Saia Q4 Earnings Dip as It Funds Rapid Expansion
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Saia Inc. saw profits dip in the fourth quarter even though revenue continues to grow at a healthy pace.
Both net income and revenue grew for all of 2019, the Johns Creek, Ga., less-than-truckload carrier reported Feb. 3.
The trucking firm said it posted net income of $21.4 million for the quarter, down 15.7% from $25.4 million it earned in the same period a year earlier. Diluted earnings per share in the quarter were 81 cents compared with 97 cents in the fourth quarter of 2018.
Saia has opened 18 terminals in new markets in the Northeast since May 2017. (John Sommers II for Transport Topics)
Revenue rose 8.9% to $443.1 million from $406.8 million in Q4 2018.
Saia posted a profit of $113.7 million for all of 2019, 8.2% greater than the $105 million it earned in the prior year. Revenue grew 8% to $1.79 billion from $1.68 billion a year ago. Full-year diluted earnings per share were $4.30 in 2019 compared to $3.99 in 2018.
“While the fourth-quarter results did not meet our expectations, 2019 revenue of $1.8 billion was a record and overall, I am pleased with what was accomplished this year,” said Rick O’Dell, Saia’s CEO, in a release.
He attributed part of the earnings decline to costs associated with accelerated expansion plans that took place partly in the fourth quarter. Saia opened nine terminals last year, six of which opened between mid-September and the end of October.
“While these second-half openings and the associated expenses were a drag in the back half of the year, I believe that the longer-term benefit of offering customers 48-state coverage is well worth the short-term challenges associated with the expansion,” O’Dell said.
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The motor carrier has opened 18 terminals in new markets in the Northeast since May 2017.
“We are now on an annualized revenue run rate of more than $280 million of business into and out of this region,” O’Dell said.
Saia plans to step back this year, and has what Chief Operating Officer Fritz Holzgrefe described as a “light” terminal opening schedule.
“Our focus shifts to service execution across all of the new terminals and margin improvement through cost leverage,” Holzgrefe said.
The company is looking to price services to improve its profit picture, he said.
“Despite the sluggish industrial backdrop, we view the pricing environment as rational,” Holzgrefe said.
Saia ended the year with debt of $136.4 million and net debt to total capital position of 14.3%. That compares with debt of $122.9 million at the end of 2018 and a net debt to total capital position of 14.8%.
Saia ranks No. 25 on the Transport Topics Top 100 list of the largest for-hire carriers in North America, and No. 9 for LTL carriers.
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