Saia today, April 20, reported first-quarter 2007 results from continuing operations compared to first-quarter 2006. Revenues were $231.8 million, an increase of 13 percent over the prior-year quarter. Operating income from continuing operations was $7.1 million, including $2.4 million in integration expenses, compared to $8.6 million in the prior-year quarter. Net earnings were $3.023 million, compared to $2.371 million in the year-ago quarter.
Of the $2.4 million in integration expenses, $1.5 million was related to the acquisition of The Connection Company and $0.9 million to Madison Freight Systems. No further integration costs related to these acquisitions are expected. While the acquisitions did not contribute to operating profit this quarter, results were in line with management expectations.
Operating ratio excluding integration expenses was 95.9 vs. 95.8 in the prior-year quarter. Less-than-truckload yield was essentially flat for the quarter primarily due to the acquired business’ shorter average length of haul. On a pro forma basis, including the acquired companies in the first quarter of 2006, yield was up 6.7 percent partially due to the impact of mix changes, increasing length of haul and declining weight per shipment.
“I believe we are off to a great start with synergy revenue to and from the new geography after just opening the lanes on March 5th,” said Rick O’Dell, president and chief executive officer of Duluth, Ga.-based Saia. “Through solid planning, focus on execution and strong commitment, Saia employees demonstrated their ability to integrate companies quickly and in line with budget.”
The integrations of The Connection Company and Madison Freight Systems during the quarter significantly increased direct delivery capabilities in the states of Indiana, Kentucky, Ohio, Michigan and Wisconsin, O’Dell said. “We expect to benefit significantly from revenue growth and profit improvements from these acquisitions in the remainder of 2007 and into 2008,” he said.
On a pro-forma basis, the carrier achieved revenue growth and favorable yield comparisons, O’Dell said. In spite of the acquired companies operating at over 100 operating ratio for the quarter, Saia achieved essentially the same margin as the prior year quarter, he said. “Considering the difficult economic environment and the severe weather during the quarter, I was relatively pleased with the results,” O’Dell said.
Saia repurchased $5.4 million in shares during the quarter under its $25 million authorized stock repurchase program leaving $17.8 million available.
