic sale, future performance and business of
the Company. Words such as anticipate, estimate, expect, project, intend, may, plan,
predict, believe, seek, should, and similar words or expressions are intended to identify
forward-looking statements. We use such forward-looking statements regarding our future financial
condition and results of operations and our business operations in this Form 10-Q. Investors
should not place undue reliance on such forward-looking statements, and the Company undertakes no
obligation to publicly update or revise any forward-looking statements. All forward-looking
statements reflect the present expectation of future events of our management and are subject to a
number of important factors, risks, uncertainties and assumptions that could cause actual results
to differ materially from those described in the forward-looking statements. These factors and
risks include, but are not limited to, general economic conditions; indemnification obligations
associated with the sale of Jevic; the effect of ongoing litigation including class action
lawsuits; cost and availability of qualified drivers, fuel, purchased transportation, property,
revenue equipment and other operating assets; governmental regulations, including but not limited
to Hours of Service, engine emissions, compliance with recent legislation requiring companies to
evaluate their internal control over financial reporting and Homeland Security; dependence on key
employees; inclement weather; labor relations; integration risks; effectiveness of company-specific
performance improvement initiatives; competitive initiatives and pricing pressures; terrorism
risks; self-insurance claims, equity-based compensation and other expense volatility; the Companys
determination from time to time whether to purchase any shares under the repurchase program; and
other financial, operational and legal risks and uncertainties detailed from time to time in the
Companys SEC filings. These factors and risks are described in Item 1A: Risk Factors of the
Companys annual report on Form 10-K for December 31, 2006, as updated by Item 1A of this Form
10-Q.
As a result of these and other factors, no assurance can be given as to our future results and
achievements. Accordingly, a forward-looking statement is neither a prediction nor a guarantee of
future events or circumstances, and those future events or circumstances may not occur. You should
not place undue reliance on the forward-looking statements, which speak only as of the date of this
Report. We are under no obligation, and we expressly disclaim any obligation, to update or alter
any forward-looking statements, whether as a result of new information, future events or otherwise.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company is exposed to a variety of market risks, including the effects of interest rates and
fuel prices. The detail of the Companys debt structure is more fully described in the notes to
the consolidated financial statements set forth in the Form 10-K for the year ended December 31,
2006. To help mitigate our risk to rising fuel prices, Saia Motor Freight has implemented a fuel
surcharge program. This program is well established within the industry and customer acceptance of
fuel surcharges remains high. Since the amount of fuel surcharge is based on average national
diesel fuel prices and is reset weekly, exposure of the Company to fuel price volatility is
significantly reduced.
17
The following table provides information about the Companys third-party financial instruments as
of September 30, 2007. The table presents principal cash flows (in millions) and related weighted
average interest rates by contractual maturity dates. The fair value of the fixed rate debt was
estimated based upon the borrowing rates currently available to the Company for debt with similar
terms and remaining maturities.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expected maturity date |
|
2007 |
|
|
2007 |
|
2008 |
|
2009 |
|
2010 |
|
2011 |
|
Thereafter |
|
Total |
|
Fair Value |
Fixed rate debt |
|
$ |
6.4 |
|
|
$ |
11.4 |
|
|
$ |
18.9 |
|
|
$ |
18.9 |
|
|
$ |
18.6 |
|
|
$ |
29.9 |
|
|
$ |
104.1 |
|
|
$ |
110.6 |
|
Average interest rate |
|
|
7.32 |
% |
|
|
7.33 |
% |
|
|
7.34 |
% |
|
|
7.35 |
% |
|
|
7.23 |
% |
|
|
7.38 |
% |
|
|
|
|
|
|
|
|
Variable rate debt |
|
$ |
|
|
|
|
|
|
|
$ |
47.5 |
|
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
$ |
47.5 |
|
|
$ |
47.5 |
|
Average interest rate |
|
|
|
|
|
|
7.75 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Item 4. Controls and Procedures
Quarterly Controls Evaluation and Related CEO and CFO Certifications
As of the end of the period covered by this Quarterly Report on Form 10-Q, the Company conducted an
evaluation of the effectiveness of the design and operation of its disclosure controls and
procedures (Disclosure Controls). The controls evaluation was performed under the supervision and
with the participation of management, including the Companys Chief Executive Officer (CEO) and
Chief Financial Officer (CFO).
Based upon the controls evaluation, the Companys CEO and CFO have concluded that, subject to the
limitations noted below, as of the end of the period covered by this Quarterly Report on Form 10-Q,
the Companys Disclosure Controls were effective to provide reasonable assurance that material
information relating to the Company is made known to management, including the CEO and CFO,
particularly during the period when periodic reports are being prepared.
During the period covered by this Quarterly Report, there were no changes in internal control over
financial reporting that materially affected, or that are reasonably likely to materially affect,
the Companys internal control over financial reporting.
Attached as Exhibits 31.1 and 31.2 to this Quarterly Report are certifications of the CEO and the
CFO, which are required in accordance with Rule 13a-14 of the Securities Exchange Act of 1934 (the
Exchange Act). This Controls and Procedures section includes the information concerning the
controls evaluation referred to in the certifications and it should be read in conjunction with the
certifications.
Definition of Disclosure Controls
Disclosure Controls are controls and procedures designed to ensure that information required to be
disclosed in the Companys reports filed under the Exchange Act is recorded, processed, summarized
and reported timely. Disclosure Controls are also designed to ensure that such information is
accumulated and communicated to the Companys management, including the CEO and CFO, as appropriate
to allow timely decisions regarding required disclosure. The Companys Disclosure Controls include
components of its internal control over financial reporting, which consists of control processes
designed to provide reasonable assurance regarding the reliability of the Companys financial
reporting and the preparation of financial statements in accordance with U.S. generally accepted
accounting principles.
Limitations on the Effectiveness of Controls
The Companys management, including the CEO and CFO, does not expect that its Disclosure Controls
or its internal control over financial reporting will prevent all errors and all fraud. A control
system, no matter how well designed and operated, can provide only reasonable, not absolute,
assurance that the control systems objectives will be met. Further, the design of a control system
must reflect the fact that there are resource constraints and the benefits of controls must be
considered relative to their costs. Because of the inherent limitations in all control
18
systems, no evaluation of controls can provide absolute assurance that all control issues and
instances of fraud, if any, within the Company have been detected. These inherent limitations
include the realities that judgments in decision-making can be faulty, and that breakdowns can
occur because of simple error or mistake. Controls can also be circumvented by the individual acts
of some persons, by collusion of two or more people, or by management override of the controls.
Because of the inherent limitations in a cost-effective control system, misstatements due to error
or fraud may occur and not be detected.
19
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
For a description of all material pending legal proceedings, see Note 4
of the accompanying consolidated financial statements.
Item 1A. Risk Factors
Risk Factors are described in Item 1A: Risk Factors of the Companys
annual report on Form 10-K for the year ended December 31, 2006 and there have been no material
changes.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuer Purchases of Equity Securities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(d) Maximum |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number (or |
|
|
|
|
|
|
|
|
|
|
|
(c) Total Number |
|
|
Approximate Dollar |
|
|
|
(a) Total |
|
|
|
|
|
|
of Shares (or |
|
|
Value) of Shares (or |
|
|
|
Number of |
|
|
(b) Average |
|
|
Units) Purchased |
|
|
Units) that May Yet |
|
|
|
Shares (or |
|
|
Price Paid per |
|
|
as Part of Publicly |
|
|
be Purchased under |
|
|
|
Units) |
|
|
Share (or |
|
|
Announced Plans |
|
|
the Plans or |
|
Period |
|
Purchased |
|
|
Unit) |
|
|
or Programs |
|
|
Programs |
|
July 1, 2007 through
July 31, 2007 |
|
|
2,460 |
(2) |
|
$ |
21.15 |
(2) |
|
|
|
(1) |
|
$ |
17,827,046 |
(1) |
August 1, 2007 through
August 31, 2007 |
|
|
6,800 |
(3) |
|
|
18.59 |
(3) |
|
|
976,700 |
(1) |
|
|
|
(1) |
September 1, 2007 through
September 30, 2007 |
|
|
|
(4) |
|
|
|
(4) |
|
|
|
(1) |
|
|
|
(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
|
9,260 |
|
|
|
|
|
|
|
976,700 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Shares purchased as part of publicly announced programs were purchased
on the open market in accordance with the Companys $25,000,000 stock
repurchase program that was announced on November 27, 2006. This
stock repurchase program was completed in August 2007. Shares
purchased by the SCST Executive Capital Accumulation Plan were open
market purchases. For more information on the SCST Executive Capital
Accumulation Plan see the Registration Statement on Form S-8 (No.
333-103661) filed on March 7, 2003. |
|
(2) |
|
The SCST Executive Capital Accumulation Plan sold no shares of Saia
stock on the open market during the period of July 1, 2007 through
July 31, 2007. |
|
(3) |
|
The SCST Executive Capital Accumulation Plan sold no shares of Saia
stock on the open market during the period of August 1, 2007 through
August 31, 2007. |
|
(4) |
|
The SCST Executive Capital Accumulation Plan sold no shares of Saia
stock on the open market during the period of September 1, 2007
through September 30, 2007. |
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
20
Item 6. Exhibits
|
|
|
Exhibit |
|
|
Number |
|
Description of Exhibit |
|
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation of Saia, Inc. (incorporated herein
by reference to Exhibit 3.1 of Saia, Inc.s Form 8-K (File No. 0-49983) filed on
July 26, 2006). |
|
|
|
3.2
|
|
Amended and Restated Bylaws of Saia, Inc. (incorporated herein by reference to
Exhibit 3.2 of Saia, Inc.s Form 8-K (File No. 0-49983) filed on July 26, 2006). |
|
|
|
4.1
|
|
Rights Agreement between SCS Transportation, Inc. and Mellon Investor Services LLC
dated as of September 30, 2002 (incorporated herein by reference to Exhibit 4.1 of
SCS Transportation, Inc.s Form 10-Q (File No. 0-49983) for the quarter ended
September 30, 2002). |
|
|
|
31.1
|
|
Certification of Principal Executive Officer Pursuant to Exchange Act Rule 13a-15(e). |
|
|
|
31.2
|
|
Certification of Principal Financial Officer Pursuant to Exchange Act Rule 13a-15(e). |
|
|
|
32.1
|
|
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
32.2
|
|
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
21
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
|
|
|
|
SAIA, INC.
|
|
Date: October 31, 2007 |
/s/ James A. Darby
|
|
|
James A. Darby |
|
|
Vice President of Finance and
Chief Financial Officer |
|
|
22
EXHIBIT INDEX
|
|
|
Exhibit |
|
|
Number |
|
Description of Exhibit |
3.1
|
|
Amended and Restated Certificate of Incorporation of Saia, Inc. (incorporated herein
by reference to Exhibit 3.1 of Saia, Inc.s Form 8-K (File No. 0-49983) filed on
July 26, 2006). |
|
|
|
3.2
|
|
Amended and Restated Bylaws of Saia, Inc. (incorporated herein by reference to
Exhibit 3.2 of Saia, Inc.s Form 8-K (File No. 0-49983) filed on July 26, 2006). |
|
|
|
4.1
|
|
Rights Agreement between SCS Transportation, Inc. and Mellon Investor Services LLC
dated as of September 30, 2002 (incorporated herein by reference to Exhibit 4.1 of
SCS Transportation, Inc.s Form 10-Q (File No. 0-49983) for the quarter ended
September 30, 2002). |
|
|
|
31.1
|
|
Certification of Principal Executive Officer Pursuant to Exchange Act Rule 13a-15(e). |
|
|
|
31.2
|
|
Certification of Principal Financial Officer Pursuant to Exchange Act Rule 13a-15(e). |
|
|
|
32.1
|
|
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
32.2
|
|
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
E-1