UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)
☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2021

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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 executive offices)	(Zip Code)

(770) 232-5067

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.001 per share	SAIA	The Nasdaq Global Select Market

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  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

There were 26,335,096 shares of Common Stock outstanding at July 29, 2021.

SAIA, INC. AND SUBSIDIARIES

INDEX

		PAGE
PART I. FINANCIAL INFORMATION
ITEM 1:	Financial Statements	3
	Condensed Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020	3
	Condensed Consolidated Statements of Operations for the quarters and six months ended June 30, 2021 and 2020	4
	Condensed Consolidated Statements of Stockholders’ Equity for the quarters and six months ended June 30, 2021 and 2020	5
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2021 and 2020	6
	Notes to Condensed Consolidated Financial Statements	7
ITEM 2:	Management's Discussion and Analysis of Financial Condition and Results of Operations	12
ITEM 3:	Quantitative and Qualitative Disclosures About Market Risk	20
ITEM 4:	Controls and Procedures	21
PART II. OTHER INFORMATION
ITEM 1:	Legal Proceedings	22
ITEM 1A:	Risk Factors	22
ITEM 2:	Unregistered Sales of Equity Securities and Use of Proceeds	22
ITEM 3:	Defaults Upon Senior Securities	22
ITEM 4:	Mine Safety Disclosures	22
ITEM 5:	Other Information	22
ITEM 6:	Exhibits	23
Signature		24

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Saia, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(unaudited)

	June 30, 2021			December 31, 2020
Assets	(in thousands, except share and per share data)
Current Assets:
Cash and cash equivalents	$	52,860		$	25,308
Accounts receivable, net		261,113			216,899
Income tax receivable		1,598			96
Prepaid expenses and other		38,310			29,393
Total current assets		353,881			271,696
Property and Equipment, at cost		1,983,923			1,901,244
Less: accumulated depreciation		826,983			765,217
Net property and equipment		1,156,940			1,136,027
Operating Lease Right-of-Use Assets		105,965			113,715
Goodwill and Identifiable Intangibles, net		19,739			20,321
Other Noncurrent Assets		10,870			7,015
Total assets	$	1,647,395		$	1,548,774
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	100,499		$	89,381
Wages, vacation and employees’ benefits		65,187			55,392
Claims and insurance accruals		48,533			49,613
Other current liabilities		29,264			40,571
Current portion of long-term debt		21,648			20,588
Current portion of operating lease liability		19,764			20,209
Total current liabilities		284,895			275,754
Other Liabilities:
Long-term debt, less current portion		39,378			50,388
Operating lease liability, less current portion		88,208			95,321
Deferred income taxes		123,000			119,818
Claims, insurance and other		48,756			46,205
Total other liabilities		299,342			311,732
Stockholders’ 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,      26,335,096 and 26,236,570 shares issued and outstanding at      June 30, 2021 and December 31, 2020, respectively		26			26
Additional paid-in-capital		270,608			267,666
Deferred compensation trust, 95,428 and 91,888 shares of common      stock at cost at June 30, 2021 and December 31, 2020, respectively		(3,781	)		(2,944	)
Retained earnings		796,305			696,540
Total stockholders’ equity		1,063,158			961,288
Total liabilities and stockholders’ equity	$	1,647,395		$	1,548,774

See accompanying notes to condensed consolidated financial statements.

3

Saia, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

For the quarters and six months ended June 30, 2021 and 2020

(unaudited)

	Second Quarter						Six Months
	2021			2020			2021			2020
	(in thousands, except per share data)
Operating Revenue	$	571,333		$	418,114		$	1,055,407		$	864,510
Operating Expenses:
Salaries, wages and employees' benefits		268,786			224,277			513,223			462,922
Purchased transportation		62,481			26,406			107,512			56,465
Fuel, operating expenses and supplies		90,664			65,902			175,565			148,801
Operating taxes and licenses		14,559			13,743			28,897			28,139
Claims and insurance		17,328			18,293			28,808			28,714
Depreciation and amortization		34,659			33,664			70,031			66,254
Loss (gain) from property disposals, net		(69	)		148			(268	)		(1,242	)
Total operating expenses		488,408			382,433			923,768			790,053
Operating Income		82,925			35,681			131,639			74,457
Nonoperating Expenses (Income):
Interest expense		834			1,594			1,686			2,996
Other, net		(430	)		(751	)		(561	)		(204	)
Nonoperating expenses, net		404			843			1,125			2,792
Income Before Income Taxes		82,521			34,838			130,514			71,665
Income Tax Provision		20,047			6,384			30,749			15,100
Net Income	$	62,474		$	28,454		$	99,765		$	56,565
Weighted average common shares outstanding – basic		26,332			26,134			26,309			26,102
Weighted average common shares outstanding – diluted		26,704			26,569			26,687			26,543
Basic Earnings Per Share	$	2.37		$	1.09		$	3.79		$	2.17
Diluted Earnings Per Share	$	2.34		$	1.07		$	3.74		$	2.13

See accompanying notes to condensed consolidated financial statements.

4

Saia, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity

For the quarters and six months ended June 30, 2021 and 2020

(unaudited)

	Common Shares		Common Stock		Additional Paid-in Capital			Deferred Compensation Trust			Retained Earnings		Total
	(in thousands, except share data)
BALANCE at December 31, 2020		26,236,570	$	26	$	267,666		$	(2,944	)	$	696,540	$	961,288
Stock compensation, including options and long-term incentives		—		—		1,711			—			—		1,711
Exercise of stock options less shares withheld for taxes		46,741		—		3,678			—			—		3,678
Shares issued for long-term incentive awards, net of shares withheld for taxes		50,381		—		(6,350	)		—			—		(6,350	)
Purchase of shares by Deferred Compensation Trust		—		—		742			(742	)		—		—
Sale of shares by Deferred Compensation Trust		—		—		(17	)		17			—		—
Net income		—		—		—			—			37,291		37,291
BALANCE at March 31, 2021		26,333,692	$	26	$	267,430		$	(3,669	)	$	733,831	$	997,618
Stock compensation, including options and long-term incentives		—		—		1,810			—			—		1,810
Director deferred share activity		1,404		—		1,256			—			—		1,256
Exercise of stock options less shares withheld for taxes		—		—		—			—			—		—
Shares issued for long-term incentive awards, net of shares withheld for taxes		—		—		—			—			—		—
Purchase of shares by Deferred Compensation Trust		—		—		112			(112	)		—		—
Sale of shares by Deferred Compensation Trust		—		—		—			—			—		—
Net income		—		—		—			—			62,474		62,474
BALANCE at June 30, 2021		26,335,096	$	26	$	270,608		$	(3,781	)	$	796,305	$	1,063,158

	Common Shares		Common Stock		Additional Paid-in Capital			Deferred Compensation Trust			Retained Earnings		Total
	(in thousands, except share data)
BALANCE at December 31, 2019		25,936,532	$	26	$	260,871		$	(3,871	)	$	558,200	$	815,226
Stock compensation, including options and long-term incentives		—		—		1,317			—			—		1,317
Exercise of stock options less shares withheld for taxes		69,640		—		2,137			—			—		2,137
Shares issued for long-term incentive awards, net of shares withheld for taxes		57,176		—		(3,404	)		—			—		(3,404	)
Purchase of shares by Deferred Compensation Trust		—		—		1,146			(1,146	)		—		—
Sale of shares by Deferred Compensation Trust		—		—		(59	)		59			—		—
Net income		—		—		—			—			28,111		28,111
BALANCE at March 31, 2020		26,063,348	$	26	$	262,008		$	(4,958	)	$	586,311	$	843,387
Stock compensation, including options and long-term incentives		—		—		1,640			—			—		1,640
Director deferred share activity		71,681		—		1,230			—			—		1,230
Exercise of stock options less shares withheld for taxes		12,800		—		454			—			—		454
Shares issued for long-term incentive awards, net of shares withheld for taxes		1,002		—		(75	)		—			—		(75	)
Purchase of shares by Deferred Compensation Trust		—		—		128			(128	)		—		—
Sale of shares by Deferred Compensation Trust		—		—		(121	)		121			—		—
Net income		—		—		—			—			28,454		28,454
BALANCE at June 30, 2020		26,148,831	$	26	$	265,264		$	(4,965	)	$	614,765	$	875,090

See accompanying notes to condensed consolidated financial statements.

5

Saia, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

For the six months ended June 30, 2021 and 2020

(unaudited)

	Six Months
	2021			2020
	(in thousands)
Operating Activities:
Net income	$	99,765		$	56,565
Noncash items included in net  income:
Depreciation and amortization		70,031			66,254
Deferred income taxes		3,183			7,570
Other, net		5,640			7,239
Changes in operating assets and liabilities, net		(38,479	)		10,605
Net cash provided by operating activities		140,140			148,233
Investing Activities:
Acquisition of property and equipment		(100,202	)		(148,865	)
Proceeds from disposal of property and equipment		236			6,143
Net cash used in investing activities		(99,966	)		(142,722	)
Financing Activities:
Repayments of revolving credit agreement		(27,614	)		(221,026	)
Borrowings of revolving credit agreement		27,614			255,097
Proceeds from stock option exercises		3,678			2,591
Shares withheld for taxes		(6,350	)		(3,479	)
Repayment of finance leases		(9,950	)		(9,662	)
Net cash (used in) provided by financing activities		(12,622	)		23,521
Net Increase in Cash and Cash Equivalents		27,552			29,032
Cash and cash equivalents, beginning of period		25,308			248
Cash and cash equivalents, end of period	$	52,860		$	29,280

See accompanying notes to condensed consolidated financial statements.

6

Saia, Inc. and Subsidiaries

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 subsidiaries (together, the Company or Saia).  All significant intercompany accounts and transactions have been eliminated in the condensed consolidated financial statements.

The condensed consolidated financial statements have been prepared by the Company without audit by the independent registered public accounting firm.  In the opinion of management, all normal recurring adjustments necessary for a fair presentation of the condensed consolidated balance sheets, statements of operations, stockholders’ equity and cash flows for the interim periods included herein have been made.  These interim condensed consolidated 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 Company’s Annual Report on Form 10-K for the year ended December 31, 2020.  Operating results for the quarter and six months ended June 30, 2021 are not necessarily indicative of the results of operations that may be expected for the year ended December 31, 2021.

Business

The Company provides national less-than-truckload (LTL) services through a single integrated organization.  While more than 97 percent of its revenue has been derived from transporting LTL shipments across 44 states, the Company also offers customers a wide range of other value-added services, including non-asset truckload, expedited and logistics services across North America.  The Company’s customer base is diversified across numerous industries.

Revenue Recognition

The Company’s revenues are derived primarily from the transportation of freight as it satisfies performance obligations that arise from contracts with its customers.  The Company’s performance obligations arise when it receives a bill of lading (“BOL”) to transport a customer's commodities at negotiated prices contained in either a transportation services agreement or a publicly disclosed tariff rate. Once a BOL is received and accepted, a legally-enforceable contract is formed whereby the parties are committed to perform and the rights of the parties, shipping terms and conditions, and payment terms have been identified. A customer may submit many BOLs for transportation services at various times throughout a service agreement term but each shipment represents a distinct service that is a separately identified performance obligation.

The typical transit time to complete a shipment is from one to five days.  Billing for transportation services normally occurs after completion of the service and payment is generally due within 30 days after the invoice date. The Company recognizes revenue related to the Company’s LTL, non-asset truckload and expedited services over the transit time of the shipment as it moves from origin to destination. Revenue for services started but not completed at the reporting date is recognized based on transit status at the end of each reporting period.

Key estimates included in the recognition and measurement of revenue and related accounts receivable are as follows:

• Revenue associated with shipments in transit is recognized ratably over transit time; and

• Adjustments to revenue for billing adjustments and collectability.

The portion of the gross invoice related to interline transportation services that involve the services of another party, such as another LTL service provider, is not recorded in the Company’s revenues.  Revenue from logistics services is recognized as the services are provided.

7

Remaining performance obligations represent the transaction price allocated to future reporting periods for freight services started but not completed at the reporting date. This includes the unearned portion of billed and unbilled amounts for freight shipments in transit that the Company expects to recognize as revenue in the period subsequent to the reporting date, which is generally less than one week.  The Company has elected to apply the optional exemption in accordance with the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 606 as it pertains to additional quantitative disclosures pertaining to remaining performance obligations.  

Claims and Insurance Accruals

Effective March 1, 2018, the Company entered into a new automobile liability insurance policy with a three-year term. Generally, the Company is responsible for the risk retention amount per occurrence of $2.0 million under the policy.  Thereafter, the policy provides insurance coverage for a single loss of $8.0 million, an aggregate loss limit of $24.0 million for each policy year, and a $48.0 million aggregate loss limit for the 36-month term originally ended March 1, 2021.  Under the policy, the Company may elect to commute the policy with respect to the first 12 months of the policy term and concurrently extend the policy for an additional one-year period if paid losses in the first 12 months of the policy are less than $5.2 million.  In August 2019, the Company elected to commute the policy for such period. As a result, the Company received a return of $5.2 million of the premium paid (the maximum return premium available), based on the amount of claims paid and the insurer was released from all liability in connection with claims occurring in such 12-month period.  The Company is now self-insured for the first $10 million per occurrence with respect to such 12-month period and the policy has been extended for one additional year to March 1, 2022.  As a result of the return premium and policy extension, the Company recognized a $0.5 million reduction in insurance premium expense in the second quarter of 2021.  The Company will continue to recognize the remainder of the return premium as a reduction in insurance premium expense ratably over the remainder of the policy period now ending March 1, 2022. Additionally, the Company is required to pay an additional premium of up to $11.0 million if losses paid by the insurer are greater than $15.6 million over the three-year policy period ending March 1, 2022.  Based on claims occurring since March 1, 2019, no such additional premium was accrued at June 30, 2021.  Commencing on August 30, 2022, the Company may elect to commute the policy with respect to the insurer’s entire liability under the policy in which case the Company would be entitled to a return of a portion of the premium paid, up to $15.6 million, based on the amount of claims paid and the insurer would be released from all liability under the policy ending March 1, 2022.  As a result, if the Company elects to commute the policy as to the entire policy term, the Company would be self-insured for $10 million per occurrence for the four years ended March 1, 2022.

 Accounting Pronouncements Adopted in 2021

In 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes,” which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This standard became effective for interim and annual reporting periods beginning after December 15, 2020. The Company adopted the standard effective January 1, 2021 and upon adoption this standard did not have a material impact on its consolidated financial statements or related disclosures.

8

(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):

	Second Quarter				Six Months
	2021		2020		2021		2020
Numerator:
Net income	$	62,474	$	28,454	$	99,765	$	56,565
Denominator:
Denominator for basic earnings per share–weighted      average common shares		26,332		26,134		26,309		26,102
Effect of dilutive stock options		107		77		114		87
Effect of other common stock equivalents		265		358		264		354
Denominator for diluted earnings per share–adjusted      weighted average common shares		26,704		26,569		26,687