Saia, Inc. — 2021 Form 10-K Summary
Reporting period: Fiscal year ended December 31, 2021. Although the request references 2021 Q4, this filing is an annual report and does not provide a clear standalone fourth-quarter financial summary.
Business context
Saia is primarily a less-than-truckload (LTL) carrier, with more than 97% of revenue from LTL services. It serves 45 states and operates a network of 176 facilities, with approximately 5,600 tractors and 19,300 trailers at year-end. The company also provides non-asset truckload, expedited and logistics services.
Financial performance and liquidity
| Metric | 2021 | 2020 | Change |
|---|---|---|---|
| Operating revenue | $2,288.7 million | $1,822.4 million | +25.6% |
| Operating income | $335.1 million | $180.3 million | +85.9% |
| Net income | $253.2 million | $138.3 million | +83.1% |
| Diluted earnings per share | $9.48 | $5.20 | Increased |
| Operating ratio | 85.4% | 90.1% | Improved 4.7 percentage points |
| Operating cash flow | $382.6 million | $309.1 million | Increased |
LTL revenue per hundredweight rose 12.8% to $20.68, and revenue per shipment rose 20.0% to $289. LTL tonnage increased 11.5% in the statistical table; management separately reported tonnage growth of 12.4% per workday. LTL shipments increased 4.9% in the table, while management reported 5.7% per workday.
Net cash used in investing activities was $277.8 million, primarily for equipment, real estate and technology. Net cash used in financing activities was $23.5 million. Year-end cash was $106.6 million and working capital was $94.9 million, compared with negative $4.1 million a year earlier.
There were no revolver borrowings at year-end. The $300 million revolving facility had $270.7 million of remaining availability, subject to covenants; it matures in February 2024 and includes a conditional $100 million accordion. Finance-lease debt was $50.4 million. Saia reported covenant compliance. No cash dividend was paid; dividends are restricted under the credit agreement.
Changes versus the prior year
- Revenue growth reflected pricing actions, higher volumes, terminal expansion and a more favorable business mix. A 5.9% general rate increase took effect January 18, 2021 for customers subject to general rate increases.
- Profitability improved substantially, but expenses also rose: purchased transportation increased 76.6%, salaries and benefits 10.4%, and fuel and other operating expenses 23.8%.
- Management attributed cost pressure to wage increases, higher fuel prices, internal capacity constraints and higher purchased-transportation rates. Claims and insurance expense increased $11.6 million.
- Capital expenditures rose to $277.3 million from $218.8 million. Cash increased to $106.6 million from $25.3 million.
Outlook, risks and contingencies
- Management expected 2022 net capital expenditures to exceed $500 million, including fleet, real estate and technology investments. It planned to open at least 10–15 terminals in 2022.
- A 7.5% general rate increase was implemented January 24, 2022 for customers representing approximately 20–25% of revenue. Management identified pricing, density, geographic expansion, productivity and cost alignment as priorities, but provided no earnings or revenue guidance.
- Management cited uncertainty around economic conditions and inflation. Key risks include driver and labor shortages, wage and fuel inflation, purchased-transportation availability and cost, equipment and supply-chain delays, competitive pricing, severe weather, COVID-19 disruption, cybersecurity, regulation and execution of expansion plans.
- Claims and insurance are significant estimation areas. The company reported $114.7 million in claims, insurance and other liabilities; the auditor identified self-insured workers’ compensation and bodily-injury claim estimates as a critical audit matter. The company has material self-insured retention exposure and potential insurance-related payments.
- Operating lease commitments totaled $126.5 million, excluding an additional terminal lease expected to commence in 2023, estimated at approximately $57 million over 15 years. Capital-expenditure purchase commitments were $57.5 million.
- Ordinary-course legal proceedings were disclosed. Management believes probable and estimable losses are provided for and does not expect a material adverse effect on financial condition, while noting results in a particular quarter or year could be materially affected.
KPMG issued an unqualified opinion on the financial statements and concluded internal control over financial reporting was effective. The filing reports no material effect from adoption of the accounting standard implemented in 2021.
Investor verification priorities
- Confirm the durability and retention of the 2021 yield and pricing gains, including the effect of the January 2022 rate increase and fuel surcharges.
- Track whether volume growth, labor availability and purchased-transportation costs support operating-ratio improvement.
- Assess execution and returns on the planned increase in capital spending and terminal expansion, alongside equipment-delivery constraints.
- Review the development of self-insured claims, insurance coverage and the potential cost of significant claims or policy decisions.
- Reconcile year-end liquidity and lease obligations with the planned 2022 investment program and credit-facility covenants.