SAIA INC Q3 FY2024 earnings call

• Year-over-year growth in shipments (average 37,200 per day vs. 34,300 last year, +8.5%) and revenue ($842 million, a record third quarter).
• Yield excluding fuel surcharge up 1.7% due to constructive pricing and mix changes. Revenue per shipment excluding fuel surcharge up 0.9% despite headwinds from weight per shipment and length of haul.
• Opened 11 new terminals in Q3, a record, with new terminals in the Great Plains expanding addressable market. New terminals, even those open less than six months, improved operating ratio by over 10 points sequentially.
• Salaries, wages, and benefits up 15.5% due to 13% headcount growth and July 2024 wage increase. Purchased transportation expense down 14.5%. Fuel expense down 1.3% due to lower diesel prices. Depreciation up 19.8% due to investments in equipment, real estate, and technology.

Saia's third quarter 2024 revenue was $842 million, an 8.6% increase from the prior year. Yield or revenue per hundredweight excluding fuel surcharge increased 1.7%. Revenue per shipment excluding fuel surcharge rose 0.9%. Tonnage per workday increased 7.7% due to an 8.5% increase in shipments per workday, partially offset by a 0.8% decrease in average weight per shipment. The third quarter operating ratio was 85.1%, deteriorating 170 basis points from the prior year. Eleven new terminals were opened in the quarter, expanding the addressable market and enabling direct service to all contiguous 48 states.

• Anticipated 2024 capital expenditures around $1 billion.
• Expect margin improvement in 2025, assuming stable or slightly positive macro environment.
• CapEx expected to normalize in 2025 after significant 2024 investments, with focus on capturing value from new terminals opened in recent years.

• Macroeconomic uncertainties impacting industrial backdrop and retail business.
• Weather events (hurricanes) affecting volume and operations.
• Operational challenges with new terminal openings, including initial costs, entering new geographies, and ensuring customer acceptance.

Q: Can you talk about sequential growth in October and workers' comp?

A: Matthew Batteh provided monthly shipment and tonnage numbers, noting October to date shipments up ~4% and tonnage up ~6.5%, while stating workers' comp costs are part of normal business development with no one-time items.

Q: Talk about revenue per hundredweight ex fuel and fourth quarter outlook?

A: Matthew Batteh mentioned mix impacts revenue per hundredweight, strong contractual renewals at 7.9%, and focus on mix management and pricing, with GRI at 7.9%, expecting focus to remain on driving price and service.

Q: Normal seasonality in OR from 3Q to 4Q and 2025 expense growth?

A: Matthew Batteh said historical sequential OR degradation is ~250 basis points on average, but Saia expects to beat this due to new market expansion and customer acceptance. Frederick Holzgrefe discussed 2025 expense growth moderating as terminal growth normalizes, with focus on capturing value from new terminals.