UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
|
|
|
þ
|
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2008
OR
|
|
|
o
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|
FOR THE TRANSITION PERIOD FROM
to
Commission file number: 0-49983
SAIA, INC.
(Exact name of registrant as specified in its charter)
|
|
|
Delaware
|
|
48-1229851
|
(State of incorporation)
|
|
(I.R.S. Employer
|
|
|
Identification No.)
|
|
|
|
11465 Johns Creek Parkway, Suite 400
|
|
30097
|
Johns Creek, GA
|
|
(Zip Code)
|
(Address of principal
|
|
|
executive offices)
|
|
|
(770) 232-5067
(Registrants telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes
þ
No
o
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See definition of large accelerated
filer, accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act.
|
|
|
|
|
|
|
Large accelerated filer
o
|
|
Accelerated filer
þ
|
|
Non-accelerated filer
o
(Do not check if a smaller reporting company)
|
|
Smaller Reporting Company
o
|
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes
o
No
þ
Indicate the number of shares outstanding of each of the issuers classes of common stock, as of
the latest practicable date.
|
|
|
Common Stock
|
|
Outstanding Shares at July 28, 2008
|
Common Stock, par value $.001 per share
|
|
13,450,472
|
Saia, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share data)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
December 31,
|
|
|
|
2008
|
|
|
2007
|
|
Assets
|
|
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
5,565
|
|
|
$
|
6,656
|
|
Accounts receivable, net
|
|
|
127,690
|
|
|
|
107,116
|
|
Prepaid expenses and other
|
|
|
52,504
|
|
|
|
37,837
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
185,759
|
|
|
|
151,609
|
|
Property and Equipment, at cost
|
|
|
609,641
|
|
|
|
596,357
|
|
Less-accumulated depreciation
|
|
|
242,229
|
|
|
|
227,585
|
|
|
|
|
|
|
|
|
Net property and equipment
|
|
|
367,412
|
|
|
|
368,772
|
|
Goodwill, net
|
|
|
35,470
|
|
|
|
35,470
|
|
Other Intangibles, net
|
|
|
3,444
|
|
|
|
3,860
|
|
Other Noncurrent Assets
|
|
|
904
|
|
|
|
872
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
592,989
|
|
|
$
|
560,583
|
|
|
|
|
|
|
|
|
Liabilities and Shareholders Equity
|
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable and checks outstanding
|
|
$
|
62,632
|
|
|
$
|
42,732
|
|
Wages, vacation and employees benefits
|
|
|
36,790
|
|
|
|
32,862
|
|
Other current liabilities
|
|
|
48,322
|
|
|
|
38,138
|
|
Current portion of long-term debt
|
|
|
15,188
|
|
|
|
12,793
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
162,932
|
|
|
|
126,525
|
|
Other Liabilities:
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
144,682
|
|
|
|
160,052
|
|
Deferred income taxes
|
|
|
54,661
|
|
|
|
55,961
|
|
Claims, insurance and other
|
|
|
24,717
|
|
|
|
17,393
|
|
|
|
|
|
|
|
|
Total other liabilities
|
|
|
224,060
|
|
|
|
233,406
|
|
|
|
|
|
|
|
|
Commitments and Contingencies
|
|
|
|
|
|
|
|
|
Shareholders Equity:
|
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par value, 50,000 shares authorized,
none issued and outstanding
|
|
|
|
|
|
|
|
|
Common stock, $0.001 par value, 50,000,000 shares authorized,
13,450,472 and 13,448,602 shares issued and outstanding at
June 30, 2008 and December 31, 2007, respectively
|
|
|
13
|
|
|
|
13
|
|
Additional paid-in-capital
|
|
|
171,379
|
|
|
|
170,260
|
|
Deferred compensation trust, 164,117 and 144,507 shares of
common stock at cost at June 30, 2008 and
December 31, 2007, respectively
|
|
|
(2,859
|
)
|
|
|
(2,584
|
)
|
Retained earnings
|
|
|
37,464
|
|
|
|
32,963
|
|
|
|
|
|
|
|
|
Total shareholders equity
|
|
|
205,997
|
|
|
|
200,652
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders equity
|
|
$
|
592,989
|
|
|
$
|
560,583
|
|
|
|
|
|
|
|
|
See accompanying notes to condensed consolidated financial statements.
3
Saia, Inc.
Condensed Consolidated Statements of Operations
For the quarter and six months ended June 30, 2008 and 2007
(in thousands, except per share data)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter
|
|
|
Six Months
|
|
|
|
2008
|
|
|
2007
|
|
|
2008
|
|
|
2007
|
|
Operating Revenue
|
|
$
|
276,050
|
|
|
$
|
252,762
|
|
|
$
|
525,380
|
|
|
$
|
484,589
|
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries, wages and employees benefits
|
|
|
136,871
|
|
|
|
135,237
|
|
|
|
270,218
|
|
|
|
265,042
|
|
Purchased transportation
|
|
|
21,704
|
|
|
|
19,073
|
|
|
|
40,688
|
|
|
|
35,240
|
|
Fuel, operating expenses and supplies
|
|
|
79,940
|
|
|
|
55,910
|
|
|
|
146,413
|
|
|
|
106,304
|
|
Operating taxes and licenses
|
|
|
9,083
|
|
|
|
8,762
|
|
|
|
18,046
|
|
|
|
17,083
|
|
Claims and insurance
|
|
|
7,474
|
|
|
|
9,463
|
|
|
|
16,919
|
|
|
|
18,261
|
|
Depreciation and amortization
|
|
|
10,375
|
|
|
|
9,796
|
|
|
|
20,542
|
|
|
|
18,816
|
|
Operating gains, net
|
|
|
(267
|
)
|
|
|
(58
|
)
|
|
|
(299
|
)
|
|
|
(223
|
)
|
Integration charges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,427
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
265,180
|
|
|
|
238,183
|
|
|
|
512,527
|
|
|
|
462,950
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
10,870
|
|
|
|
14,579
|
|
|
|
12,853
|
|
|
|
21,639
|
|
Nonoperating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
3,102
|
|
|
|
2,352
|
|
|
|
6,288
|
|
|
|
4,557
|
|
Other, net
|
|
|
(30
|
)
|
|
|
(128
|
)
|
|
|
67
|
|
|
|
(279
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonoperating expenses, net
|
|
|
3,072
|
|
|
|
2,224
|
|
|
|
6,355
|
|
|
|
4,278
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Before Income Taxes
|
|
|
7,798
|
|
|
|
12,355
|
|
|
|
6,498
|
|
|
|
17,361
|
|
Income Tax Provision
|
|
|
1,593
|
|
|
|
4,951
|
|
|
|
1,127
|
|
|
|
6,936
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from Continuing Operations
|
|
|
6,205
|
|
|
|
7,404
|
|
|
|
5,371
|
|
|
|
10,425
|
|
Loss from Discontinued Operations
|
|
|
(872
|
)
|
|
|
|
|
|
|
(872
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
$
|
5,333
|
|
|
$
|
7,404
|
|
|
$
|
4,499
|
|
|
|
10,425
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding basic
|
|
|
13,290
|
|
|
|
14,135
|
|
|
|
13,294
|
|
|
|
14,186
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding diluted
|
|
|
13,484
|
|
|
|
14,405
|
|
|
|
13,480
|
|
|
|
14,459
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per Share-Continuing Operations
|
|
$
|
0.47
|
|
|
$
|
0.52
|
|
|
$
|
0.40
|
|
|
$
|
0.73
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share-Continuing Operations
|
|
$
|
0.46
|
|
|
$
|
0.51
|
|
|
$
|
0.40
|
|
|
$
|
0.72
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Loss Per Share-Discontinued Operations
|
|
$
|
(0.07
|
)
|
|
|
|
|
|
$
|
(0.07
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Loss Per Share-Discontinued Operations
|
|
$
|
(0.06
|
)
|
|
|
|
|
|
$
|
(0.06
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per Share
|
|
$
|
0.40
|
|
|
$
|
0.52
|
|
|
$
|
0.34
|
|
|
$
|
0.73
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share
|
|
$
|
0.40
|
|
|
$
|
0.51
|
|
|
$
|
0.33
|
|
|
$
|
0.72
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to condensed consolidated financial statements.
4
Saia, Inc.
Condensed Consolidated Statements of Cash Flows
For the six months ended June 30, 2008 and 2007
(in thousands)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
Six Months
|
|
|
|
2008
|
|
|
2007
|
|
Operating Activities:
|
|
|
|
|
|
|
|
|
Net cash from operating activitiescontinuing operations
|
|
|
30,823
|
|
|
$
|
19,855
|
|
Net cash from (used in) operating activitiesdiscontinued operations
|
|
|
717
|
|
|
|
(117
|
)
|
|
|
|
|
|
|
|
|
Net cash from operating activities
|
|
|
31,540
|
|
|
|
19,738
|
|
|
|
|
|
|
|
|
|
|
Investing Activities:
|
|
|
|
|
|
|
|
|
Acquisition of property and equipment
|
|
|
(20,614
|
)
|
|
|
(29,002
|
)
|
Proceeds from disposal of property and equipment
|
|
|
994
|
|
|
|
487
|
|
Acquisition of business
|
|
|
|
|
|
|
(2,344
|
)
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
(19,620
|
)
|
|
|
(30,859
|
)
|
|
|
|
|
|
|
|
|
|
Financing Activities:
|
|
|
|
|
|
|
|
|
Proceeds from long-term debt
|
|
|
25,000
|
|
|
|
12,916
|
|
Repayment of long-term debt
|
|
|
(38,011
|
)
|
|
|
(1,401
|
)
|
Repurchase of common stock
|
|
|
|
|
|
|
(5,408
|
)
|
Proceeds from stock option exercises
|
|
|
|
|
|
|
624
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash from (used in) financing activities
|
|
|
(13,011
|
)
|
|
|
6,731
|
|
|
|
|
|
|
|
|
Net Decrease in Cash and Cash Equivalents
|
|
|
(1,091
|
)
|
|
|
(4,390
|
)
|
Cash and cash equivalents, beginning of period
|
|
|
6,656
|
|
|
|
10,669
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of period
|
|
$
|
5,565
|
|
|
$
|
6,279
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Cash Flow Information:
|
|
|
|
|
|
|
|
|
Income taxes paid, net
|
|
|
517
|
|
|
$
|
2,504
|
|
Interest paid
|
|
|
6,469
|
|
|
|
3,229
|
|
See accompanying notes to condensed consolidated financial statements.
5
Saia, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
(1) Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements include the accounts of
Saia, Inc. and its wholly owned regional transportation subsidiary, Saia Motor Freight Line, LLC
(together the Company or Saia). The financial statements include the financial position and
results of operations of The Connection Company (the Connection) since its acquisition date of
November 18, 2006 and Madison Freight Systems, Inc. (Madison Freight) since its acquisition date of
February 1, 2007.
The condensed consolidated financial statements have been prepared by the Company, without audit by
independent registered public accountants. In the opinion of management, all normal recurring
adjustments necessary for a fair presentation of the statement of the financial position, results
of operations and cash flows for the interim periods included herein have been made. These interim
financial statements of the Company have been prepared in accordance with U.S. generally accepted
accounting principles for interim financial information, the instructions to Quarterly Report on
Form 10-Q and Rule 10-01 of Regulation S-X. Certain information and note disclosures normally
included in financial statements prepared in accordance with U.S. generally accepted accounting
principles have been condensed or omitted from these statements. The accompanying condensed
consolidated financial statements should be read in conjunction with the Companys annual report on
Form 10-K for the year ended December 31, 2007. Operating results for the quarter and six-months
ended June 30, 2008, are not necessarily indicative of the results of operations that may be
expected for the year ended December 31, 2008.
Business
The Company provides regional and interregional less-than-truckload (LTL) services and selected
national LTL and time-definite services across the United States through its wholly owned
subsidiary, Saia Motor Freight Line, LLC (Saia Motor Freight).
Integration Charges
Integration charges totaling zero and $2.4 million were expensed in the quarter and six-months
ended June 30, 2007 in connection with the acquisitions of the Connection and Madison Freight.
These integration charges consist of employee retention and stay bonuses, training, communications,
fleet re-logoing, technology integration and other related items.
New Accounting Pronouncements
In September 2006, the Financial Accounting Standards Board (FASB) issued Statement No. 157,
Fair
Value Measurements
(Statement 157)
.
Statement 157 defines fair value, establishes a framework for
measuring fair value and requires enhanced disclosures about fair value measurements. Statement
157 requires companies to disclose the fair value of financial instruments according to a fair
value hierarchy. Additionally, companies are required to provide certain disclosures regarding
instruments within the hierarchy, including a reconciliation of the beginning and ending balances
for each major category of assets and liabilities. Statement 157 is effective for the Companys
fiscal year beginning January 1, 2008. The adoption of Statement 157 has not had a material effect
on the Companys consolidated financial statements. In February 2008, the FASB issued Staff
Positions No. 157-1 and No. 157-2 which partially defer the effective date of Statement 157 for one
year for certain nonfinancial assets and liabilities and remove certain leasing transactions from
its scope. The Company will evaluate the manner in which the nonfinancial items covered by
Statement 157 will be adopted.
In February 2007, the FASB issued Statement No. 159,
Fair Value Options for Financial Assets and
Financial Liabilities
(Statement 159), which permits an entity to choose to measure many financial
instruments and certain other items at fair value at specified election dates. Statement 159 is
effective for the Companys fiscal year beginning January 1, 2008. The adoption of Statement 159
has not had a material effect on the Companys consolidated financial statements.
In December 2007, the FASB issued Statement No. 141 (revised 2007),
Business Combinations
(Statement 141R). Statement 141R establishes principles and requirements for how an acquirer
recognizes and measures in its financial statements the identifiable assets acquired, the
liabilities assumed, any non-controlling interest in the acquiree and
6
the goodwill acquired. Statement 141R also establishes disclosure requirements to enable the
evaluation of the nature and financial effects of the business combination. Statement 141R is
effective for fiscal years beginning after December 15, 2008. The Company will assess the impact
of the business combination provisions of Statement 141R upon the occurrence of a business
combination.
(2) Computation of Earnings Per Share
The calculation of basic earnings per common share and diluted earnings per common share was as
follows (in thousands, except per share amounts):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter
|
|
|
Six Months
|
|
|
|
2008
|
|
|
2007
|
|
|
2008
|
|
|
2007
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
$
|
6,205
|
|
|
$
|
7,404
|
|
|
$
|
5,371
|
|
|
$
|
10,425
|
|
Loss from discontinued operations, net
|
|
|
(872
|
)
|
|
|
|
|
|
|
(872
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
5,333
|
|
|
$
|
7,404
|
|
|
$
|
4,499
|
|
|
$
|
10,425
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for basic earnings
per shareweighted average common shares
|
|
|
13,290
|
|
|
|
14,135
|
|
|
|
13,294
|
|
|
|
14,186
|
|
Effect of dilutive stock options
|
|
|
95
|
|
|
|
211
|
|
|
|
94
|
|
|
|
219
|
|
Effect of other common stock equivalents
|
|
|
99
|
|
|
|
59
|
|
|
|
92
|
|
|
|
54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for diluted
earnings per shareadjusted weighted average common shares
|
|
|
13,484
|
|
|
|
14,405
|
|
|
|
13,480
|
|
|
|
14,459
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per Share Continuing Operations
|
|
$
|
0.47
|
|
|
$
|
0.52
|
|
|
$
|
0.40
|
|
|
$
|
0.73
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic (Loss) Per Share Discontinued Operations
|
|
|
(0.07
|
)
|
|
|
|
|
|
|
(0.07
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per Share
|
|
$
|
0.40
|
|
|
$
|
0.52
|
|
|
$
|
0.34
|
|
|
$
|
0.73
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share Continuing Operations
|
|
$
|
0.46
|
|
|
$
|
0.51
|
|
|
$
|
0.40
|
|
|
$
|
0.72
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted (Loss) Per Share Discontinued Operations
|
|
|
(0.06
|
)
|
|
|
|
|
|
|
(0.06
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Share
|
|
$
|
0.40
|
|
|
$
|
0.51
|
|
|
$
|
0.33
|
|
|
$
|
0.72
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the quarters ended June 30, 2008 and 2007 respectively, options for 329,300 and 49,510 shares
were excluded from the calculation of diluted earnings per share because their effect was
anti-dilutive. For the six months ended June 30, 2008 and 2007 respectively, options for 320,613
and 117,360 shares were excluded from the calculation of diluted earnings per share because their
effect was anti-dilutive.
(3) Commitments and Contingencies
Fuel Surcharge Litigation.
In late July 2007, a lawsuit was filed in the United States District
Court for the Southern District of California against Saia and several other major LTL freight
carriers alleging that the defendants conspired to fix fuel surcharge rates in violation of federal
antitrust laws and seeking injunctive relief, treble damages and attorneys fees. Since the filing
of the original case, similar cases have been filed against Saia and other LTL freight carriers,
each with the same allegation of conspiracy to fix fuel surcharge rates. The cases were
consolidated and transferred to the United States District Court for the Northern District of
Georgia, and the plaintiffs in these cases are seeking class action certification.
Plaintiffs filed their Amended Consolidated Complaint on May 23, 2008. Plaintiffs voluntarily
dismissed the following carriers from the Amended Consolidated Complaint without prejudice: R&L
Carriers, Inc., New England Motor Freight, Inc., Southeast Freight Lines, Inc., AAA Cooper
Transportation, Jevic Transportation, Inc. (Jevic) and Sun Capital Partners. Plaintiffs also
voluntarily dismissed Southern Motor Carriers Rate Conference, Inc. without prejudice.
On June 25, 2008, Defendants filed their Motion to Dismiss Plaintiffs Consolidated Class
Action Complaint on the grounds that it failed to adequately plead collusion and conspiracy. Given
the nature and status of the claims, we
7
cannot yet determine the amount or a reasonable range of
potential loss, if any. We believe that these claims have no merit and intend to vigorously defend
ourselves.
California Labor Code Litigation
. The Company is a defendant in a lawsuit originally filed in July
2007 in California state court on behalf of California dock workers alleging various violations of
state labor laws. In August 2007, the case was removed to the United States District Court for the
Central District of California. The claims include the alleged failure of the Company to provide
rest and meal breaks and the alleged failure to reimburse the employees for the cost of work shoes,
among other claims. In January 2008, the parties negotiated a conditional class-wide settlement
under which the Company would pay $0.8 million to settle these claims. This pre-certification
settlement is subject to court approval. In March 2008, the District Court denied preliminary
approval and the named Plaintiff filed a petition with the United States Court of Appeal for the
Ninth Circuit seeking permission to appeal this ruling. The petition is now pending. The proposed
settlement has been reflected as a liability of $0.8 million as of June 30, 2008 and was recorded
as other operating expenses in the fourth quarter of 2007.
Other.
The Company is subject to legal proceedings that arise in the ordinary course of its
business. In the opinion of management, the aggregate liability, if any, with respect to these
actions will not have a material adverse effect on our consolidated financial position but could
have a material adverse effect on the results of operations in a quarter or annual period.
(4) Debt and Financing Arrangements
At June 30, 2008 debt consisted of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
December 31,
|
|
|
|
2008
|
|
|
2007
|
|
Credit Agreement with Banks, described below
|
|
$
|
18,506
|
|
|
$
|
48,724
|
|
Senior Notes under a Master Shelf Agreement,
described below
|
|
|
130,000
|
|
|
|
110,000
|
|
Subordinated debentures, interest rate of 7.0%
semi-annual installment payments due from 2005 to 2011
|
|
|
11,364
|
|
|
|
14,121
|
|
|
|
|
|
|
|
|
Total Debt
|
|
|
159,870
|
|
|
|
172,845
|
|
Current Maturities
|
|
|
15,188
|
|
|
|
12,793
|
|
|
|
|
|
|
|
|
Long-Term Debt
|
|
$
|
144,682
|
|
|
$
|
160,052
|
|
|
|
|
|
|
|
|
On September 20, 2002, Saia issued $100 million in Senior Notes under a $125 million (amended to
$150 million in April 2005) Master Shelf Agreement with Prudential Investment Management, Inc. and
certain of its affiliates. Saia issued another $25 million in Senior Notes on November 30, 2007
and $25 million in Senior Notes on January 31, 2008 under the same Master Shelf Agreement.
The initial $100 million Senior Notes are unsecured and have a fixed interest rate of 7.38 percent.
Payments due under the $100 million Senior Notes were interest only until June 30, 2006 and at
that time semi-annual principal payments began with the final payment due December 2013. The
November 2007 issuance of $25 million Senior Notes are unsecured and have a fixed interest rate of
6.14 percent. The January 2008 issuance of $25 million Senior Notes are unsecured and have a fixed
interest rate of 6.17 percent. Payments due for both recent $25 million issuances will be interest
only until June 30, 2011 and at that time semi-annual principal payments will begin with the final
payments due January 1, 2018. Under the terms of the Senior Notes, Saia must maintain certain
financial covenants including a maximum ratio of total indebtedness to earnings before interest,
taxes, depreciation, amortization and rent (EBITDAR), a minimum interest coverage ratio and a
minimum tangible net worth, among others. At June 30, 2008, the Company was in compliance with
these financial covenants.
At December 31, 2007, Saia also had a $110 million Agented Revolving Credit Agreement (the Credit
Agreement) with Bank of Oklahoma, N.A., as agent. The Credit Agreement was unsecured with an
interest rate based on LIBOR or prime at the Companys option, plus an applicable spread, in
certain instances, and had a maturity date of January 2009. On January 28, 2008, Saia amended and
restated the Credit Agreement, increasing it to $160 million, extending the maturity to January 28,
2013 and adjusting the interest rate schedule. In addition, the financial covenants were revised
to a fixed charge coverage ratio, leverage ratio and adjusted leverage ratio, removing the minimum
tangible net worth test. At June 30, 2008, Saia had $18.5 million of borrowings under the Credit
Agreement, at an interest rate of 5.00 percent, $54.2 million in letters of credit outstanding
under the Credit Agreement and, subject to the satisfaction of existing debt covenants,
availability of $87.3 million. The available portion of the Credit Agreement may be used for
future capital expenditures, working capital and letter of credit
8
requirements as needed. Under
the terms of the Credit Agreement, Saia must satisfy a tangible net worth covenant and maintain a fixed charge coverage ratio, leverage ratio and adjusted leverage ratio. At June
30, 2008, Saia was in compliance with these financial covenants.
Based on the borrowing rates currently available to the Company for debt with similar terms and
remaining maturities, the estimated fair value of total debt at June 30, 2008 and December 31, 2007
is $160.3 million and $181.8 million, respectively.
The principal maturities of long-term debt for the next five years (in thousands) are as follows:
|
|
|
|
|
|
|
Amount
|
2008
|
|
$
|
5,000
|
|
2009
|
|
|
18,938
|
|
2010
|
|
|
18,938
|
|
2011
|
|
|
22,196
|
|
2012
|
|
|
25,714
|
|
Thereafter through 2018
|
|
|
69,084
|
|
(5) Income Taxes
In May 2008, the Company was approved as an alternative fueler by the IRS. As a result of
receiving approval, the Company recorded, as a discrete item in the quarter, a tax benefit of $1.4
million which represents the amount of the alternative fuel credit for 2006 and 2007.
Additionally, the Company has included the estimated amount of the 2008 alternative fuel credit
(approximately $1 million) in the calculation of its estimated annual effective tax rate for 2008.
As a result, the current estimated annual effective tax rate before discrete item for the
alternative fuel credit is approximately 38 percent as compared to an estimated annual effective
tax rate of approximately 41 percent at the end of the first quarter 2008.
(6) Discontinued Operations
The Company sold the stock of Jevic Transportation, Inc.
(Jevic) on June 30, 2006 and remains a
guarantor under indemnity agreements, primarily with certain insurance underwriters with respect
to Jevics self-insured retention (SIR) obligation for workers compensation, bodily injury and
property damage and general liability claims against Jevic arising out of occurrences prior to the
transaction date. The SIR obligation was estimated to be approximately $15.3 million as of the
June 30, 2006 transaction date. In connection with the transaction, Jevic provided collateral in
the form of a $15.3 million letter of credit with a third party bank in favor of the Company. The
amount of the letter of credit was reduced in April 2008 to $13.6 million following a draw by the
Company on the letter of credit to fund the SIR portion of a settlement of a bodily injury claim
against Jevic arising prior to the transaction date. Jevic filed bankruptcy in May 2008 and the
Company recorded liabilities for all residual indemnification obligations in claims, insurance and
other current liabilities, based on the current estimates of the indemnification obligations as of
June 30, 2008. Accordingly, the Company established a liability of $14.6 million for open Jevic
claims for occurrences prior to June 30, 2006. Additionally, the Company recorded a receivable of
$13.6 million, included in prepaid expenses and other current assets, for the amounts available
under the letter of credit. The income statement impact of $0.9 million, net of taxes, is
reflected as discontinued operations in the second quarter of 2008.
Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
This discussion should be read in conjunction with the accompanying unaudited condensed
consolidated financial statements and our 2007 audited consolidated financial statements included
in the Companys annual report on Form 10-K for the year ended December 31, 2007. Those financial
statements include additional information about our significant accounting policies, practices and
the transactions that underlie our financial results.
Executive Overview
The Companys business is highly correlated to the general economy and, in particular, industrial
production. The Companys priorities are focused on increasing volume within existing geographies
while managing both the mix and yield of business to achieve increased profitability. The
Companys business is labor intensive, capital intensive and service sensitive. The Company looks
for opportunities to improve cost effectiveness, safety and asset utilization (primarily tractors
and trailers). Technology is important to supporting both customer service and operating
management. The Company grew operating revenue by 9.2 percent in the second quarter of 2008 over
the
9
second quarter of 2007. Revenue growth was attributable to improvement in yield (revenue per
hundred weight) through the impact of higher fuel surcharges and increased length of haul.
Operating income was $10.9 million for the second quarter of 2008, a decrease of $3.7 million from
the prior-year quarter. The Company recorded a pre-tax benefit of $0.6 million in the second
quarter of 2008 for equity-based compensation compared to a pre-tax expense of $0.8 million in the
second quarter of 2007 as a result of the impact of stock price changes in the respective periods.
The Company also recorded a tax benefit in the second quarter of 2008 for the prior period impact
of an alternative fuel tax credit of $1.4 million. Earnings from continuing operations in the
second quarter of 2008 were $0.46 per share compared to $0.51 per share in the second quarter of
2007. Second quarter 2008 operating income was impacted by the soft freight environment,
escalating fuel prices and higher costs. The operating ratio (operating expenses divided by
operating revenue) of 96.1 percent in the second quarter of 2008 compared to 94.2 percent in the
second quarter of 2007.
The Company had $30.8 million in cash from operating activities of continuing operations through
the first six months of the year compared with $19.9 million generated in the prior-year period.
Cash flows from operating activities of discontinued operations were $0.7 million for the six
months ended June 30, 2008 versus $0.1 million of cash used in operating activities of discontinued
operations for the six months ended June 30, 2007. The Company had net cash used in investing
activities of $19.6 million during the first six months of 2008 for the purchase of property and
equipment compared to $30.9 million in the first six months of 2007, which included the acquisition
of Madison Freight. The Companys cash used in financing activities during the first six months of
2008 included proceeds from borrowings on long-term debt of $25 million, which was more than offset
by $38.0 million of debt repayments. The Company had borrowings of $18.5 million and $54.2 million
in letters of credit outstanding on its credit agreement and a cash balance of $5.6 million as of
June 30, 2008.
General
The following managements discussion and analysis describes the principal factors affecting the
results of operations, liquidity and capital resources, as well as the critical accounting policies
of Saia, Inc. (also referred to as Saia and the Company).
The Company is an asset-based transportation company based in Johns Creek, Georgia providing
regional and multi-regional LTL services and selected national LTL and guaranteed service solutions
to a broad base of customers across the United States through its wholly owned subsidiary, Saia
Motor Freight, LLC.
Our business is highly correlated to the general economy and, in particular, industrial production.
It also is impacted by a number of other factors as detailed in the
Forward Looking Statements
section of this Form 10-Q. The key factors that affect our operating results are the volumes of
shipments transported through our network, as measured by our average daily shipments and tonnage;
the prices we obtain for our services, as measured by revenue per hundredweight (a measure of
yield) and revenue per shipment; our ability to manage our cost structure for capital expenditures
and operating expenses such as salaries, wages and benefits; purchased transportation; claims and
insurance expense; fuel and maintenance; and our ability to match operating costs to shifting
volume levels. Fuel surcharges have remained in effect for several years and are a significant
component of revenue and pricing. Fuel surcharges are a more integral part of annual customer
contract renewals, blurring the distinction between base price increases and recoveries under the
fuel surcharge program.
10
Results of Operations
Saia, Inc.
Selected Results of Operations and Operating Statistics Continuing Operations
For the quarters ended June 30, 2008 and 2007
(in thousands, except ratios and revenue per hundredweight)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percent
|
|
|
|
|
|
|
|
|
|
|
|
Variance
|
|
|
|
2008
|
|
|
2007
|
|
|
08 v. 07
|
|
Operating Revenue
|
|
$
|
276,050
|
|
|
$
|
252,762
|
|
|
|
9.2
|
%
|
Operating Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries, wages and employees benefits
|
|
|
136,871
|
|
|
|
135,237
|
|
|
|
1.2
|
|
Purchased transportation
|
|
|
21,704
|
|
|
|
19,073
|
|
|
|
13.8
|
|
Depreciation and amortization
|
|
|
10,375
|
|
|
|
9,796
|
|
|
|
5.9
|
|
Fuel and other operating expenses
|
|
|
96,230
|
|
|
|
74,077
|
|
|
|
29.9
|
|
Operating Income
|
|
|
10,870
|
|
|
|
14,579
|
|
|
|
(25.4
|
)
|
Operating Ratio
|
|
|
96.1
|
%
|
|
|
94.2
|
%
|
|
|
1.9
|
|
Nonoperating Expense
|
|
|
3,072
|
|
|
|
2,224
|
|
|
|
38.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Working Capital
|
|
|
22,827
|
|
|
|
11,207
|
|
|
|
|
|
Cash Flows from Operations (year to date)
|
|
|
30,823
|
|
|
|
19,855
|
|
|
|
|
|
Net Acquisitions of Property and Equipment (year to date)
|
|
|
19,620
|
|
|
|
28,515
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Statistics:
|
|
|
|
|
|
|
|
|
|
|
|
|
LTL Tonnage
|
|
|
963
|
|
|
|
982
|
|
|
|
(1.9
|
)
|
Total Tonnage
|
|
|
1,165
|
|
|
|
1,174
|
|
|
|
(0.7
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTL Shipments
|
|
|
1,735
|
|
|
|
1,781
|
|
|
|
(2.6
|
)
|
Total Shipments
|
|
|
1,762
|
|
|
|
1,807
|
|
|
|
(2.5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LTL Revenue per hundredweight
|
|
$
|
13.28
|
|
|
$
|
11.98
|
|
|
|
10.8
|
|
Total Revenue per hundredweight
|
|
$
|
11.86
|
|
|
$
|
10.78
|
|
|
|
10.0
|
|
Quarter and six months ended June 30, 2008 vs. Quarter and six months ended June 30, 2007
Continuing Operations
Revenue and volume
Consolidated revenue increased 9.2 percent to $276.1 million as a result of higher yields including
the impact of increased fuel surcharges and increased length of haul partially offset by decreased
tonnage primarily as a result of the difficult economic environment. Fuel prices have continued to
increase during the second quarter of 2008. However, unlike the first quarter of 2008 where the
rapid rise in fuel prices resulted in net additional fuel expense, the cost per gallon increases
were offset by the increase in fuel surcharges during the second quarter of 2008. We have
experienced cost increases in other operating costs as a result of increased fuel prices. However,
the total impact of higher energy prices on other non-fuel related expenses is difficult to
determine.
Saias LTL revenue per hundredweight (a measure of yield) increased 10.8 percent to $13.28 per
hundredweight for the second quarter of 2008 including the impact of fuel surcharges. Saias LTL
tonnage was down 1.9 percent to 1.0 million tons and LTL shipments were down 2.6 percent to 1.7
million shipments. Approximately 70 percent of Saia Motor Freights revenue is subject to
individual customer price adjustment negotiations that occur throughout the year. The remaining 30
percent of revenue is subject to an annual general rate increase. On February 18, 2008, Saia Motor
Freight implemented a 5.4 percent general rate increase for customers comprising this 30 percent of
revenue. Competitive factors, customer turnover and mix changes, among other things impact the
extent to which customer rate increases are retained over time.
11
For the six months ended June 30, 2008 operating revenues were $525.4 million up 8.4 percent from
$484.6 million for the six months ended June 30, 2007 due to higher yields and revenue per shipment
reflecting the increased fuel surcharges and longer lengths of haul. Consistent with the quarterly
results, higher fuel prices have resulted in increases in other operating expenses as well.
Operating expenses and margin
Consolidated operating income of $10.9 million in the second quarter of 2008 compared to $14.6
million in the prior year. The second quarter 2008 operating ratio (operating expenses divided by
operating revenue) was 96.1 compared to 94.2 for the same period in 2007. Higher fuel prices, in
conjunction with volume changes due to increased length of haul, caused $20.2 million of the
increase in fuel, operating expenses and supplies. Year-over-year yield increases were more than
offset by cost increases in wages, health care and depreciation and maintenance. Accident expense
in the second quarter of 2008 was $2.0 million less than the second quarter of 2007 reflecting
favorable trends in the severity of accidents incurred. Purchased transportation expenses
increased 13.8 percent reflecting both higher fuel prices and increased utilization driven by the
opening of lanes to and from the acquired territories. The annual wage rate increase for 2007
averaged 2.5 percent and was effective December 1, 2007. The Company recorded no annual incentive
expense in the second quarter of 2008 versus $1.1 million in the second quarter of 2007 based on
the Companys current operating performance. The Company recorded pre-tax benefit of $0.6 million
in the second quarter of 2008 for equity-based compensation compared to a pre-tax expense of $0.8
million in the second quarter of 2007 as a result of the impact of stock price changes in the
respective periods. Equity-based compensation expense includes the expense for the cash-based
awards under the Companys long-term incentive plans, which is a function of the Companys stock
price performance versus a peer group, and the deferred compensation plans expense, which is tied
to changes in the Companys stock price.
For the six months ended June 30, 2008, operating income was $12.9 million with an operating ratio
of 97.6 percent compared to operating income of $21.6 million with an operating ratio of 95.5
percent for the six-months ended June 30, 2007. The six months ended June 30, 2007 results include
integration charges of $2.4 million due to the integration of the operations of the Connection and
Madison Freight during the first quarter of 2007. Higher fuel prices and fuel volumes resulted in
$33 million of the increase in fuel, operating expenses and supplies for the six months ended June
30, 2008. Purchased transportation expenses increased 15.5 percent during the first six months of
2008 due to higher utilization and higher fuel prices.
Other
Substantially all non-operating expenses represent interest expense and the increase in net
non-operating expenses is a result of overall higher average debt balances during the second
quarter of 2008 versus the second quarter of 2007. The effective tax rate was 20.4 percent for the
quarter ended June 30, 2008 compared to 40.1 percent for the quarter ended June 30, 2007. The 2008
tax rate includes the impact of non-recurring items, specifically the alternative fuel tax credit
of $1.4 million for 2006 and 2007 as the Company was approved as an alternative fueler in the
second quarter of 2008. The Company has included the estimated amount of the 2008 alternative fuel
credit (approximately $1 million) in the calculation of its estimated annual effective tax rate for
2008. As a result, the current estimated annual effective tax rate before discrete item for the
alternative fuel credit is approximately 38 percent as compared to an estimated annual effective
tax rate of approximately 41 percent at the end of the first quarter 2008.
Income from continuing operations was $6.2 million or $0.46 per diluted share in the second quarter
of 2008 compared to $7.4 million, or $0.51 per diluted share, in the second quarter of 2007.
Income from continuing operations was $5.4 million or $0.40 per diluted share in the first six
months of 2008 compared to income from continuing operations of $10.4 million or $0.72 per diluted
share in the first six months of 2007.
Discontinued Operations
In the second quarter of 2008, the Company recorded a $0.9 million charge, net of tax, as a result
of the liabilities associated with the indemnification obligations under the Stock Purchase
Agreement for the sale of Jevic Transportation, Inc.
Working capital/capital expenditures
Working capital at June 30, 2008 was $22.8 million, which increased from working capital at June
30, 2007 of $11.2 million due to increased net accounts receivable balances of $13.0 million due to
slower payments from customers resulting in increased days outstanding, as well as an increase in
income tax receivable of $6.4 million, partially offset by increases in current liabilities. Cash
flows from operating activities were $31.5 million for the six months ended June 30, 2008 versus
$19.7 million for the six months ended June 30, 2007. For the six months ended June 30, 2008 cash
used in investing activities was $19.6 million versus $30.9 million in the prior-year period,
primarily due to higher property and equipment purchases and the acquisition of Madison Freight in
2007. The 2007
12
acquisition of property and equipment includes investments in real estate for terminals and in both
additions and replacement of revenue equipment and technology equipment and software. For the
six-months ended June 30, 2008, cash used in financing activities was $13.0 million versus cash
from financing activities of $6.7 million for the prior-year period. Current year financing
activities included $25.0 million in proceeds from new senior notes, which were more than offset by
net payments on the revolving credit facility and senior notes of $38.0 million.
Outlook
Our business remains highly correlated to the success of Company specific improvement initiatives
as well as a variety of external factors, including the general economy. Given the volume and
pricing trends in the first half of 2008, there remains uncertainty as to the direction of the
economy for the balance of 2008. For 2008, we plan to continue to focus on providing top quality
service and improving safety performance while building density within our existing geography.
Saia continues to evaluate opportunities to grow and further increase profitability.
The Company plans to continue to pursue revenue and cost initiatives to improve profitability.
Planned revenue initiatives include, but are not limited to, building density and improving
performance in our current geography, targeted marketing initiatives to grow revenue in more
profitable segments, as well as pricing and yield management. The extent to which these revenue
initiatives are successful will be impacted by the underlying economic trends, competitor
initiatives and other factors discussed under
Risk Factors
.
Planned cost management initiatives include, but are not limited to, seeking gains in productivity
and asset utilization that collectively are designed to offset anticipated inflationary unit cost
increases in salaries and wage rates, healthcare, workers compensation, fuel and all the other
expense categories. Specific cost initiatives include linehaul routing optimization, reduction in
costs of purchased transportation, expansion of wireless dock technology and an enhanced weight and
inspection process. If the Company builds market share, there are numerous operating leverage cost
benefits. Conversely, should the economy soften from present levels, the Company plans to attempt
to match resources and capacity to shifting volume levels to lessen unfavorable operating leverage.
The success of cost improvement initiatives is also impacted by the cost and availability of
drivers and purchased transportation, fuel, insurance claims, regulatory changes, successful
implementation of profit improvement initiatives and other factors discussed under
Risk Factors
.
See
Forward-Looking Statements
for a more complete discussion of potential risks and uncertainties
that could materially affect our future performance.
New Accounting Pronouncements
In September 2006, the FASB issued Statement No. 157,
Fair Value Measurements
(Statement 157)
.
Statement 157 defines fair value, establishes a framework for measuring fair value and requires
enhanced disclosures about fair value measurements. Statement 157 requires companies to disclose
the fair value of financial instruments according to a fair value hierarchy. Additionally,
companies are required to provide certain disclosures regarding instruments within the hierarchy,
including a reconciliation of the beginning and ending balances for each major category of assets
and liabilities. Statement 157 is effective for the Companys fiscal year beginning January 1,
2008. The adoption of Statement 157 has not had a material effect on the Companys consolidated
financial statements. In February 2008, the FASB issued Staff Positions No. 157-1 and No. 157-2
which partially defer the effective date of Statement 157 for one year for certain nonfinancial
assets and liabilities and remove certain leasing transactions from its scope. The Company will
evaluate the manner in which the nonfinancial items covered by
Statement 157 will be adopted.
In February 2007, the FASB issued Statement No. 159,
Fair Value Options for Financial Assets and
Financial Liabilities
(Statement 159), which permits an entity to choose to measure many financial
instruments and certain other items at fair value at specified election dates. Statement 159 is
effective for the Companys fiscal year beginning January 1, 2008. The adoption of Statement 159
has not had a material effect on the Companys consolidated financial statements.
In December 2007, the FASB issued Statement No. 141 (revised 2007),
Business Combinations
(Statement 141R). Statement 141R establishes principles and requirements for how an acquirer
recognizes and measures in its financial statements the identifiable assets acquired, the
liabilities assumed, any non-controlling interest in the acquiree and the goodwill acquired.
Statement 141R also establishes disclosure requirements to enable the evaluation of the nature and
financial effects of the business combination. Statement 141R is effective for fiscal years
beginning after December 15, 2008. The Company will assess the impact of the business combination
provisions of Statement 141R upon the occurrence of a business combination.
13
Financial Condition
The Companys liquidity needs arise primarily from capital investment in new equipment, land and
structures and information technology, letters of credit required under insurance programs, as well
as funding working capital requirements.
On September 20, 2002, Saia issued $100 million in Senior Notes under a $125 million (amended to
$150 million in April 2005) Master Shelf Agreement with Prudential Investment Management, Inc. and
certain of its affiliates. Saia issued another $25 million in Senior Notes on November 30, 2007
and $25 million in Senior Notes on January 31, 2008 under the same Master Shelf Agreement. At June
30, 2008, a total of $130 million is outstanding under this Master Shelf Agreement.
The initial $100 million Senior Notes are unsecured and have a fixed interest rate of 7.38 percent.
Payments due under the $100 million Senior Notes were interest only until June 30, 2006 and at
that time semi-annual principal payments began with the final payment due December 2013. The
November 2007 issuance of $25 million Senior Notes are unsecured and have a fixed interest rate of
6.14 percent. The January 2008 issuance of $25 million Senior Notes are unsecured and have a fixed
interest rate of 6.17 percent. Payments due for both recent $25 million issuances will be interest
only until June 30, 2011 and at that time semi-annual principal payments will begin with the final
payments due January 1, 2018. Under the terms of the Senior Notes, Saia must maintain certain
financial covenants including a maximum ratio of total indebtedness to earnings before interest,
taxes, depreciation, amortization and rent (EBITDAR), a minimum interest coverage ratio and a
minimum tangible net worth, among others. At June 30, 2008, the Company was in compliance with
these financial covenants.
At December 31, 2007, Saia also had a $110 million Agented Revolving Credit Agreement (the Credit
Agreement) with Bank of Oklahoma, N.A., as agent. The Credit Agreement was unsecured with an
interest rate based on LIBOR or prime at the Companys option, plus an applicable spread, in
certain instances, and had a maturity date of January 2009. On January 28, 2008, Saia amended and
restated the Credit Agreement, increasing it to $160 million, extending the maturity to January 28,
2013 and adjusting the interest rate schedule. In addition, the financial covenants were revised
to a fixed charge coverage ratio, leverage ratio and adjusted leverage ratio, removing the minimum
tangible net worth test. At June 30, 2008, Saia had $18.5 million of borrowings under the Credit
Agreement, $54.2 million in letters of credit outstanding under the Credit Agreement and, subject
to the satisfaction of existing debt covenants, availability of $87.3 million. The available
portion of the Credit Agreement may be used for future capital expenditures, working capital and
letter of credit requirements as needed. Under the terms of the Credit Agreement, Saia must
satisfy a tangible net worth covenant and maintain a fixed charge coverage ratio, leverage ratio
and adjusted leverage ratio. At June 30, 2008, Saia was in compliance with these financial
covenants.
At June 30, 2008, Yellow Corporation, now known as YRC Worldwide (Yellow), provided guarantees on
behalf of Saia primarily for open workers compensation claims and casualty claims incurred prior
to March 1, 2000. Under the Master Separation and Distribution Agreement entered into in
connection with the 100 percent tax-free distribution of shares to Yellow shareholders, Saia pays
Yellows actual cost of any collateral it provides to insurance underwriters in support of these
claims at cost plus 100 basis points through October 2008. At June 30, 2008, the portion of
collateral allocated by Yellow to Saia in support of these claims was $1.6 million.
Projected net capital expenditures for 2008 are now approximately $35 million primarily due to a
reduction in strategic real estate opportunities within Saias existing network. This represents
an approximately $54 million decrease from 2007 net capital expenditures for property and
equipment. Approximately $11.9 million of the 2008 capital budget was committed at June 30, 2008.
Net capital expenditures pertain primarily to replacement of revenue equipment and additional
investments in information technology, land and structures.
The Company has historically generated cash flows from operations that have funded its capital
expenditure requirements. Cash flows from operations were $46.3 million for the year ended
December 31, 2007, while net cash used in investing activities were $91.4 million. As such, the
$41.1 million cash from financing activities also supported capital expenditures in 2007. Cash
flows from operations were $31.5 million for the six months ended June 30, 2008 which funded the
$19.6 million of total capital expenditures in the first six months of 2008. Cash flows from
operating activities for the six months ended June 30, 2008 were $11.0 million higher than the
prior year period primarily due to decreased working capital requirements. The timing of capital
expenditures can largely be managed around the seasonal working capital requirements of the
Company. The Company believes it has adequate sources of capital to meet short-term liquidity
needs through its cash ($5.6 million at June 30, 2008) and, subject to the satisfaction of existing
debt covenants, availability under its revolving credit facility ($87.3 million at June 30, 2008).
Future operating cash flows are primarily dependent upon the Companys profitability and its
ability to manage its working capital requirements, primarily accounts receivable, accounts payable
and wage and benefit accruals. The Company has the ability to adjust its capital expenditures in
the event of a shortfall in anticipated
14
operating cash flows. The Company believes its current capital structure and availability under
its borrowing facilities along with anticipated cash flows from future operations will be
sufficient to fund planned replacements of revenue equipment, investments in technology and real
estate. Additional sources of capital may be needed to fund future long-term strategic growth
initiatives.
In accordance with U.S. generally accepted accounting principles, our operating leases are not
recorded in our balance sheet; however, the future minimum lease payments are included in the
Contractual Cash Obligations table below. See the notes to our audited consolidated financial
statements included in our annual report on Form 10-K for the year ended December 31, 2007 for
additional information. In addition to the principal amounts disclosed in the tables below, the
Company has interest obligations of approximately $11.5 million for 2008 and decreasing for each
year thereafter, based on borrowings outstanding at June 30, 2008.
Contractual Cash Obligations
The following tables set forth a summary of our contractual cash obligations and other commercial
commitments as of June 30, 2008 (in millions).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments due by year
|
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
2011
|
|
|
2012
|
|
|
Thereafter
|
|
|
Total
|
|
Contractual cash obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revolving line of credit (1)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
18.5
|
|
|
$
|
18.5
|
|
Long-term debt (1)
|
|
|
5.0
|
|
|
|
18.9
|
|
|
|
18.9
|
|
|
|
22.2
|
|
|
|
25.7
|
|
|
|
50.7
|
|
|
|
141.4
|
|
Operating leases
|
|
|
7.5
|
|
|
|
12.2
|
|
|
|
8.4
|
|
|
|
5.8
|
|
|
|
3.8
|
|
|
|
9.5
|
|
|
|
47.2
|
|
Purchase obligations (2)
|
|
|
15.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total contractual
obligations
|
|
$
|
28.1
|
|
|
$
|
31.1
|
|
|
$
|
27.3
|
|
|
$
|
28.0
|
|
|
$
|
29.5
|
|
|
$
|
78.7
|
|
|
$
|
222.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
See Note 4 to the condensed consolidated financial statements.
|
|
(2)
|
|
Includes commitments of $11.9 million for capital expenditures.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of commitment expiration by year
|
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
|
2011
|
|
|
2012
|
|
|
Thereafter
|
|
|
Total
|
|
Other commercial commitments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available line of credit
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
87.3
|
|
|
$
|
87.3
|
|
Letters of credit
|
|
|
46.2
|
|
|
|
9.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
55.8
|
|
Surety bonds
|
|
|
3.1
|
|
|
|
2.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total commercial
commitments
|
|
$
|
49.3
|
|
|
$
|
12.5
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
87.3
|
|
|
$
|
149.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company has unrecognized tax benefits of approximately $3.3 million and accrued interest and
penalties of $1.4 million related to the unrecognized tax benefits as of June 30, 2008. The
Company cannot reasonably estimate the timing of cash settlement with respective taxing authorities
beyond one year and accordingly has not included the amounts within the above contractual cash
obligation and other commercial commitment tables.
The Company sold the stock of Jevic Transportation, Inc. (Jevic) on June 30, 2006 and remains a
guarantor under indemnity agreements, primarily with certain insurance underwriters with respect
to Jevics self-insured retention (SIR) obligation for workers compensation, bodily injury and
property damage and general liability claims against Jevic arising out of occurrences prior to the
transaction date. The SIR obligation was estimated to be approximately $15.3 million as of the
June 30, 2006 transaction date. In connection with the transaction, Jevic provided collateral in
the form of a $15.3 million letter of credit with a third party bank in favor of the Company. The
amount of the letter of credit was reduced in April 2008 to $13.6 million following a draw by the
Company on the letter of credit to fund the SIR portion of a settlement of a bodily injury claim
against Jevic arising prior to the transaction date. Jevic filed bankruptcy in May 2008 and the
Company recorded liabilities for all residual indemnification obligations in claims, insurance and
other current liabilities, based on the current estimates of the indemnification obligations as of
June 30, 2008. Accordingly, the Company established a liability of $14.6 million for open Jevic
claims for occurrences prior to June 30, 2006. Additionally, the Company recorded a receivable of
$13.6 million, included in
15
prepaid expenses and other current assets, for the amounts available under the letter of credit.
The income statement impact of $0.9 million, net of taxes, is reflected as discontinued operations
in the second quarter of 2008.
Critical Accounting Policies and Estimates
The Company makes estimates and assumptions in preparing the consolidated financial statements that
affect reported amounts and disclosures therein. In the opinion of management, the accounting
policies that generally have the most significant impact on the financial position and results of
operations of the Company include:
|
|
Claims and Insurance Accruals
. The Company has self-insured retention limits
generally ranging from $250,000 to $2.0 million per claim for medical, workers compensation,
auto liability, casualty and cargo claims. For the policy year March 2003 through February
2004 only, the Company has an aggregate exposure limited to an additional $2.0 million above
its $1.0 million per claim deductible under its auto liability program. The liabilities
associated with the risk retained by the Company are estimated in part based on historical
experience, third-party actuarial analysis with respect to workers compensation claims,,
demographics, nature and severity, past experience and other assumptions. The liabilities for
self-funded retention are included in claims and insurance reserves based on claims incurred,
with liabilities for unsettled claims and claims incurred but not yet reported being
actuarially determined with respect to workers compensation claims and with respect to all
other liabilities, estimated based on managements evaluation of the nature and severity of
individual claims and historical experience. However, these estimated accruals could be
significantly affected if the actual costs of the Company differ from these assumptions. A
significant number of these claims typically take several years to develop and even longer to
ultimately settle. These estimates tend to be reasonably accurate over time; however,
assumptions regarding severity of claims, medical cost inflation, as well as specific case
facts can create short-term volatility in estimates.
|
|
|
Revenue Recognition and Related Allowances
. Revenue is recognized on a
percentage-of-completion basis for shipments in transit while expenses are recognized as
incurred. In addition, estimates included in the recognition of revenue and accounts
receivable include estimates of shipments in transit and estimates of future adjustments to
revenue and accounts receivable for billing adjustments and collectability.
|
|
|
|
Revenue is recognized in a systematic process whereby estimates of shipments in transit are
based upon actual shipments picked up, scheduled day of delivery and current trend in average
rates charged to customers. Since the cycle for pick up and delivery of shipments is
generally 1-3 days, typically less than 5 percent of a total months revenue is in transit at
the end of any month. Estimates for credit losses and billing adjustments are based upon
historical experience of credit losses, adjustments processed and trends of collections.
Billing adjustments are primarily made for discounts and billing corrections. These estimates
are continuously evaluated and updated; however, changes in economic conditions, pricing
arrangements and other factors can significantly impact these estimates.
|
|
|
Depreciation and Capitalization of Assets
. Under the Companys accounting policy
for property and equipment, management establishes appropriate depreciable lives and salvage
values for the Companys revenue equipment (tractors and trailers) based on their estimated
useful lives and estimated fair values to be received when the equipment is sold or traded in.
These estimates are routinely evaluated and updated when circumstances warrant. However,
actual depreciation and salvage values could differ from these assumptions based on market
conditions and other factors.
|
|
|
Goodwill
. In connection with its acquisition of Clark Bros. Transit, Inc. in 2004,
the Connection in 2006 and Madison Freight in 2007, the Company allocated purchase price based
on independent appraisals of intangible assets and real property and managements estimates of
valuations of other tangible assets. Annually, the Company assesses goodwill impairment by
applying a fair value based test. This fair value based test involves assumptions regarding
the long-term future performance of the Company, fair value of the assets and liabilities of
the Company, cost of capital rates and other assumptions. However, actual recovery of
remaining goodwill could differ from these assumptions based on market conditions and other
factors. In the event remaining goodwill is determined to be impaired, a charge to earnings
would be required.
|
|
|
Equity-based Incentive Compensation
. The Company maintains long-term incentive
compensation arrangements in the form of stock options, restricted stock, cash-based awards
and stock-based awards. The criteria for the cash-based and stock-based awards are total
shareholder return versus a peer group of companies over a three year performance period. The
Company accrues for cash-based award expenses based on performance criteria from the beginning
of the performance period through the reporting date. This results in the potential for
significant adjustments from period to period that cannot be predicted. The Company accounts
for its stock-based awards in accordance with Financial Accounting Standards Board
|
16
|
|
Statement No. 123R with the expense amortized over the three year vesting period based on the Monte
Carlo fair value at the date the stock-based awards are granted. The Company accounts for
stock options in accordance with Financial Accounting Standards Board Statement No. 123R with
option expense amortized over the three year vesting period based on the Black-Scholes-Merton
fair value at the date the options are granted. See discussion of adoption of Statement No.
123R in Note 9 to the consolidated financial statements included in the Companys annual
report on Form 10-K for the year ended December 31, 2007 and the Saia, Inc. Amended and
Restated 2003 Omnibus Incentive Plan included in the Companys Definitive Proxy Statement on
Schedule 14A filed on March 16, 2007.
|
These accounting policies, and others, are described in further detail in the notes to our audited
consolidated financial statements included in the Companys annual report on Form 10-K for the year
ended December 31, 2007.
The preparation of financial statements in accordance with accounting principles generally accepted
in the United States requires management to adopt accounting policies and make significant
judgments and estimates to develop amounts reflected and disclosed in the financial statements. In
many cases, there are alternative policies or estimation techniques that could be used. We maintain
a thorough process to review the application of our accounting policies and to evaluate the
appropriateness of the many estimates that are required to prepare the financial statements.
However, even under optimal circumstances, estimates routinely require adjustment based on changing
circumstances and the receipt of new or better information.
Forward-Looking Statements
Statements in this report regarding the Company and its business, which are not historical facts
are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are made in
accordance with the Private Securities Litigation Reform Act of 1995. Words such as anticipate,
estimate, expect, project, intend, may, plan, predict, believe, seek, should,
and similar words or expressions are intended to identify forward-looking statements. We use such
forward-looking statements regarding our future financial condition and results of operations and
our business operations in this Form 10-Q. Investors should not place undue reliance on such
forward-looking statements, and the Company undertakes no obligation to publicly update or revise
any forward-looking statements. All forward-looking statements reflect the present expectation of
future events of our management and are subject to a number of important factors, risks,
uncertainties and assumptions that could cause actual results to differ materially from those
described in the forward-looking statements. These factors and risks include, but are not limited
to, general economic conditions; integration risks; indemnification obligations associated with the
sale of Jevic Transportation, Inc.; our ability to remain in compliance with the agreements
governing our indebtedness; the effect of ongoing litigation including class action lawsuits; cost
and availability of qualified drivers, fuel, purchased transportation, property, revenue equipment
and other operating assets; governmental regulations, including but not limited to Hours of
Service, engine emissions, compliance with legislation requiring companies to evaluate their
internal control over financial reporting and Homeland Security; dependence on key employees;
inclement weather; labor relations; effectiveness of company-specific performance improvement
initiatives; competitive initiatives and pricing pressures, including in connection with fuel
surcharges; terrorism risks; self-insurance claims, equity-based compensation and other expense
volatility; and other financial, operational and legal risks and uncertainties detailed from time
to time in the Companys SEC filings. These factors and risks are described in Item 1A: Risk
Factors of the Companys annual report on Form 10-K for the year ended December 31, 2007, as
updated by Item 1A of this Form 10-Q.
As a result of these and other factors, no assurance can be given as to our future results and
achievements. Accordingly, a forward-looking statement is neither a prediction nor a guarantee of
future events or circumstances, and those future events or circumstances may not occur. You should
not place undue reliance on the forward-looking statements, which speak only as of the date of this
Form 10-Q. We are under no obligation, and we expressly disclaim any obligation, to update or alter
any forward-looking statements, whether as a result of new information, future events or otherwise.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company is exposed to a variety of market risks, including the effects of interest rates and
fuel prices. The detail of the Companys debt structure is more fully described in the notes to
the consolidated financial statements set forth in the Companys annual report on Form 10-K for the
year ended December 31, 2007. To help mitigate our risk to rising fuel prices, the Company has
implemented a fuel surcharge program. This program is well established within the industry and
customer acceptance of fuel surcharges remains high. Since the amount of fuel surcharge is based
on average national diesel fuel prices and is reset weekly, exposure of the Company to fuel price
volatility is
17
significantly reduced. However, the fuel surcharge may not fully compensate the Company for
increased fuel prices during periods of rapid increases in the price of fuel.
The following table provides information about the Companys third-party financial instruments as
of June 30, 2008. The table presents principal cash flows (in millions) and related weighted
average interest rates by contractual maturity dates. The fair value of the fixed rate debt was
estimated based upon the borrowing rates currently available to the Company for debt with similar
terms and remaining maturities.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expected maturity date
|
|
2008
|
|
|
2008
|
|
2009
|
|
2010
|
|
2011
|
|
2012
|
|
Thereafter
|
|
Total
|
|
Fair Value
|
Fixed rate debt
|
|
$
|
5.0
|
|
|
$
|
18.9
|
|
|
$
|
18.9
|
|
|
$
|
22.2
|
|
|
$
|
25.7
|
|
|
$
|
50.7
|
|
|
$
|
141.4
|
|
|
$
|
141.8
|
|
Average interest rate
|
|
|
7.33
|
%
|
|
|
7.34
|
%
|
|
|
7.35
|
%
|
|
|
7.09
|
%
|
|
|
6.93
|
%
|
|
|
6.40
|
%
|
|
|
|
|
|
|
|
|
Variable rate debt
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
18.5
|
|
|
$
|
18.5
|
|
|
$
|
18.5
|
|
Average interest rate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5.00
|
%
|
|
|
|
|
|
|
|
|
Item 4. Controls and Procedures
Quarterly Controls Evaluation and Related CEO and CFO Certifications
As of the end of the period covered by this Form 10-Q, the Company conducted an evaluation of the
effectiveness of the design and operation of its disclosure controls and procedures (Disclosure
Controls). The controls evaluation was performed under the supervision and with the participation
of management, including the Companys Chief Executive Officer (CEO) and Chief Financial Officer
(CFO).
Based upon the controls evaluation, the Companys CEO and CFO have concluded that, subject to the
limitations noted below, as of the end of the period covered by this Form 10-Q, the Companys
Disclosure Controls are effective to ensure that information the Company is required to disclose in
reports that the Company files or submits under the Securities Exchange Act of 1934, as amended
(the Exchange Act) is recorded, processed, summarized and reported within the time periods
specified in SEC rules and forms.
During the period covered by this Form 10-Q, there were no changes in internal control over
financial reporting that materially affected, or that are reasonably likely to materially affect,
the Companys internal control over financial reporting.
Attached as Exhibits 31.1 and 31.2 to this Form 10-Q are certifications of the CEO and the CFO,
which are required in accordance with Rule 13a-14 of the Exchange Act. This Controls and Procedures
section includes the information concerning the controls evaluation referred to in the
certifications and it should be read in conjunction with the certifications.
Definition of Disclosure Controls
Disclosure Controls are controls and procedures designed to ensure that information required to be
disclosed in the Companys reports filed under the Exchange Act is recorded, processed, summarized
and reported timely. Disclosure Controls are also designed to ensure that such information is
accumulated and communicated to the Companys management, including the CEO and CFO, as appropriate
to allow timely decisions regarding required disclosure. The Companys Disclosure Controls include
components of its internal control over financial reporting, which consists of control processes
designed to provide reasonable assurance regarding the reliability of the Companys financial
reporting and the preparation of financial statements in accordance with U.S. generally accepted
accounting principles.
Limitations on the Effectiveness of Controls
The Companys management, including the CEO and CFO, does not expect that its Disclosure Controls
or its internal control over financial reporting will prevent all errors and all fraud. A control
system, no matter how well designed and operated, can provide only reasonable, not absolute,
assurance that the control systems objectives will be met. Further, the design of a control system
must reflect the fact that there are resource constraints and the benefits of controls must be
considered relative to their costs. Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues and instances of
fraud, if any, within the Company have been detected. These inherent limitations include the
realities that judgments in decision-making can be faulty, and that breakdowns can occur because of
simple error or mistake. Controls can also be circumvented by the individual acts of some persons,
by collusion of two or more people, or by management override of the controls. Because of the
inherent limitations in a cost-effective control system, misstatements due to error or fraud may
occur and not be detected.
18
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
For a description of all material pending legal proceedings, see Note
3 of the accompanying consolidated financial statements.
Item 1A. Risk Factors
Risk Factors are described in Item 1A: Risk Factors of the Companys
annual report on Form 10-K for the year ended December 31, 2007 and there have been no material
changes.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuer Purchases of Equity Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(d) Maximum
|
|
|
|
|
|
|
|
|
|
|
|
(c) Total Number
|
|
|
Number (or
|
|
|
|
(a) Total
|
|
|
|
|
|
|
of Shares (or
|
|
|
Approximate Dollar
|
|
|
|
Number of
|
|
|
(b) Average
|
|
|
Units) Purchased
|
|
|
Value) of Shares (or
|
|
|
|
Shares (or
|
|
|
Price Paid per
|
|
|
as Part of Publicly
|
|
|
Units) that May Yet
|
|
|
|
Units)
|
|
|
Share (or
|
|
|
Announced Plans
|
|
|
be Purchased under
|
|
Period
|
|
Purchased (1)
|
|
|
Unit)
|
|
|
or Programs
|
|
|
the Plans or Programs
|
|
April 1, 2008 through
April 30, 2008
|
|
|
860
|
(2)
|
|
$
|
13.77
|
(2)
|
|
|
|
|
|
$
|
|
|
May 1, 2008 through
May 31, 2008
|
|
|
|
(3)
|
|
|
|
(3)
|
|
|
|
|
|
|
|
|
June 1, 2008 through
June 30, 2008
|
|
|
4,720
|
(4)
|
|
|
12.16
|
(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
5,580
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Shares purchased by the SCST Executive Capital Accumulation Plan were open market purchases. For more
information on the SCST Executive Capital Accumulation Plan see the Registration Statement on Form S-8 (No. 333-103661) filed on March 7, 2003.
|
|
(2)
|
|
The SCST Executive Capital Accumulation Plan sold 1,700 shares of Saia stock on the open market at $15.52 during
the period of April 1, 2008 through April 30, 2008.
|
|
(3)
|
|
The SCST Executive Capital Accumulation Plan sold no shares of Saia stock on the open market during the period of
May 1, 2008 through May 31, 2008.
|
|
(4)
|
|
The SCST Executive Capital Accumulation Plan sold no shares of Saia stock on the open market during the period of
June 1, 2008 through June 30, 2008.
|
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
On April 23, 2008, the Company entered into an Amendment to the Saia, Inc. Amended and Restated
2003 Omnibus Incentive Plan (Plan Amendment) to allow non-qualified stock options awarded under the
plan to be exercised on a net exercise basis, to allow stock appreciation rights granted pursuant
to the plan to be settled in either cash or Company common stock and to clarify that the Company
may satisfy its withholding obligations under the plan by withholding shares received as a result
of the exercise of an award under the plan.
On June 4, 2008, the Company entered into Amendment No. 4 to the Senior Notes Master Shelf
Agreement with Prudential Investment Management, Inc. and certain of its affiliates (Amendment No.
4). Amendment No. 4 modifies certain defined terms and the Tangible Net Worth covenant and
replaces financial covenants establishing maximum ratios of Total Indebtedness to EBITDAR, Adjusted
Total Indebtedness to EBITDAR and EBIT to Interest Expense with financial covenants establishing a
maximum Fixed Charge Coverage Ratio, Leverage Ratio and Adjusted Leverage Ratio, each to be tested
on a quarterly basis. Amendment No. 4 also permits, in the event the Company or one of its
subsidiaries acquires all of the outstanding stock of an entity or entities operating a primary
19
line of business within the Companys core industry, the indebtedness of such entity assumed as a
result of the acquisition to be maintained and remain in effect until the existing maturity date
provided the aggregate indebtedness from all acquired entities does not exceed $25 million.
Additionally, Amendment No. 4 excludes repurchases of the Companys common stock prior to the date
of the amendment from the Fixed Charge Coverage Ratio calculation and also excludes from such
calculation subsequent repurchases up to the aggregate amount of $50 million provided the Company
meets certain financial covenants following the repurchase.
The foregoing description of the Plan Amendment and Amendment No. 4 are qualified in their entirely
by reference to the amendments, which are filed hereto as Exhibit 10.1 and Exhibit 10.2,
respectively, and incorporated herein by reference.
20
Item 6. Exhibits
|
|
|
Exhibit
|
|
|
Number
|
|
Description of Exhibit
|
|
|
|
3.1
|
|
Amended and Restated Certificate of Incorporation of Saia, Inc. (incorporated herein
by reference to Exhibit 3.1 of Saia, Inc.s Form 8-K (File No. 0-49983) filed on
July 26, 2006).
|
|
|
|
3.2
|
|
Amended and Restated Bylaws of Saia, Inc. (incorporated herein by reference to
Exhibit 3.1 of Saia, Inc.s Form 8-K (File No. 0-49983) filed on July 29, 2008).
|
|
|
|
4.1
|
|
Rights Agreement between SCS Transportation, Inc. and Mellon Investor Services LLC
dated as of September 30, 2002 (incorporated herein by reference to Exhibit 4.1 of
SCS Transportation, Inc.s Form 10-Q (File No. 0-49983) for the quarter ended
September 30, 2002).
|
|
|
|
10.1
|
|
Amendment to the Saia, Inc. Amended and Restated Omnibus Incentive Plan
|
|
|
|
10.2
|
|
Amendment No. 4 to the Senior Notes Shelf Agreement dated as of June 4, 2008 and
related Consent
|
|
|
|
31.1
|
|
Certification of Principal Executive Officer Pursuant to Exchange Act Rule 13a-15(e).
|
|
|
|
31.2
|
|
Certification of Principal Financial Officer Pursuant to Exchange Act Rule 13a-15(e).
|
|
|
|
32.1
|
|
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2
|
|
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
21
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
|
|
|
|
|
SAIA, INC.
|
|
Date: August 4, 2008
|
/s/ James A. Darby
|
|
|
James A. Darby
|
|
|
Vice President of Finance and
Chief Financial Officer
|
|
|
22
EXHIBIT INDEX
|
|
|
Exhibit
|
|
|
Number
|
|
Description of Exhibit
|
3.1
|
|
Amended and Restated Certificate of Incorporation of Saia, Inc. (incorporated herein
by reference to Exhibit 3.1 of Saia, Inc.s Form 8-K (File No. 0-49983) filed on
July 26, 2006).
|
|
|
|
3.2
|
|
Amended and Restated Bylaws of Saia, Inc. (incorporated herein by reference to
Exhibit 3.2 of Saia, Inc.s Form 8-K (File No. 0-49983) filed on July 29, 2008).
|
|
|
|
4.1
|
|
Rights Agreement between SCS Transportation, Inc. and Mellon Investor Services LLC
dated as of September 30, 2002 (incorporated herein by reference to Exhibit 4.1 of
SCS Transportation, Inc.s Form 10-Q (File No. 0-49983) for the quarter ended
September 30, 2002).
|
|
|
|
10.1
|
|
Amendment to the Saia, Inc. Amended and Restated Omnibus Incentive Plan
|
|
|
|
10.2
|
|
Amendment No. 4 to the Senior Notes Master Shelf Agreement dated as of June 4, 2008
and related Consent
|
|
|
|
31.1
|
|
Certification of Principal Executive Officer Pursuant to Exchange Act Rule 13a-15(e).
|
|
|
|
31.2
|
|
Certification of Principal Financial Officer Pursuant to Exchange Act Rule 13a-15(e).
|
|
|
|
32.1
|
|
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2
|
|
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
E-1
Exhibit 10.2
AMENDMENT NO. 4 TO
MASTER SHELF AGREEMENT
(SAIA, Inc. f/k/a SCS Transportation, Inc.)
June 4, 2008
Prudential Investment Management, Inc.
(Prudential)
The Prudential Insurance Company
of America
Pruco Life Insurance Company
Reliastar Life Insurance Company
Southland Life Insurance Company
Pruco Life Insurance
Company of New Jersey
Prudential Retirement
Insurance and Annuity Company
United of Omaha Life
Insurance Company
Universal Prudential Arizona
Reinsurance Company
Zurich American Insurance Company
Each Prudential Affiliate (as defined herein)
which becomes bound by certain provisions of the
Agreement as hereinafter provided (together with
each above-named entity, the
Purchasers)
c/o Prudential Capital Group
Gateway Center Four
100 Mulberry Street
Newark, NJ 07102-4069
Ladies and Gentlemen:
We
refer to the Master Shelf Agreement, dated as of September 20, 2002 (as amended or modified
to date, the
Agreement)
, among the undersigned, SAIA, Inc. f/k/a SCS
Transportation, Inc., a
Delaware Corporation (the
Company)
and Purchasers. Unless otherwise defined
herein, the terms
defined in the Agreement shall be used herein as therein defined.
We refer also to that certain Consent Letter, dated as of January 28, 2008 (the
Consent
Letter
), among the Company, SAIA Motor Freight Line, LLC, a Delaware
limited liability company
(Guarantor)
and Purchasers.
Pursuant to the requirements of the Consent Letter and Section 5M of the Agreement, the
Company and Purchasers desire to amend the Agreement to include
therein any Additional Covenants and Additional Defaults contained in the Restated Credit
Agreement (as that term is defined in the Consent Letter).
Therefore, Purchasers and the Company, in consideration of the mutual promises and agreements
set forth herein and in the Agreement, agree as follows:
1.
Amendments.
(a)
Paragraph 5D.
Paragraph 5D of the Agreement
is amended to add the following sentence at the end of such paragraph:
Notwithstanding the above, in the event, and each time, Company or one of its Subsidiaries
acquires one hundred percent (100%) of the outstanding stock of an entity (or entities)
(each a Target) which operates a primary line of business within Companys core
industry, the indebtedness of such Target assumed as a result of such acquisition, and
Liens affecting the assets of such Target and securing such indebtedness, may be
maintained and remain in effect for a period of time not beyond the existing maturity date
of such indebtedness; provided, however, that the aggregate amount of assumed indebtedness
from all Targets shall not exceed $25,000,000 at any one time outstanding.
(b)
Paragraph 5F.
Paragraph 5F of the Agreement is amended in its entirety to read as follows:
5F.
Insurance.
The Company will, and will cause each of its Subsidiaries to, maintain, with
financially sound and reputable insurers, insurance with respect to their respective properties and
businesses against such casualties and contingencies, of such types, on such terms and in such
amounts as is customary in the case of entities of established reputations engaged in the same or a
similar business and similarly situated; and upon the written request of any Purchaser, the Company
promptly shall deliver evidence thereof to Purchasers.
(c)
Paragraph 5J.
Paragraph 5J of
the Agreement is amended to add the following sentence at the end of such paragraph:
Notwithstanding the
above, the requirements of this Section 5J shall not apply to
indebtedness of a Target assumed by the Company or one of its Subsidiaries, as allowed
under Section 5D.
(d)
Paragraph 6A.
Paragraph 6A of
the Agreement is amended in its entirety to read as follows:
6A
Financial Covenants.
6A(1)
Fixed Charge Coverage Ratio.
The Company will not permit, as of the last day of any
fiscal quarter, the Fixed Charge Coverage Ratio, calculated on a consolidated basis, to be less
than 1.10 to 1.00
2
6A(2)
Leverage Ratio.
The Company will not permit, as of the last day of any fiscal quarter,
the Leverage Ratio, calculated on a consolidated basis, to be greater than 3.25 to 1.00.
6A(3)
Adjusted Leverage Ratio.
The Company will not permit, as of the last day of any fiscal
quarter, the Adjusted Leverage Ratio, calculated on a consolidated basis, to be greater than 3.75
to 1.00.
6A(4)
Tangible Net Worth.
The Company will not permit Tangible Net Worth at any time to be
less than $180,000,000
plus
the sum of (i) 75% of positive Net Income from Continuing
Operations in each fiscal quarter commencing with the fiscal quarter ended June 30, 2006, and (ii)
75% of the Net Proceeds from the issuance and sale of equity securities after the date hereof, plus
or minus loss from Discontinued Operations commencing with the fiscal quarter ended June 30, 2006
minus
the total amount paid by the Company for the repurchase of its shares after June 30,
2006, up to $25,000,000.
(e)
Paragraph 6(C)(1).
(i) Paragraph 6(C)(1) is amended by deleting clause (vi) thereof in its entirety.
(f)
Paragraph 6C(3)
is hereby amended by changing the period at the end of the
clause (viii) thereof to a semi-colon and by inserting therein the following new clauses
(ix) and (x):
|
(ix)
|
|
the repurchase of shares of common stock of the Company. Repurchases made
prior to the date of this Agreement will be excluded from the Fixed Charge Coverage
Ratio. Repurchases made subsequent to the date of this Agreement up to the aggregate
amount of $50,000,000 will also be excluded from the Fixed Charge Coverage Ratio
calculation, provided that (i) Borrowers pro forma Leverage Ratio following the
repurchase shall be less than or equal to 2.75 to 1.00, (ii) the Companys pro forma
Adjusted Leverage Ratio following the repurchase shall be less than or equal to 3.25
to 1.00, and (iii) the Companys pro forma Available Liquidity following the
repurchase shall be greater than or equal to $30,000,000.; and
|
|
|
(x)
|
|
the Permitted Acquisitions.
|
(g)
Paragraph 10B.
(i) Paragraph 10B of the Agreement is hereby amended by
deleting the definitions of EBIT, EBITDAR, Indebtedness, Interest Expense,
Net Income and Total Indebtedness therein and replacing such definitions with the
following revised definitions:
EBITDAR
means, for any period, the sum of Net Income
plus,
to the extent
deducted in the determination of Net Income, (i) all provisions for federal, state and
other income tax of the Company and its Subsidiaries (ii) Interest Expense, (iii)
provisions for depreciation and amortization and (iv) Rental Expense,
excluding
(a) any gains or losses resulting from the sale, conversion or other
3
disposition of capital assets (i.e., assets other than current assets), (b) any gains resulting
from the write-up of assets, (c) any earnings of any Person acquired by the Company or any
Subsidiary through purchase, merger or consolidation or otherwise for any period prior to the date
of acquisition, (d) any deferred credit representing the excess of equity in any such Subsidiary
at the date of acquisition over the cost of the investment in such Subsidiary, (e) any gains or
losses from the acquisition of securities or the retirement or extinguishment of Indebtedness, (f)
any gains on collections from the proceeds of insurance policies or settlements, (g) any
restoration to income of any Contingency Reserve, except to the extent that provision for such
reserve was made out of income accrued during such period, (h) any income, gain or loss during
such period from any discontinued operations or the disposition thereof, from any extraordinary
items or from any prior period adjustments, and (i) any equity of the Company or any Subsidiary in
the undistributed earnings (but not losses) of any corporation or other entity which is not a
Subsidiary of the Company, which in the aggregate will be deducted only to the extent they are
positive, adjusted for minority interests in Subsidiaries.
Indebtedness
means with respect to any Person without duplication, (1) indebtedness or liability
for borrowed money; (2) obligations evidenced by bonds, debentures, notes, or other similar
instruments; (3) obligations for the deferred purchase price of property acquired by such Person
(excluding accounts payable arising in the ordinary course of business but including all
liabilities created or arising under any conditional sale or other title retention agreement with
respect to any such property); (4) redemption obligations in respect of mandatorily redeemable
Preferred Stock; (5) obligations as lessee under Capital Leases; (6) current liabilities in respect
of unfunded vested benefits under Plans covered by ERISA; (7) obligations under acceptance
facilities; (8) the outstanding balance of the purchase price of uncollected accounts receivable of
such Person subject at such time to a sale of receivables or other similar transaction, regardless
of whether such transaction is effected without recourse to such Person or in a manner which would
not be reflected on the balance sheet of such Person in accordance with GAAP; (9) obligations
secured by any Liens, whether or not the obligations have been assumed; and (10) all guaranties,
endorsements (other than for collection or deposit in the ordinary course of business), and other
contingent obligations to purchase, to provide funds for payment, to supply funds to invest in any
Person or entity, or otherwise to assure a creditor against loss with respect to liabilities of a
type described in any of the clauses above.
Interest Expense
means, with respect to any period, the sum (without duplication) of (i) all
interest and prepayment charges in respect of any Indebtedness (including imputed interest in
respect of Capitalized Lease Obligations and net costs of Swaps) deducted in determining Net
Income for such period, together with all interest capitalized or deferred during such period and
not deducted in determining Net Income for such period,
plus
(ii) all debt discount and
expenses amortized or required to be amortized in the determination of Net Income for such period.
4
Net Income
means, for any period of determination, with respect to the Company on a
Consolidated basis with its Subsidiaries (other than any Subsidiary which is restricted
from declaring or paying dividends or otherwise advancing funds to its parent whether by
contract or otherwise), cumulative net income earned during such period as determined in
accordance with GAAP.
Total Indebtedness
means Indebtedness as of a particular date of determination plus six
(6) times Rental Expense for the period of four (4) consecutive fiscal quarters most
recently ended on or prior to such date.
(ii) Paragraph 10B of the Agreement is further amended by adding therein new definitions of
Adjusted EBITDAR, Adjusted Leverage Ratio, Adjusted Total Indebtedness, Available
Liquidity, Capital Expenditures, Fixed Charge Coverage Ratio, Leverage Ratio, Maintenance
Capital Expenditures, Net Cash Flow, Permitted Acquisitions and Total Debt Service in
alphabetical order to read as follows:
Adjusted EBITDAR
means EBITDAR plus (i) pro forma additions related to Permitted
Acquisitions, and (ii) certain non-recurring charges and/or extraordinary items proposed
by the Company and to be included at the Required Holders sole discretion, which will not
be withheld unreasonably.
Adjusted Leverage Ratio
means the ratio of (i) Adjusted Total Indebtedness on the last
day of a completed fiscal quarter of the Company, to (ii) Adjusted EBITDAR for the period
of four (4) consecutive fiscal quarters ended on such date.
Adjusted Total Indebtedness
means Total Indebtedness plus the aggregate face amount of
all letters of credit issued and outstanding under the Credit Agreement.
Available Liquidity
means, as of a particular date of determination, unused availability
under the Credit Agreement
plus
net cash on hand of the Company and its
Subsidiaries.
Capital Expenditures
means, for any applicable period of determination, the aggregate
amount of all expenditures of the Company and its Subsidiaries for fixed or capital assets
made during such period which, in accordance with GAAP, would be classified as capital
expenditures.
Fixed Charge Coverage Ratio
means, as of the last day of a completed fiscal quarter of
the Company, the ratio of (i) Net Cash Flow for the period of four (4) consecutive fiscal
quarters ended on such date to (ii) Total Debt Service for such period.
5
Leverage Ratio
means the ratio of (i) Total Indebtedness on the last day of a completed
fiscal quarter of the Company, to (ii) Adjusted EBITDAR for the period of four (4)
consecutive fiscal quarters ended on such date.
Maintenance Capital Expenditures
means Capital Expenditures by the Company and its
Subsidiaries during a particular period of determination (i) for purchases of tractors,
trailers, and other revenue equipment deemed by the Company to be replacement purchases
and (ii) to maintain long term assets (e.g., property, plant and equipment) in good
working order.
Net Cash Flow
means Adjusted EBITDAR less the sum of Rental Expense, cash taxes,
Maintenance Capital Expenditures, distributions and treasury stock purchases not otherwise
excluded pursuant to Paragraph 6C(3)(ix).
Permitted Acquisitions
means acquisitions otherwise prohibited hereunder, which meet the
following criteria: (i) the acquisition target is in the same line of business as the
Company, (ii) no Default exists at the time of such acquisition or would result from such
acquisition, (iii) the Company has delivered to Purchasers written notice of the intended
acquisition not less than ten (10) days prior to the consummation of such acquisition
transaction, (iv) the Companys pro forma, post-acquisition Leverage Ratio shall be less
than or equal to 2.75 to 1.00, and (v) the Companys pro forma, post-acquisition Adjusted
Leverage Ratio shall be less than or equal to 3.25 to 1.00, and (vi) the Companys pro
forma, post-acquisition Available Liquidity shall be greater than or equal to $30,000,000.
Total Debt Service
means the sum of interest expense, schedule principal payments on
long-term debt and Capital Lease payments.
(h)
Paragraph 10C.
The first sentence of Paragraph 10C is amended in its entirety to read as follows:
References in this Agreement to GAAP shall be deemed to refer to generally accepted
accounting principles in effect in the United States on January 1, 2008, as amended from
time to time.
2.
Conditions Precedent.
The effectiveness of this Amendment is contingent on:
(a) the Consent attached hereto
shall have been executed by the Subsidiary Guarantors;
(b) receipt by Prudential of all documents evidencing other necessary corporate action
and governmental approvals, if any, with respect to the amendments to the Agreement
herein contained.
3.
Representation and Warranties.
The Company hereby represents and warrants
to each Purchaser as follows:
6
(a) The Company is a corporation duly organized and validly existing in good
standing under the laws of the State of Delaware, each Subsidiary is duly organized and
validly existing in good standing under the laws of the jurisdiction in which it is
organized, and the Company has and each Subsidiary has the power to own its respective
property and to carry on its respective business as now being conducted. The execution,
delivery and performance by the Company of this Amendment are within the Companys
corporate powers and have been duly authorized by all necessary corporate action.
(b) Neither the execution nor delivery of this Amendment, nor fulfillment of nor
compliance with the terms and provisions hereof will conflict with, or result in a breach
of the terms, conditions or provisions of, or constitute a default under, or result in any
violation of, or result in the creation of any Lien upon any of the properties or assets of
the Company pursuant to, the charter or by-laws of the Company, any award of any
arbitrator of any agreement (including any agreement with stockholders), instrument,
order, judgment, decree, statute, law, rule or regulation to which the Company is subject.
(c) This Amendment constitutes the valid and binding obligation of the Company enforceable in accordance with its terms.
(d) No Default or Event of Default has occurred and is continuing.
4.
Expenses.
The Company hereby confirms its obligations under the Agreement,
whether or not the transactions hereby contemplated are consummated, to pay, promptly
after request by the Purchasers, all reasonable out-of-pocket costs and expenses, including
attorneys fees and expenses, incurred by the Purchasers in connection with this Letter
Agreement or the transactions contemplated hereby, in enforcing any rights under this
Letter Agreement, or in responding to any subpoena or other legal process or informal
investigative demand issued in connection with this letter agreement or the transactions
contemplated hereby. The obligations of the Company under this Section 4 shall survive
transfer by any Purchaser of any Note and payment of any Note.
5.
Miscellaneous.
On and after the effective date of this Letter Amendment, each
reference in the Agreement to this Agreement, hereunder, hereof, or words of like
import referring to the Agreement, and each reference in the Notes to the Agreement,
thereunder, thereof, or words of like import referring to the Agreement, shall mean
the Agreement as amended by this Letter Amendment. The Agreement, as amended by
this Letter Amendment, is and shall continue to be in full force and effect and is hereby in
all respects ratified and confirmed. The execution, delivery and effectiveness of this
Letter Amendment shall not, except as expressly provided herein, operate as a waiver of
any right, power or remedy under the Agreement nor constitute a waiver of any provision
of the Agreement. This Letter Agreement is not intended by the parties to be, and shall
not be construed to be, a novation of the Agreement or an accord and satisfaction in
regard thereto.
This Amendment may be executed in any number of counterparts and by any combination of the
parties hereto in separate counterparts, each of which counterpart shall
7
be an original and all of which, taken together, shall constitute one and the same Amendment.
If you agree to the terms and provisions hereof, please evidence your agreement by executing
and returning at least one counterpart of this Amendment to SAIA, Inc., 11465 Johns Creek Parkway,
Suite 400, Duluth, GA 30097, Attention of Chief Financial Officer. This Amendment shall become
effective as of the date first above written when and if counterparts of this Amendment shall have
been executed by us and you.
|
|
|
|
|
|
|
Very truly yours,
|
|
|
|
|
|
|
|
SAIA, I
nc.
|
|
|
f/k/a
SCS
T
ransportation
,
I
nc.
|
|
|
|
|
|
|
|
By:
|
|
/s/ James A. Darby
|
|
|
|
|
|
|
|
Title: Vice President Finance and
Chief Financial
Officer
|
Accepted:
|
|
|
|
|
|
|
|
|
|
P
rudential investment management, inc.
|
|
|
|
|
|
|
|
By:
|
|
/s/ Jay White
|
|
|
|
|
|
|
|
|
|
Vice President
|
|
|
|
|
|
|
|
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
|
|
|
|
|
|
By:
|
|
/s/ Jay White
|
|
|
|
|
|
|
|
|
|
Vice President
|
|
|
|
|
|
|
|
Pruco
Life
Insurance
Company
|
|
|
|
|
|
|
|
By:
|
|
/s/ Jay White
|
|
|
|
|
|
|
|
|
|
Vice President
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reliastar
Life
Insurance
Company
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
Prudential Private Placement Investors,
L.P. (as Investment Advisor)
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
Prudential Private Placement Investors, Inc.
(as
its General Partner)
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Jay White
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vice President
|
|
|
|
|
|
|
|
|
|
|
|
Security
Life
Of
Denver
Insurance
Company
(formerly Southland Life Insurance Company)
|
|
|
|
|
|
|
|
By:
|
|
Prudential Private Placement Investors,
L.P. (as Investment Advisor)
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
Prudential Private Placement
Investors, Inc.
(as
its General Partner)
|
|
|
|
|
|
By:
|
|
/s/ Jay White
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vice President
|
|
|
|
|
|
|
|
|
|
|
|
Pruco
Life
Insurance
Company
Of
New
Jersey
|
|
|
|
|
|
|
|
By:
|
|
/s/ Jay White
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vice President
|
|
|
|
|
|
|
|
|
|
|
|
P
rudenital
R
etirement
I
nsurance
A
nd
A
nnuity
C
ompany
|
|
|
|
|
|
|
|
|
|
By:
|
|
Prudential Investment Management, Inc.,
as
investment manager
|
|
|
|
|
|
|
|
|
|
|
|
By:
|
|
/s/ Jay White
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vice president
|
|
|
|
|
9
|
|
|
|
|
|
|
|
|
|
U
nited
O
f
O
maha
L
ife
I
nsurance
C
ompany
|
|
|
|
|
|
|
|
By:
|
|
Prudential Private Placement Investors,
L.P. (as Investment Advisor)
|
|
|
|
|
|
|
|
By:
|
|
Prudential Private Placement Investors, Inc.
(as its General Partner)
|
|
|
|
|
|
|
|
By:
|
|
/s/ Jay White
|
|
|
|
|
|
|
|
|
|
Vice President
|
|
|
|
|
|
|
|
U
niversal
P
rudential
A
rizona
R
einsurance
C
ompany
|
|
|
|
|
|
|
|
By:
|
|
Prudential Investment Management, Inc.,
as investment manager
|
|
|
|
|
|
|
|
By:
|
|
/s/ Jay White
|
|
|
|
|
|
|
|
|
|
Vice President
|
|
|
|
|
|
|
|
Z
urich
A
merican
I
nsurance
C
ompany
|
|
|
|
|
|
|
|
By:
|
|
Prudential Private Placement Investors,
L.P. (as Investment Advisor)
|
|
|
|
|
|
|
|
By:
|
|
Prudential Private Placement Investors,
Inc.
(as its General Partner)
|
|
|
|
|
|
|
|
By:
|
|
/s/ Jay White
|
|
|
|
|
|
|
|
|
|
Vice President
|
|
|
10
CONSENT
The undersigned, as a Guarantor under the Guaranty Agreement dated as of September 20, 2002
(the
Guaranty)
in favor of the holders from time to time of the Notes issued pursuant to the
Agreement, referred to in the foregoing Amendment No. 4 to Master Shelf Agreement (the
Amendment),
hereby consents to the Amendment and hereby confirms and agrees that, notwithstanding
the effectiveness of the Amendment, the Guaranty is, and shall continue to be, in full force and
effect and is hereby confirmed and ratified in all respects.
|
|
|
|
|
|
|
SAIA MOTOR FREIGHT LINE,
LLC, as successor to Saia Motor
Freight Line, Inc.
|
|
|
|
|
|
|
|
By:
|
|
/s/ James A. Darby
|
|
|
|
|
|
|
|
Name: James A. Darby
|
|
|
Title: Vice President Finance and
Chief Financial Officer
|
11