SAIA INC Q4 FY2024 earnings call

• 2024 marked Saia's 100th year, with revenue crossing $3 billion and nearly 9 million shipments. It was a record year for investments, opening 21 terminals, relocating 9, and ending with 214 terminals, providing national coverage. • Invested in equipment, servicing over 6,000 trailers, and onboarded over 1,300 new team members, focusing on customer-first values. • Fourth quarter revenue of $789 million was a record, with shipments per workday up 4.5% and revenue per shipment ex-fuel up 1.3%. • Full year 2024 saw revenue at $3.2 billion, operating income at $482.2 million, and operating ratio at 85%. • Anticipates capital expenditures for 2025 to exceed $700 million, including relocations, upgrades, and openings of up to 5-6 facilities.

In the fourth quarter, Saia's revenue was $789 million, a 5% increase from the prior year's fourth quarter, marking a record for any fourth quarter in the company's history. Shipments per workday increased 4.5%, and revenue per shipment excluding fuel surcharge rose 1.3%. Weight per shipment increased 3.7% during the quarter, while yield or revenue per hundredweight excluding fuel surcharge decreased 2.3%. For the full year 2024, revenue reached a record $3.2 billion, operating income was $482.2 million, and the operating ratio deteriorated to 85%. Cost per shipment remained relatively flat, increasing by 0.2% from 2023.

• Anticipates capital expenditures for 2025 to be over $700 million, including relocations, upgrades, and openings of up to 5-6 facilities. • Sees full year operating ratio improvement in the 80 to 100 basis point range. • Focuses on maturing new terminals and improving operating efficiency over time as the business scales.

• Macro-economic uncertainties that could impact freight volume and pricing. • Weather-related disruptions that may affect operations and volume. • Short-term impact on margins due to continued investment in terminals and fleet.

Q: Jon Chappell asked about December and January tonnage/shipments and normal seasonal trend for OR 4Q to 1Q.

A: Matthew Batteh said October shipments per day up 4.4% tonnage per day up 6.9%, November shipments up 2.3%, tonnage up 5.7%, December shipments up 7.2%, tonnage up 13.5%, January to-date shipments up ~6.5% tonnage up ~13.5%. Sees ~30-50 basis points deterioration from Q4 range, with February and March critical. Three quarters of January growth from 2024 terminals, not at company average but anchored on full year 80-100 basis point improvement.

Q: Tom Wadewitz inquired about OR seasonality and improvement in 2Q.

A: Frederick Holzgrefe said 21 facilities opened last year with operating ratio for those facilities improving but not at company average. Sees improvement through the year as facilities mature, lapping startup costs, expecting full year 80-100 basis point OR improvement. Matthew Batteh added equipment in at elevated pace affecting depreciation.

Q: Chris Wetherbee asked about OR full year guidance and volume/weight per shipment.

A: Frederick Holzgrefe said intensely focused on finding customers/markets valuing Saia service, not assuming macro environment step up. Sees 80-100 basis point OR improvement with 21 facilities pushed to maturity, noting potential to beat if environment improves. Matthew Batteh mentioned flat cost per shipment year-over-year despite investments.

Q: Brian Ossenbeck asked about pricing trends and GRI acceptance.

A: Matthew Batteh said focused on pricing and mix optimization, GRI acceptance with some volume movement but good overall. Focus on revenue per shipment, preferring heavier weighted shipments. Discussed equipment/real estate disposal in other expenses.

Q: Jordan Alliger asked about mix optimization and yield.

A: Matthew Batteh said mix optimization involves conversations with customers about freight profile, national network providing better access to customers' book of business. Weight per shipment divergence affects yield, but focused on revenue per shipment internally.

Q: Scott Group asked about sequential yield/revenue per shipment and terminal openings.

A: Matthew Batteh said no intra quarter yield/revenue per shipment updates, focused on pricing conversations with customers. Frederick Holzgrefe said opening 5-6 facilities this year with low impact on business, cross border exposure ~2% total. Matthew Batteh discussed CapEx deployment and interest impact on EPS.

Q: Daniel Imbro asked about service initiatives and CapEx deployment.

A: Frederick Holzgrefe said service initiatives showing up in volume numbers, customers voting with their feet. Matthew Batteh said investing capital back in business has been right, with CapEx projections and interest impact on EPS considered.

Q: Ken Hoexter asked about on-time performance, claims ratio, and OR target.

A: Matthew Batteh said claims ratio was 0.59% for the quarter and 0.58% for the full year. Frederick Holzgrefe said focused on driving operating cost to get OR into 70s, no specific PT target, but focused on customer expectations and low cost options when meeting them.

Q: Ravi Rosa asked about OR target timeline and terminal opening drag on OR.

A: Frederick Holzgrefe said OR improvement depends on favorable backdrop and long-term focus on national network. Matthew Batteh said 21 terminals operated around breakeven for the quarter as a drag, but maturing facilities show potential. Focus on mix and price to accelerate OR improvement.

Q: Stephanie Moore (Joe Halfling) asked about competitive environment and sales force.

A: Frederick Holzgrefe said focused on providing consistent service, arming sales force with data on market opportunities, and providing high-level service to sell. Joseph Halfling asked about sales force targeting SMB growth, with Frederick Holzgrefe emphasizing data-driven approach and great service behind it.

Q: Christopher Kuhn asked about workforce addition and service quality.

A: Frederick Holzgrefe said focused on training and onboarding new employees, with service metrics, productivity, and safety improving over time as employees mature. Christopher Kuhn asked about OR benefit from trained workforce, with Frederick Holzgrefe confirming benefits in service metrics, claims, and injury rates.

Q: Tyler Brown asked about door ownership and revenue per bill accessorials.

A: Matthew Batteh said finished the year with ~9,900 doors, owning ~70% of them. Frederick Holzgrefe said still in early innings of accessorial journey, comparing to public carriers and focusing on data to drive accessorial discussions, still cheaper on total revenue per bill basis.

Q: Tom Wadewitz, Chris Wetherbee, etc. continued with various follow-ups as per transcript