Saia Inc. today, April 24, reported first-quarter 2009 results compared to first-quarter 2008: Revenues were $206.1 million, a decrease of 17 percent;
Operating loss was $7.5 million compared to operating income of $2.0 million;
Net loss was $6.2 million compared to net loss of $833,000;
Operating ratio was 103.6 vs. 99.2;
LTL tonnage per workday was down 7.2 percent as LTL shipments per workday were down 4.8 percent with a 2.6 percent reduction in weight per shipment; and
LTL yield was down 8.9 percent primarily due to the decline in fuel surcharges.
The company said first-quarter margins declined primarily due to an unprecedented reduction in tonnage and increasing pricing pressure, which more than offset the decline in fuel costs and benefits from recent expense reduction initiatives, which include the following: Streamlining of management structure by eliminating 1 division and 4 regions;
Headcount reduction of 11 percent;
Productivity improvement in all categories — city, dock, office and load average;
Terminal labor cost improvement of 5 percent per freight bill;
Preventable accidents improvement of 17 percent and lost-time injuries improvement of 40 percent; and
Suspension of the 401(k) match effective Feb. 1.
On April 1, the company implemented a reduction in compensation equal to 10 percent of salary for the leadership team and a five percent wage reduction for hourly, linehaul and salaried employees in operations, maintenance and administration. The company said the first quarter historically is the weakest due to lower seasonality of demand and the potential for adverse weather, and it believes the results of its first-quarter operations will not be indicative of full-year results.
“We are operating during extremely difficult economic times with weak tonnage demand and increasingly competitive pricing, which continues to pressure margins,” said Rick O’Dell, president and chief executive officer of Johns Creek, Ga.-based Saia. “We are combating this challenging environment with targeted sales and marketing programs and pursuing aggressive cost reductions supported by engineered efficiency initiatives. Our execution is solid on a number of fronts, including improved performance over last year in on-time service, key productivity metrics and safety. We also continue to strengthen our balance sheet with a $20 million debt reduction during the quarter.”
Saia said total debt was $116.3 million at March 31; net of the company’s $12 million cash balance at quarter-end, net debt to total capital was 37.0 percent, which compares to total debt of $136.4 million at Dec. 31. Net capital expenditures for the first three months of 2009 were $2 million compared to $13 million in the prior-year quarter, according to the company, which said it is planning net capital expenditures in 2009 of about $10 million; this reduced level is due to the uncertain economic environment and will be reevaluated as tonnage improves.
“Saia remains committed to managing through these difficult times with a relentless focus on our strategy of building density in our network, customer satisfaction, engineered process improvements and prudent balance sheet management to achieve long-term benefits for our customers and shareholders,” O’Dell said.