Saia, Inc. (SAIA) Bundle
Understanding Saia, Inc. (SAIA) Revenue Streams
Understanding Saia, Inc.’s Revenue Streams
Saia, Inc. primarily generates its revenue through less-than-truckload (LTL) services, which account for over 97% of its total revenue. The company also offers additional services such as non-asset truckload and logistics services across North America.
Revenue Breakdown by Segment
| Revenue Source | Percentage of Total Revenue |
|---|---|
| LTL Services | 97% |
| Non-Asset Truckload | 2% |
| Logistics Services | 1% |
Year-over-Year Revenue Growth Rate
For the third quarter of 2024, consolidated revenue increased by 8.6% to $842.1 million from $775.1 million in the same period of 2023. For the first nine months of 2024, operating revenues were $2.4 billion, reflecting a 13.6% increase from $2.1 billion in the first nine months of 2023.
Contribution of Different Business Segments to Overall Revenue
The breakdown of operating revenue for the third quarter of 2024 is as follows:
| Business Segment | Operating Revenue (Q3 2024) | Operating Revenue (Q3 2023) | Percentage Change |
|---|---|---|---|
| LTL Services | $828.1 million | $770.1 million | 7.5% |
| Non-Asset Truckload | $10.0 million | $5.0 million | 100% |
| Logistics Services | $4.2 million | $4.0 million | 5% |
Analysis of Significant Changes in Revenue Streams
The increase in revenue in the third quarter of 2024 was primarily attributed to a rise in shipments and tonnage, with LTL tonnage up 9.4% to 1.6 million tons and LTL shipments increasing 10.2% to 2.4 million shipments. The LTL revenue per hundredweight, excluding fuel surcharge, increased 1.7% to $21.75.
Approximately 75% of the company's operating revenue was subject to specific customer price negotiations, while the remaining 25% was affected by general rate increases. Notably, the company implemented rate increases of 7.5% and 6.5% in December 2023 and January 2023, respectively.
Fuel surcharge revenue as a percentage of operating revenue decreased to 14.8% for Q3 2024, down from 16.9% in Q3 2023, reflecting changes in customer mix and the average cost of diesel fuel.
Summary of Key Revenue Metrics
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Consolidated Revenue | $842.1 million | $775.1 million | +8.6% |
| Operating Revenue (9 months) | $2.4 billion | $2.1 billion | +13.6% |
| LTL Tonnage | 1.6 million tons | 1.5 million tons | +9.4% |
| LTL Shipments | 2.4 million | 2.2 million | +10.2% |
| LTL Revenue per hundredweight | $21.75 | $21.39 | +1.7% |
A Deep Dive into Saia, Inc. (SAIA) Profitability
Profitability Metrics
Understanding the profitability metrics of Saia, Inc. is crucial for investors assessing the company's financial health. Key indicators include gross profit, operating profit, and net profit margins.
Gross Profit, Operating Profit, and Net Profit Margins
For the third quarter of 2024, Saia reported:
- Operating Revenue: $842.1 million
- Operating Income: $125.2 million
- Net Income: $92.7 million
- Gross Profit Margin: 14.9% (calculated as Operating Income/Operating Revenue)
- Operating Profit Margin: 14.9% (calculated as Operating Income/Operating Revenue)
- Net Profit Margin: 11.0% (calculated as Net Income/Operating Revenue)
Trends in Profitability Over Time
Comparing the third quarter of 2024 to the same period in 2023:
- Operating Revenue Growth: Up 8.6% from $775.1 million in Q3 2023
- Operating Income: Down 2.5% from $128.4 million in Q3 2023
- Net Income: Down 5.0% from $98.2 million in Q3 2023
Comparison of Profitability Ratios with Industry Averages
In comparison to the transportation industry averages for 2024:
| Metric | Saia, Inc. | Industry Average |
|---|---|---|
| Gross Profit Margin | 14.9% | 20.5% |
| Operating Profit Margin | 14.9% | 10.2% |
| Net Profit Margin | 11.0% | 8.5% |
Analysis of Operational Efficiency
Operational efficiency can be assessed through various cost management metrics:
- Operating Ratio: 85.1% in Q3 2024 compared to 83.4% in Q3 2023, indicating rising operating costs relative to revenue.
- Salaries, wages and employee benefits: Increased by $53.5 million year-over-year, primarily due to increased headcount and a 4.1% wage increase.
- Purchased transportation costs: Decreased by $11.2 million year-over-year, reflecting optimization efforts.
- Fuel and operating expenses: Increased by $14.5 million year-over-year, driven by facility and administrative cost increases.
In terms of revenue per shipment:
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| LTL Revenue per Shipment | $345.93 | $351.64 |
| LTL Revenue per Hundredweight | $25.64 | $25.87 |
Debt vs. Equity: How Saia, Inc. (SAIA) Finances Its Growth
Debt vs. Equity: How Saia, Inc. Finances Its Growth
Overview of Company’s Debt Levels
As of September 30, 2024, Saia, Inc. reported total debt of $190.963 million, a significant increase from $16.488 million as of December 31, 2023. This total includes:
- Credit Arrangements: $183.0 million
- Finance Leases: $7.963 million
The current portion of long-term debt was $6.761 million, while long-term debt, less current portion, was $184.202 million.
Debt-to-Equity Ratio and Industry Comparison
The debt-to-equity ratio for Saia, Inc. as of September 30, 2024, stands at approximately 0.11. This figure is calculated based on total debt of $190.963 million divided by total equity of $1.73 billion (approximated based on the latest financial statements). In comparison, the industry standard for transportation companies typically ranges from 0.5 to 1.0. Saia's lower ratio suggests a conservative approach to leveraging.
Recent Debt Issuances, Credit Ratings, or Refinancing Activity
On May 1, 2024, Saia, Inc. issued senior promissory notes under a Private Shelf Agreement totaling $100 million, with an interest rate of 6.09% and a maturity of five years. Additionally, the company has a revolving credit facility of $300 million, which is set to expire in February 2028. As of September 30, 2024, Saia had $83.0 million in outstanding borrowings under this facility, along with $32.2 million in outstanding letters of credit.
Balancing Debt Financing and Equity Funding
Saia, Inc. strategically balances its financing through a mix of debt and equity. The company has historically generated cash flows from operations to fund a large portion of its capital expenditures, with net capital expenditures anticipated to be approximately $1 billion in 2024. The company’s financing activities in 2024 included:
- Repayments of revolving credit facility: $870.1 million
- Borrowings of revolving credit facility: $953.1 million
- Borrowings on private shelf agreement: $100 million
These activities demonstrate an active approach to maintaining liquidity while managing debt levels.
| Debt Component | Amount (in millions) |
|---|---|
| Credit Arrangements | $183.0 |
| Finance Leases | $7.963 |
| Total Debt | $190.963 |
| Current Portion of Long-Term Debt | $6.761 |
| Long-Term Debt, Less Current Portion | $184.202 |
| Debt-to-Equity Ratio | 0.11 |
Assessing Saia, Inc. (SAIA) Liquidity
Assessing Saia, Inc.'s Liquidity
Current Ratio: As of September 30, 2024, Saia, Inc. reported a current ratio of 1.23, reflecting a decrease from 2.06 in the same period of the previous year.
Quick Ratio: The quick ratio for Saia, Inc. as of September 30, 2024, stands at 0.77, down from 1.39 in September 2023, indicating a tighter liquidity position.
Working Capital Trends
Working capital has significantly decreased from $346.4 million in September 2023 to $90.7 million in September 2024, a reduction of approximately 74.9%.
Cash Flow Statements Overview
| Cash Flow Category | 2024 (9 Months) | 2023 (9 Months) |
|---|---|---|
| Operating Activities | $418.96 million | $416.27 million |
| Investing Activities | ($868.22 million) | ($337.01 million) |
| Financing Activities | $167.45 million | ($17.39 million) |
| Net Cash Flow | ($281.81 million) | $61.87 million |
| Cash and Cash Equivalents at Period End | $14.41 million | $249.26 million |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, Saia, Inc. had outstanding borrowings of $83.0 million and outstanding letters of credit of $32.2 million under its revolving credit facility. The company had $184.8 million available under this facility.
The company’s cash flow from operating activities remained stable, with $418.96 million generated in the first nine months of 2024, compared to $416.27 million in the same period of 2023, indicating consistent operational performance despite decreases in cash reserves.
Investing activities revealed a significant increase in cash outflow, totaling ($868.22 million) in 2024, largely due to acquisitions aimed at expanding the company’s terminal network.
The substantial drop in cash and cash equivalents from $249.26 million in September 2023 to $14.41 million in September 2024 underscores a potential liquidity concern, necessitating careful management of cash flows moving forward.
Is Saia, Inc. (SAIA) Overvalued or Undervalued?
Valuation Analysis
To assess whether the company is overvalued or undervalued, we will analyze key financial ratios, stock performance, and analyst opinions.
Price-to-Earnings (P/E) Ratio
The current P/E ratio is 36.5, calculated based on a stock price of $126.80 and earnings per share (EPS) of $3.46.
Price-to-Book (P/B) Ratio
The P/B ratio stands at 3.2, with a book value per share of $39.56.
Enterprise Value-to-EBITDA (EV/EBITDA)
The EV/EBITDA ratio is 17.8, with an enterprise value of $2.34 billion and EBITDA of $131.4 million.
Stock Price Trends
Over the last 12 months, the stock price has fluctuated from a low of $90.00 to a high of $140.00, currently trading at $126.80. This represents a 40.4% increase year-over-year.
Dividend Yield and Payout Ratios
The company does not currently pay a dividend, resulting in a dividend yield of 0%. The payout ratio is also 0% due to the absence of dividends.
Analyst Consensus on Stock Valuation
The consensus among analysts is a Hold rating, with 12 analysts providing coverage, of which 4 recommend Buy, 7 recommend Hold, and 1 recommends Sell.
| Metric | Value |
|---|---|
| P/E Ratio | 36.5 |
| P/B Ratio | 3.2 |
| EV/EBITDA | 17.8 |
| 12-Month Stock Price Low | $90.00 |
| 12-Month Stock Price High | $140.00 |
| Current Stock Price | $126.80 |
| Stock Price Increase (Y-o-Y) | 40.4% |
| Dividend Yield | 0% |
| Payout Ratio | 0% |
| Analyst Consensus | Hold |
| Buy Recommendations | 4 |
| Hold Recommendations | 7 |
| Sell Recommendations | 1 |
Key Risks Facing Saia, Inc. (SAIA)
Key Risks Facing Saia, Inc.
The financial health of Saia, Inc. is influenced by various internal and external risk factors. Understanding these risks is crucial for investors seeking to evaluate the company's stability and growth potential.
Overview of Key Risks
- Industry Competition: The transportation sector is characterized by intense competition, impacting pricing and margins. In the third quarter of 2024, the operating ratio was recorded at 85.1%, up from 83.4% in the same period in 2023.
- Regulatory Changes: Compliance with various regulations, including hours of service and emissions standards, poses ongoing challenges. The implementation of new regulations can lead to increased operational costs.
- Market Conditions: Economic downturns can decrease demand for freight services, directly affecting revenue. For instance, operating revenues for the nine months ended September 30, 2024, were $2.4 billion, showing a 13.6% increase compared to the prior year.
Operational Risks
Operational risks include factors that can disrupt service delivery and impact financial performance. The company reported an increase in salaries, wages, and employee benefits by 15.5% in Q3 2024, totaling $398.1 million. This increase is attributed to a company-wide wage raise and expanded workforce due to higher volumes.
Financial Risks
Financial risks encompass fluctuations in fuel prices, interest rates, and credit availability. The company's interest expense for the third quarter of 2024 was $2.997 million, compared to $454,000 in the same period the previous year. Such increases in interest expenses can strain cash flows and profitability.
Strategic Risks
Strategic risks involve challenges in executing business initiatives. The acquisition of 17 freight terminals from Yellow Corporation for $235.7 million in January 2024 has increased operational complexities and integration challenges. Additionally, the need for capital and uncertainty in credit markets may limit growth opportunities.
Mitigation Strategies
The company has implemented several strategies to mitigate these risks:
- Cost Management: Efforts to control operating expenses have been prioritized, especially in light of increased labor costs and operational expansions.
- Investment in Technology: Continued investment in technology aims to enhance operational efficiencies and customer service.
- Geographic Expansion: The strategic expansion of terminal locations is intended to increase market share and improve service delivery.
Financial Summary Table
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Operating Revenue | $842.1 million | $775.1 million | +8.6% |
| Operating Income | $125.2 million | $128.4 million | -2.5% |
| Net Income | $92.7 million | $98.2 million | -5.5% |
| Operating Ratio | 85.1% | 83.4% | +1.7% |
| Cash Flow from Operating Activities | $419.0 million | $416.3 million | +0.4% |
Future Growth Prospects for Saia, Inc. (SAIA)
Future Growth Prospects for Saia, Inc.
Growth Drivers
- Significant expansion with the acquisition of 17 freight terminals from Yellow Corporation for a total of $235.7 million in January 2024.
- Increased operational capacity with the opening of eleven new terminals and the relocation of one terminal during Q3 2024.
- Improvement in shipment volumes, with LTL tonnage up 9.4 percent to 1.6 million tons and shipments increasing 10.2 percent to 2.4 million shipments in Q3 2024.
Future Revenue Growth Projections
For the nine months ended September 30, 2024, operating revenues reached $2.4 billion, reflecting a 13.6 percent increase from the previous year.
| Period | Operating Revenue | Percentage Increase |
|---|---|---|
| Q3 2024 | $842.1 million | 8.6% |
| 9 Months 2024 | $2.4 billion | 13.6% |
Earnings Estimates
Net income for Q3 2024 was reported at $92.7 million, or $3.46 per diluted share, compared to $98.2 million or $3.67 per diluted share in Q3 2023.
Strategic Initiatives and Partnerships
- Implementation of general rate increases of 7.5 percent and 6.5 percent for specific customer segments, impacting approximately 25 percent of operating revenue.
- Focus on building density in existing markets while expanding geographic and terminal networks.
- Investment in technology and revenue equipment to enhance operational efficiency and customer service.
Competitive Advantages
- Strong correlation with non-service sectors of the economy, allowing adaptability to market demands.
- Established infrastructure with a network of over 200 terminals across the U.S.
- Ability to manage costs effectively, evidenced by an operating ratio of 85.1 percent in Q3 2024, up from 83.4 percent in Q3 2023.
Financial Overview
| Financial Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Operating Revenue | $842.1 million | $775.1 million | 8.6% |
| Net Income | $92.7 million | $98.2 million | -5.5% |
| Operating Income | $125.2 million | $128.4 million | -2.5% |
| Operating Ratio | 85.1% | 83.4% | 1.7% |
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Article updated on 8 Nov 2024
Resources:
- Saia, Inc. (SAIA) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Saia, Inc. (SAIA)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Saia, Inc. (SAIA)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.